SAN ANTONIO, Aug. 14, 2015 (GLOBE NEWSWIRE) -- Payment Data Systems, Inc. (NASDAQ:PYDS) an integrated electronic payments solutions provider, today announced financial results for the quarter ended June 30, 2015.
Revenues for the quarter ended June 30, 2015 grew 4% to $3,424,756 as compared to $3,304,173 for the same period in 2014 due to higher transaction volumes in credit card and debit card and ACH processing. Gross profit for the quarter ended June 30, 2015 grew 5% to $998,144 from $954,905 for the same period in 2014.
Operating income for the quarter ended June 30, 2015 declined to $91,833 when compared to $466,379 for the same period in 2014. The decline was primarily attributable to a number of charges associated with preparing the Company for NASDAQ, including adding two independent Directors to the Board of Directors, and preparation for the July 2nd annual shareholder's meeting, including legal, accounting, transfer agent, and brokerage fees. The Company also incurred higher non-cash related expenses including depreciation associated with the Akimbo acquisition, initial stock grants to our two new outside directors and higher amortization of stock based compensation for current and new employees during the second quarter.
The Company's net income for the quarter ended June 30, 2015 declined to $24,850 as compared to $486,801 for the same period in the prior year. The decline was attributed to the same factors mentioned above, along with higher income taxes and unrealized losses on marketable securities.
Cash and cash equivalents for the quarter ended June 30, 2015 increased to $64,865,661 from $60,790,124 for the same period in 2014.
Highlights for the second quarter of 2015 include:
- Credit card processing volumes for second quarter of 2015 were the highest in the history of the company for any previous quarter. Credit card dollars processed during second quarter of 2015 were up 9% over the same time period in 2014. Credit card transactions processed during first quarter of 2014 were up 6% over the same time period in 2014.
- Electronic check transaction volumes for the second quarter of 2015 were the fourth highest in the history of the Company for any previous quarter. Electronic check transaction volumes during second quarter of 2015 were up 2% over the same time period in 2014. Returned check transactions processed during first quarter of 2015 were down 2% over the same time period in 2014.
- Total dollars processed for the second quarter of 2015 exceeded $806,800,000 and is the second highest in the history of the Company for any previous quarter.
Habib Yunus, CFO said, "If we look at net cash provided by operating activities on our statement of cash flows for the six months ended June 30, 2015, we generated more than $10.4 million in cash. If we subtract $9.1 million because it belongs to our customers, our core operations generated $1.3 million. This is a great number for a company of our size."
Mr. Yunus continued, "In the third quarter the Company also expects one-time legal and transfer agent charges associated with the reverse share split, which took place on July 23rd, and fees associated with the NASDAQ up-listing, which took place on August 11, 2015. The Company also continues to invest in growth through expanded sales efforts, new employees in customer service, and augmented technology development activities."
Mr. Yunus explained, "As we grow, we have more non-cash expenses than we had in the past. The biggest is stock based compensation, which is the amortization of stock grants made to employees and directors. For the six months ended June 30, 2015 it was $627,056. We believe stock-based compensation is a cost-effective way to incentivize team members because we can use the cash saved to re-invest in the business."
Akimbo Integration
The acquisition of Akimbo, the integration of Akimbo's consumer applications with FiCentive's processing platform, and the transition of Akimbo Card customers was completed by May 2015. The addition of employees who joined the team in the Akimbo acquisition, along with new hires in customer service, have resulted in higher SG&A and rent expense than we had in the same period last year. The Company fully expects that new products and product features, along with expanded sales and marketing efforts, will create value and achieve revenue growth that will exceed our costs.
"The combination of Akimbo's product-driven approach with FiCentive's processing capabilities is exciting, and it is being fueled by The Company's continued investment in prepaid. We'll be following the upcoming launch of the new card program [discussed at the July 2nd Shareholder's Meeting] with some exciting product announcements for Akimbo and our existing corporate incentive and gift card solutions," Houston Frost, SVP of Corporate Development said. "Over the past two quarters, we've fully integrated Akimbo's consumer applications, transitioned the Akimbo Card program, and developed a new consumer prepaid program."
Company President and COO Louis Hoch explained, "We are still evaluating how accretive the Akimbo product will be to Company earnings. However, the experience and creativity that the Akimbo team has brought to Payment Data and FiCentive has already positioned us to be a leader in the prepaid and incentive card marketplace."
Michael Long, Company's CEO and Chairman said, "This quarter was the final push to move our Company to up-list on NASDAQ and, as a result, we incurred a number of one-time expenses. We're excited to have realized this long-standing goal and we look forward to focusing on revenue growth. We believe that our listing on NASDAQ will help broaden our shareholder base, increase appeal to institutional investors, provide us with greater liquidity and increase shareholder value. Our July transaction growth, along with the addition of new customers are exceeding our expectations for the third quarter. The remaining two quarters should demonstrate our ability to continue to grow processed transactions and produce strong financial metrics for the year."
Mr. Long continued, "We're excited about our future and continue to believe our stock is undervalued and is trading below valuation multiples our industry receives."
| PAYMENT DATA SYSTEMS, INC. | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (UNAUDITED) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Revenues | $ 3,424,756 | $ 3,304,173 | $ 7,167,216 | $ 6,034,996 |
| Operating expenses: | ||||
| Cost of services | 2,426,612 | 2,349,268 | 4,802,006 | 4,441,294 |
| Selling, general and administrative: | ||||
| Stock-based compensation | 393,525 | 72,995 | 627,056 | 150,990 |
| Cancellation of stock-based compensation | -- | -- | (163,936) | -- |
| Other expenses | 419,838 | 404,825 | 937,018 | 785,258 |
| Depreciation and amortization | 92,948 | 10,706 | 178,520 | 20,611 |
| Total operating expenses | 3,332,923 | 2,837,794 | 6,380,664 | 5,398,153 |
| Operating income | 91,833 | 466,379 | 786,552 | 636,843 |
| Other income and (expense): | ||||
| Interest income | 19,358 | 22,424 | 38,358 | 29,238 |
| Other income (expense) | (32,305) | 8,593 | (32,409) | 5,233 |
| Total other income and (expense), net | (12,947) | 31,017 | 5,949 | 34,471 |
| Income before income taxes | 78,886 | 497,396 | 792,501 | 671,314 |
| Income taxes | 54,036 | 10,595 | 59,036 | 22,774 |
| Net income | $ 24,850 | $ 486,801 | $ 733,465 | $ 648,540 |
| Basic earnings per common share: | $ 0.00 | $ 0.06 | $ 0.10 | $ 0.08 |
| Diluted earnings per common share: | $ 0.00 | $ 0.05 | $ 0.06 | $ 0.07 |
| Weighted average common shares outstanding | ||||
| Basic | 7,369,329 | 8,334,304 | 7,369,329 | 8,333,949 |
| Diluted | 12,081,754 | 8,855,559 | 12,102,919 | 8,837,016 |
| See notes to interim consolidated financial statements. | ||||
For complete results, please view our 10-Q report to be filed with the SEC today.
About Payment Data Systems, Inc.
Payment Data Systems is an integrated payment solutions provider to merchants and billers. The organization provides an extensive set of products to deliver world-class payment acceptance. Payment Data has solutions for merchants, billers, banks, service bureaus and card issuers. The strength of the Company is its ability to offer specifically tailored solutions for card issuance, payment acceptance and bill payments.
For additional information, visit www.paymentdata.com. Contact Michael Long for Investor Relations information at 210.249.4040 or email at ir@paymentdata.com.
Website: www.paymentdata.com, www.ficentive.com, www.zbill.com
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FORWARD-LOOKING STATEMENTS DISCLAIMER
Except for the historical information contained herein, the matters discussed in this release include certain forward-looking statements, which are intended to be covered by safe harbors. Those statements include, but may not be limited to, all statements regarding the Company's and management's intent, belief and expectations, such as statements concerning the Company's future and its operating and growth strategy. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, the factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. One or more of these factors have affected, and in the future could affect, the Company's businesses and financial results and could cause actual results to differ materially from plans and projections. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company's objectives and plans will be achieved. All forward-looking statements made in this release are based on information presently available to the Company's management. The Company assumes no obligation to update any forward-looking statements, except as required by law.