VersaPay Announces 2010 First Quarter Results
- Company generates more than 65% year-over-year revenue growth -
TORONTO, May 28 /CNW/ - VersaPay Corporation (TSXV: VPY) ("VersaPay" or the "Company"), a provider of merchant credit, debit, gift and loyalty card payment processing solutions, today announced its financial and operational results for the three-month period ended March 31, 2010. All amounts are reported in Canadian dollars unless otherwise stated.
Q1 2010 Operational Highlights
- Increased total gross transaction value processed 83% to
$132 million from $72 million in Q1 2009
- Monthly gross transaction value processed was $58 million for
March 2010
- Listed on the TSX Venture Exchange
- Completed $3.5 million equity financing
- Signed partnership agreement with the Business Improvements Areas
of British Columbia
- Subsequent to quarter end, entered into agreement to sell 75%
ownership position in Positive Inc.
Q1 2010 Financial Summary(1)
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Q1 2010 Q1 2009
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Recurring revenue(2) $2.5M $1.5M
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Non-recurring revenue(3) $0.1M $0.1M
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TOTAL REVENUE $2.6M $1.6M
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Expenses $3.5M $1.7M
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Adjusted EBITDA(4) $(0.5)M $(0.1)M
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Net income $(0.8)M $(0.1)M
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Net income per share $(0.08) $(0.26)
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Cash and cash equivalents $1.4M $0.2M
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"The growth in our merchant customer base drove strong improvements in our Q1 top line results, in particular our recurring revenue, which was up 72% compared to last year," said Bill McGill, Acting CEO of VersaPay. "In the quarter, we continued to successfully leverage our partnership with the Association of Canadian Travel Agencies, increasing our penetration of the travel industry with new customer wins. In addition, we further invested in the business, expanding our sales team, enhancing our technology and building partnerships to better enable us to execute on our long-term growth strategies."
Mr. McGill continued: "We are confident in our ability to continue to expand our merchant customer base through our direct sales efforts and channel partnerships. We believe the depth and expertise of our team in combination with our competitively priced, customizable, end-to-end, onsite and online payment processing solutions, position us to successfully capitalize on the growth opportunities in front of us."
Q1 2010 Financial Review
Total revenue for Q1 2010 was $2.6 million, which was a 67% increase from total revenue of $1.6 million in Q1 2009. The year-over-year improvement in VersaPay's top line was driven primarily by growth in the Company's transaction processing fees, which were $2.4 million, up from $1.4 million in Q1 2009 as a result of the Company's success in continuing to expand its merchant customer base. Q1 2010 revenue from product sales and other (primarily comprised of point-of-sale device revenue) was $0.1 million, and revenue from VersaCard and VersaEFT fees was $0.04 million. This is compared to Q1 2009 revenue from product sales and other and revenue from VersaCard and VersaEFT fees of $0.1 million and $0.06 million, respectively. Recurring revenue (defined as Transaction processing fees + VersaCard/EFT fees) for Q1 2010 was $2.5 million, or 94% of total revenue, compared to Q1 2009 recurring revenue of $1.5 million, or 92% of total revenue.
Total expenses for Q1 2010 were $3.5 million, compared to $1.7 million in Q1 2009. The year-over-year increase predominantly reflects the Company's investment in the business to establish the necessary infrastructure in terms of sales staff, marketing, partnerships, technology and cross-Canada reach to support its long-term growth. In addition, the Company's costs of service and costs of products sold increased compared to last year, as a result of growth in number of merchant customers VersaPay is serving.
Adjusted EBITDA for Q1 2010, was $(0.5) million, compared to $(0.1) million in Q1 2009, reflecting VersaPay's increased investment in the business, which was partially offset by the Company's revenue growth. Net income for Q1 2010 was $(0.8) million or $(0.08) per share, compared to $(0.1) million or $(0.26) per share.
As at March 31, 2010, VersaPay had cash and cash equivalents of $1.4 million, an increase from $0.2 million as at December 31, 2009. This primarily reflects the $2.8 million in net proceeds VersaPay generated from the equity financing the Company completed in Q1 2010, which was offset, in part, by cash used in operating activities for the quarter of $1.3 million and cash used in investing activities of $0.1 million.
(1) A complete set of financial statements and notes and MD&A for the
three-month period ended March 31, 2010 will be available on the
Company's website at www.versapay.com and on SEDAR.
(2) Defined as Transaction processing fees + VersaCard/EFT fees
(3) Defined as Product sales (point-of-sale devices) and other
(4) Adjusted EBITDA defined as Earnings Before Interest, Taxes,
Depreciation, Amortization and Stock-based compensation. See table A.
Table A
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Q1 2010 Q1 2009
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Adjusted EBITDA $(524,654) $(71,648)
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Interest expense $14,438 $(13,251)
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Amortization $(25,739) $(10,534)
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Stock-based compensation $(290,949) -
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Net Earnings $(826,904) $(95,433)
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About VersaPay
VersaPay's financial technology enables businesses and consumers across Canada to accept and process credit, debit and gift card transactions. As a payment services and financial technology company serving more than 2,500 Canadian businesses, VersaPay, in conjunction with its partners, provides the hardware, technology, infrastructure and support services that businesses of all types require to accept and process electronic payments from their consumers and clients.
While its core business is payment processing services, VersaPay also provides enhanced financial technology solutions such as VersaEFT - the Company's proprietary Electronic Bill Presentment and Payment solution - which enables merchants and consumers to easily transact with one another.
The Company was recognized by PROFIT Magazine as Canada's Top Emerging Growth Company and was ranked Number 1 in Canada on the 2009 HOT 50 List. VersaPay is headquartered in Vancouver, Canada and has operations in Toronto and Montreal. To learn more about VersaPay, visit http://www.versapay.com.
Forward Looking and Other Cautionary Statements
This news release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company's current expectations. When used in this news release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology, are intended to identify forward-looking statements and information. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks relating to the speculative nature of the Company's business, the Company's formative stage of development and the Company's financial position. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward looking statements if these beliefs, estimates and opinions or other circumstances should change.
Investors are cautioned against attributing undue certainty to forward-looking statements. There are a number of important factors that could cause the Company's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others, risks related to following: the Company's financial position and the potential need for future financings, the ability of the Company to maintain its relationship with its strategic partner for payment processing, the efforts and abilities of the senior management team, the ability of the Company to attract and retain skilled management, competition in the payment processing industry, and the Company's ability to respond to technological change and protect its intellectual property rights.
The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. There can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE SECURITIES LEGISLATION.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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VERSAPAY CORPORATION (Formerly JG Capital Corp)
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UNAUDITED CONSOLIDATED BALANCE SHEETS
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As at As at
March 31 December 31
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2010 2009
$ $
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ASSETS
Current
Cash and cash equivalents 1,405,508 206,763
Funds held for merchants 435,384 365,518
Receivables 427,825 307,675
Prepaid expenses 17,126 17,133
Current assets of discontinued operations 44,510 29,133
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2,330,353 926,222
Share Issue Costs - 425,536
Equipment 356,252 318,735
Intangible Asset 136,352 101,592
Non-Current assets of discontinued operations 152,258 161,012
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2,975,215 1,933,097
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LIABILITIES
Current
Accounts payable and accrued liabilities 632,628 1,259,384
Funds due to merchants 435,384 365,518
Deferred revenue 8,479 9,688
JG Capital Loan - 225,000
Current portion of obligation under capital
lease 37,160 36,819
Current liabilities of discontinued
operations 74,620 76,728
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1,188,271 1,973,137
Obligation under Capital Lease, net of current
portion 85,475 97,546
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1,273,746 2,070,683
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Non-Controlling Interest in Positive Inc. 11,806 7,569
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SHAREHOLDERS' EQUITY (DEFICIENCY)
Share Capital 7,018,805 4,872,073
Shares Subscriptions Received - 288,958
Contributed Surplus 1,460,487 618,955
Deficit (6,789,629) (5,925,141)
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1,689,663 (145,155)
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2,975,215 1,933,097
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VERSAPAY CORPORATION (formerly JG Capital Corp)
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UNAUDITED CONSOLIDATED STATEMENT OF LOSS, COMPREHENSIVE LOSS AND DEFICIT
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3 months ended March 31
2010 2009
$ $
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Revenue
Transaction processing fees 2,447,262 1,395,605
Product sales and other 145,376 126,029
VersaCard/EFT fees 44,853 55,490
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2,637,491 1,577,125
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Expenses
Cost of services 1,609,696 916,283
Cost of products sold and other 370,507 247,493
VersaCard/EFT costs 11,561 26,111
Amortization 25,739 10,534
Bad debts 1,178 -
Bank charges and interest (14,438) 13,251
Consulting fees 92,084 140,512
General and administrative 126,886 27,541
Marketing and promotion 31,439 13,270
Professional fees 88,323 20,192
Rent and occupancy 67,494 39,970
Salaries and benefits 600,209 172,125
Stock-based compensation 290,949 -
Telecom & wireless connection fees 122,177 29,746
Travel 40,591 15,529
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3,464,395 1,672,557
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Loss from Continuing Operations (826,904) (95,433)
Results from Discontinued Operations 8,717 (39,500)
Non Controlling Interest (4,237) 10,473
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Net Loss and Comprehensive Loss for the Period (822,424) (124,460)
Deficit, beginning of period (5,925,141) (4,583,892)
Charges on share purchase warrant modification (42,064) -
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Deficit, end of period (6,789,629) (4,708,352)
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Loss per Share - basic and fully diluted $ (0.08) $ (0.26)
Weighted average number of common shares
outstanding 10,603,511 8,523,159
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VERSAPAY CORPORATION (formerly JG Capital Corp)
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UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOW
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March 31, 2010
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3 months ended March 31
2010 2009
$ $
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Cash Provided By (Used In) Operating
Activities
Net loss for the period (822,424) (124,460)
Items not affecting cash:
- amortization capital assets 25,739 10,534
- cancellation of JG Capital loan interest 14,271 -
- stock-based compensation 290,949 -
- non-controlling interest 4,237 (10,473)
- discontinued operations (8,717) 13,977
Change in non-cash working capital items
receivables (104,732) 233,474
prepaid expenses - (3,391)
accounts payable and accrued liabilities (626,756) 118,740
deferred revenue (1,209) 1,417
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(1,228,642) 239,818
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Cash Provided by (Used In) Financing Activities
issuance of common shares, net of issuance
costs 2,537,131 6,092
capital lease payments (11,730) (2,729)
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2,525,401 3,363
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Cash Used in Investing Activities
acquisition of equipment (63,255) (5,015)
developed technology (34,760)
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(98,015) (5,015)
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Increase in Cash 1,198,745 238,166
Cash, beginning of period 206,763 325,175
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Cash, end of period 1,405,508 563,341
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Supplementary Cash Flow Information:
Interest paid - 13,251
%SEDAR: 00029483E
For further information: Bill McGill, Acting CEO, VersaPay Corporation, [email protected], (647) 258-9378; Kristen Dickson, Investor Relations, The Equicom Group, [email protected], (416) 815-0700 ext. 273
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