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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Official Payments Holdings, Inc. (MM) | NASDAQ:OPAY | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.34 | 0 | 01:00:00 |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
|
|
94-3145844
|
(State or other jurisdiction
of incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
o
|
Accelerated filer
x
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
(Do not check if a smaller reporting company)
|
|
1
|
|||
|
1
|
||
|
|
1
|
|
|
|
2
|
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
|
16
|
||
|
28
|
||
|
28
|
||
29
|
|||
|
29
|
||
|
29
|
||
|
34
|
||
34
|
|||
35
|
(in thousands)
|
June 30, 2013
|
September 30, 2012
|
||||||
|
(unaudited)
|
|
||||||
ASSETS:
|
|
|
||||||
Current assets:
|
|
|
||||||
Cash and cash equivalents
|
$
|
40,298
|
$
|
39,071
|
||||
Accounts receivable, net
|
3,353
|
5,304
|
||||||
Settlements receivable,
|
20,337
|
15,291
|
||||||
Prepaid expenses and other current assets
|
1,608
|
1,692
|
||||||
Total current assets
|
65,596
|
61,358
|
||||||
|
||||||||
Property, equipment and software, net
|
19,456
|
17,368
|
||||||
Goodwill
|
17,673
|
17,582
|
||||||
Other intangible assets, net
|
631
|
1,107
|
||||||
Other assets
|
706
|
509
|
||||||
Total assets
|
$
|
104,062
|
$
|
97,924
|
||||
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY:
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
114
|
$
|
74
|
||||
Settlements payable
|
23,911
|
17,019
|
||||||
Accrued compensation liabilities
|
3,070
|
6,373
|
||||||
Accrued discount fees
|
6,671
|
5,616
|
||||||
Other accrued liabilities
|
3,084
|
2,201
|
||||||
Deferred income
|
263
|
284
|
||||||
Total current liabilities
|
37,113
|
31,567
|
||||||
Other liabilities:
|
||||||||
Deferred rent
|
3
|
67
|
||||||
Other liabilities
|
884
|
1,103
|
||||||
Total other liabilities
|
887
|
1,170
|
||||||
Total liabilities
|
38,000
|
32,737
|
||||||
|
||||||||
Contingencies and commitments
|
||||||||
|
||||||||
Shareholders' equity:
|
||||||||
Preferred stock, no par value; authorized shares: 4,579;
no shares issued and outstanding
|
—
|
—
|
||||||
Common stock $0.01 par value, and paid-in capital; shares authorized: 44,260; shares issued: 20,905 and 20,817; shares outstanding: 16,730 and 16,642
|
196,689
|
195,126
|
||||||
Treasury stock—at cost, 4,175 shares
|
(31,383
|
)
|
(31,383
|
)
|
||||
Accumulated deficit
|
(99,244
|
)
|
(98,556
|
)
|
||||
Total shareholders' equity
|
66,062
|
65,187
|
||||||
Total liabilities and shareholders' equity
|
$
|
104,062
|
$
|
97,924
|
|
Three months ended
June 30,
|
Nine months ended
June 30,
|
||||||||||||||
(in thousands, except per share data)
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Revenues
|
$
|
45,792
|
$
|
39,163
|
$
|
111,922
|
$
|
106,820
|
||||||||
|
||||||||||||||||
Costs and expenses:
|
||||||||||||||||
Direct costs
|
33,946
|
28,922
|
79,477
|
75,697
|
||||||||||||
General and administrative
|
7,044
|
6,601
|
20,851
|
23,096
|
||||||||||||
Selling and marketing
|
2,055
|
2,635
|
6,309
|
6,296
|
||||||||||||
Depreciation and amortization
|
2,106
|
1,851
|
5,829
|
5,620
|
||||||||||||
Total costs and expenses
|
45,151
|
40,009
|
112,466
|
110,709
|
||||||||||||
Income (loss) from continuing operations before other expense and income taxes
|
641
|
(846
|
)
|
(544
|
)
|
(3,889
|
)
|
|||||||||
|
||||||||||||||||
Other expense :
|
||||||||||||||||
Interest expense, net
|
1
|
1
|
3
|
—
|
||||||||||||
Total other expense
|
1
|
1
|
3
|
—
|
||||||||||||
|
||||||||||||||||
Income (loss) from continuing operations before income taxes
|
640
|
(847
|
)
|
(547
|
)
|
(3,889
|
)
|
|||||||||
Income tax provision
|
5
|
5
|
7
|
5
|
||||||||||||
|
||||||||||||||||
Income (loss) from continuing operations
|
635
|
(852
|
)
|
(554
|
)
|
(3,894
|
)
|
|||||||||
Loss from discontinued operations, net
|
(88
|
)
|
(1
|
)
|
(134
|
)
|
(13
|
)
|
||||||||
|
||||||||||||||||
Net income (loss)
|
$
|
547
|
$
|
(853
|
)
|
$
|
(688
|
)
|
$
|
(3,907
|
)
|
|||||
|
||||||||||||||||
Earnings (loss) per share—Basic:
|
||||||||||||||||
From continuing operations
|
$
|
0.04
|
$
|
(0.05
|
)
|
$
|
(0.03
|
)
|
$
|
(0.23
|
)
|
|||||
From discontinued operations
|
(0.01
|
)
|
—
|
(0.01
|
)
|
—
|
||||||||||
Earnings (loss) per share—Basic
|
$
|
0.03
|
$
|
(0.05
|
)
|
$
|
(0.04
|
)
|
$
|
(0.23
|
)
|
|||||
Earnings (loss) per share—Diluted:
|
||||||||||||||||
From continuing operations
|
$
|
0.04
|
$
|
(0.05
|
)
|
$
|
(0.03
|
)
|
$
|
(0.23
|
)
|
|||||
From discontinued operations
|
(0.01
|
)
|
—
|
(0.01
|
)
|
—
|
||||||||||
Earnings (loss) per share—Diluted
|
$
|
0.03
|
$
|
(0.05
|
)
|
$
|
(0.04
|
)
|
$
|
(0.23
|
)
|
|||||
|
||||||||||||||||
Weighted average common shares used in computing per share amounts:
|
||||||||||||||||
Basic
|
16,727
|
16,642
|
16,697
|
16,642
|
||||||||||||
Diluted
|
16,912
|
16,642
|
16,697
|
16,642
|
|
Nine months ended
June 30,
|
|||||||
(in thousands)
|
2013
|
2012
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
||||||
Net loss
|
$
|
(688
|
)
|
$
|
(3,907
|
)
|
||
Less: Loss from discontinued operations, net
|
(134
|
)
|
(13
|
)
|
||||
Loss from continuing operations, net
|
(554
|
)
|
(3,894
|
)
|
||||
Non-cash items included in net loss from continuing operations:
|
||||||||
Restructuring costs
|
256
|
803
|
||||||
Depreciation and amortization
|
5,829
|
5,620
|
||||||
Provision for doubtful accounts
|
—
|
26
|
||||||
Deferred rent
|
(34
|
)
|
(3
|
)
|
||||
Share-based compensation
|
1,121
|
1,008
|
||||||
Net effect of changes in assets and liabilities:
|
||||||||
Accounts receivable
|
1,951
|
91
|
||||||
Settlement processing assets and obligations, net
|
1,846
|
(1,023
|
)
|
|||||
Prepaid expenses and other assets
|
294
|
524
|
||||||
Accounts payable and accrued liabilities
|
(1,932
|
)
|
1,526
|
|||||
Other long term liabilities
|
(283
|
)
|
161
|
|||||
Deferred income
|
(21
|
)
|
(195
|
)
|
||||
Cash provided by operating activities from continuing operations
|
8,473
|
4,644
|
||||||
Cash used in operating activities from discontinued operations
|
(134
|
)
|
(13
|
)
|
||||
Cash provided by operating activities
|
8,339
|
4,631
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Capitalized internally developed software
|
(6,236
|
)
|
(1,911
|
)
|
||||
Purchase of equipment and software
|
(1,213
|
)
|
(1,610
|
)
|
||||
Earn-out payments - ChoicePay
|
(91
|
)
|
(91
|
)
|
||||
Cash used in investing activities
|
(7,540
|
)
|
(3,612
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net proceeds from issuance of common stock
|
442
|
—
|
||||||
Capital lease obligations and other financing arrangements
|
(14
|
)
|
(26
|
)
|
||||
Cash provided by (used in) financing activities
|
428
|
(26
|
)
|
|||||
Net increase in cash and cash equivalents
|
1,227
|
993
|
||||||
Cash and cash equivalents at beginning of period
|
39,071
|
39,760
|
||||||
Cash and cash equivalents at end of period
|
$
|
40,298
|
$
|
40,753
|
|
Nine months ended
June 30,
|
|||||||
(in thousands)
|
2013
|
2012
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
||||||
Cash paid during the period for:
|
|
|
||||||
Interest
|
$
|
—
|
$
|
2
|
||||
Income taxes paid, net
|
$
|
42
|
$
|
1
|
·
|
Federal, State and Local governments—which includes federal and state income and business tax payments, and local real property tax payments;
|
·
|
Higher Education—which consists of payments to post-secondary educational institutions;
|
·
|
Utility—which includes payments to private and public utilities;
|
·
|
Charitable organizations; and
|
·
|
Other—which includes rent, insurance, and K-12 education meal payments and fee payments.
|
Level 1— | Quoted prices in active markets for identical assets or liabilities. |
Level 2— | Inputs other than quoted prices in active markets, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
Level 3— | Unobservable inputs, for which there is little or no market data for the assets or liabilities. |
(in thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Cash equivalents:
|
|
|
|
|
||||||||||||
Money market
|
$
|
8,261
|
—
|
—
|
$
|
8,261
|
(in thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Cash equivalents:
|
|
|
|
|
||||||||||||
Money market
|
$
|
8,256
|
—
|
—
|
$
|
8,256
|
|
Nine months ended June 30,
|
|||||||
(in thousands, except percentages)
|
2013
|
2012
|
||||||
Revenue
|
$
|
25,109
|
$
|
17,893
|
||||
Percentage of Payment Solutions revenue
|
22.5
|
%
|
16.9
|
%
|
(in thousands)
|
Payment Solutions
|
VSA
|
Discontinued Operations
|
Total
|
||||||||||||
Goodwill
|
$
|
17,582
|
$
|
—
|
$
|
23,041
|
$
|
40,623
|
||||||||
Accumulated impairment loss
|
—
|
—
|
(23,041
|
)
|
(23,041
|
)
|
||||||||||
Balance at September 30, 2012
|
17,582
|
—
|
—
|
17,582
|
||||||||||||
ChoicePay, Inc. earn-out payments
|
91
|
—
|
—
|
91
|
||||||||||||
Goodwill
|
17,673
|
—
|
23,041
|
40,714
|
||||||||||||
Accumulated impairment loss
|
—
|
—
|
(23,041
|
)
|
(23,041
|
)
|
||||||||||
Balance at June 30, 2013
|
$
|
17,673
|
$
|
—
|
$
|
—
|
$
|
17,673
|
June 30, 2013
|
September 30, 2012
|
||||||||||||||||||||||||
(in thousands)
|
Amortization period
|
Gross
|
Accumulated amortization
|
Net
|
Gross
|
Accumulated amortization
|
Net
|
||||||||||||||||||
Client relationships
|
8-15 years
|
$
|
26,059
|
$
|
(25,531
|
)
|
$
|
528
|
$
|
26,059
|
$
|
(25,362
|
)
|
$
|
697
|
||||||||||
Technology and research and development
|
5 years
|
1,842
|
(1,753
|
)
|
89
|
1,842
|
(1,488
|
)
|
354
|
||||||||||||||||
Trademarks
|
6-10 years
|
3,463
|
(3,449
|
)
|
14
|
3,463
|
(3,407
|
)
|
56
|
||||||||||||||||
Other intangible assets, net
|
|
$
|
31,364
|
$
|
(30,733
|
)
|
$
|
631
|
$
|
31,364
|
$
|
(30,257
|
)
|
$
|
1,107
|
Three months ended June 30,
|
Nine months ended June 30,
|
|||||||||||||||
(in thousands)
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Current income tax provision:
|
||||||||||||||||
State
|
$
|
5
|
$
|
5
|
$
|
7
|
$
|
5
|
||||||||
Federal
|
—
|
—
|
—
|
—
|
||||||||||||
Total provision for income taxes
|
$
|
5
|
$
|
5
|
$
|
7
|
$
|
5
|
(in thousands)
|
Severance
|
Relocation
|
Facilities closures
|
Total
|
||||||||||||
Balance at September 30, 2012
|
$
|
—
|
$
|
—
|
$
|
1,219
|
$
|
1,219
|
||||||||
Cash payments
|
—
|
—
|
(264
|
)
|
(264
|
)
|
||||||||||
Additions
|
—
|
—
|
292
|
292
|
||||||||||||
|
||||||||||||||||
Balance at June 30, 2013
|
$
|
—
|
$
|
—
|
$
|
1,247
|
$
|
1,247
|
(in thousands)
|
Payment Solutions
|
VSA
|
Total
|
|||||||||
Three months ended June 30, 2013
|
||||||||||||
Revenues
|
$
|
45,618
|
$
|
174
|
$
|
45,792
|
||||||
Costs and expenses:
|
||||||||||||
Direct costs
|
33,905
|
41
|
33,946
|
|||||||||
General and administrative
|
7,035
|
9
|
7,044
|
|||||||||
Selling and marketing
|
2,055
|
—
|
2,055
|
|||||||||
Depreciation and amortization
|
2,106
|
—
|
2,106
|
|||||||||
Total costs and expenses
|
45,101
|
50
|
45,151
|
|||||||||
Income from continuing operations before other expense and income taxes
|
517
|
124
|
641
|
|||||||||
Other expense:
|
||||||||||||
Interest expense, net
|
1
|
—
|
1
|
|||||||||
Total other expense
|
1
|
—
|
1
|
|||||||||
Income from continuing operations before taxes
|
516
|
124
|
640
|
|||||||||
Income tax provision
|
5
|
—
|
5
|
|||||||||
Income from continuing operations
|
$
|
511
|
$
|
124
|
$
|
635
|
(in thousands)
|
Payment Solutions
|
VSA
|
Total
|
|||||||||
Three months ended June 30, 2012
|
||||||||||||
Revenues
|
$
|
38,906
|
$
|
257
|
$
|
39,163
|
||||||
Costs and expenses:
|
||||||||||||
Direct costs
|
28,776
|
146
|
28,922
|
|||||||||
General and administrative
|
6,584
|
17
|
6,601
|
|||||||||
Selling and marketing
|
2,635
|
—
|
2,635
|
|||||||||
Depreciation and amortization
|
1,851
|
—
|
1,851
|
|||||||||
Total costs and expenses
|
39,846
|
163
|
40,009
|
|||||||||
(Loss) income from continuing operations before other expense and income taxes
|
(940
|
)
|
94
|
(846
|
)
|
|||||||
Other expense:
|
||||||||||||
Interest expense, net
|
1
|
—
|
1
|
|||||||||
Total other expense
|
1
|
—
|
1
|
|||||||||
(Loss) income from continuing operations before taxes
|
(941
|
)
|
94
|
(847
|
)
|
|||||||
Income tax provision
|
5
|
—
|
5
|
|||||||||
(Loss) income from continuing operations
|
$
|
(946
|
)
|
$
|
94
|
$
|
(852
|
)
|
(in thousands)
|
Payment Solutions
|
VSA
|
Total
|
|||||||||
Nine months ended June 30, 2013
|
||||||||||||
Revenues
|
$
|
111,435
|
$
|
487
|
$
|
111,922
|
||||||
Costs and expenses:
|
||||||||||||
Direct costs
|
79,338
|
139
|
79,477
|
|||||||||
General and administrative
|
20,822
|
29
|
20,851
|
|||||||||
Selling and marketing
|
6,309
|
—
|
6,309
|
|||||||||
Depreciation and amortization
|
5,829
|
—
|
5,829
|
|||||||||
Total costs and expenses
|
112,298
|
168
|
112,466
|
|||||||||
(Loss) income from continuing operations before other expense and income taxes
|
(863
|
)
|
319
|
(544
|
)
|
|||||||
Other expense:
|
||||||||||||
Interest expense, net
|
3
|
—
|
3
|
|||||||||
Total other expense
|
3
|
—
|
3
|
|||||||||
(Loss) income from continuing operations before taxes
|
(866
|
)
|
319
|
(547
|
)
|
|||||||
Income tax provision
|
7
|
—
|
7
|
|||||||||
(Loss) income from continuing operations
|
$
|
(873
|
)
|
$
|
319
|
$
|
(554
|
)
|
(in thousands)
|
Payment Solutions
|
VSA
|
Total
|
|||||||||
Nine months ended June 30, 2012
|
||||||||||||
Revenues
|
$
|
105,678
|
$
|
1,142
|
$
|
106,820
|
||||||
Costs and expenses:
|
||||||||||||
Direct costs
|
75,099
|
598
|
75,697
|
|||||||||
General and administrative
|
22,906
|
190
|
23,096
|
|||||||||
Selling and marketing
|
6,296
|
—
|
6,296
|
|||||||||
Depreciation and amortization
|
5,620
|
—
|
5,620
|
|||||||||
Total costs and expenses
|
109,921
|
788
|
110,709
|
|||||||||
(Loss) income from continuing operations before other expense and income taxes
|
(4,243
|
)
|
354
|
(3,889
|
)
|
|||||||
Other expense:
|
||||||||||||
Interest expense, net
|
—
|
—
|
—
|
|||||||||
Total other expense
|
—
|
—
|
—
|
|||||||||
(Loss) income from continuing operations before taxes
|
(4,243
|
)
|
354
|
(3,889
|
)
|
|||||||
Income tax provision
|
5
|
—
|
5
|
|||||||||
(Loss) income from continuing operations
|
$
|
(4,248
|
)
|
$
|
354
|
$
|
(3,894
|
)
|
(in thousands)
|
June 30, 2013
|
September 30, 2012
|
||||||
Continuing operations:
|
|
|
||||||
Payment Solutions
|
$
|
103,677
|
$
|
97,756
|
||||
VSA
|
385
|
168
|
||||||
Total assets
|
$
|
104,062
|
$
|
97,924
|
|
Three months ended
June 30,
|
Nine months ended
June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Weighted-average assumptions used in Black-Scholes model:
|
|
|
|
|
||||||||||||
Expected period that options will be outstanding
(in years)
|
5.00
|
5.00
|
5.00
|
5.00
|
||||||||||||
Interest rate
(based on U.S. Treasury yields at time of grant)
|
0.75
|
%
|
0.78
|
%
|
0.64
|
%
|
0.92
|
%
|
||||||||
Volatility
|
46.35
|
%
|
48.71
|
%
|
48.03
|
%
|
48.76
|
%
|
||||||||
Dividend yield
|
—
|
—
|
—
|
—
|
||||||||||||
Weighted-average fair value of options granted
|
$
|
2.31
|
$
|
1.98
|
$
|
2.20
|
$
|
1.56
|
||||||||
Weighted-average intrinsic value of options exercised
(in thousands)
|
$
|
8
|
$
|
—
|
$
|
54
|
$
|
—
|
|
|
Weighted-average
|
|
||||||||||
(in thousands, except per share data)
|
Shares
under option
|
Exercise
price
|
Remaining
contractual term
|
Aggregate
intrinsic value
|
|||||||||
Options outstanding at September 30, 2012
|
3,160
|
$
|
5.72
|
|
|
||||||||
Granted
|
375
|
5.27
|
|
|
|||||||||
Exercised
|
(89
|
)
|
4.99
|
|
$
|
54
|
|||||||
Forfeitures or expirations
|
(240
|
)
|
8.19
|
|
|||||||||
Options outstanding at June 30, 2013
|
3,206
|
$
|
5.72
|
7.10 years
|
$
|
5,032
|
|||||||
Options vested and expected to vest at June 30, 2013
|
2,779
|
$
|
5.83
|
7.48 years
|
$
|
4,228
|
|||||||
Options exercisable at June 30, 2013
|
1,803
|
$
|
6.36
|
6.18 years
|
$
|
2,284
|
|
Total restricted stock units awarded
|
Vesting date
|
2013 annual meeting
|
54,000
|
April 5, 2014
|
(in thousands)
|
2012 annual meeting
|
2013 annual meeting
|
||||||
Expense recognized for the quarter ended June 30, 2013
|
$
|
9
|
$
|
90
|
||||
Expense recognized through June 30, 2013
|
351
|
90
|
||||||
Expense to be recognized through vesting date
|
351
|
(a)
|
(b)
|
a.
|
Paid in April 2013.
|
b.
|
Liability Awards are revalued at the end of every quarter based on the closing price of our stock on the last day of the quarter. We are unable to estimate the expense expected to be recognized for these awards.
|
Three months ended June 30,
|
Nine months ended June 30,
|
|||||||||||||||
(in thousands, except per share data)
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Numerator:
Earnings (loss) from:
|
||||||||||||||||
Continuing operations, net of income taxes
|
$
|
635
|
$
|
(852
|
)
|
$
|
(554
|
)
|
$
|
(3,894
|
)
|
|||||
Discontinued operations, net of income taxes
|
(88
|
)
|
(1
|
)
|
(134
|
)
|
(13
|
)
|
||||||||
Net earnings (loss)
|
$
|
547
|
$
|
(853
|
)
|
$
|
(688
|
)
|
$
|
(3,907
|
)
|
|||||
Denominator:
|
||||||||||||||||
Basic weighted-average common shares outstanding
|
16,727
|
16,642
|
16,697
|
16,642
|
||||||||||||
Effects of dilutive common stock options
|
185
|
—
|
—
|
—
|
||||||||||||
Diluted weighted-average shares
|
16,912
|
16,642
|
16,697
|
16,642
|
||||||||||||
Earnings (loss) per basic share
|
||||||||||||||||
From continuing operations
|
$
|
0.04
|
$
|
(0.05
|
)
|
$
|
(0.03
|
)
|
$
|
(0.23
|
)
|
|||||
From discontinued operations
|
(0.01
|
)
|
—
|
(0.01
|
)
|
—
|
||||||||||
Earnings (loss) per basic share
|
$
|
0.03
|
$
|
(0.05
|
)
|
$
|
(0.04
|
)
|
$
|
(0.23
|
)
|
|||||
Earnings (loss) per diluted share
|
||||||||||||||||
From continuing operations
|
$
|
0.04
|
$
|
(0.05
|
)
|
$
|
(0.03
|
)
|
$
|
(0.23
|
)
|
|||||
From discontinued operation
|
(0.01
|
)
|
—
|
(0.01
|
)
|
—
|
||||||||||
Earnings (loss) per diluted share
|
$
|
0.03
|
$
|
(0.05
|
)
|
$
|
(0.04
|
)
|
$
|
(0.23
|
)
|
Three months ended June 30,
|
Nine months ended June 30,
|
|||
(in thousands)
|
2013
|
2012
|
2013
|
2012
|
Weighted-average options excluded from computation of diluted loss per share
|
599
|
2,845
|
746
|
2,887
|
Three months ended June 30,
|
Nine months ended June 30,
|
|||
(in thousands)
|
2013
|
2012
|
2013
|
2012
|
Common stock equivalents excluded from computation of diluted loss per share
|
—
|
—
|
102
|
—
|
Three months ended
|
Nine months ended
|
|||||||||||||||
|
June 30, 2013
|
June 30, 2013
|
||||||||||||||
(in thousands, except per share)
|
Net (loss) income
|
(Loss) earnings per share
|
Net (loss) income
|
(Loss) earnings per share
|
||||||||||||
Continuing Operations:
|
|
|
|
|
||||||||||||
Payment Solutions
|
$
|
511
|
$
|
0.03
|
$
|
(873
|
)
|
$
|
(0.05
|
)
|
||||||
VSA
|
124
|
0.01
|
319
|
0.02
|
||||||||||||
Total Continuing Operations
|
$
|
635
|
$
|
0.04
|
$
|
(554
|
)
|
$
|
(0.03
|
)
|
||||||
|
||||||||||||||||
Total Discontinued Operations
|
$
|
(88
|
)
|
$
|
(0.01
|
)
|
$
|
(134
|
)
|
$
|
(0.01
|
)
|
||||
|
||||||||||||||||
Net loss
|
$
|
547
|
$
|
0.03
|
$
|
(688
|
)
|
$
|
(0.04
|
)
|
Three months ended
|
Variance
|
|||||||||||||||
June 30,
|
2013 vs. 2012
|
|||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$
|
|
%
|
|||||||||||
Revenues
|
$
|
45,792
|
$
|
39,163
|
$
|
6,629
|
16.9
|
%
|
||||||||
Costs and expenses
|
45,151
|
40,009
|
5,142
|
12.9
|
%
|
|||||||||||
Loss from continuing operations before other income and income taxes
|
641
|
(846
|
)
|
1,487
|
(175.8
|
)%
|
||||||||||
Other expense
|
1
|
1
|
—
|
0.0
|
%
|
|||||||||||
Income (loss) from continuing operations before income taxes
|
640
|
(847
|
)
|
1,487
|
(175.6
|
)%
|
||||||||||
Income tax provision
|
5
|
5
|
—
|
0.0
|
%
|
|||||||||||
Income (loss) from continuing operations
|
635
|
(852
|
)
|
1,487
|
(174.5
|
)%
|
||||||||||
Income (loss) from discontinued operations, net
|
(88
|
)
|
(1
|
)
|
(87
|
)
|
8,700.0
|
%
|
||||||||
Net income (loss)
|
$
|
547
|
$
|
(853
|
)
|
$
|
1,400
|
(164.1
|
)%
|
|||||||
Nine months ended
|
Variance
|
|||||||||||||||
June 30,
|
2013 vs. 2012
|
|||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$
|
|
%
|
|||||||||||
Revenues
|
$
|
111,922
|
$
|
106,820
|
$
|
5,102
|
4.8
|
%
|
||||||||
Costs and expenses
|
112,466
|
110,709
|
1,757
|
1.6
|
%
|
|||||||||||
Loss from continuing operations before other income and income taxes
|
(544
|
)
|
(3,889
|
)
|
3,345
|
(86.0
|
)%
|
|||||||||
Other (expense) income
|
(3
|
)
|
—
|
(3
|
)
|
NM
|
||||||||||
Loss from continuing operations before income taxes
|
(547
|
)
|
(3,889
|
)
|
3,342
|
(85.9
|
)%
|
|||||||||
Income tax benefit
|
7
|
5
|
2
|
40.0
|
%
|
|||||||||||
Loss from continuing operations
|
(554
|
)
|
(3,894
|
)
|
3,340
|
(85.8
|
)%
|
|||||||||
Loss from discontinued operations, net
|
(134
|
)
|
(13
|
)
|
(121
|
)
|
930.8
|
%
|
||||||||
Net loss
|
$
|
(688
|
)
|
$
|
(3,907
|
)
|
$
|
3,219
|
(82.4
|
)%
|
||||||
1
NM = not meaningful
|
|
Three months ended
|
|
||||||||||||||
|
June 30,
|
Variance
|
||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$
|
|
%
|
|||||||||||
Revenues
|
|
|
|
|||||||||||||
Payment Solutions
|
$
|
45,618
|
$
|
38,906
|
$
|
6,712
|
17.3
|
%
|
||||||||
VSA
|
174
|
257
|
(83
|
)
|
(32.3
|
)%
|
||||||||||
Total
|
$
|
45,792
|
$
|
39,163
|
$
|
6,629
|
16.9
|
%
|
||||||||
|
Nine months ended
|
|||||||||||||||
|
June 30,
|
Variance
|
||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$ |
|
%
|
|||||||||||
Revenues
|
||||||||||||||||
Payment Solutions
|
$
|
111,435
|
$
|
105,678
|
$
|
5,757
|
5.4
|
%
|
||||||||
VSA
|
487
|
1,142
|
(655
|
)
|
(57.4
|
)%
|
||||||||||
Total
|
$
|
111,922
|
$
|
106,820
|
$
|
5,102
|
4.8
|
%
|
|
Three months ended
|
|
||||||||||||||
|
June 30,
|
Variance
|
||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$
|
|
%
|
|||||||||||
Direct costs
|
|
|
|
|||||||||||||
Payment Solutions:
|
|
|
|
|||||||||||||
Discount fees
|
$
|
32,376
|
$
|
27,134
|
$
|
5,242
|
19.3
|
%
|
||||||||
Other costs
|
1,529
|
1,642
|
(113
|
)
|
(6.9
|
)%
|
||||||||||
Total Payment Solutions
|
33,905
|
28,776
|
5,129
|
17.8
|
%
|
|||||||||||
VSA
|
41
|
146
|
(105
|
)
|
(71.9
|
)%
|
||||||||||
Total
|
$
|
33,946
|
$
|
28,922
|
$
|
5,024
|
17.4
|
%
|
||||||||
Nine months ended
|
||||||||||||||||
June 30,
|
Variance
|
|||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$ |
|
%
|
|||||||||||
Direct costs
|
||||||||||||||||
Payment Solutions:
|
||||||||||||||||
Discount fees
|
$
|
74,802
|
$
|
70,415
|
$
|
4,387
|
6.2
|
%
|
||||||||
Other costs
|
4,536
|
4,684
|
(148
|
)
|
(3.2
|
)%
|
||||||||||
Total Payment Solutions
|
79,338
|
75,099
|
4,239
|
5.6
|
%
|
|||||||||||
VSA
|
139
|
598
|
(459
|
)
|
(76.8
|
)%
|
||||||||||
Total
|
$
|
79,477
|
$
|
75,697
|
$
|
3,780
|
5.0
|
%
|
|
Three months ended
|
|
||||||||||||||
|
June 30,
|
Variance
|
||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$
|
|
%
|
|||||||||||
General and administrative
|
|
|
|
|||||||||||||
Payment Solutions
|
$
|
7,035
|
$
|
6,584
|
$
|
451
|
6.8
|
%
|
||||||||
VSA
|
9
|
17
|
(8
|
)
|
(47.1
|
)%
|
||||||||||
Total
|
$
|
7,044
|
$
|
6,601
|
$
|
443
|
6.7
|
%
|
||||||||
|
Nine months ended
|
|||||||||||||||
|
June 30,
|
Variance
|
||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$ |
|
%
|
|||||||||||
General and administrative
|
||||||||||||||||
Payment Solutions
|
$
|
20,822
|
$
|
22,906
|
$
|
(2,084
|
)
|
(9.1
|
)%
|
|||||||
VSA
|
29
|
190
|
(161
|
)
|
(84.7
|
)%
|
||||||||||
Total
|
$
|
20,851
|
$
|
23,096
|
$
|
(2,245
|
)
|
(9.7
|
)%
|
|
Three months ended
|
|
||||||||||||||
|
June 30,
|
Variance
|
||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$
|
|
%
|
|||||||||||
Selling and marketing
|
|
|
|
|||||||||||||
Payment Solutions
|
$
|
2,055
|
$
|
2,635
|
$
|
(580
|
)
|
(22.0
|
)%
|
|||||||
VSA
|
—
|
—
|
—
|
NM
|
||||||||||||
Total
|
$
|
2,055
|
$
|
2,635
|
$
|
(580
|
)
|
(22.0
|
)%
|
|||||||
1
NM = not meaningful
|
||||||||||||||||
|
Nine months ended
|
|||||||||||||||
|
June 30,
|
Variance
|
||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$ |
|
%
|
|||||||||||
Selling and marketing
|
||||||||||||||||
Payment Solutions
|
$
|
6,309
|
$
|
6,296
|
$
|
13
|
0.2
|
%
|
||||||||
VSA
|
—
|
—
|
—
|
NM
|
||||||||||||
Total
|
$
|
6,309
|
$
|
6,296
|
$
|
13
|
0.2
|
%
|
||||||||
1
NM = not meaningful
|
|
Three months ended
|
|
||||||||||||||
|
June 30,
|
Variance
|
||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$
|
|
%
|
|||||||||||
Depreciation and amortization
|
|
|
|
|||||||||||||
Payment Solutions
|
$
|
2,106
|
$
|
1,851
|
$
|
255
|
13.8
|
%
|
||||||||
VSA
|
—
|
—
|
—
|
NM
|
||||||||||||
Total
|
$
|
2,106
|
$
|
1,851
|
$
|
255
|
13.8
|
%
|
||||||||
1
NM = not meaningful
|
||||||||||||||||
|
Nine months ended
|
|||||||||||||||
|
June 30,
|
Variance
|
||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
$ |
|
%
|
|||||||||||
Depreciation and amortization
|
||||||||||||||||
Payment Solutions
|
$
|
5,829
|
$
|
5,620
|
$
|
209
|
3.7
|
%
|
||||||||
VSA
|
—
|
—
|
—
|
NM
|
||||||||||||
Total
|
$
|
5,829
|
$
|
5,620
|
$
|
209
|
3.7
|
%
|
||||||||
1
NM = not meaningful
|
·
|
We believe Payment Solutions net revenue is useful for evaluating our business and our performance against peer companies in the electronic payments industry. We also believe that this measure provides investors with additional information about financial measures used by management in its financial and operational decision-making.
|
·
|
We believe Payment Solutions net revenue and Adjusted EBITDA from continuing operations are important indicators of our operational strength and the performance of our business because they provide a link between our operating cash flow and our results of operations.
|
·
|
We incur discount fees for most of the transactions we process. The discount fee represents a significant portion of our overall costs and by deducting the discount fee from gross revenue we provide information about the revenue we have available to us for operational purposes.
|
·
|
Depreciation and amortization expense primarily relates to property and equipment and amortization of capitalized labor and intangible assets. These expenses are non-cash charges that have significantly fluctuated over the past several years. As a result, we believe that adding back these non-cash charges to net income is useful in evaluating the operating performance of our business on a consistent basis from year-to-year.
|
·
|
As a result of varying federal and state income tax rates, we believe that presenting a financial measure that adjusts net income for provision for income taxes is useful to investors when evaluating the operating performance of our business.
|
·
|
Financial Accounting Standards Board Accounting Standards Codification (ASC) 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their estimated fair values. We believe adjusting net income for share based compensation expense is useful to investors when evaluating the operating performance of our business.
|
·
|
We recorded a restructuring charge in fiscal 2012 in conjunction with moving our corporate headquarters from Reston, Virginia to Norcross, GA. Since we executed this move with the expectation of future benefits and do not anticipate any significant restructuring charges in the future we believe adjusting net income for this non-operational expense is useful to investors when evaluating the operating performance of our business.
|
·
|
We believe that analysts and investors use Payment Solutions net revenue and Adjusted EBITDA from continuing operations as supplemental measures to evaluate the overall operating performance of companies in our industry.
|
·
|
for periodic evaluation of our performance against key competitors;
|
·
|
for planning purposes, including the preparation of our internal annual operating budget;
|
·
|
to allocate resources to enhance the financial performance of our business; and
|
·
|
to evaluate the effectiveness of our operational strategies.
|
|
Three months ended June 30,
|
|||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
Change ($)
|
Change (%)
|
||||||||||||
Revenue from continuing operations
|
$
|
45,792
|
$
|
39,163
|
$
|
6,629
|
16.9
|
%
|
||||||||
Less:
|
||||||||||||||||
Non-Payment Solutions revenue
|
174
|
257
|
(83
|
)
|
(32.3
|
)%
|
||||||||||
Payment Solutions gross revenue
|
45,618
|
38,906
|
6,712
|
17.3
|
%
|
|||||||||||
Less:
|
||||||||||||||||
Payment Solutions Discount fees
|
32,376
|
27,134
|
5,242
|
19.3
|
%
|
|||||||||||
Payment Solutions net revenue
|
$
|
13,242
|
$
|
11,772
|
$
|
1,470
|
12.5
|
%
|
||||||||
|
Nine months ended June 30,
|
|||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
Change ($)
|
Change (%)
|
||||||||||||
Revenue from continuing operations
|
$
|
111,922
|
$
|
106,820
|
$
|
5,102
|
4.8
|
%
|
||||||||
Less:
|
||||||||||||||||
Non-Payment Solutions revenue
|
487
|
1,142
|
(655
|
)
|
(57.4
|
)%
|
||||||||||
Payment Solutions gross revenue
|
111,435
|
105,678
|
5,757
|
5.4
|
%
|
|||||||||||
Less:
|
||||||||||||||||
Payment Solutions Discount fees
|
74,802
|
70,415
|
4,387
|
6.2
|
%
|
|||||||||||
Payment Solutions net revenue
|
$
|
36,633
|
$
|
35,263
|
$
|
1,370
|
3.9
|
%
|
|
Adjusted EBITDA from continuing operations
|
|||||||||||||||
|
Three months ended June 30,
|
|||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
Change ($)
|
Change (%)
|
||||||||||||
Net income (loss) from continuing operations
|
$
|
635
|
$
|
(852
|
)
|
$
|
1,487
|
174.5
|
%
|
|||||||
Adjustments:
|
||||||||||||||||
Depreciation/amortization
|
2,106
|
1,851
|
255
|
13.8
|
%
|
|||||||||||
Stock-based compensation
|
367
|
371
|
(4
|
)
|
(1.1
|
)%
|
||||||||||
Restructuring charge
|
292
|
2
|
290
|
14,500.0
|
%
|
|||||||||||
Tax provision
|
5
|
5
|
—
|
0.0
|
%
|
|||||||||||
Interest expense, net
|
1
|
1
|
—
|
0.0
|
%
|
|||||||||||
Adjusted EBITDA from continuing operations
|
$
|
3,406
|
$
|
1,378
|
$
|
2,028
|
147.2
|
%
|
||||||||
|
Adjusted EBITDA from continuing operations
|
|||||||||||||||
|
Nine months ended June 30,
|
|||||||||||||||
(in thousands, except percentages)
|
2013
|
2012
|
Change ($)
|
Change (%)
|
||||||||||||
Net loss from continuing operations
|
$
|
(554
|
)
|
$
|
(3,894
|
)
|
$
|
3,340
|
85.8
|
%
|
||||||
Adjustments:
|
||||||||||||||||
Depreciation/amortization
|
5,829
|
5,620
|
209
|
3.7
|
%
|
|||||||||||
Stock-based compensation
|
1,412
|
1,352
|
60
|
4.4
|
%
|
|||||||||||
Restructuring charge
|
292
|
1,493
|
(1,201
|
)
|
(80.4
|
)%
|
||||||||||
Tax provision
|
7
|
5
|
2
|
40.0
|
%
|
|||||||||||
Interest expense, net
|
3
|
—
|
3
|
NM
|
||||||||||||
Adjusted EBITDA from continuing operations
|
$
|
6,989
|
$
|
4,576
|
$
|
2,413
|
52.7
|
%
|
||||||||
1
NM = not meaningful
|
·
|
whether there has been a significant adverse change in the business climate that affects the value of an asset;
|
·
|
whether there has been a significant change in the extent or manner in which an asset is used; and
|
·
|
whether there is an expectation that the asset will be sold or disposed of before the end of its originally estimated useful life.
|
† | Filed herewith. |
* | XBRL (Extensible Business Reporting Language) information is furnished and not filed herewith, is not a part of a registration statement or Prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections. |
|
OFFICIAL PAYMENTS HOLDINGS, INC.
|
|
Dated: August 6, 2013
|
|
|
|
|
|
|
By:
|
/s/ Jeff Hodges
|
|
|
Jeff Hodges
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
† | Filed herewith. |
* | XBRL (Extensible Business Reporting Language) information is furnished and not filed herewith, is not a part of a registration statement or Prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections. |
1 Year Official Payments Holdings, Inc. (MM) Chart |
1 Month Official Payments Holdings, Inc. (MM) Chart |
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