News Column

iPayment Reports Unaudited Financial Results For Second Quarter and First Six Months Of 2014

August 30, 2014



By a News Reporter-Staff News Editor at Investment Weekly News -- iPayment Holdings, Inc. ("Holdings") and iPayment, Inc. ("iPayment" or the "Company") announced their unaudited financial results for the three months and six months ended June 30, 2014. All operations are conducted through iPayment and its subsidiaries. Holdings is a holding company that does not have any operations or material assets other than its ownership of iPayment and its subsidiaries. The financial results of Holdings are substantially the same as those of iPayment with the exception of interest expense, income tax provision (benefit) and net and comprehensive income (loss). The financial results discussed below represent those of iPayment and its consolidated subsidiaries, except where otherwise noted.

For the second quarter of 2014, the Company processed $5.8 billion of total transaction volume, a 2.0% increase from the second quarter of 2013. In the second quarter of 2014, the Company processed 89.0 million transactions, an increase of 2.1% from the second quarter of 2013. Total revenues increased by 5.1% to $182.9 million for the second quarter of 2014 from $173.9 million for the second quarter of 2013. This increase was primarily due to higher volume per merchant, partially offset by a lower number of merchants on file during the second quarter of 2014 versus the second quarter of 2013. Revenues, net of interchange, increased 2.6% to $85.5 million for the second quarter of 2014 compared with $83.3 million for the second quarter of 2013. Income from operations increased 98.9% to $15.7 million for iPayment and its consolidated subsidiaries and 99.3% to $15.6 million for Holdings and its consolidated subsidiaries for the second quarter of 2014, compared with $7.9 million for iPayment and its consolidated subsidiaries and $7.8 million for Holdings and its consolidated subsidiaries for the second quarter of 2013. Income from operations for the second quarter of 2014 was affected by higher net revenue and lower charges related to an amended purchase agreement and the related employment agreements from the acquisition of Flagship Merchant Services ("Flagship"), a business acquired by the Company in May 2012. Results for the second quarter of 2014 included $0.2 million in embezzlement recoveries and $0.1 million of investigation and remediation costs associated with the matters described in the Company's November 5, 2012 Report on Form 8-K. Excluding stock-based compensation, the Flagship-related charges, and embezzlement recoveries and costs, income from operations for the second quarter of 2014 would have been $16.5 million versus $16.6 million in the comparable period in 2013. At the end of June 2014, the Company had approximately 106,000 active merchants and approximately 150,000 merchants on file from which it generated revenue.

For the second quarter of 2014, the Company had a net and comprehensive loss of $0.3 million and Consolidated EBITDA of $29.1 million, compared with a net and comprehensive loss of $21.6 million and Consolidated EBITDA of $30.6 million for the second quarter of 2013. The improvement in net and comprehensive loss for the second quarter of 2014 reflected the lower Flagship-related charges mentioned above and the recording of a tax valuation allowance on deferred tax assets in second quarter of 2013.

For the first six months of 2014, the Company processed $11.0 billion of total transaction volume, a 0.5% increase from $10.9 billion for the first six months of 2013. Total revenues increased by 3.4% to $341.0 million for the first six months of 2014 from $329.9 million for the first six months of 2013. Revenues, net of interchange, increased 0.1% to $157.6 million for the first six months of 2014 compared with $157.4 million for the first six months of 2013. Income from operations increased 21.6% to $22.8 million for iPayment and its consolidated subsidiaries and $22.7 million for Holdings and its consolidated subsidiaries for the first six months of 2014, compared with $18.7 million for both iPayment and its consolidated subsidiaries and for Holdings and its consolidated subsidiaries for the first six months of 2013. Excluding stock-based compensation, the Flagship-related charges, and embezzlement recoveries and costs, income from operations for the first six months of 2014 would have been $24.5 million, a decrease of 10.1% from the comparable period in 2013. Results for the first six months of 2014 included $0.3 million in embezzlement recoveries and $0.3 million of investigation and remediation costs associated with the matters described in the Company's November 5, 2012 Report on Form 8-K. Conference Call Management will hold a conference call on Thursday, August 14, 2014, at 10:00 a.m. (Eastern Time) to discuss the Company's results for the second quarter and first six months of 2014. Participants should dial 719-457-1035 approximately 10 minutes prior to the start of the call. A telephonic replay will become available after 1:00 p.m. (Eastern Time) on Thursday, August 14, 2014, and will continue to be available through August 23, 2014, by dialing 719-457-0820 and entering confirmation code 8683833.

Keywords for this news article include: Finance, iPayment Holdings Inc.

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Source: Investment Weekly News


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