- First-quarter total revenues of $6.3 million, a decrease of
$4.3 million from first-quarter 2020
- First-quarter net loss of $1.6 million, or diluted earnings
per share (EPS) of ($0.03)
- First-quarter adjusted EBITDA of ($0.4) million, or diluted
adjusted EBITDA per share of ($0.01)
- First-quarter gross dollar load volume declined 15.2% versus
the year-ago period and increased 12.2% versus the previous
quarter
- First-quarter purchase volume declined 13.1% versus the
year-ago period and was unchanged versus the previous
quarter
- 2021 full-year financial outlook provided
Paysign, Inc. (NASDAQ: PAYS), a leading provider of prepaid card
programs, digital banking services, and payment processing, today
reported financial results for the first quarter of 2021.
“As expected, the first quarter is typically a seasonally weak
quarter for our business due to the distribution of tax refunds.
However, this year the weakness was exacerbated by the
pandemic-related stimulus check distributions and unemployment
subsidies which created a disincentive for individuals to donate
plasma. While these stimulus measures will likely continue to
impact our business through the third quarter of 2021, we remain
cautiously optimistic that our businesses will continue to rebound
as vaccinations become more prevalent and business restrictions are
lifted,” said Mark Newcomer, Paysign CEO. “During the quarter we
added three new plasma centers. So far this year, we have signed
agreements with four new entrants in the plasma collection space,
each with aggressive long-term growth plans, with initial centers
expected to go live in the second quarter. We expect to add a total
of 60 new plasma centers this year, exiting 2021 with at least 400
centers. Our average revenue per plasma center for the first
quarter was $5,260, which we expect to be a low-water mark for
2021. Additionally, we continue to win new pharmaceutical copay
business and expect three new programs to launch in the third and
fourth quarters. With $6.6 million of unrestricted cash and zero
debt on our balance sheet, we remain well-capitalized and
positioned to weather any further impacts from the pandemic.”
2021 Outlook
“While the first quarter continued to be impacted by COVID-19
and government stimulus measures, we believe those factors will
begin to abate during the second half of the year and return us to
growth in revenues and adjusted EBITDA both sequentially and
year-over-year,” said Jeff Baker, Paysign CFO. “For the full year
2021, we expect total revenue to be in the range of $29.0 million
to $32.0 million, reflecting growth of 20% to 32%, and adjusted
EBITDA to be in the range of $0.35 million to $1.90 million. Gross
profit margins are expected to be approximately 45.0%, or an
increase of 640 basis points over 2020. Operating expenses are
expected to increase modestly to $18.0 million to $18.5 million, or
2.0% to 4.9%.”
Baker concluded, “This outlook presumes that the second-quarter
results are slightly better than the first-quarter results and that
we begin to see a recovery in the business in the third quarter
when unemployment subsidies are scheduled to end in early
September. With a non-COVID-19-impacted fourth quarter, we estimate
our plasma revenue could reach $27.5 million for the full year 2021
and increase by an additional $10.0 million in 2022.”
First-Quarter 2021 Financial Overview
- Revenues decreased $4.3 million (40.6%) versus the year-ago
period.
- Plasma revenue decreased $2.0 million (26.7%) primarily due to
the impact of COVID-19 which resulted in a decrease in plasma
donations and dollars loaded to cards. Average revenue per center
declined 38.8%. We added three new plasma centers during the
quarter, exiting the quarter with 343 centers. This compares to 285
centers at the end of March 2020.
- Pharma revenue decreased $2.1 million (70.8%) primarily driven
by the change in accounting estimate that occurred in the third
quarter of 2020 which impacted the recognition of settlement income
during the first quarter compared to the first quarter of 2020
- Cost of revenues decreased $1.4 million (29.0%). Cost of
revenues are comprised of transaction processing fees, data
connectivity and data center expenses, network fees, bank fees,
card production and postage costs, customer service, program
management, application integration setup and sales and commission
expense. The decrease was primarily due the decline in plasma
transactions, as many of the plasma transaction costs are variable
in nature which are provided by third parties who charge us based
on the number of transactions that occur during the period.
- Gross profit decreased $2.9 million (50.5%) primarily due to
the reduction in pharma revenues. Gross margin was 45.1% compared
to 54.1% in the first quarter of 2020.
- Operating expenses increased $0.1 million (3.0%) from the first
quarter of 2020. The year-over-year increase between the same
period in the prior year was primarily due to severance-related
expenses, legal fees related to our class-action defense, increases
in depreciation and amortization and increases in rent costs,
partially offset by declines in staffing and compensation costs and
stock-based compensation. The severance-related expenses and legal
fees related to our class-action defense were $0.5 million of
operating expense for the quarter.
- Net income decreased $3.2 million to a loss of $1.6 million.
The overall change in net income relates to the aforementioned
factors.
- “EBITDA,” which is defined as earnings before interest, taxes,
depreciation and amortization expense, and which is a non-GAAP
metric, decreased $2.9 million to a loss of $1.0 million due to the
aforementioned factors.
- “Adjusted EBITDA,” which reflects the adjustment to EBITDA to
exclude stock-based compensation charges, and which is a non-GAAP
metric used by management to gauge the operating performance of the
business, decreased $3.0 million to a loss of $0.4 million due to
the aforementioned factors.
COVID-19 Update
The outbreak of a novel coronavirus and the incidence of the
related disease (COVID-19) starting in late 2019 has continued,
spreading throughout the United States and much of the world
beginning in the first quarter of 2020. In March 2020, the World
Health Organization declared the outbreak a pandemic. While the
disruption is currently expected to be temporary, there is
uncertainty about the duration. The COVID-19 outbreak and the new
stimulus packages signed into law during 2020 and 2021 have had and
will continue to have an adverse effect on the company's results of
operations. While we remain cautiously optimistic, given the
uncertainty around the extent and timing of the potential future
spread or mitigation of COVID-19 and around the imposition or
relaxation of protective measures, management cannot reasonably
estimate the impact on the company's future results of operations,
cash flows, or financial condition.
First-Quarter 2021 Financial Results Conference Call
Details
At 5:00 p.m. Eastern time today, the company will host a
conference call to discuss its first-quarter 2021 results. The
conference call may include forward-looking statements. The dial-in
information for this call is 877.407.2988 (within the U.S.) and
201.389.0923 (outside the U.S.). A replay of the call will be
available until August 11, 2021, and can be accessed by dialing
877.660.6853 (within the U.S.) and 201.612.7415 (outside the U.S.),
using passcode 13719135.
Forward-Looking Statements
Certain statements contained in this press release may be deemed
to be forward-looking statements under federal securities laws, and
the company intends that such forward-looking statements be subject
to the safe-harbor created thereby. All statements, other than
statements of fact, included in this release, are forward-looking
statements. Such forward-looking statements include, among others,
that our business will continue to rebound from the pandemic; the
number of new plasma centers the company expects to add in 2021
materialize; the first quarter of 2021 will be a low-water mark for
revenue per plasma center; the expected total revenue, gross profit
margins, operating expenses, adjusted EBITDA and plasma revenues
for 2021 and 2022 meet our expectations; the company’s ability to
return to year-over-year growth; and that the company remains
well-capitalized and positioned to weather impacts from the
pandemic. We caution that these statements are qualified by
important risks, uncertainties and other factors that could cause
actual results to differ materially from those reflected by such
forward-looking statements. Such factors include, among others, the
inability to continue our current growth rate in future periods;
that a downturn in the economy, including as a result of COVID-19,
as well as government stimulus measures, could reduce our customer
base and demand for our products and services, which could have an
adverse effect on our business, financial condition, profitability
and cash flows; operating in a highly regulated environment;
failure by us or business partners to comply with applicable laws
and regulations; changes in the laws, regulations, credit card
association rules or other industry standards affecting our
business; that a data security breach could expose us to liability
and protracted and costly litigation; and other risk factors set
forth in our Form 10-K for the year ended December 31, 2020. Except
to the extent required by federal securities laws, the company
undertakes no obligation to publicly update or revise any
statements in this release, whether as a result of new information,
future events or otherwise.
About Paysign, Inc.
Paysign, Inc., (NASDAQ: PAYS), is a vertically integrated
provider of prepaid card products and processing services for
corporate, consumer, and government applications. Our payment
solutions are utilized by our corporate customers as a means to
increase customer loyalty, increase patient adherence rates, reduce
administration costs, and streamline operations. Public sector
organizations can utilize our payment solutions to disburse public
benefits or for internal payments. We market our prepaid card
solutions under our Paysign brand. As we are a payment processor
and prepaid card program manager, we derive our revenues from all
stages of the prepaid card lifecycle. We provide a card processing
platform consisting of proprietary systems and software
applications based on the unique needs of our clients. We have
extended our processing business capabilities through our
proprietary Paysign platform. Through the Paysign platform, we
provide a variety of services including transaction processing,
cardholder enrollment, value loading, cardholder account
management, reporting, and customer service. The Paysign platform
is built on modern cross-platform architecture and is designed to
be highly flexible, scalable and customizable. The platform has
allowed the company to significantly expand its operational
capabilities by facilitating our entry into new markets within the
payments space through its flexibility and ease of customization.
The Paysign platform delivers cost benefits and revenue-building
opportunities to our partners. We have developed prepaid card
programs for corporate incentives and rewards including, but not
limited to, consumer rebates and rewards, donor compensation,
clinical trials, healthcare reimbursement payments, and
pharmaceutical payment assistance. We have expanded our product
offerings to include additional corporate incentive products and
demand deposit accounts accessible with a debit card. In the
future, we expect to further expand our product offerings into
other prepaid card offerings such as payroll cards, travel cards,
and expense reimbursement cards. Our cards are sponsored by our
issuing bank partners. For over 15 years healthcare companies,
major pharmaceutical companies, multinationals, prestigious
universities, and social media companies have relied on Paysign to
provide state-of-the-art prepaid payment programs tailored to their
unique requirements. Paysign® is a registered trademark of Paysign,
Inc. in the United States and other countries. For more information
visit us at paysign.com or follow us on LinkedIn, Twitter, and
Facebook.
PAYSIGN, INC. CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the three months ended
March 31,
2021
2020
Revenues Plasma industry
$
5,383,151
$
7,343,410
Pharma industry
882,830
3,020,377
Other
13,447
212,686
Total revenues
6,279,428
10,576,473
Cost of revenues
3,447,622
4,855,520
Gross profit
2,831,806
5,720,953
Operating expenses Selling, general and administrative
3,864,986
3,827,324
Depreciation and amortization
595,848
502,376
Total operating expenses
4,460,834
4,329,700
Income (loss) from operations
(1,629,028
)
1,391,253
Other income Interest income
7,101
62,161
Total other income (expense)
7,101
62,161
Income (loss) before income tax provision (benefit)
(1,621,927
)
1,453,414
Income tax provision (benefit)
1,600
(87,551
)
Net income (loss)
$
(1,623,527
)
$
1,540,965
Net income (loss) per share Basic
$
(0.03
)
$
0.03
Diluted
$
(0.03
)
$
0.03
Weighted average common shares Basic
50,351,971
48,713,163
Diluted
50,351,971
54,688,066
PAYSIGN, INC. CONSOLIDATED BALANCE SHEETS
March 31,
December 31,
2021
2020
(Unaudited) (Audited) ASSETS Current assets
Cash
$
6,559,678
$
7,829,453
Restricted Cash
58,773,488
48,100,951
Accounts receivable
635,576
654,859
Prepaid expenses and other current assets
1,947,984
1,375,364
Total current assets
67,916,726
57,960,627
Fixed assets, net
1,841,910
1,849,164
Intangible assets, net
3,722,642
3,699,033
Operating lease right-of-use asset
4,218,978
4,324,682
Total assets
$
77,700,256
$
67,833,506
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities Accounts payable and accrued liabilities
$
2,311,685
$
2,162,256
Operating lease, current portion
325,470
320,636
Customer card funding
58,773,488
48,100,951
Total current liabilities
61,410,643
50,583,843
Operating lease liability, long term portion
3,930,395
4,013,598
Total liabilities
65,341,038
54,597,441
Stockholders' equity Common stock: $0.001 par value;
150,000,000 shares authorized, 50,750,882 and 50,251,607 issued at
March 31, 2021 and December 31, 2020, respectively
50,751
50,252
Additional paid-in capital
15,135,071
14,388,890
Treasury stock at cost, 303,450 shares, March 31, 2021 and December
31, 2020
(150,000
)
(150,000
)
Retained earnings (accumulated loss)
(2,676,604
)
(1,053,077
)
Total stockholders' equity
12,359,218
13,236,065
Total liabilities and stockholders' equity
$
77,700,256
$
67,833,506
Paysign, Inc. Non-GAAP Measures
To supplement Paysign’s financial results presented on a GAAP
basis, we use non-GAAP measures that exclude from net income the
following cash and non-cash items: interest, taxes, amortization
and depreciation and stock-based compensation. We believe these
non-GAAP measures used by management to gauge the operating
performance of the business help investors better evaluate our past
financial performance and potential future results. Non-GAAP
measures should not be considered in isolation or as a substitute
for comparable GAAP accounting, and investors should read them in
conjunction with the company’s financial statements prepared in
accordance with GAAP. The non-GAAP measures we use may be different
from, and not directly comparable to, similarly titled measures
used by other companies.
“EBITDA” is defined as earnings before interest, taxes,
depreciation and amortization expense. “Adjusted EBITDA” reflects
the adjustment to EBITDA to exclude stock-based compensation
charges.
Adjusted EBITDA is not intended to represent cash flows from
operations, operating income (loss) or net income (loss) as defined
by U.S. GAAP. Management cautions that amounts presented in
accordance with Paysign’s definition of Adjusted EBITDA may not be
comparable to similar measures disclosed by other companies because
not all companies calculate Adjusted EBITDA in the same manner.
PAYSIGN, INC.
Three Months Ended March
31,
(Unaudited)
2021
2020
Reconciliation of EBITDA and Adjusted EBITDA to net income:
Net income (loss)
$
(1,623,527
)
$
1,540,965
Income tax expense (benefit)
1,600
(87,551
)
Interest income
(7,101
)
(62,161
)
Depreciation and amortization
595,848
502,376
EBITDA
(1,033,180
)
1,893,629
Stock-based compensation
636,214
724,183
Adjusted EBITDA
$
(396,966
)
$
2,617,812
Adjusted EBITDA per share Basic
$
(0.01
)
$
0.05
Diluted
$
(0.01
)
$
0.05
Weighted average common shares Basic
50,351,971
48,713,163
Diluted
50,351,971
54,688,066
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210511006141/en/
Investor Relations: ir@paysign.com 888.522.4853
Media Relations: Alicia Ches aches@paysign.com 702.749.7257
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