Ipayment (NASDAQ:IPMT)
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iPayment, Inc. (NASDAQ:IPMT) today announced financial
results for the fourth quarter and twelve months ended December 31,
2005. Revenues grew 80.4% to $183,035,000 for the quarter from
$101,441,000 for the fourth quarter of 2004. Net income was
$10,657,000 for the fourth quarter of 2005, up 39.9% from $7,617,000
for the fourth quarter of 2004. Earnings per diluted share increased
38.1% to $0.58 for the fourth quarter of 2005 from $0.42 for the
fourth quarter of 2004. Results for the fourth quarter of 2005
included other expense, net, of $512,000, principally related to the
previously announced work of the Special Committee of the Board of
Directors.
The Company's revenue growth for the quarter reflected an increase
in charge volume to $6.5 billion from $3.5 billion for the fourth
quarter of 2004. At December 31, 2005, iPayment, Inc. and its
wholly-owned subsidiaries had 404 employees. Consistent with the past
two quarters, the Company will not provide financial guidance or hold
a conference call to discuss its fourth quarter results.
This press release contains forward-looking statements about
iPayment, Inc. within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, and
pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. For example, statements in the future
tense, words such as "anticipates," "estimates," "expects," "intends,"
"plans," "believes," and words and terms of similar substance used in
connection with any discussion of future results, performance or
achievements identify such forward-looking statements. Those
forward-looking statements involve risks and uncertainties and are not
guarantees of future results, performance or achievements, and actual
results, performance or achievements could differ materially from the
Company's current expectations as a result of numerous factors,
including but not limited to the following: acquisitions; liability
for merchant chargebacks; restrictive covenants governing the
Company's indebtedness; actions taken by its bank sponsors; migration
of merchant portfolios to new bank sponsors; the Company's reliance on
card payment processors and on independent sales organizations;
changes in interchange fees; risks associated with the unauthorized
disclosure of data; imposition of taxes on Internet transactions;
actions by the Company's competitors; and risks related to the
integration of companies and merchant portfolios the Company has
acquired or may acquire. These and other risks are more fully
disclosed in the Company's filings with the U.S. Securities and
Exchange Commission, including without limitation the Company's Annual
Report on Form 10-K for 2005. The Company undertakes no obligation to
revise or update any forward-looking statements in order to reflect
events or circumstances that may arise after the date of this release.
iPayment, Inc. is a provider of credit and debit card-based
payment processing services to approximately 140,000 small merchants
across the United States. iPayment's payment processing services
enable merchants to process both traditional card-present, or "swipe,"
transactions, as well as card-not-present transactions, including
transactions over the internet or by mail, fax or telephone.
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iPayment, Inc.
Financial Highlights
(in thousands, except per share data)
Consolidated Income Three months ended Twelve months ended
Statements December 31, December 31,
---------------------------------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues $183,035 $101,441 $702,712 $364,182
Interchange 104,118 49,609 407,736 176,562
Other costs of
services 54,729 36,227 213,138 135,316
Selling, general
and administrative 4,721 3,736 18,062 12,437
------------ ------------ ------------ ------------
Total operating
expenses 163,568 89,572 638,936 324,315
------------ ------------ ------------ ------------
Income from
operations 19,467 11,869 63,776 39,867
Other expense
(income)
Interest expense 1,947 725 8,657 2,707
Other expense
(income) 512 55 1,423 (279)
------------ ------------ ------------ ------------
Income before
income taxes 17,008 11,089 53,696 37,439
Income tax
provision 6,607 3,472 20,915 12,704
Minority interest 256 - 606 -
------------ ------------ ------------ ------------
Net income $ 10,657 $ 7,617 $ 33,387 $ 24,735
============ ============ ============ ============
Earnings per share
Basic $ 0.61 $ 0.46 $ 1.96 $ 1.50
Diluted $ 0.58 $ 0.42 $ 1.84 $ 1.39
Weighted average
shares outstanding
Basic 17,569 16,628 17,049 16,545
Diluted 18,289 18,231 18,259 18,137
Percentages of
Revenues
Interchange 56.9% 48.9% 58.0% 48.5%
Other costs of
services 29.9% 35.7% 30.3% 37.2%
Selling, general
and administrative 2.6% 3.7% 2.6% 3.4%
Income from
operations 10.6% 11.7% 9.1% 10.9%
Effective tax rate 38.8% 31.3% 39.0% 33.9%
iPayment, Inc.
Consolidated Balance Sheets
(in thousands)
December 31, December 31,
Assets 2005 2004
------------- -------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 1,023 $ 888
Accounts receivable, net 22,718 17,031
Prepaid expenses and other 2,549 6,765
------------- -------------
Total current assets 26,290 24,684
Restricted cash 3,090 3,248
Property and equipment, net 2,907 2,749
Intangible assets, net 192,343 219,331
Goodwill, net 105,178 79,360
Other assets 11,173 6,876
------------- -------------
Total assets $340,981 $336,248
============= =============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 6,394 $ 2,418
Accrued liabilities and other 24,575 11,377
------------- -------------
Total current liabilities 30,969 13,795
Long-term debt 100,228 168,437
Minority interest in equity of subsidiary 431 -
------------- -------------
Total liabilities 131,628 182,232
------------- -------------
Stockholders' equity:
Common stock 152,457 130,507
Retained earnings 56,896 23,509
------------- -------------
Total stockholders' equity 209,353 154,016
------------- -------------
Total liabilities and stockholders' equity $340,981 $336,248
============= =============
iPayment, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Twelve months ended
December 31,
-------------------------
2005 2004
------------ ------------
Cash flows from operating activities: (Unaudited) (Unaudited)
Net income $33,387 $24,735
Adjustments to reconcile net income to net
cash provided by
operating activities:
Depreciation and amortization 40,657 20,143
Noncash interest expense 987 681
Changes in assets and liabilities:
Accounts receivable (5,687) (3,923)
Prepaid expenses and other current assets 4,260 (4,137)
Other assets (5,757) (2,922)
Accounts payable 3,961 (625)
Accrued liabilities and other 4,420 4,499
------------ ------------
Net cash provided by operating activities 76,228 38,451
------------ ------------
Cash flows from investing activities:
Changes in restricted cash 209 7,893
Expenditures for property and equipment (1,133) (897)
Acquisitions of businesses, portfolios and
other intangibles (24,148) (148,572)
Deferred payments for acquisition of
businesses (990) (2,000)
------------ ------------
Net cash used in investing activities (26,062) (143,576)
------------ ------------
Cash flows from financing activities:
Net repayments on line of credit (52,500) 107,500
Repayments of debt and capital lease
obligations (721) (4,526)
Proceeds from issuance of common stock 3,190 2,306
------------ ------------
Net cash provided by (used in) financing
activities (50,031) 105,280
------------ ------------
Net increase in cash 135 155
Cash and cash equivalents at beginning of
period 888 733
------------ ------------
Cash and cash equivalents at end of period $ 1,023 $ 888
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