Planet Payment Reports First Half 2011 Results; Common Shares to Resume Trading

Net Revenue as Restated Increases 47%

Net Income $1.0 Million; Adjusted EBITDA $2.6 Million

LONG BEACH, N.Y., Oct. 26, 2011 (GLOBE NEWSWIRE) -- Planet Payment, Inc. (LSE:PPT) (LSE:PPTR) (OTCQX:PLPM), a leading provider of international payment processing and multi-currency processing services, today announced its results for the six months ended June 30, 2011 and that the Company has adjusted its revenue presentation and reissued recent historical financial statements. As a result of this announcement the Company expects the temporary suspension of its shares on the AIM market to be lifted and the Company to be reinstated to the OTCQX market tier.

During the first half of 2011, the Company again achieved strong operating results, highlighted as follows:

• Net revenue for the period increased 47% to $19.9m (H1'10: $13.5m).
• Consolidated gross billings increased 70% to $47.0m (H1'10: $27.7m). (See below for explanation of this metric)
• Gross foreign currency mark-up increased 86% to $40.2m (H1'10: $21.6m). (See below for explanation of this metric)
• Net income increased to $1.0m (H1'10 loss: ($2.3m)).
• Adjusted EBITDA for the period was $2.6m compared to a loss of ($0.4m) a year ago. See Table 1 for reconciliation of net income (loss) to Adjusted EBITDA.
• Settled multi-currency dollar volume increased 79% to $1,057.3m (H1'10: $592.2m).
• Multi-currency active merchant locations increased by 66% to 14,345 as of June 30, 2011 (as of June 30, 2010: 8,639).

In these results the Company has adopted an adjusted presentation of net revenue. During the process of preparing the Company to become a reporting company under U.S. securities laws, the Company, in consultation with its independent registered public accountant, Deloitte & Touche, LLP, reconsidered the presentation of its net revenue and concluded that it is more appropriate to report its multi-currency processing services revenue net of the gross foreign currency mark-up amounts that are shared with acquirers and their merchants. While the Company does not believe that these presentational adjustments are material to its financial statements for any reported period the Company concluded that the consolidated financial statements as of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009 and 2010 and for the six months ended June 30, 2010 should be restated. Details of the adjustments to our previously issued audited financial statements for the years ended December 31, 2008, 2009 and 2010 and the unaudited statements of operations and statements of cash flows for the six months ended June 30, 2010 are set forth in Note 2 to the consolidated condensed financial statements included in this announcement and filed with OTCQX.

Planet Payment's revenue growth reflects the increase in transaction processing volumes primarily driven by increases in active merchant locations. The Company is now reporting on two key metrics in its business. "Consolidated Gross Billings" which represents the aggregate of (a) gross foreign currency mark-up; and (b) revenue earned and reported on payment processing services; and "Gross Foreign Currency Mark-up" ("gross mark-up") which represents the gross foreign currency mark-up amount on settled dollar volume processed using our multi-currency processing services.

Planet Payment's customers have continued to roll out our multi-currency processing solutions as reflected by a 66% increase in active multi-currency merchant locations over H1'10. During the first half of 2011 the total number of active merchant locations continued to grow, increasing by approximately 100% during the period.

During the first half of 2011, the Company continued to expand its acquiring customer base in both existing and new markets, in particular announcing agreements with Global Payments to provide multi-currency services in the United States and Canada, complementing the existing agreements in the Asia Pacific region. In March, the Company announced the expansion of its agreement with Vantiv (formerly Fifth Third Processing Solutions), to offer Pay in Your Currency on ATMs throughout the United States.

In April 2011, the Company announced that investors led by Camden Partners had converted their entire outstanding principal amount of $9.0 million of convertible notes into an aggregate of 4,049,776 shares of common stock. In addition, the Company issued 425,000 shares of common stock in lieu of cash payments for accrued interest and a prepayment fee negotiated at the time of conversion. This transaction strengthened the Company's balance sheet and will eliminate related future interest expense.

In May 2011, the Company launched the MICROS Payment Gateway, which it operates under a worldwide license from MICROS Systems, Inc., to support payment solutions for merchants using MICROS point of sale and property management systems in the hospitality and retail industries.

Since the beginning of 2011, the Company has rolled out services in the United Arab Emirates, the Philippines and other Asia Pacific countries launched in 2010 and with additional acquirers in Canada. Network International announced in July that over 3,500 merchant locations in the UAE have signed agreements to offer the Company's Pay in Your Currency service. Planet Payment also continues to benefit from a robust new business pipeline and is currently working to implement additional acquiring bank, processor and merchant solutions. 

During the first half of 2011, the claims under our "Time of Transaction Foreign Currency Conversion" patent applications have been found to be patentable in Singapore and Australia and we expect the patents in those countries to be granted shortly. These are in addition to the patents previously granted in the United States and other countries.

As announced on September 29, 2011, as a result of the reconsideration of the Company's revenue presentation, the Company delayed its results for the period beyond the deadlines required by AIM and OTCQX market rules. The Company therefore requested the AIM market to temporarily suspend trading in the Company's shares from that date and OTC Markets Group, Inc. temporarily removed the Company from its OTCQX tier. As a result of today's announcement the Company expects AIM to lift the suspension today and OTC Markets Group, Inc. to reinstate the Company to the OTCQX tier with effect from tomorrow. The Company's shares will thereafter resume trading on both markets, as they did prior to September 29, 2011.

Additional breakdown on the Company's performance can be found in the Management's Discussion and Analysis of Financial Condition and Results of Operations appended to this release. In accordance with the rules of the OTCQX market, the Company's Second Quarter Report, including its Consolidated Condensed Financial Statements (unaudited), as of December 31, 2010 and June 30, 2011 and for the six months ended June 30, 2011 and 2010, have been posted on the OTCQX website at www.otcqx.com and on the Company's website at www.planetpayment.com.

The audited Consolidated Financial Statements as of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009 and 2010, together with the notes thereto and the updated auditors' opinion thereon, have been reissued and are posted on the Company's website at www.planetpayment.com and at www.otcqx.com.

Forward-Looking Statements. Information contained in this announcement may include 'forward-looking statements.' All statements other than statements of historical facts included herein, including, without limitation, those regarding the financial position, business strategy, plans and objectives of management for future operations of both Planet Payment and its business partners, are forward-looking statements. Such forward-looking statements are based on a number of assumptions regarding Planet Payment's present and future business strategies, and the environment in which Planet Payment expects to operate in future, which assumptions may or may not be fulfilled in practice. Actual results may vary materially from the results anticipated by these forward-looking statements as a result of a variety of risk factors, including, regulatory changes and changes in card association regulations and practices; general economic risk and volume of international travel and commerce and others. See the Company's Quarterly Report for the period, filed at www.otcqx.com for other risk factors which investors should consider. These forward-looking statements speak only as to the date of this announcement and cannot be relied upon as a guide to future performance. Planet Payment expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in its expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

Management's Discussion and Analysis of Financial Condition and Results of Operations

REISSUE OF HISTORICAL FINANCIAL STATEMENTS

During the process of preparing the Company to become a reporting company under U.S. securities laws, the Company reconsidered the presentation of its net revenue. The Audit Committee of the Board of Directors and management concluded on October 20, 2011 that it was more appropriate to present gross foreign currency mark-up amounts billed for multi-currency processing services, net of the mark-up amounts shared with acquiring bank and processing customers and their merchants, with respect to such services. Management consulted with the Company's independent registered public accountant, Deloitte & Touche LLP, regarding the issue. As a result, the Company has restated its audited consolidated financial statements for the years ended December 31, 2008, 2009 and 2010 and unaudited consolidated financial statements for the six months ended June 30, 2010. The Company does not believe that these presentational adjustments and the corrections referred to below are material to its financial statements for any reported period.

The Company adjusted the presentation of multi-currency processing services revenues earned on our indirectly acquired business from gross to be net of the amounts related to certain third party revenue share arrangements. Historically, the Company has reported the gross foreign currency mark-up amounts billed, as revenue with the acquirer and merchant share of the gross mark-up being deducted from revenue as a cost of revenue. The financial statements for the years 2008, 2009 and 2010 and the six months ended June 30, 2010 have been adjusted to show as net revenue, the net amount the Company retains after paying these revenue share amounts. The adjustments resulted in a reduction of previously reported revenues and corresponding reductions in cost of revenue in those periods. For 2008, 2009 and 2010 the reduction in revenue and the corresponding reduction in cost of revenue are $14.7 million, $20.7 million and $34.1 million, respectively, and for the six months ended June 30, 2010 the reduction in revenue and the corresponding reduction in cost of revenue is $14.1 million.

The Company has also taken the opportunity to make certain corrections to its financial statements, as explained in the notes thereto, which are unrelated to the adjustments referred to above and which are not considered material to the financial statements for any period. The complete restated audited Consolidated Financial Statements as of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009 and 2010, together with the notes thereto and the updated auditors' opinion thereon, have been posted on the Company's website at www.planetpayment.com and at www.otcqx.com.

The previously issued Consolidated Financial Statements as of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009 and 2010, together with the notes thereto and auditors' opinion thereon, and previously issued unaudited Consolidated Financial Statements as of and for the six months ended June 30, 2010, should no longer be relied upon. Similarly, related press releases, annual reports and stockholder communications describing the Company's financial statements for these periods should no longer be relied upon. Only the reissued statements for such periods should be relied upon. The restated unaudited consolidated statements of operations and cash flows for the six months ended June 30, 2010 are included in the financial statements appended to this announcement and in the Company's OTCQX Second Quarter Report referenced above.

RESULTS OF OPERATIONS

Six Months Ended June 30, 2011 Compared to the Six Months Ended June 30, 2010

NON-GAAP MEASURES

The Company provides certain non-GAAP financial measures in this statement, in order to provide investors with additional perspective of underlying business trends and results. In addition management utilizes these measures in monitoring performance. These non-GAAP key business indicators, which include Adjusted EBITDA, should not be considered replacements for and should be read in conjunction with the GAAP financial measures.

EBITDA: Adjusted EBITDA for the period was $2.6m compared to a loss of ($0.4m) a year ago. The increase in adjusted EBITDA for the first half reflects the increase in revenue and gross profit during the period. See Table 1 below for a reconciliation of Net loss to adjusted EBITDA.