VersaPay Corporation, a provider of merchant credit, debit, gift and loyalty
card payment processing solutions, announced its financial and
operational results for the three-month period ended March 31, 2010. All
amounts are reported in Canadian dollars unless otherwise stated.
Q1 2010 Operational Highlights
– Increased total gross transaction value processed 83% to
$132 million from $72 million in Q1 2009
– Monthly gross transaction value processed was $58 million for
– Listed on the TSX Venture Exchange
– Completed $3.5 million equity financing
– Signed partnership agreement with the Business Improvements
of British Columbia
– Subsequent to quarter end, entered into agreement to sell 75%
ownership position in Positive Inc.
Q1 2010 Financial Summary(1)
Q1 2010 Q1
Recurring revenue(2) $2.5M
Non-recurring revenue(3) $0.1M
TOTAL REVENUE $2.6M
Adjusted EBITDA(4) $(0.5)M
Net income $(0.8)M
Net income per share $(0.08)
Cash and cash equivalents $1.4M
“The growth in our merchant customer base drove strong improvements in
our Q1 top line results, in particular our recurring revenue, which was
up 72% compared to last year,” said Bill McGill, Acting CEO of VersaPay.
“In the quarter, we continued to successfully leverage our partnership
with the Association of Canadian Travel Agencies, increasing our
penetration of the travel industry with new customer wins. In addition,
we further invested in the business, expanding our sales team, enhancing
our technology and building partnerships to better enable us to execute
on our long-term growth strategies.”
Mr. McGill continued: “We are confident in our ability to continue to
expand our merchant customer base through our direct sales efforts and
channel partnerships. We believe the depth and expertise of our team in
combination with our competitively priced, customizable, end-to-end,
onsite and online payment processing solutions, position us to
successfully capitalize on the growth opportunities in front of us.”
Q1 2010 Financial Review
Total revenue for Q1 2010 was $2.6 million, which was a 67% increase
from total revenue of $1.6 million in Q1 2009. The year-over-year
improvement in VersaPay’s top line was driven primarily by growth in the
Company’s transaction processing fees, which were $2.4 million, up from
$1.4 million in Q1 2009 as a result of the Company’s success in
continuing to expand its merchant customer base. Q1 2010 revenue from
product sales and other (primarily comprised of point-of-sale device
revenue) was $0.1 million, and revenue from VersaCard and VersaEFT fees
was $0.04 million. This is compared to Q1 2009 revenue from product
sales and other and revenue from VersaCard and VersaEFT fees of $0.1
million and $0.06 million, respectively. Recurring revenue (defined as
Transaction processing fees + VersaCard/EFT fees) for Q1 2010 was $2.5
million, or 94% of total revenue, compared to Q1 2009 recurring revenue
of $1.5 million, or 92% of total revenue.
Total expenses for Q1 2010 were $3.5 million, compared to $1.7 million
in Q1 2009. The year-over-year increase predominantly reflects the
Company’s investment in the business to establish the necessary
infrastructure in terms of sales staff, marketing, partnerships,
technology and cross-Canada reach to support its long-term growth. In
addition, the Company’s costs of service and costs of products sold
increased compared to last year, as a result of growth in number of
merchant customers VersaPay is serving.
Adjusted EBITDA for Q1 2010, was $(0.5) million, compared to $(0.1)
million in Q1 2009, reflecting VersaPay’s increased investment in the
business, which was partially offset by the Company’s revenue growth.
Net income for Q1 2010 was $(0.8) million or $(0.08) per share, compared
to $(0.1) million or $(0.26) per share.
As at March 31, 2010, VersaPay had cash and cash equivalents of $1.4
million, an increase from $0.2 million as at December 31, 2009. This
primarily reflects the $2.8 million in net proceeds VersaPay generated
from the equity financing the Company completed in Q1 2010, which was
offset, in part, by cash used in operating activities for the quarter of
$1.3 million and cash used in investing activities of $0.1 million.
(1) A complete set of financial statements and notes and MD&A for the
three-month period ended March 31, 2010 will be available on the
Company’s website at www.versapay.com and on SEDAR.
(2) Defined as Transaction processing fees + VersaCard/EFT fees
(3) Defined as Product sales (point-of-sale devices) and other
(4) Adjusted EBITDA defined as Earnings Before Interest, Taxes,
Depreciation, Amortization and Stock-based compensation. See
Q1 2010 Q1
Adjusted EBITDA $(524,654)
Interest expense $14,438
Net Earnings $(826,904)
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 VersaEFT – the
Company’s proprietary Electronic Bill Presentment and Payment solution –
which enables merchants and consumers to easily transact with one another.
The Company was recognized by PROFIT Magazine as Canada’s Top Emerging
Growth Company and was ranked Number 1 in Canada on the 2009 HOT 50
List. VersaPay is headquartered in Vancouver, Canada and has operations
in Toronto and Montreal. To learn more about VersaPay, visit