Third Quarter 2020 Financial Results
- Total transaction volume increased to
$956.2 million , as compared to$953.7 million for the same comparable period in 2019. - Net revenues decreased to
$16.7 million , as compared to$16.8 million for the same comparable period in 2019. - North American Transaction Solutions revenue increased to
$16.07 million , as compared to$15.9 million for the same comparable period in 2019. - International Transaction Solutions revenue decreased to
$0.67 million , as compared to$0.90 million for the same comparable period in 2019. - Operating expenses increased to
$4.1 million , as compared to$3.6 million for the same comparable period. - Gross margin decreased to
$2.2 million , as compared to$2.7 million for the same comparable period in 2019.
“We continue working diligently in an effort to finalize the Mullen merger for the benefit of our shareholders,” commented
Results of Operations for the Three Months Ended
The Company reported a net loss attributable to common stockholders of approximately
The following tables set forth the Company’s sources of revenues, cost of revenues and the respective gross margins for the three months ended
QTD | ||||||||||||||||||||
Three | Three | |||||||||||||||||||
Months Ended | Months Ended | Increase / | ||||||||||||||||||
Source of Revenues | Mix | Mix | (Decrease) | % change | ||||||||||||||||
North American Transaction Solutions | $ | 16,072,518 | 96.0 | % | $ | 15,923,805 | 94.7 | % | $ | 148,713 | 0.93 | % | ||||||||
International Transaction Solutions | 661,856 | 4.0 | % | 895,881 | 5.3 | % | (234,025 | ) | -26.12 | % | ||||||||||
Total | $ | 16,734,374 | 100.0 | % | $ | 16,819,686 | 100.0 | % | $ | (85,312 | ) | |||||||||
Three | Three | |||||||||||||||||||
Months Ended | % of | Months Ended | % of | Increase / | ||||||||||||||||
Cost of Revenues | revenues | revenues | (Decrease) | |||||||||||||||||
North American Transaction Solutions | $ | 14,083,449 | 87.6 | % | $ | 13,414,334 | 84.2 | % | $ | 669,115 | 4.99 | % | ||||||||
International Transaction Solutions | 476,741 | 72.0 | % | 664,907 | 74.2 | % | (188,166 | ) | -28.30 | % | ||||||||||
Total | $ | 14,560,190 | 87.0 | % | $ | 14,079,241 | 83.7 | % | $ | 480,949 | ||||||||||
Three | Three | |||||||||||||||||||
Months Ended | % of | Months Ended | % of | Increase / | ||||||||||||||||
Gross Margin | revenues | revenues | (Decrease) | |||||||||||||||||
North American Transaction Solutions | $ | 1,989,069 | 12.4 | % | $ | 2,509,471 | 15.8 | % | $ | (520,402 | ) | -20.74 | % | |||||||
International Transaction Solutions | 185,115 | 28.0 | % | 230,974 | 25.8 | % | (45,859 | ) | -19.85 | % | ||||||||||
Total | $ | 2,174,184 | 13.0 | % | $ | 2,740,445 | 16.3 | % | $ | (566,261 | ) | |||||||||
YTD | ||||||||||||||||||||
Nine | Nine | |||||||||||||||||||
Months Ended | Months Ended | Increase / | ||||||||||||||||||
Source of Revenues | Mix | Mix | (Decrease) | % change | ||||||||||||||||
North American Transaction Solutions | $ | 44,204,134 | 95.5 | % | $ | 46,025,308 | 95.2 | % | $ | (1,821,174 | ) | -3.96 | % | |||||||
International Transaction Solutions | 2,086,415 | 4.5 | % | 2,328,871 | 4.8 | % | (242,456 | ) | -10.41 | % | ||||||||||
Total | $ | 46,290,549 | 100.0 | % | $ | 48,354,179 | 100.0 | % | $ | (2,063,630 | ) | |||||||||
Nine | Nine | |||||||||||||||||||
Months Ended | % of | Months Ended | % of | Increase / | ||||||||||||||||
Cost of Revenues | revenues | revenues | (Decrease) | |||||||||||||||||
North American Transaction Solutions | $ | 37,923,749 | 85.8 | % | $ | 38,627,147 | 83.9 | % | $ | (703,398 | ) | -1.82 | % | |||||||
International Transaction Solutions | 1,473,635 | 70.6 | % | 1,613,607 | 69.3 | % | (139,972 | ) | -8.67 | % | ||||||||||
Total | $ | 39,397,384 | 85.1 | % | $ | 40,240,754 | 83.2 | % | $ | (843,370 | ) | |||||||||
Nine | Nine | |||||||||||||||||||
Months Ended | % of | Months Ended | % of | Increase / | ||||||||||||||||
Gross Margin | revenues | revenues | (Decrease) | |||||||||||||||||
North American Transaction Solutions | $ | 6,280,385 | 14.2 | % | $ | 7,398,161 | 16.1 | % | $ | (1,117,776 | ) | -15.11 | % | |||||||
International Transaction Solutions | 612,780 | 29.4 | % | 715,264 | 30.7 | % | (102,484 | ) | -14.33 | % | ||||||||||
Total | $ | 6,893,165 | 14.9 | % | $ | 8,113,425 | 16.8 | % | $ | (1,220,260 | ) | |||||||||
Net revenues consist primarily of service fees from transaction processing. Net revenues were approximately
The gross margin for the three months ended
Operating Expenses Analysis:
Operating expenses were approximately
The components of the Company’s selling, general and administrative expenses are reflected in the tables below.
Selling, general and administrative expenses for the three months ended
QTD | YTD | |||||||||||||||||||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||||||||||||||
Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | |||||||||||||||||||||||||||
Salaries, benefits, taxes and contractor payments | $ | 563,948 | $ | 95,254 | $ | 84,688 | $ | 743,890 | Salaries, benefits, taxes and contractor payments | $ | 1,649,488 | $ | 300,221 | $ | 753,983 | $ | 2,703,692 | |||||||||||||||||||
Professional fees | 91,468 | 29,523 | 251,262 | 372,253 | Professional fees | 253,046 | 117,951 | 748,210 | 1,119,207 | |||||||||||||||||||||||||||
Rent | 16,664 | 16,183 | 10,568 | 43,415 | Rent | 34,307 | 46,341 | 102,076 | 182,724 | |||||||||||||||||||||||||||
Business development | 42,198 | 2,500 | 2,929 | 47,627 | Business development | 153,547 | 2,517 | 8,836 | 164,900 | |||||||||||||||||||||||||||
Travel expense | 1,306 | 12,396 | 39,506 | 53,208 | Travel expense | 6,615 | 46,892 | 135,032 | 188,539 | |||||||||||||||||||||||||||
Filing fees | - | - | 18,916 | 18,916 | Filing fees | - | - | 56,254 | 56,254 | |||||||||||||||||||||||||||
Transaction gains | - | 12,641 | - | 12,641 | Transaction gains | - | 89,140 | - | 89,140 | |||||||||||||||||||||||||||
Office expenses | 65,208 | 2,961 | 18,091 | 86,260 | Office expenses | 184,692 | 13,688 | 63,065 | 261,445 | |||||||||||||||||||||||||||
Communications expenses | 33,387 | 32,210 | 25,707 | 91,304 | Communications expenses | 122,158 | 121,574 | 61,578 | 305,310 | |||||||||||||||||||||||||||
Insurance expense | - | - | 46,772 | 46,772 | Insurance expense | - | - | 127,457 | 127,457 | |||||||||||||||||||||||||||
Other expenses | 2,561 | 2,065 | 126,684 | 131,310 | Other expenses | 2,990 | 4,168 | 142,991 | 150,149 | |||||||||||||||||||||||||||
Total | $ | 816,740 | $ | 205,733 | $ | 625,123 | $ | 1,647,596 | Total | $ | 2,406,843 | $ | 742,492 | $ | 2,199,482 | $ | 5,348,817 | |||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||||||||||||||
Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | |||||||||||||||||||||||||||
Salaries, benefits, taxes and contractor payments | $ | 304,391 | $ | 124,921 | $ | 729,426 | $ | 1,158,738 | Salaries, benefits, taxes and contractor payments | $ | 926,868 | $ | 400,943 | $ | 2,294,391 | $ | 3,622,202 | |||||||||||||||||||
Professional fees | 125,713 | 58,478 | 486,984 | 671,175 | Professional fees | 400,058 | 186,440 | 1,334,367 | 1,920,865 | |||||||||||||||||||||||||||
Rent | - | 23,048 | 51,795 | 74,843 | Rent | - | 57,144 | 157,086 | 214,230 | |||||||||||||||||||||||||||
Business development | 75,414 | 540 | 18,707 | 94,661 | Business development | 168,582 | 1,655 | 28,821 | 199,058 | |||||||||||||||||||||||||||
Travel expense | 36,337 | 10,553 | 18,466 | 65,356 | Travel expense | 95,984 | 24,038 | 83,833 | 203,855 | |||||||||||||||||||||||||||
Filing fees | - | - | 37,213 | 37,213 | Filing fees | - | - | 78,125 | 78,125 | |||||||||||||||||||||||||||
Transaction losses | - | 7,169 | - | 7,169 | Transaction losses | - | (36,923 | ) | - | (36,923 | ) | |||||||||||||||||||||||||
Office expenses | 91,051 | 4,460 | 12,093 | 107,604 | Office expenses | 249,232 | 14,485 | 38,406 | 302,123 | |||||||||||||||||||||||||||
Communications expenses | 39,530 | 61,428 | 17,710 | 118,668 | Communications expenses | 119,233 | 158,495 | 59,584 | 337,312 | |||||||||||||||||||||||||||
Insurance expense | - | - | 42,418 | 42,418 | Insurance expense | - | - | 112,932 | 112,932 | |||||||||||||||||||||||||||
Other expenses | 15,073 | 1,672 | 4,196 | 20,941 | Other expenses | 12,639 | 7,610 | 108,693 | 128,942 | |||||||||||||||||||||||||||
Total | $ | 687,509 | $ | 292,269 | $ | 1,419,008 | $ | 2,398,786 | Total | $ | 1,972,596 | $ | 813,887 | $ | 4,296,238 | $ | 7,082,721 | |||||||||||||||||||
Variance | Variance | |||||||||||||||||||||||||||||||||||
Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | |||||||||||||||||||||||||||
Salaries, benefits, taxes and contractor payments | $ | 259,557 | $ | (29,667 | ) | $ | (644,738 | ) | $ | (414,848 | ) | Salaries, benefits, taxes and contractor payments | $ | 722,620 | $ | (100,722 | ) | $ | (1,540,408 | ) | $ | (918,510 | ) | |||||||||||||
Professional fees | (34,245 | ) | (28,955 | ) | (235,722 | ) | (298,922 | ) | Professional fees | (147,012 | ) | (68,489 | ) | (586,157 | ) | (801,658 | ) | |||||||||||||||||||
Rent | 16,664 | (6,865 | ) | (41,227 | ) | (31,428 | ) | Rent | 34,307 | (10,803 | ) | (55,010 | ) | (31,506 | ) | |||||||||||||||||||||
Business development | (33,216 | ) | 1,960 | (15,778 | ) | (47,034 | ) | Business development | (15,035 | ) | 862 | (19,985 | ) | (34,158 | ) | |||||||||||||||||||||
Travel expense | (35,031 | ) | 1,843 | 21,040 | (12,148 | ) | Travel expense | (89,369 | ) | 22,854 | 51,199 | (15,316 | ) | |||||||||||||||||||||||
Filing fees | - | - | (18,297 | ) | (18,297 | ) | Filing fees | - | - | (21,871 | ) | (21,871 | ) | |||||||||||||||||||||||
Transaction gains | - | 5,472 | - | 5,472 | Transaction gains | - | 126,063 | - | 126,063 | |||||||||||||||||||||||||||
Office expenses | (25,843 | ) | (1,499 | ) | 5,998 | (21,344 | ) | Office expenses | (64,540 | ) | (797 | ) | 24,659 | (40,678 | ) | |||||||||||||||||||||
Communications expenses | (6,143 | ) | (29,218 | ) | 7,997 | (27,364 | ) | Communications expenses | 2,925 | (36,921 | ) | 1,994 | (32,002 | ) | ||||||||||||||||||||||
Insurance expense | - | - | 4,354 | 4,354 | Insurance expense | - | - | 14,525 | 14,525 | |||||||||||||||||||||||||||
Other (income) expenses | (12,512 | ) | 393 | 122,488 | 110,369 | Other (income) expenses | (9,649 | ) | (3,442 | ) | 34,298 | 21,207 | ||||||||||||||||||||||||
Total | $ | 129,231 | $ | (86,536 | ) | $ | (793,885 | ) | $ | (751,190 | ) | Total | $ | 434,247 | $ | (71,395 | ) | $ | (2,096,756 | ) | $ | (1,733,904 | ) | |||||||||||||
Salaries, benefits, taxes and contractor payments decreased by approximately
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
To supplement its consolidated financial statements presented in accordance with
GAAP | Share-based Compensation | Adjusted Non-GAAP | ||||||
Three Months Ended | ||||||||
Net loss attributable to | $ | (2,329,570 | ) | $ | 1,089,113 | $ | (1,240,457 | ) |
Basic and diluted earnings per share | $ | (0.52 | ) | $ | 0.24 | $ | (0.28 | ) |
Basic and diluted shares used in computing earnings per share | 4,498,510 | 4,498,510 | ||||||
Three Months Ended | ||||||||
Net loss attributable to | $ | (1,010,627 | ) | $ | 15,008 | $ | (995,619 | ) |
Basic and diluted earnings per share | $ | (0.24 | ) | $ | - | $ | (0.24 | ) |
Basic and diluted shares used in computing earnings per share | 4,152,433 | 4,152,433 | ||||||
GAAP | Share-based Compensation | Adjusted Non-GAAP | ||||||
Nine Months Ended | ||||||||
Net loss attributable to | $ | (4,021,057 | ) | $ | 1,135,013 | $ | (2,886,044 | ) |
Basic and diluted earnings per share | $ | (0.94 | ) | $ | 0.27 | $ | (0.67 | ) |
Basic and diluted shares used in computing earnings per share | 4,264,624 | 4,264,624 | ||||||
Nine Months Ended | ||||||||
Net loss attributable to | $ | (3,668,921 | ) | $ | 2,035,855 | $ | (1,633,066 | ) |
Basic and diluted earnings per share | $ | (0.91 | ) | $ | 0.50 | $ | (0.41 | ) |
Basic and diluted shares used in computing earnings per share | 4,033,521 | 4,033,521 |
Use of Non-GAAP Financial Measures
Non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP measures exclude significant expenses that are required by GAAP to be recorded in the Company's financial statements and are subject to inherent limitations.
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