TIDMBILL
RNS Number : 8818M
Billing Services Group Limited
20 September 2019
For Immediate Release
Billing Services Group Limited
("BSG" or the "Company")
Unaudited interim results for the six months ended June 30,
2019
IMPROVED EBITDA DRIVEN BY HIGHER GROSS MARGIN
AND LOWER OPERATING EXPENSES
(September 20, 2019) San Antonio, Texas, USA - BSG, a leading
provider of telecommunications clearing and financial settlement
products, Wi-Fi data solutions and verification services, today
announces its unaudited results for the six months ended June 30,
2019.
Financial Highlights
(All amounts in US$)
Six Months Ended June 30
2019 2018
-------------- -------------------
Revenues $ 7.0 million $ 8.4 million
Gross margin 64.4% 58.3%
Cash operating expenses $ 4.0 million $ 4.5 million
EBITDA (1) $ 0.5 million $ 0.3 million
Net income (loss) $ 0.0 million $ (0.6) million
Net income (loss) per $ 0.00 per $ (0.00) per share
basic share share
Cash balance at end of
period $ 7.1 million $ 9.0 million
(1) EBITDA is computed as earnings before interest, income
taxes, depreciation, amortization and other non-cash and
nonrecurring income or expense items. EBITDA is not a recognized
measure under generally accepted accounting principles (GAAP).
-- Experienced a $1.4 million decline in revenue ($7.0 million
vs. $8.4 million in the first half of 2018)
-- Improved gross margin by 6.1 percentage points (64.4% vs. 58.3% in the first half of 2018)
-- Reduced operating expenses by $0.5 million ($4.0 million vs.
$4.5 million in the first half of 2018)
-- Generated $0.5 million of EBITDA (2018: $0.3 million)
-- Paid $1.3 million in cash dividends
-- Ended the period with $7.1 million of cash (December 31, 2018: $9.2 million)
-- Ended the period with $5.4 million of working capital (December 31, 2018: $6.6 million)
BSG Wireless Operational Highlights
-- Renewed the web application contract with British Telecom
-- Signed a new authentication service contract with Comcast
-- Signed two new mobile application development and service contracts with Comcast
-- Renewed our WLDS two year contract with Telus
Third Party Verification ("VoiceLog") Operational Highlights
-- Completed an Electronic Letter of Authorization product
offering that has been deployed with our first client
-- Implemented processes to begin handling telemarketing sales with Direct Energy
-- Completed organizational and certain partner changes that
streamlined operations and delivery updates and resulted in cost
savings
Current Trading and Strategy
-- As described in previous announcements, the Company performed
a strategic review to assist the Board in determining the future
composition of the group, including capital structure and business
lines. There have been five material actions taken as a result of
the review:
-- Completed a $5.0 million cash tender offer in December 2017
-- Engaged investment banks and initiated discussions to sell BSG Wireless in 2017
-- Paid a $1.2 million cash dividend in July 2018
-- Renewed discussions with possible buyers for all or parts of the business in 2019
-- Paid a $1.3 million cash dividend in April 2019
-- Following a sale of any portion of BSG's businesses, the
Board will consider further cash distributions and other actions
with respect to any remaining assets or business lines.
-- Trading for the six months ended June 30, 2019 was in line
with the Board's expectations and consistent with the recent
trading conditions experienced by the Company.
-- The Company will not provide guidance on projected future financial performance at this time.
Commenting on the results, Denham H.N. Eke and Jason R. Wolff,
Non-Executive Co-Chairmen, said:
"The first-half results demonstrate the Company's disciplined
execution of its business plan. Improved gross margins and lower
operating expenses enabled the Company to generate a higher level
of EBITDA despite lower revenues."
INQUIRIES:
Billing Services Group Limited +1 210 949 7000
Norman M. Phipps
finnCap Limited +44 (0) 20 7220 0500
Stuart Andrews/Scott Mathieson
About BSG:
BSG's headquarters is located in San Antonio, Texas, USA. The
Company's shares are traded on the London Stock Exchange (AIM:
BILL). For more information on BSG, visit
(www.bsgclearing.com).
Chief Executive's Statement
Our first-half results for 2019 demonstrate an effective
execution of the business plan. The Company generated $0.5 million
of EBITDA, which was an improvement over the $0.3 million generated
in the same period last year. The $0.2 million improvement in
EBITDA is particularly noteworthy, because revenues declined $1.4
million (17%) compared to the first half of last year.
The Company paid a $1.3 million cash dividend in April 2019. At
June 30, 2019, the Company held $7.1 million in cash.
Financial Performance
Revenues. The decline in revenues was expected. For the past
several years, we have regularly commented on the secular decline
in transaction volumes associated with our legacy business line -
billing and clearing services related to wireline telecommunication
providers. The trend will continue as wireless communications
displace wireline phone usage. It is also important to reiterate
that a decision by the remaining local exchange carriers (LECs) to
exit third-party billing will have a material adverse effect on
this business segment and the overall business.
BSG operates two other business lines designed to complement the
legacy business segment and diversify revenue streams. The first,
BSG Wireless, provides Wi-Fi data clearing services to wireless
network operators in North America and Europe. Unlike our legacy
business, BSG Wireless is a beneficiary of growth in wireless
communications. Our other business line, VoiceLog, provides
independent transaction confirmations for US customers, including
utility services, cable/telecommunication companies and healthcare
providers. VoiceLog is unaffected by trends in wireline and
wireless communications. Combined revenues from these two business
lines compare favorably to last year, but in an amount insufficient
to offset the revenue decline in our legacy business line.
EBITDA. The improvement in this year's first-half EBITDA
resulted from an expansion of gross margin and expense reductions.
Gross margin improved by 6.1 percentage points due to (i) more
favorable pricing on services related to our legacy business line
and (ii) revenue growth in BSG Wireless, which operates at a higher
gross margin level than the legacy business. Additionally, EBITDA
benefitted from $0.5 million of expense reductions, which largely
resulted from moving a portion of BSG Wireless' UK-based sales,
data management, accounting and financial functions into the
Company's San Antonio facility. The realignment reduced
compensation and other expenses. The expense reduction actions were
taken in steps during the first half of 2018. A full six-month
effect of the on-going savings was realized during the first half
of 2019.
Balance Sheet. The Company's balance sheet at June 30, 2019 is
strong, with $7.1 million of cash and $5.4 million of working
capital. The reduction in cash balance and working capital during
the first half of 2019 is largely attributable to the $1.3 million
cash dividend paid in April and the adoption of the new lease
accounting standard (see Note 4).
Strategic Review
As described in previous announcements, the Company initiated a
strategic review to assist the Board in determining the future
composition of the group, including capital structure and business
lines. There have been five material actions taken as a result of
the review:
-- Completed a $5.0 million cash tender offer in December 2017
-- Engaged investment banks and initiated discussions to sell BSG Wireless in 2017
-- Paid a $1.2 million cash dividend in July 2018
-- Renewed discussions with possible buyers for all or parts of the business in 2019
-- Paid a $1.3 million cash dividend in April 2019
The actions listed above have cumulatively returned $7.5 million
in cash to shareholders over the past 18 months.
Going Forward
Management continues to focus on actions that will improve
earnings and cash flow. The Board remains focused on the future
composition of the group, including creating liquidity events for
our shareholders, and the optimization of capital allocation.
In light of the potentially significant changes in the business,
we will not provide guidance on projected future financial
performance.
Sincerely,
Norman M. Phipps
Chief Executive Officer
FINANCIAL REVIEW
Financial Review of the Six Months Ended June 30, 2019
The Company's unaudited results for the six months ended June
30, 2019 are compared against the six months ended June 30, 2018 in
the accompanying consolidated financial statements. BSG's
consolidated financial statements are prepared in conformity with
United States GAAP for interim financial information.
Certain Terms
Revenues. Revenues are derived primarily from fees charged to
wireline and wireless service providers for data clearing,
financial settlement, information management, payment and financial
risk management, third-party verification and customer service
functions. During 2016, the Company introduced a direct billing
service under which end-user consumers are invoiced directly by the
Company, rather than through LECs as third-party billers. Revenue
recognized under third-party billing includes the Company's service
fees plus amounts necessary to compensate the LECs for their
third-party billing services. Revenue for direct billing does not
include any components other than the Company's service fees.
Cost of Services and Gross Profit. Cost of services arises
primarily in the Company's wireline billing and clearing business.
Cost of services in the clearinghouse business includes billing and
collection fees charged by LECs and other service providers for
payment processing. Such fees are assessed for each record
submitted and for each bill rendered to end-user consumers. BSG
charges its customers a negotiated fee for billing and collection
services. Accordingly, gross profit is generally dependent upon
transaction volume, processing fees charged per transaction and any
differential between the fees charged to customers by BSG and the
related fees charged to BSG by LECs and other service
providers.
Operating Expenses. Operating expenses include all selling,
marketing, data management, customer service, facilities and
administrative costs (including payroll and related expenses)
incurred in support of operations, substantially all of which are
settled through the payment of cash.
Depreciation and Amortization. Depreciation expense applies to
software, furniture and fixtures, telecommunications and computer
equipment. Amortization expense relates to definite-lived
intangible assets that are amortized in accordance with Accounting
Standards Codification (ASC) 350, Intangibles - Goodwill and Other.
These assets consist of contracts with customers and LECs. Assets
are depreciated or amortized, as applicable, over their respective
useful lives.
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA). Earnings before interest, income taxes, depreciation and
amortization, a non-GAAP metric, is a measurement of profitability
often used by investors and lenders. The computation of EBITDA also
excludes other non-cash and nonrecurring items as additions or
deductions to earnings.
Third-Party Payables. Third-party payables include amounts owed
to customers in the ordinary course of clearinghouse activities and
additional amounts maintained as reserves for retrospective charges
from LECs and other parties. In its clearinghouse business, the
Company aggregates call records received from its customers. It
then submits the call records either to (i) LECs for billing to
end-user consumers; or (ii) end-user consumers. The Company
collects funds from LECs and directly billed end-user consumers
each day.
Under normal circumstances, funds collected from LECs are
distributed to the Company's customers approximately ten days after
receipt, under weekly settlement protocols. The Company withholds a
portion of the funds received from LECs to pay (i) the Company's
processing fees, (ii) billing and collection fees of LECs, (iii)
sales and other taxes paid by the Company and (iv) an amount deemed
necessary to serve as a reserve against retrospective charges from
LECs.
Funds collected from directly billed end-user consumers are
credited to the Company's customers when received. The Company
withholds a portion of the funds received from end-user consumers
to pay (i) the Company's processing fees, (ii) sales and other
taxes paid by the Company and (iii) an amount deemed necessary to
serve as a reserve against retrospective charges from payment
processors or other parties.
When LECs, payment processors and other parties make payments to
the Company, they withhold funds to cover a variety of expenses and
potential retrospective charges. As noted above, the Company
similarly withholds funds from its customers to cover expenses and
retrospective charges. The third-party payables balance is computed
as the excess of (i) funds owed to the Company's customers,
inclusive of reserves for retrospective charges, over the sum of
(ii) amounts owed from the Company's customers and (iii) reserves
withheld for retrospective charges by LECs, payment processors and
other parties.
Comparison of Results for the Six Months Ended June 30, 2019 to
the Six Months Ended June 30, 2018
Total Revenues. Total revenues of $7.0 million in 2019 were $1.4
million, or 17%, lower than the $8.4 million of revenues recorded
during the first half of 2018. The $1.4 million decrease reflects
lower transaction volumes across all clearing, settlement and
customer service activities provided for wireline service
providers, partially offset by improved pricing for clearing,
settlement and customer service activities and higher managed
service fees arising within the wireless business.
Cost of Services and Gross Profit. Cost of services in the first
half of 2019 was $2.5 million, compared to $3.5 million in the
first half of 2018. The $1.0 million, or 29%, decrease in cost of
services largely reflects lower fees from LECs for billing and
collection services attributable to the lower level of transaction
volumes. The Company generated $4.5 million of gross profit in the
first half of 2019, compared to $4.9 million in the first half of
2018. The gross margin of 64.4% in the first half of 2019 is 6.1
percentage points higher than the 58.3% margin achieved in the
first half of 2018. The improved gross margin in 2019 resulted from
improved pricing for billing and clearing services and a larger
percentage of revenue originating from the wireless business, which
operates at a higher gross margin level than the wireline
business.
Operating Expenses. Operating expenses were $4.0 million in the
first half of 2019, compared to $4.5 million in the first half of
2018. The $0.5 million, or 11%, decrease largely reflects
reductions in compensation and other expenses in BSG Wireless,
primarily attributable to moving a portion of BSG Wireless'
UK-based sales, data management, accounting and financial functions
into the Company's San Antonio facility during 2018.
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA). The Company generated $0.5 million of EBITDA during the
first half of 2019, compared to $0.3 million during the first half
of 2018. A reconciliation of net income (loss) and EBITDA in each
period follows:
Six Months Ended June 30
$ millions 2019 2018
Net income (loss) $ - $ (0.6)
Depreciation expense 0.5 0.6
Amortization of intangibles 0.1 0.3
Nonrecurring restructuring
expense - 0.4
Income tax expense - 0.2
Other income, net (0.1) (0.6)
EBITDA $ 0.5 $ 0.3
======= ========
Depreciation and Amortization Expense. Depreciation and
amortization expenses totaled $0.6 million in the first half of
2019, compared to $0.9 million in the first half of 2018. The $0.3
million decline reflects cessation of amortization charges on
components of intangible assets for which accumulated amortization
charges reached the assets' respective gross carrying values.
Nonrecurring Restructuring Expense. In the first half of 2018,
the Company recognized $0.4 million of nonrecurring restructuring
expense associated with severance and similar payment obligations
related to headcount reduction and other changes in the BSG
Wireless business. Nonrecurring restructuring expense was not
included as an expense for purposes of computing EBITDA.
Other Income, Net. The Company realized $0.1 million of other
income, net during the first half of 2019, compared to $0.6 million
in the first half of 2018. Other income, net in both periods arose
primarily from adjustments to reserves related to class action
litigation and recoveries from customers.
Other income and expense arises from miscellaneous items
typically of a nonrecurring nature. Accordingly, other income and
expense items were not included as earnings or expense for purposes
of calculating EBITDA.
Change in Cash. BSG's cash balance at June 30, 2019 was $7.1
million, compared to $9.2 million at December 31, 2018. The $2.1
million decrease in cash during the first half of 2019 is largely
attributable to a $1.3 million dividend, a $0.6 million use of cash
in operating activities, $0.1 million of capital expenditures and
$0.1 million of payments on long-term debt.
Change in Restricted Cash. In the ordinary course of business,
LECs withhold funds from their payments to the Company in order to
create a reserve securing potential future obligations of the
Company to the LEC. Through December 31, 2017, pursuant to a 2012
agreement with one LEC, the LEC released a net of $0.8 million of
cash reserves. The cash was transferred into a restricted Company
bank account used for funding the Company's indemnification
obligations under class action litigation against the LEC. During
2018, $0.5 million was released from the restricted cash account
($0.4 million during the first half of 2018), reducing restricted
cash to $0.3 million at December 31, 2018 and June 30, 2019.
Change in Third-Party Payables. Third-party payables at June 30,
2019, inclusive of long-term liabilities, were $3.9 million,
compared to $4.4 million at December 31, 2018. The $0.5 million
decrease in third-party payables during the first half of 2019
resulted largely from ordinary course settlement activities, which
in turn were affected by the reduction of transaction volume in
third-party billing.
Change in Accrued Liabilities. Accrued liabilities at June 30,
2019 were $0.3 million, compared to $0.2 million at December 31,
2018. The $0.1 million increase in accrued liabilities was
attributable to the timing of ordinary course payments and
adjustments.
Capital Expenditures. During the first half of 2019, the Company
invested $0.1 million in capital expenditures, primarily for
computer equipment. In the first half of 2018, capital expenditures
totaled $0.3 million.
Cash Flows for the Six Months Ended June 30, 2019
Cash flow used in operating activities. Net cash used in
operating activities was $0.6 million during the first half of
2019. Net cash used was principally attributable to a $0.6 million
reduction in trade accounts payable, a $0.5 million reduction in
third-party payables and a $0.2 million increase in trade
receivables, offset by $0.6 million of depreciation and
amortization.
Cash flow used in investing activities. Net cash used in
investing activities was $0.1 million, reflecting $0.1 million of
capital expenditures.
Cash flow used in financing activities. Cash used in financing
activities was $1.4 million, attributable to $1.3 million of
dividends and $0.1 million of payments on long-term debt.
******************************
A copy of this statement is available on the Company's website
(www.bsgclearing.com), and copies are available from BSG's
Nominated Advisor at the address below:
Billing Services Group Limited
c/o finnCap Limited
60 New Broad Street
London EC2M 1JJ
United Kingdom
Forward Looking Statements
This report contains certain "forward--looking" statements and
information relating to the plans, objectives, expectations and
intentions of the Company that are based on the beliefs of the
Company's management as well as assumptions made by and information
currently available to the Company's management. When used in this
report, the words "anticipate," "believe," "estimate," "expect,"
"intend," "projects," "could," "should," "will" and words or
phrases of similar meaning are intended to identify
forward--looking statements. Forward-looking statements reflect the
Company's current views with respect to future events and financial
performance. Such statements, including certain information set
forth herein under "Financial Review" that is not historical fact
or statement of current condition, reflect management's assessment
of the current risks, uncertainties and assumptions related to
certain factors including, without limitation, the competitive
environment, general economic conditions, customer relations,
relationships with local exchange carriers and other vendors,
availability of credit, borrowing terms, interest rates, foreign
exchange rates, litigation, governmental regulation and
supervision, capital expenditures, product development, product
acceptance, technological change and disruption, changes in
industry practices, one-time events and other factors described
herein. Based upon changing conditions or circumstances arising
from any one or more of these risks or uncertainties, or should any
underlying assumptions prove incorrect, actual results may vary
materially from historical or anticipated results as described
herein.
Readers are cautioned not to place undue reliance on
forward-looking statements. The Company does not intend to update
or revise these forward--looking statements, whether because of new
information, future events or otherwise.
Billing Services Group Limited
Condensed Consolidated Balance Sheets
(In thousands, except shares)
June 30, December 31, June 30,
2019 2018 2018
----------- ------------------ -----------
(Derived from
Audited Financial
(Unaudited) Statements) (Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 7,096 $ 9,234 $ 9,022
Restricted cash 342 342 442
Accounts receivable 2,536 2,321 3,521
Purchased receivables - - 233
Prepaid expenses and other current
assets 345 277 436
Total current assets 10,319 12,174 13,654
Property, equipment and software 49,882 49,820 49,979
Less: accumulated depreciation and
amortization 47,226 46,697 46,204
----------- ------------------ -----------
Net property, equipment and software 2,656 3,123 3,775
Intangible assets, net of accumulated
amortization of $76,534, $76,457 and
$76,201 at June 30, 2019, December
31, 2018 and June 30, 2018, respectively 5,190 5,278 5,614
Right-of-use operating lease 547 - -
Deferred taxes 1,811 1,811 247
Goodwill - 1 9,964
Other assets 21 21 65
----------- ------------------ -----------
Total assets $ 20,544 $ 22,408 $ 33,319
=========== ================== ===========
Continued on following page
Billing Services Group Limited
Condensed Consolidated Balance Sheets (continued)
(In thousands, except shares)
June 30,
December 31, June 30,
2019 2018 2018
---------------- ------------------------------------ ----------------
(Derived from
Audited Financial
(Unaudited) Statements) (Unaudited)
Liabilities and shareholders' equity
Current liabilities:
Trade accounts payable $ 589 $ 1,169 $ 1,358
Third-party payables 3,549 4,040 4,724
Accrued liabilities 291 214 1,183
Right-of-use operating lease liability
- current 407 - -
Term loan note payable 91 121 118
Total current liabilities 4,927 5,544 7,383
Term note payable - noncurrent 26 56 118
Right-of-use operating lease liability
- noncurrent 107 - -
Other liabilities 320 368 577
Total liabilities 5,380 5, 968 8,078
Commitments and contingencies
Shareholders' equity:
Common stock, $0.59446 par value;
350,000,000
shares authorized; 164,768,689 shares
issued and outstanding at June 30, 2019,
December 31, 2018 and June 30, 2018 97,948 97,948 97,948
Additional paid-in capital (deficit) (110,596) (110,596) (110,600)
Retained earnings 28,781 30,035 38,518
Change in accounting principle - Leases
ASC 842 33 - -
Accumulated other comprehensive loss (1,002) (947) (625)
Total shareholders' equity 15,164 16,440 25,241
Total liabilities and shareholders' equity $ 20,544 $ 22,408 $ 33,319
================ ==================================== ================
See accompanying notes.
Billing Services Group Limited
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Six Months Ended June 30,
2019 2018
------------------ -------------------
(Unaudited) (Unaudited)
Operating revenues $ 7,041 $ 8,360
Cost of services 2,508 3,490
------------------ -------------------
Gross profit 4,533 4,870
Selling, general, and administrative
expenses 3,985 4,535
EBITDA 548 335
Depreciation and amortization expense 634 958
Nonrecurring restructuring expense - 428
Stock-based compensation expense - 11
Operating loss (86) (1,062)
Other income:
Interest income, net 4 4
Foreign currency transactions 9 15
Other income, net 95 615
------------------ -------------------
Total other income, net 108 634
------------------ -------------------
Income (loss) from operations before
income taxes 22 (428)
Income tax benefit (expense) 23 (158)
------------------ -------------------
Net income (loss) 45 (586)
Other comprehensive loss (55) (204)
------------------ -------------------
Comprehensive loss $ (10) $ (790)
================== ===================
Net income (loss) per basic and diluted
share:
Basic net income (loss) per share $ 0.00 $ (0.00)
================== ===================
Diluted net income (loss) per share $ 0.00 $ (0.00)
================== ===================
Weighted average shares outstanding 164,769 164,769
================== ===================
See accompanying notes.
Billing Services Group Limited
Condensed Consolidated Statements of Cash Flows
(In thousands)
Six Months Ended June
30,
2019 2018
------------------------ -------------------------
(Unaudited) (Unaudited)
Operating activities
Net income (loss) $ 45 $ (586)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation 552 650
Amortization of intangibles 82 308
Stock-based compensation expense - 11
Loss on asset disposal 1 3
Expense in provision for deferred taxes - 144
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (215) 95
Increase in other current assets and other
assets (68) (53)
Decrease in trade accounts payable (580) (65)
Decrease in third-party payables (539) (1,439)
Increase (decrease) in accrued and other
liabilities 77 (1,665)
Net cash used in operating activities (645) (2,597)
Investing activities
Purchases of property, equipment and software (85) (345)
Net receipts on purchased receivables - 227
Net cash used in investing activities (85) (118)
Financing activities
Borrowings of long-term debt - 37
Payments on long-term debt (60) (53)
Restricted cash - 389
Dividend payment (1,300) -
Net cash (used in) provided by financing
activities (1,360) 373
Effect of exchange rate changes on cash (48) (164)
------------------------ -------------------------
Net decrease in cash and cash equivalents (2,138) (2,506)
Cash and cash equivalents at beginning of
period 9,234 11,528
------------------------ -------------------------
Cash and cash equivalents at June 30 $ 7,096 $ 9,022
======================== =========================
See accompanying notes.
BILLING SERVICES GROUP LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited interim condensed consolidated
financial statements of Billing Services Group Limited (BSG or the
Company) have been prepared in accordance with accounting
principles generally accepted in the United States for interim
financial information. Accordingly, they do not include all of the
information and disclosures required by generally accepted
accounting principles for complete financial statements. Management
uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities,
and the reported amounts of revenues and expenses. Actual results
could vary from the estimates that were used.
NOTE 2 NET INCOME OR LOSS PER COMMON SHARE
Basic and diluted net income or loss per share are computed by
dividing net income or loss by the weighted average number of
shares of common stock outstanding during the relevant periods.
Diluted net income or loss per share includes the effect of all
dilutive options exercisable into common stock, unless the effect
of such inclusion would be anti-dilutive.
NOTE 3 COMMITMENTS AND CONTINGENCIES
The Company is involved in various claims, legal actions and
regulatory proceedings arising in the ordinary course of business.
The Company believes it is unlikely that the outcome of any of the
claims or proceedings to which the Company is a party will have a
material adverse effect on the Company's financial position. Due to
the inherent uncertainty of litigation and regulatory proceedings,
however, there can be no assurance that the resolution of any
particular claim or proceeding would not have a material adverse
effect on the Company's results of operations for the fiscal period
in which such resolution occurred.
The Company's subsidiary's federal tax returns for 2016 through
2018 remain subject to examination by the federal tax authority.
Most state tax returns for the 2016 through 2018 tax years remain
open for examination by the relevant tax authorities.
NOTE 4 CHANGE IN ACCOUNTING PRINCIPLE - LEASES
On January 1, 2018, the Company adopted ASC Topic 842, Leases.
The new guidance requires the recognition of right-of-use assets
and lease liabilities on the balance sheet for leases with terms
greater than 12 months or leases that contain a purchase option
that is reasonably certain to be exercised. Lessees are now
required to classify leases as either finance or operating leases.
This classification will determine whether lease expense is
recognized based on an effective interest method or on a
straight-line basis over the term of the lease.
NOTE 4 CHANGE IN ACCOUNTING PRINCIPLE - LEASES (continued)
The Company elected to utilize the package of practical
expedients in ASC 842-10-65-1(f) that, upon adoption of ASC 842,
allows entities to (1) not reassess whether any expired or existing
contracts are or contain leases, (2) retain the classification of
leases (e.g., operating or finance lease) existing as of the date
of adoption and (3) not reassess initial direct costs for any
existing leases. The Company elected to utilize the practical
expedient in ASC 842-10-65-1(gg) in which an entity not need to
assess whether existing land easements not previously accounted for
as leases contain a lease under ASC 842. The Company also elected
to utilize the practical expedient in ASC 842-10-15-37 in which the
Company has chosen to account for each separate lease component of
a contract and its associated nonlease components as a single lease
component.
The Company adopted ASC 842 using the modified retrospective
method, and accordingly, the new guidance was applied
retrospectively to leases that existed as of January 1, 2019 (the
date of initial application). As a result, the Company has recorded
total right-of-use assets of approximately $706 thousand, total
current lease liabilities of approximately $358 thousand, total
noncurrent lease liabilities of $315 thousand and an adjustment to
beginning retained earnings of approximately $33 thousand as of
January 1, 2019. The adoption of ASC 842 did not have a material
impact on the Company's results of operations or cash flows.
The Company's right of use assets and lease liabilities relate
to office facilities used for the Company's headquarters. The lease
does not contain options to renew, options to purchase the leased
property, or material residual value guarantees, or material
restrictions and covenants.
Long-term leases (leases with terms greater than 12 months) are
recorded on the consolidated balance sheet at the present value of
the minimum lease payments not yet paid. The Company uses its
incremental borrowing rate to determine the present value of the
lease when the rate implicit in the lease is not readily
determinable.
Short-term leases (leases with an initial term of 12 months or
less or leases that are cancelable by the lessee and lessor without
significant penalties) are not recorded on the consolidated balance
sheet and are expensed on a straight-line basis over the lease
term.
For the six month period ended June 30, 2019, the Company
recognized expense related to operating leases in the amount of
approximately $211 thousand.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BLGDCISBBGCC
(END) Dow Jones Newswires
September 20, 2019 02:00 ET (06:00 GMT)
Billing Services (LSE:BILL)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Billing Services (LSE:BILL)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024