Mr. Craig O'Neill reports
VERSAPAY REPORTS FISCAL 2013 RESULTS
VersaPay Corp. has released its financial results for fiscal 2013. Top-line revenue for fiscal 2013 was $17.5-million compared with $16.9-million the previous fiscal year. Revenue growth occurred across both of the company's operating units, the point-of-sale (POS) merchant services business and the emerging cloud-based VersaPay Solutions business.
Fiscal 2013 highlights:
-
Grew total processing volume to $1.1-billion for fiscal 2013 versus $1-billion in fiscal 2013;
-
Entered into a payment processing and referral agreement with TD
Merchant Services, an operating division of the Toronto Dominion Bank;
-
Hired a successful cloud-based software entrepreneur, Craig O'Neill, as
chief executive officer;
-
Entered into a U.S. reseller agreement with Heartland Payment Systems;
-
Loss per share declined to seven cents per share compared with 10 cents per share
in fiscal 2012.
Subsequent to fiscal 2013 highlights:
-
Winpak Ltd.'s Winnipeg manufacturing division became a VersaPay
Solutions customer, selecting VersaPay's cloud-based e-invoicing solution
to automate its accounts receivable processes;
-
Completed a $5-million bought-deal financing.
Q4 AND FISCAL 2013 FINANCIAL SUMMARY (1)
(in millions of dollars)
Three months ended Year ended
Dec. 31, Dec. 31,
2013 2012 2013 2012
Total revenue $ 4.2 $ 4.1 $ 17.5 $ 16.9
Cash operating expenses (2) $ 1.0 $ 1.2 $ 4.0 $ 4.3
Adjusted EBITDA (3) $ (0.1) $ (0.3) $ (0.7) $ (1.0)
Net (loss) $ (0.3) $ (0.5) $ (1.1) $ (1.5)
Dec. 31, 2013
Cash $ 1.3
(1) The audited consolidated financial statements for the year ended
Dec. 31, 2013, and the related management's discussion and analysis
for the period will be available on the company's website and on SEDAR.
(2) Cash operating expense is defined as operating expense excluding
depreciation, amortization and share-based payments.
(3) Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation, amortization, share-based payments, other income and
impairment loss.
"I am very pleased to report another year of revenue growth for VersaPay," commented Craig O'Neill, VersaPay's chief executive officer. "Although the lion's share of revenue continues to derive from our POS business, we see momentum building with VersaPay Solutions. Our pipeline is building nicely and will only increase as our partners, Heartland Payment Systems in the U.S. and TD Merchant Services in Canada, come on-line. We are very encouraged with the trajectory of the solutions business."
Fourth-quarter and fiscal 2013 financial review
Total revenues for the fourth quarter of 2013 increased 2 per cent to $4.2-million from $4.1-million in the fourth quarter of 2012. Total revenue for the year ended Dec. 31, 2013, increased 4 per cent to $17.5-million from $16.9-million for the year ended Dec. 31, 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 19 per cent to $1.0-million from $1.2-million in the fourth quarter of 2013 from the same period in 2012. Cash operating expense for the year ended Dec. 31, 2013, decreased 7 per cent to $4.0-million from $4.3-million in 2012.
Adjusted EBITDA for the fourth quarter of 2013 was ($100,000), compared with ($300,000) in the fourth quarter of 2012. For the year ended Dec. 31, 2013, adjusted EBITDA was ($700,000), compared with ($1.0-million) in 2012.
Loss from continuing operations for the fourth quarter of 2013 was ($300,000). This compares with a loss from continuing operations of ($500,000) for the fourth quarter of 2012. For the year ended Dec. 31, 2013, loss from continuing operations was ($1.1-million), compared with ($1.5-million) in 2012.
ADJUSTED EBITDA
Three months ended, Year ended,
Dec. 31 Dec. 31
2013 2012 2013 2012
Adjusted EBITDA (1) $(145,142) $(339,497) $(670,620) $(942,166)
Share-based payments (77,340) (48,479) (260,080) (182,148)
Interest expense (39,092) (29,150) (159,584) (144,038)
Amortization (15,191) (39,098) (106,138) (169,089)
Other income - - 85,774 -
Impairment (loss) - (31,763) - (31,763)
Net (loss) (276,765) (487,988) (1,110,648) (1,469,204)
(1) Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation, amortization, share-based payments, other income and
impairment loss.
New bylaw
VersaPay further announces that the company's board of directors has approved the new bylaw No. 1A, replacing the previous bylaw No. 1. Of note, the new bylaw includes the addition of the advance notice provision for nominations of directors by shareholders of the company in certain circumstances. The provision requires advance notice to VersaPay in circumstances where nominations of persons for election to the board are made by the shareholders other than pursuant to: (a) a requisition of a meeting made pursuant to the provisions of the Canada Business Corporations Act, or (b) a shareholder proposal made pursuant to the provisions of the CBCA.
Among other things, the provision fixes a deadline by which holders of record of common shares must submit director nominations to VersaPay prior to any annual or special meeting of shareholders, and sets forth the information that a shareholder must include in the notice to the company.
In the case of an annual meeting of shareholders, notice to VersaPay must be provided not less than 30 days nor more than 65 days prior to the date of the annual meeting; provided, however, that in the event that the annual meeting is called for a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement. In the case of a special meeting of shareholders (which is not also an annual meeting), notice to the company must be provided no later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made.
The company believes that the provision is considered to be good corporate governance. The provision provides a clear process for shareholders to follow for director nominations, and sets out a reasonable time frame for nominee submissions and the provision of accompanying information. The purpose of the provision is to treat all shareholders fairly by ensuring that all shareholders receive adequate notice of the nominations to be considered at a meeting and can thereby exercise their voting rights in an informed manner. In addition, the provision should assist in facilitating an orderly and efficient meeting process.
The new bylaw is effective immediately, and will be placed before shareholders for ratification and confirmation at the next annual and special meeting of shareholders of the company to be held on May 28, 2014. The implementation of the new bylaw also remains subject to receipt of conditional acceptance by the TSX Venture Exchange. The full text of the new bylaw may be obtained upon request by contacting the chief executive officer of the company at 647-258-9378 or by e-mail.
2013 FINANCIAL RESULTS
Year ended Dec. 31,
2013 2012
Revenue
VersaPay Solutions $394,446 $251,210
POS merchant services 17,148,642 16,620,832
17,543,088 16,872,042
Cost of sales
VersaPay Solutions 263,424 223,257
POS merchant services 14,067,629 13,385,049
14,331,053 13,608,306
Gross profit 3,212,035 3,263,736
Expenses
Depreciation and amortization 106,138 169,089
General and office expenses 571,710 677,061
Interest expense 159,584 144,038
Marketing and promotion 217,829 129,743
Professional and consulting fees 634,265 659,533
Rent and occupancy 239,572 320,248
Research and development 385,763 388,174
Salaries and benefits 1,833,516 2,031,143
Share-based payments 260,080 182,148
Total expenses 4,408,457 4,701,177
Other income 85,774 -
Other expenses
Impairment (loss) - 31,763
Net (loss) and comprehensive
(loss) for the year (1,110,648) (1,469,204)
(Loss) per share, basic $ (0.07) $ (0.10)
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