- Second-quarter total loads and total gross dollar load
volume increased 13.1% and 34.7% year-over-year,
respectively
- Second-quarter purchase transactions and purchase dollar
volume increased 19.1% and 44.5% year-over-year,
respectively
- Second-quarter total revenues of $6.7 million, a
year-over-year increase of $0.2 million or 3.2%
- Second-quarter plasma revenue of $5.9 million, a
year-over-year increase of $1.4 million or 30.1%
- Second-quarter net loss of $0.9 million, or diluted earnings
per share (EPS) of ($0.02)
- Second-quarter adjusted EBITDA of $0.2 million, or diluted
adjusted EBITDA per share of $0.00
Paysign, Inc. (NASDAQ: PAYS), a leading provider of prepaid card
programs, digital banking services and integrated payment
processing, today reported financial results for the second quarter
of 2021.
“We are pleased to report a sequential improvement in our
revenues and operating results for the quarter. Throughout the
quarter we saw month-over-month improvements in our financial
results as pandemic-related stimulus began to phase out, thus
providing an incentive for individuals to supplement their income
by donating plasma. This trend has continued in July despite the
recent U.S. Customs and Border Protection decision affecting
Mexican citizens’ ability to receive compensation for donating
plasma, which only impacted revenue on about 7% of our plasma
centers,” said Mark Newcomer, Paysign CEO. “We continue to focus on
diversifying our business and investing for sustained long-term
growth. With the renewal of a major pharmaceutical hub customer and
their copay programs and the addition of five new pharmaceutical
copay programs that are expected to launch between now and the end
of 2021, we are excited to continue to advance our capabilities and
value in the patient affordability space.”
2021 Outlook
“While the second quarter continued to be impacted by COVID-19
and government stimulus measures as expected, we did see improving
trends as we moved through the quarter. Preliminary indications are
that the improving trends will continue as long as the U.S. does
not enter widespread lockdown conditions and the government does
not provide additional stimulus checks to individuals. More
importantly, we continue to believe that our business will benefit
in the fourth quarter as unemployment subsidies for the entire
country are scheduled to end in early September,” said Jeff Baker,
Paysign CFO.
“For the full year 2021, we continue to forecast total revenue
to be in the range of $29.0 million to $32.0 million, reflecting
growth of 20% to 32%. We are raising our adjusted EBITDA forecast
to be in the range of $0.75 million to $1.90 million due to the
better-than-expected results this quarter and higher gross profit
margin expectations given operating leverage in our model as plasma
volumes recover and we add more pharma programs. We are raising our
gross profit margin forecast by 150 basis points to 46.5%, which is
an increase of 790 basis points over 2020. Operating expenses are
expected to increase modestly between $18.0 million to $18.5
million, or 2.0% to 4.9%,” Baker concluded.
Second-Quarter 2021 Financial Overview
The following additional details are provided to aid in
understanding Paysign’s second-quarter 2021 results versus the
year-ago period:
- Revenues increased $0.2 million or 3.2% versus the year-ago
period. The increase was driven by the impact of the following
factors:
- Plasma revenue increased $1.4 million (30.1%) primarily due to
an increase in plasma donations and dollars loaded to cards as
business restrictions in place due to COVID-19 began to relax and
large amounts of pandemic-related stimulus checks hit individuals’
bank accounts in April. The average revenue per center increased
6.4%. We added 13 additional plasma centers during the quarter,
exiting the quarter with 356 centers. This compares to 290 centers
at the end of June 2020.
- Pharma revenue decreased $1.1 million (63.8%) 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 second quarter compared to the second quarter of
2020.
- Cost of revenues increased $0.4 million (11.5%). Cost of
revenues is 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 increase was primarily due to the increase in plasma
transactions, as many of the plasma transaction costs are variable,
which are provided by third parties who charge us based on the
number of transactions that occur during the period.
- Gross profit decreased $0.2 million (4.6%) primarily due to the
reduction in pharma revenues, offset by increases in plasma
revenues. Gross profit margin was 47.4% compared to 51.3% in the
second quarter of 2020.
- Operating expenses increased $0.1 million (3.5%) from the
second quarter of 2020. Excluding the loss on the abandonment of
assets in the second quarter of 2020, operating expenses would have
increased $0.2 million (4.6%) from the year-ago period. The
year-over-year increase was primarily due to increases in
depreciation and amortization due to the continued capitalization
of new software and equipment, continued enhancements to our
platform and new furniture and fixtures and leasehold improvements
associated with the relocation to a new building in June 2020.
Additionally, rent and occupancy expense increased $0.1 million due
to the relocation as previously mentioned.
- Income tax benefit declined $0.4 million primarily as a result
of the full valuation allowance on our deferred tax asset at the
end of 2020 and the tax benefit related to our stock-based
compensation and a pretax loss in the prior-year period.
- Net loss increased $0.7 million to a loss of $0.9 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 $0.2 million to a loss of $0.3 million due to the
aforementioned factors.
- “Adjusted EBITDA,” which reflects the adjustment to EBITDA to
exclude stock-based compensation charges and loss on abandonment of
assets, and which is a non-GAAP metric used by management to gauge
the operating performance of the business, decreased $0.3 million
to a profit of $0.2 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 given the development of new
variants that appear to be spreading. 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 and
have seen improvements in our operating results, we are not back to
pre-pandemic operating levels. Given the uncertainty around the
extent and timing of the potential future spread or mitigation of
COVID-19 and variants and 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.
Second-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 second-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 November 10, 2021, and can be accessed by dialing
877.660.6853 (within the U.S.) and 201.612.7415 (outside the U.S.),
using passcode 13721129.
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
and variants, 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 leading provider of prepaid
card programs, comprehensive patient affordability offerings,
digital banking services and integrated payment processing designed
for businesses, consumers and government institutions. Founded in
2001 and headquartered in southern Nevada, the company creates
customized, innovative payment solutions for clients across all
industries, including pharmaceutical, healthcare, hospitality and
retail. By using Paysign solutions, clients enjoy benefits such as
lower administrative costs, streamlined operations, increased
revenues, accelerated product adoption, and improved customer,
employee and partner loyalty.
Built on the foundation of a powerful and reliable payments
platform, Paysign’s end-to-end technologies securely enable a wide
range of services, including transaction processing, cardholder
enrollment, value loading, cardholder account management, reporting
and customer care. The modern cross-platform architecture is
designed to be highly flexible, scalable and customizable, which
delivers cost benefits and revenue-building opportunities to
clients and partners.
As a full-service program manager, Paysign manages all aspects
of the prepaid card lifecycle, from card design and bank approvals,
production, packaging, distribution and personalization, to
inventory and security controls, renewals, lost and stolen cards
and card replacement. The company’s in-house, bilingual customer
care is available 24/7/365 through live agents, interactive voice
response (IVR), and two-way SMS alerts.
For more than 20 years major pharmaceutical and healthcare
companies and multinational enterprises have relied on Paysign to
provide full-service programs tailored to their unique
requirements. The company has designed and launched prepaid card
programs for corporate rewards, employee incentives, consumer
rebates, donor compensation, clinical trials, healthcare
reimbursement payments and copay assistance.
Paysign’s expanded product offerings now include additional
corporate incentive products and demand deposit accounts accessible
with a debit card. The product roadmap includes expanded offerings
into new prepaid card categories including payroll, travel, and
expense reimbursement. For more information, visit paysign.com.
PAYSIGN, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues Plasma industry
$
5,947,313
$
4,572,439
$
11,330,464
$
11,915,849
Pharma industry
641,037
1,768,565
1,523,867
4,788,942
Other
62,940
102,061
76,387
314,747
Total revenues
6,651,290
6,443,065
12,930,718
17,019,538
Cost of revenues
3,498,723
3,138,350
6,946,345
7,993,870
Gross profit
3,152,567
3,304,715
5,984,373
9,025,668
Operating expenses Selling, general and administrative
3,474,562
3,401,501
7,339,548
7,228,825
Loss on abandonment of assets
-
42,898
-
42,898
Depreciation and amortization
614,182
506,477
1,210,030
1,008,853
Total operating expenses
4,088,744
3,950,876
8,549,578
8,280,576
Income (loss) from operations
(936,177
)
(646,161
)
(2,565,205
)
745,092
Other income Interest income, net
5,010
3,130
12,111
65,291
Income (loss) before income tax provision (benefit)
(931,167
)
(643,031
)
(2,553,094
)
810,383
Income tax provision (benefit)
800
(423,797
)
2,400
(511,348
)
Net income (loss)
$
(931,967
)
$
(219,234
)
$
(2,555,494
)
$
1,321,731
Net income (loss) per share Basic
$
(0.02
)
$
0.00
$
(0.05
)
$
0.03
Diluted
$
(0.02
)
$
0.00
$
(0.05
)
$
0.02
Weighted average common shares Basic
50,748,437
49,015,686
50,551,299
48,864,424
Diluted
50,748,437
49,015,686
50,551,299
54,542,458
PAYSIGN, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
June 30,
December 31,
2021
2020
(Unaudited)
(Audited)
ASSETS Current assets Cash
$
6,615,180
$
7,829,453
Restricted Cash
65,755,562
48,100,951
Accounts receivable
947,954
654,859
Prepaid expenses and other current assets
1,741,866
1,375,364
Total current assets
75,060,562
57,960,627
Fixed assets, net
1,757,518
1,849,164
Intangible assets, net
3,842,205
3,699,033
Operating lease right-of-use asset
4,113,275
4,324,682
Total assets
$
84,773,560
$
67,833,506
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities Accounts payable and accrued liabilities
2,863,837
$
2,162,256
Operating lease, current portion
330,376
320,636
Customer card funding
65,755,562
48,100,951
Total current liabilities
68,949,775
50,583,843
Operating lease liability, long term portion
3,845,938
4,013,598
Total liabilities
72,795,713
54,597,441
Stockholders' equity Common stock: $0.001 par value;
150,000,000 shares authorized, 51,143,382 and 50,251,607
51,143
50,252
issued at June 30, 2021 and December 31, 2020, respectively
Additional paid-in capital
15,685,275
14,388,890
Treasury stock at cost, 303,450 shares, June 30, 2021 and December
31, 2020
(150,000
)
(150,000
)
Accumulated deficit
(3,608,571
)
(1,053,077
)
Total stockholders' equity
11,977,847
13,236,065
Total liabilities and stockholders' equity
$
84,773,560
$
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 and loss on abandonment of assets.
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.
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of adjusted EBITDA to net income
(loss): Net income (loss)
$
(931,967
)
$
(219,234
)
$
(2,555,494
)
$
1,321,731
Income tax provision (benefit)
800
(423,797
)
2,400
(511,348
)
Interest income
(5,010
)
(3,130
)
(12,111
)
(65,291
)
Depreciation and amortization
614,182
506,477
1,210,030
1,008,853
EBITDA
(321,995
)
(139,684
)
(1,355,175
)
1,753,945
Loss on abandonment of assets
-
42,898
-
42,898
Stock-based compensation
540,921
600,775
1,177,135
1,324,958
Adjusted EBITDA
$
218,926
$
503,989
$
(178,040
)
$
3,121,801
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210810005977/en/
Paysign Investor Relations: 888.522.4810 ir@paysign.com
Paysign Media Relations: Alicia Ches Director, Marketing
702.749.7257 pr@paysign.com
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