News Column

VersaPay Announces 2013 Second Quarter and Year Results

Page 3 of 1

LogoTracker

TORONTO, ONTARIO -- (Marketwired) -- 08/27/13 -- VersaPay Corporation (TSX VENTURE: VPY) ("VersaPay" or the "Company"), a provider of merchant credit and debit card payment processing services ("POS Merchant Services") and proprietary, cloud-based financial technology solutions ("VersaPay Solutions"), today announced its financial and operational results for the three and six months ended June 30, 2013. All amounts are in Canadian dollars unless otherwise noted.

Q2 2013 Highlights

-- Entered into a payment processing and referral agreement with TD Merchant Services-- Adjusted EBITDA(1) Was $(0.1) million, less than half of the Adjusted EBITDA loss of $(0.3) million in Q2 2012-- Grew year over year Electronic Money Transfer ("EMT") per-transaction revenues by 213%-- Grew year over year revenues by 4%Q2 2013 Financial Summary(2)---------------------------------------------------------------------------- Three months ended, Six months ended, June 30 June 30 ---------------------------------------------------- 2013 2012 2013 2012----------------------------------------------------------------------------Total Revenue $ 4.4M $ 4.2M $ 8.5M $ 8.1M----------------------------------------------------------------------------Cash Operating Expenses(3) $ 1.0M $ 1.2M $ 2.1M $ 2.2M----------------------------------------------------------------------------Adjusted EBITDA(1) $ (0.1)M $ (0.3)M $ (0.4)M $ (0.5)M----------------------------------------------------------------------------Net Loss $ (0.3)M $ (0.4)M $ (0.6)M $ (0.7)M---------------------------------------------------------------------------- June 30, 2013--------------------------------------------------Cash $ 1.1 M--------------------------------------------------



"Overall, we are pleased with the results for the second quarter," said Bill McGill, CEO of VersaPay. Mr. McGill continued, "While our financial results continue to be driven by our POS business, we are also encouraged by the progress made in our VersaPay Solutions business. In addition to experiencing strong growth in EMT transaction revenues, we signed a key agreement with TD Merchant Services in the quarter. Moreover, our pipeline of key partner and end customer relationships is expected to provide a foundation for future growth."

Q2 and Year to Date 2013 Financial Review

Total revenues for Q2 2013 increased 4% to $4.4 million from $4.2 million in Q2 2012. Total revenue for the six months ended June 30, 2013 increased 5% to $8.5 million from $8.1 million for the same period in 2012. The year-over-year improvement was driven primarily by growth in the Company's transaction processing fees.

Cash operating expense (excluding amortization and share-based payments) decreased 16% to $1.0 million from $1.2 million in Q2 2013 from the same period in 2012. Cash operating expense for the six months ended June 30, 2013 decreased 6% to $2.1 million from $2.2 million in 2012.

Adjusted EBITDA for Q2 2013 was $(0.1) million, compared to $(0.3) million in Q2 2012. For the six months ended June 30, 2013, Adjusted EBITDA was $(0.4) million, compared to $(0.5) million in 2012.

Loss from continuing operations for Q2 2013 was $(0.3) million. This compares to a loss from continuing operations of $(0.4) million for Q2 2012. For the six months ended June 30, 2013, loss from continuing operations was $(0.6) million, compared to $(0.7) million in 2012.

Table A---------------------------------------------------------------------------- Three months ended, Six months ended, June 30 June 30 2013 2012 2013 2012----------------------------------------------------------------------------Adjusted EBITDA(1) $ (135,891) $ (298,393) $ (383,624) $ (513,845)Share based payments (64,550) (31,933) (125,722) (57,087)Interest expense (46,566) (39,614) (90,265) (78,762)Amortization (34,975) (43,999) (71,590) (87,814)Other income 23,028 - 85,774 -----------------------------------------------------------------------------Net Loss $ (258,954) $ (413,939) $ (585,427) $ (737,508)----------------------------------------------------------------------------



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 VersaPay EMT and VersaPay EIPP - the Company's proprietary Electronic Bill Presentment and Payment solution - which enables merchants and consumers to easily transact with one another.

VersaPay is headquartered in Toronto, Canada and has operations in Montreal and New York. 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.

---------------------------------------------------------------------------- June 30, 2013 December 31, 2012 $ $----------------------------------------------------------------------------ASSETSCurrentCash and cash equivalents 1,053,633 1,461,388Funds held for merchants 3,048,998 1,726,284Receivables 427,776 410,480Prepaid expenses 38,754 27,973---------------------------------------------------------------------------- 4,569,161 3,626,125Non-currentEquipment 223,394 290,449Intangible assets 9,734 39,011----------------------------------------------------------------------------Total Assets 4,802,289 3,955,585--------------------------------------------------------------------------------------------------------------------------------------------------------LIABILITIESCurrentAccounts payable and accrued liabilities 297,853 459,621Funds due to merchants 3,048,998 1,726,284Current portion of obligations under finance lease 30,635 37,492---------------------------------------------------------------------------- 3,377,486 2,223,397Non-currentObligations under finance lease, net of current portion 13,511 29,361Promissory note 662,427 630,190----------------------------------------------------------------------------Total Liabilities 4,053,424 2,882,948--------------------------------------------------------------------------------------------------------------------------------------------------------EQUITYShare capital 10,266,637 9,981,720Reserve 1,474,255 1,497,517Warrants 372,260 372,260Deficit (11,364,287) (10,778,860)----------------------------------------------------------------------------Total Equity 748,865 1,072,637----------------------------------------------------------------------------Total Liabilities and Equity 4,802,289 3,955,585------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Three months ended, Six months ended, June 30 June 30 2013 2012 2013 2012 $ $ $ $----------------------------------------------------------------------------Revenue POS Merchant Services 4,291,596 4,165,151 8,358,520 8,013,393 VersaPay Solutions 92,565 56,494 163,614 113,159---------------------------------------------------- ---------------------- 4,384,161 4,221,645 8,522,134 8,126,552---------------------------------------------------- ----------------------Cost of Sales POS Merchant Services 3,504,607 3,319,652 6,796,664 6,393,598 VersaPay Solutions 62,450 53,491 119,809 101,890---------------------------------------------------- ---------------------- 3,567,057 3,373,143 6,916,473 6,495,488---------------------------------------------------- ----------------------Gross Profit 817,104 848,502 1,605,661 1,631,064---------------------------------------------------- ----------------------Expenses Bank charges and interest 46,566 39,614 90,265 78,762 Consulting fees 68,353 71,916 129,765 165,569 Depreciation and amortization 34,975 43,999 71,590 87,814 General and administrative 92,894 114,536 184,013 241,186 Marketing and promotion 51,963 11,774 80,421 34,373 Professional fees 81,866 115,632 231,927 204,172 Rent and occupancy 52,249 80,141 127,361 168,515 Research and development 95,860 108,135 199,117 183,106 Salaries and benefits 434,156 560,274 894,098 982,121 Share based payments 64,550 31,933 125,722 57,087 Technology and infrastructure 48,236 59,518 98,487 121,937 Travel 27,418 24,969 44,096 43,930---------------------------------------------------- ----------------------Total Expenses 1,099,086 1,262,441 2,276,862 2,368,572---------------------------------------------------- ----------------------Other Income 23,028 - 85,774 ----------------------------------------------------- ----------------------Net Loss and Comprehensive Loss for the Period (258,954) (413,939) (585,427) (737,508)------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Issued Total Capital Reserve Warrants Deficit Equity----------------------------------------------------------------------------As at December 31, 2011 $ 7,891,062 $1,010,525 $ 690,291 $ (9,309,656) $ 282,222Net loss for the period - - - (737,508) (737,508)Shares Issued 1,780,202 - 54,269 - 1,834,471Exercise of options 237,728 (48,228) - - 189,500Share based payments - 57,087 - - 57,087Warrants expired - 372,300 (372,300) - -----------------------------------------------------------------------------At June 30, 2012 $ 9,908,992 $1,391,684 $ 372,260 $(10,047,164) $1,625,772------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Issued Total Capital Reserve Warrants Deficit Equity----------------------------------------------------------------------------As at December 31, 2012 $ 9,981,720 $1,497,517 $ 372,260 $(10,778,860) $1,072,637Net loss for the period - - - (585,427) (585,427)Shares Issued - - - - -Exercise of options 284,917 (148,984) - - 135,933Share based payments - 125,722 - - 125,722Warrants expired - - - - -----------------------------------------------------------------------------At June 30, 2013 $10,266,637 $1,474,255 $ 372,260 $(11,364,287) $ 748,865------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Six months ended, June 30 2013 2012 $ $----------------------------------------------------------------------------Cash Provided By (Used In) Operating Activities Net loss for the period (585,427) (737,508) Items not affecting cash: Depreciation of equipment 42,314 58,538 Amortization of intangible assets 29,277 29,276 Interest accreted on promissory note 32,237 25,148 Loss on disposal of equipment 15,795 - Share based payments 125,722 57,087 Change in non-cash working capital items Receivables (17,296) (87,291) Prepaid expenses (10,781) 8,041 Accounts payable and accrued liabilities (161,768) (40,936)---------------------------------------------------------------------------- (529,927) (687,645)Cash Provided By (Used in) in Investing Activities Acquisition of equipment (2,954) - Proceeds on disposal of equipment 11,900 (24,214)---------------------------------------------------------------------------- 8,946 (24,214)Cash Provided by (Used In) Financing Activities Issuance of common shares, net of issuance costs 135,933 2,023,972 Finance lease payments (22,707) (34,945)---------------------------------------------------------------------------- 113,226 1,989,027Increase (decrease) in cash and cash equivalents (407,755) 1,277,168Cash and cash equivalents, beginning of period 1,461,388 559,497----------------------------------------------------------------------------Cash and cash equivalents, end of period 1,053,633 1,836,665--------------------------------------------------------------------------------------------------------------------------------------------------------



(1) Adjusted EBITDA is defined as Earnings Before Interest, Taxes, Depreciation, Amortization, Share-Based Payments and Other Income. See table A.

(2) Condensed interim financial statements and MD&A for the three and six months ended June 30, 2013 will be available on the Company's website at www.versapay.com and on SEDAR.

(3) Defined as operating expense excluding depreciation, amortization and share-based payments.



Contacts:
VersaPay Corporation
Bill McGill
CEO
1-647-258-9378
bill.mcgill@versapay.com
www.versapay.com

VersaPay Corporation
Hogan Mullally
Investor Relations
1-204-479-2516
hogan@sectorspeak.com



Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters