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EXHIBIT 20.1
[LOGO] LML Payment Systems news release
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LML ANNOUNCES SECOND QUARTER RESULTS AND ALSO REPORTS THE CORPORATION IS NOW A
DOMESTIC U.S. ISSUER
VANCOUVER, BC, November 15, 2000 - LML PAYMENT SYSTEMS INC. (the "Corporation")
(Nasdaq: LMLP) today reported results for the second quarter and six month
period ended September 30, 2000. For the second quarter, revenues increased to
$2,462,683, an increase of $2,404,419 (4,127%) compared to $58,264 for the
corresponding period of the previous year. Operating expenses, exclusive of non-
cash items, were $1,898,285, an increase of $1,757,844 (1,252%) compared to
$140,441 for the corresponding period of the previous year. Sales and
administrative expenses, exclusive of non-cash items, were $916,629, an increase
of $741,497 (424%) compared to $175,132 for the corresponding period of the
previous year. Operating income was $564,397, an increase of $646,574 (787%)
compared to the operating loss of ($82,177) for the corresponding period of the
previous year. The increases in revenues, expenses and income for the period
were primarily attributable to the inclusion of financial results for wholly-
owned subsidiaries CF Data and Check Center and two (2) months financial results
for Phoenix EPS and Check Technologies Inc. which were both acquired by the
Corporation during the period.
There was a loss before interest, tax, depreciation and amortization ("EBITDA")
of ($276,513) or ($.02) per share compared to ($194,000) or ($.02) per share for
the corresponding period of the previous year. Non-cash amortization expenses of
$719,848 were primarily attributable to corporate acquisitions. There was a net
loss of ($997,485) or ($.06) per share, compared to ($375,849) or ($.03) per
share reported for the three months ended September 30, 1999.
Revenues for the six months ended September 30, 2000 increased to $4,608,228, an
increase of $4,459,811 (3,005%) compared to $148,417 for the corresponding
period of the previous year. Operating expenses, exclusive of non-cash items,
were $3,640,634, an increase of $3,346,141 (1,137%) compared to $294,493 for the
six months ended September 30, 1999. Operating income for the six months ended
September 30, 2000 was $967,593, an increase of $1,113,669 (763%) from the
operating loss of approximately ($146,076) for the corresponding period of the
previous year. Sales, general and administrative expenses, exclusive of non-cash
items, increased $1,219,734 (330%) to $1,589,937 compared to $370,203 for the
six months ended September 30, 1999.
For the six months ended September 30, 2000, the Corporation reported an EBITDA
loss of ($328,717) or ($.02) per share compared to ($461,445) or ($.04) per
share for the corresponding period of the previous year. Non-cash amortization
expenses of $1,145,094 for the six months ended September 30, 2000, were, again,
primarily attributable to corporate acquisitions. There was a net loss of
($1,556,983) or ($.10) per share, compared to a net loss of ($808,998) or ($.07)
per share reported for the corresponding period of the previous year.
At the end of the quarter, the Corporation had available cash of $11,214,057
compared to $99,957 for the corresponding period for the previous year.
-more-
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"During this quarter, through prudent investment of financial, technical and
managerial resources, we have made important advances toward the accomplishment
of our long-term objective of establishing LML Payment Systems as a significant
player in the electronic payment processing industry," said Corporation
President and CEO, Patrick H. Gaines.
Effective September 30, 2000, the Corporation, which had been a foreign private
issuer, became a domestic U.S. issuer for purposes of the U.S. Securities
Exchange Act of 1934, as amended (the "Exchange Act"). As a result, all of the
periodic reports (including the Form 10-Q relating to the Corporation's quarter
ended September 30, 2000) and other documents required to be filed by the
Corporation under the Exchange Act are now filed via Edgar with the U.S.
Securities and Exchange Commission (the "SEC") and may be obtained by accessing
the database maintained by the SEC at www.sec.gov.
LML Payment Systems is a financial payment processor specializing in providing
end-to-end check processing solutions for national, regional and local retail
merchants. The Corporation's processing services include traditional check
verification and collection along with electronic processing services including
Electronic Check Re-presentment (whereby returned paper checks are represented
for payment electronically) and Electronic Check Conversion (whereby paper
checks are converted into electronic transactions right at the point of sale).
The Corporation's intellectual property estate will include a recently allowed
patent application regarding internet checking transactions, in addition to U.S.
Patent No. 5,484,988. U.S. Patent No. 5,484,988, describes a "Checkwriting point
of sale system," which, through a centralized database and authorization system,
is capable of providing and administering various electronic payment services
for customers and businesses.
Statements contained in this news release which are not historical facts are
forward-looking statements, subject to uncertainties and risks. For a discussion
of the risks associated with the Corporation's business, please see the
documents filed by the Corporation with the SEC.
CONTACTS: Patrick Gaines
President & CEO Investor Relations
LML Payment Systems Inc. LML Payment Systems Inc.
(604) 689-4440 (800) 888-2260
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LML PAYMENT SYSTEMS INC.
CONSOLIDATED BALANCE SHEETS
(in U.S. dollars)
<TABLE>
<CAPTION>
September 30 March 31
2000 2000
$ $
(Unaudited)
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and short term deposits 11,214,057 11,528,850
Accounts receivable 431,586 369,464
Prepaid expenses 512,264 459,999
----------------- -----------------
12,157,907 12,358,313
----------------- -----------------
REAL PROPERTY 1,523,816 1,378,467
CAPITAL ASSETS 7,590,824 2,157,326
PATENTS 1,766,718 602,491
OTHER ASSETS
Restricted cash 208,561 -
Goodwill, net 7,671,733 7,009,387
Non-Compete, net 137,509 -
Note receivable 233,176 224,376
Other assets - 7,221
----------------- -----------------
8,250,979 7,240,984
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31,290,244 23,737,581
=======================================================================================================
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 2,069,039 1,370,411
Settlement holdback 350,000 -
Current portion of long term debt 336,745 1,151,751
----------------- -----------------
2,755,784 2,522,162
LONG TERM DEBT 381,206 69,613
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3,136,990 2,591,775
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SHAREHOLDERS' EQUITY
SHARE CAPITAL 29,710,237 44,047,550
DEFICIT (1,556,983) (22,901,744)
----------------- -----------------
28,153,254 21,145,806
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31,290,244 23,737,581
=======================================================================================================
</TABLE>
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LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(in U.S. dollars, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30 September 30
2000 1999 2000 1999
$ $ $ $
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE 2,462,683 58,264 4,608,228 148,417
OPERATING EXPENSES 1,898,286 140,441 3,640,635 294,493
------------ ------------ ------------------------------
OPERATING INCOME (LOSS) 564,397 (82,177) 967,593 (146,076)
------------ ------------ ------------------------------
SALES, GENERAL & ADMINISTRATIVE EXPENSES 916,629 175,132 1,589,937 370,203
OTHER ITEMS
Other expenses 21,100 (63,309) 6,122 (54,834)
Office relocation 90,504 - 90,504 -
Interest Income (187,323) - (390,253) -
LOSS BEFORE INTEREST, TAX, DEPRECIATION
------------ ------------ ------------------------------
AND AMORTIZATION (276,513) (194,000) (328,717) (461,445)
------------ ------------ ------------------------------
Amortization 718,348 127,648 1,145,094 251,335
Interest expense 1,124 54,201 83,172 96,218
------------ ------------ ------------------------------
719,472 181,849 1,228,266 347,553
------------ ------------ ------------------------------
NET LOSS (995,985) (375,849) (1,556,983) (808,998)
============ ============ ==============================
DEFICIT, beginning of period (22,901,744) (20,554,245) (22,901,744) (20,554,245)
DEFICIT ADJUSTMENT 22,901,744 - 22,901,744 -
------------ ------------ ------------------------------
AS ADJUSTED - (20,554,245) - (20,554,245)
------------ ------------ ------------------------------
DEFICIT, end of period (995,985) (20,930,094) (1,556,983) (21,363,243)
============ ============ ==============================
LOSS PER SHARE
Basic (0.06) (0.03) (0.10) (0.07)
============ ============ ==============================
Diluted (0.06) (0.03) (0.10) (0.07)
============ ============ ==============================
AVERAGE SHARES OUTSTANDING
Basic 15,105,306 11,119,066 15,105,306 11,119,066
Diluted n/a n/a n/a n/a
</TABLE>
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LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(in U.S. dollars)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
September 30
2000 1999
$ $
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<S> <C> <C>
CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES:
Net loss (1,556,983) (808,998)
Add items not affecting cash
Amortization 1,145,094 251,335
Interest on long term debt - 54,427
Net changes in current assets and current liabilities
Accounts receivable (62,122) (77,819)
Prepaid expenses 35,062 (9,631)
Accounts payable and accrued liabilities 698,628 271,719
Settlement holdback 350,000 -
--------------- --------------
Net Cash provided by (used for) Operating Activities 609,679 (318,967)
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INVESTING ACTIVITIES
Real property (187,326) (5,505)
Acquisition of capital assets (1,529,109) (129,154)
Patent (1,449,291) (17,466)
Restricted cash (208,561) -
Goodwill (386,246) -
Non-Compete (150,010) -
Note receivable (8,800) -
Intangible assets 7,221 -
Deferred costs - (162,738)
--------------- --------------
Net cash used for Investing Activities (3,912,122) (314,863)
--------------- --------------
FINANCING ACTIVITIES
Re-payment of long term debt (1,121,280) -
Proceeds from long term borrowing - 260,000
Re-payment of capital lease liability (14,820) (12,141)
Proceeds from exercise of stock options 4,123,750 444,000
--------------- --------------
Net cash provided by Financing Activities 2,987,650 691,859
--------------- --------------
INCREASE (DECREASE) IN CASH (314,793) 58,029
Cash and Cash Equivalents, beginning of period 11,528,850 41,928
--------------- --------------
Cash and Cash Equivalents, end of period 11,214,057 99,957
=============== ==============
</TABLE>
