NetSpend Holdings Inc. is reporting higher first-quarter revenue, but the prepaid card marketer experienced a loss it is attributing to expenses from litigation.
NetSpend's revenue rose 13%, to $91.4 million, for the quarter compared with a year earlier. The company had a net loss of $5.8 million; it reported net income of $7.8 million a year earlier. The loss includes pre-tax litigation related losses of $25.3 million.
NetSpend said May 1 that a jury awarded Alexsam $18 million in royalties stemming from patent-infringement litigation Alexsam began in 2003. The figure does not include prejudgment interest and attorney fees, which NetSpend estimates at $6 million. NetSpend plans to request a reduction of the awarded amount. It also plans to appeal the jury's verdict and other rulings.
"We had positive results in the first quarter with all key metrics trending up as we experienced a strong tax season and completed the launch of 7-Eleven," Dan Henry, NetSpend chief executive, said in an earnings release. "During the quarter, we launched online programs with BET (see story) and PayPal (see story). We also made significant progress on executing our retail expansion plans with the signing of many new agreements."
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