- Third-quarter total revenues of $7.8 million, a
year-over-year increase of $7.9 million
- Third-quarter plasma revenue of $7.0 million, a
year-over-year increase of $1.8 million or 35.6%
- Third-quarter net loss of $0.3 million, or diluted earnings
per share (EPS) of ($0.01)
- Third-quarter adjusted EBITDA of $1.0 million, or diluted
adjusted EBITDA per share of $0.02
- Third-quarter purchase transactions and purchase dollar
volume increased 14.6% and 33.9% year-over-year,
respectively
- Third-quarter total loads and total gross dollar load volume
increased 1.9% and 24.7% year-over-year, respectively
Paysign, Inc. (NASDAQ: PAYS), a leading provider of prepaid card
programs, comprehensive patient affordability offerings, digital
banking services and integrated payment processing, today reported
financial results for the third quarter of 2021.
“We are pleased to report significant improvements in our
revenue and operating results for the third quarter. Our total
revenue for the quarter was $7.8 million, which is an increase of
$1.1 million or 16.8% from the second quarter of 2021. Our adjusted
EBITDA experienced an almost threefold increase over the same
period. We also experienced solid year-over-year increases in the
gross funds loaded on cards,” said Mark Newcomer, Paysign CEO. “The
combination of our team’s expertise in both payments and patient
affordability is allowing us to create innovative and
cost-effective solutions at the intersection of fintech and
healthcare.”
2021 Outlook
“We had a solid third quarter with revenues, loss from
operations, EBITDA and adjusted EBITDA all improving both
sequentially and year-over-year. Additionally, our balance sheet
improved sequentially as a result of this quarter’s performance.
While we continue to see the residual effects of the pandemic on
our business, we did see improving transactional trends as we moved
through the quarter. We continue to believe that our business will
improve in the fourth quarter with sequential revenue dollar growth
being similar to what we experienced in the third quarter,” said
Jeff Baker, Paysign CFO.
“Due to the operating leverage in our business model, we are
raising our gross profit margin forecast by 250 basis points to
49.0%, which is an increase of over 1,000 basis points versus 2020.
Year-over-year operating expenses are expected to remain flat at
$17.6 million or increase slightly to $17.8 million, with
sequential increases expected due to seasonal operational
expenditures incurred during the fourth quarter. Depreciation and
amortization expense is expected to be approximately $2.5 million
for the full year, and stock-based compensation expense is expected
to be approximately $2.4 million. Our adjusted EBITDA forecast is
now expected to be in the range of $1.3 million to $1.9 million due
to the better-than-expected results this quarter, the higher gross
profit margin expectations as plasma volumes remain at or better
than current levels, and lower overall operating expenditures,”
Baker concluded.
Third-Quarter 2021 Financial Overview
The following additional details are provided to aid in
understanding Paysign’s third-quarter 2021 results versus the
year-ago period:
- Revenues increased $7.9 million versus the year-ago period. The
increase was driven by the impact of the following factors:
- Plasma revenue increased $1.8 million (35.6%) primarily due to
an increase in plasma donations and dollars loaded to cards as
COVID-19 restrictions in place mainly were removed by Labor Day.
The average monthly revenue per plasma center increased 12.2%. We
added three additional plasma centers during the quarter, exiting
the quarter with 359 centers.
- Pharma revenue increased $6.0 million from a negative $5.4
million 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 third quarter compared
to the third quarter of 2020.
- Cost of revenues increased by $0.5 million (15.7%). Cost of
revenues comprises of transaction processing fees, data
connectivity, data center expenses, network fees, bank fees, card
production, 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 increased $7.4 million primarily due to the
increase in both plasma and pharma revenues. Our gross profit
margin was 51.1%.
- Operating expenses declined by $0.7 million (-14.9%) from the
third quarter of 2020. Excluding the loss on the impairment of
intangible assets in the third quarter of 2020, operating expenses
would have decreased by $0.4 million (-7.8%) from the year-ago
period. The year-over-year decline was primarily due to a reduction
in outside professional services offset by increases in (i)
compensation and benefits due to a tight labor market and increased
insurance costs, (ii) 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 and (iii) travel and entertainment due to a
more normalized working environment.
- Income tax benefit declined $2.3 million primarily due to the
full valuation allowance on our deferred tax asset at the end of
2020, the tax benefit related to our stock-based compensation and a
pretax loss in the prior-year period.
- Net loss decreased $5.9 million to a loss of $0.3 million. The
overall change in net loss relates to the factors mentioned
above.
- “EBITDA,” which is defined as earnings before interest, taxes,
depreciation and amortization expense, and which is a non-GAAP
metric, increased $8.2 million to a profit of $0.4 million due to
the factors above.
- “Adjusted EBITDA,” which reflects the adjustment to EBITDA to
exclude stock-based compensation charges, impairment of an
intangible asset, loss on the abandonment of assets and which is a
non-GAAP metric used by management to gauge the operating
performance of the business, increased $7.7 million to a profit of
$1.0 million due to the factors mentioned above.
COVID-19 Update
The coronavirus (COVID-19) pandemic, which started in late 2019
and reached the United States in early 2020, continues to
significantly impact the economy of the United States and the rest
of the world. While the disruption appears to be mitigating due to
the availability of vaccines and other factors, the ultimate
duration and severity of the pandemic remain uncertain,
particularly given the development of new variants that continue to
spread. The COVID-19 outbreak caused plasma center closures, and
the stimulus packages signed into law during 2020 and 2021 reduced
the incentive for individuals to donate plasma for supplementary
income. Those developments have had and will continue to have an
adverse impact on the company’s results of operations. While we
remain cautiously optimistic and have seen improvements in our
operating results, we cannot foresee how long it may take the
company to attain pre-pandemic operating levels as COVID-19 related
labor shortages at plasma donation centers, border closures and
other effects continue to weigh on the company’s results of
operations. Given the uncertainty around the extent and timing of
the potential future spread or mitigation of COVID-19 and variants
and around the imposition or relaxation of protective measures,
management cannot at this time estimate with reasonable accuracy
COVID-19’s further impact on the company’s results of operations,
cash flows or financial condition.
Third-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 third-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 February 9, 2022, and can be accessed by dialing
877.660.6853 (within the U.S.) and 201.612.7415 (outside the U.S.),
using passcode 13722715.
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
expected total revenue, gross profit margins, operating expenses,
adjusted EBITDA and plasma revenues for 2021 meet our expectations;
the company’s ability to grow revenues sequentially; 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 further 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 robust 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 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 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 September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues
Plasma industry
$
7,035,546
$
5,186,566
$
18,366,010
$
17,102,415
Pharma industry
660,331
(5,383,887
)
2,184,198
(594,945
)
Other
71,312
44,780
147,699
359,527
Total revenues
7,767,189
(152,541
)
20,697,907
16,866,997
Cost of revenues
3,797,919
3,281,888
10,744,264
11,275,758
Gross profit
3,969,270
(3,434,429
)
9,953,643
5,591,239
Operating expenses
Selling, general and administrative
3,618,071
4,070,211
10,957,619
11,299,036
Impairment of intangible asset
–
382,414
–
382,414
Loss on abandonment of assets
–
–
–
42,898
Depreciation and amortization
628,324
537,792
1,838,354
1,546,645
Total operating expenses
4,246,395
4,990,417
12,795,973
13,270,993
Loss from operations
(277,125
)
(8,424,846
)
(2,842,330
)
(7,679,754
)
Other income (expense)
Interest income, net
6,119
12,184
18,230
77,475
Loss before income tax provision
(benefit)
(271,006
)
(8,412,662
)
(2,824,100
)
(7,602,279
)
Income tax provision (benefit)
–
(2,260,527
)
2,400
(2,771,875
)
Net loss
$
(271,006
)
$
(6,152,135
)
$
(2,826,500
)
$
(4,830,404
)
Net loss per share
Basic
$
(0.01
)
$
(0.12
)
$
(0.06
)
$
(0.10
)
Diluted
$
(0.01
)
$
(0.12
)
$
(0.06
)
$
(0.10
)
Weighted average common shares
Basic
51,154,725
49,433,473
50,754,652
49,055,492
Diluted
51,154,725
49,433,473
50,754,652
49,055,492
PAYSIGN, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
September 30, 2021
(Unaudited)
December 31, 2020
(Audited)
ASSETS
Current assets
Cash
$
6,926,969
$
7,829,453
Restricted cash
63,260,491
48,100,951
Accounts receivable
1,680,441
654,859
Prepaid expenses and other current
assets
1,543,355
1,375,364
Total current assets
73,411,256
57,960,627
Fixed assets, net
1,733,853
1,849,164
Intangible assets, net
4,037,219
3,699,033
Operating lease right-of-use asset
4,007,571
4,324,682
Total assets
$
83,189,899
$
67,833,506
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable and accrued
liabilities
$
3,451,411
$
2,162,256
Operating lease liability, current
portion
335,357
320,636
Customer card funding
63,260,491
48,100,951
Total current liabilities
67,047,259
50,583,843
Operating lease liability, long term
portion
3,760,208
4,013,598
Total liabilities
70,807,467
54,597,441
Commitments and contingencies (Note 8)
Stockholders' equity
Common stock; $0.001 par value;
150,000,000 shares authorized, 51,636,382 and 50,251,607 issued at
September 30, 2021 and December 31, 2020, respectively
51,636
50,252
Additional paid-in capital
16,360,373
14,388,890
Treasury stock at cost, 303,450 shares
(150,000
)
(150,000
)
Accumulated deficit
(3,879,577
)
(1,053,077
)
Total stockholders' equity
12,382,432
13,236,065
Total liabilities and stockholders'
equity
$
83,189,899
$
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, depreciation
and amortization 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, impairment of intangible asset and loss on the abandonment
of assets.
Adjusted EBITDA is not intended to represent cash flows from
operations, loss from operations or net 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 September
30, (Unaudited)
Nine Months Ended September
30,
(Unaudited)
2021
2020
2021
2020
Reconciliation of adjusted
EBITDA
to net loss:
Net loss
$
(271,006
)
$
(6,152,135
)
$
(2,826,500
)
$
(4,830,404
)
Income tax provision (benefit)
–
(2,260,527
)
2,400
(2,771,875
)
Interest income, net
(6,119
)
(12,184
)
(18,230
)
(77,475
)
Depreciation and amortization
628,324
537,792
1,838,354
1,546,645
EBITDA
351,199
(7,887,054
)
(1,003,976
)
(6,133,109
)
Impairment of intangible asset
–
382,414
–
382,414
Loss on abandonment of assets
–
–
–
42,898
Stock-based compensation
603,591
798,849
1,780,726
2,123,807
Adjusted EBITDA
$
954,790
$
(6,705,791
)
$
776,750
$
(3,583,990
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211109006524/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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