- Fourth quarter total revenues of $8.8 million, an increase
of $1.5 million from fourth-quarter 2020
- Fourth quarter net income of $0.1 million, or diluted
earnings per share (EPS) of $0.00
- Fourth quarter adjusted EBITDA of $1.3 million, or diluted
adjusted EBITDA per share of $0.02
- Fourth quarter gross dollar load volume up 12.5% versus the
year-ago period and 4.6% versus the previous quarter
- Fourth quarter purchase volume up 13.2% versus the year-ago
period and up 5.4% versus the previous quarter
Paysign, Inc. (NASDAQ: PAYS), a leading provider of prepaid card
programs, comprehensive patient affordability offerings, digital
banking services and integrated payment processing, today announced
financial results for the fourth quarter and full year 2021.
“We had a good fourth quarter as load volumes and spending
trends continued to improve with Q4 volumes approaching
pre-pandemic levels. We are optimistic about the coming year and
our growth prospects in plasma, pharma and other prepaid business,”
said Mark Newcomer, Paysign CEO. “We are executing on our strategic
priorities, winning new deals in both plasma and pharma and
continuing to build out our team and technology to effectively
handle the opportunities that lie ahead for our company.”
Quarterly Results
The following additional details are provided to aid in
understanding Paysign’s fourth quarter 2021 results versus the
year-ago period:
- Revenues increased $1.5 million (21%) versus the year-ago
period. The increase was driven by the impact of the following
factors:
- Plasma revenue increased $1.3 million (20%) primarily due to an
increase in plasma donations and dollars loaded onto cards. The
average monthly revenue per plasma center increased to $6,798. We
added seven new plasma centers during the quarter, exiting the
quarter with 366 centers. This compares to 340 centers at the end
of 2020.
- Pharma revenue increased $256 thousand primarily driven by the
recognition of settlement income.
- Cost of revenues increased by $468 thousand (13%). 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 $1.0 million (28%) primarily due to the
increase in both plasma and pharma revenues. Our gross profit
margin improved to 54.3%.
- Operating expenses increased by $285 thousand (7%) from the
fourth quarter of 2020. The year-over-year increase was primarily
due to a decrease in (i) professional services and (ii) stock based
compensation, offset by an increase 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, 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 and trade show expenses.
- Income tax provision declined $3.7 million primarily due to the
full valuation allowance on our deferred tax asset at the end of
2020.
- Net income increased $4.4 million to a profit of $105 thousand.
The overall change in net income 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 $843 thousand to a profit of $762 thousand due to
the factors above.
- “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, increased $495 thousand to a profit of $1.3 million due
to the factors mentioned above.
2021 Full Year Results
The following additional details are provided to aid in
understanding Paysign’s full year 2021 results versus the year-ago
period:
- Revenues increased $5.3 million (22%) for the year ended
December 31, 2021, compared to the same period in the prior year
and consisted of a $2.5 million (11%) increase in plasma revenue, a
$3.0 million increase in pharma revenue, and a reduction of
$207,837 in other revenue.
- The increase in plasma revenue was primarily due to an increase
in plasma centers, donations and dollars loaded onto cards as
COVID-19 related government stimulus payments were phased out,
donation centers reopened and mobility restrictions were lifted
during the year. We added 26 new plasma centers during the year,
exiting with 366 centers which compares to 340 centers at the end
of 2020.
- Pharma revenue increased $3.0 million (929%) primarily driven
by the anniversary of a $6.3 million adjustment that reduced pharma
revenue for a change in accounting estimate in recognizing
settlement income for all pharma programs in the third quarter of
2020 in accordance with applicable accounting guidance, as well as
the recognition of settlement income for pharma programs that ended
throughout 2021, the launch of new pharma programs during 2021 and
the lifting of mobility restrictions allowing individuals to return
to visiting doctor offices and pharmacies to receive pharmaceutical
medicines.
- Cost of revenues declined by $64 thousand. 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. Cost of
revenues decreased primarily due to operating leverage inherent in
our plasma business as many of the plasma fees deliver a greater
revenue contribution versus the costs that are provided by third
parties who charge us based on the number of transactions that
occur during the period. In addition, there was a greater
contribution of higher margin pharma settlement income for the year
ended December 31, 2021.
- Gross profit increased $5.4 million over the prior year
resulting primarily from the increase in revenue described above,
coupled with the slight year-over-year decrease in cost of sales.
The gross profit margin was 49.9% for 2021 versus 38.6% the prior
year. The increase in gross margin resulted from a higher revenue
conversion rate generated from revenues with a larger portion of
fixed costs versus those that have a variable cost component.
- Selling, general and administrative expenses for the year
decreased $138 thousand (0.9%) compared to the prior year and
consisted primarily of (i) an increase in staffing and compensation
of $1.3 million, (ii) insurance of $250 thousand and (iii) travel
and entertainment of $170 thousand; offset by a decrease in (i)
stock-based compensation of $690 thousand, (ii) technologies and
telecom of $265 thousand and (iii) professional services for legal,
accounting, tax and consultants of $260 thousand.
- During the year ended December 31, 2021, there was no
intangible asset impairment charge or loss on the abandonment of
assets. The impairment of intangible asset of $382 thousand in
December 31, 2020, was related to a write down of the carrying
value of acquisition costs related to a business license that had
been suspended.
- Depreciation and amortization expense for 2021 increased $373
thousand compared to the prior year. The increase in depreciation
and amortization expense was primarily due to continued
capitalization of new technologies and enhancements to our
processing platform and infrastructure.
- For 2021 we recorded a loss from operations of $2.7 million, an
increase of $5.6 million from the operating loss of $8.3 million
the prior year related to the aforementioned factors.
- Other income for the year ended December 31, 2021, decreased
$62 thousand related to a decrease in interest income resulting
primarily from the reduction in the federal funds rate to near 0%
beginning in the first quarter of 2020.
- The effective tax rate was (0.4%) and (10.8%) for the years
ended December 31, 2021, and 2020, respectively. The effective tax
rates vary, primarily due to the company establishing a full
valuation allowance against its deferred tax assets during the year
ended December 31, 2020. The company continues to have a full
valuation allowance against its deferred tax assets as of December
31, 2021.
- The net loss for 2021 was $2.7 million, a $6.4 million
improvement over the prior year. The overall change in net loss
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, improved $6.0 million to a loss of $242 thousand due to the
factors mentioned above.
- “Adjusted EBITDA,” which reflects the adjustment to EBITDA to
exclude (i) impairment of intangible asset, (ii) loss on
abandonment of assets and (iii) stock-based compensation charges,
and which is a non-GAAP metric used by management to gauge the
operating performance of the business, increased $4.9 million to a
profit of $2.0 million due to the factors mentioned above.
2021 Year Milestones
- As of December 31, 2021, we had approximately 4.3 million
cardholders and 440 card programs.
- Year-over-year revenue increased 22.2%.
- We added 26 plasma programs, launched 2 net new pharma prepay
and pharma copay programs and added 4 net new corporate incentive
programs.
- We met or exceeded all guidance metrics provided during our Q1
earnings call last May. Full year total revenue of $29.5 million
was in line with our guidance of $29.0 million to $32.0 million.
Gross profit margin was 49.9%, well ahead of our guidance of 45%.
Operating expenses were $17.5 million, slightly below our initial
guidance of $18.0 million to $18.5 million. Adjusted EBITDA of $2.0
million was ahead of our guidance of $0.35 million to $1.90
million.
Balance Sheet At Year-End 2021
Unrestricted cash declined $442 thousand to $7.4 million due to
the negative impact of COVID-19 on our operations, particularly in
March and April of 2021 when government stimulus checks were widely
distributed to individuals throughout the U.S. Our operating
results did improve throughout 2021 whereby we were able to
generate positive cash flow from operations in the second half of
the year to help offset our unrestricted cash balance decline that
we experienced in the first half of the year. Restricted cash of
$61.3 million are funds used for customer card funding with a
corresponding offset under current liabilities. The increase in
2021 versus 2020 was predominately related to increases in funds on
card, increased plasma deposits and new plasma and pharma
customers, offset by declines from pharma customers whose contracts
terminated during the year. We experienced large increases in
accounts receivable and accounts payable primarily due to the
launch of six new pharma copay programs during the year whereby
Paysign invoices its customers for reimbursement to pharmacy
networks, pharmacies or individuals for their out-of-pocket costs
and remits those funds to cover the accounts payable liability. We
believe that our unrestricted cash on hand at December 31, 2021, of
$7.4 million along with anticipated revenues and operating profits
anticipated for 2022, and our account receivable and account
payable process, will be sufficient to sustain our operations for
the next twelve months.
2022 Outlook
“We had another good quarter with revenues, income 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 and a more
normal seasonal pattern as we moved through the quarter. We
continue to believe that our business will continue to grow and
improve in 2022,” said Jeff Baker, Paysign CFO.
“For the full year 2022, we expect total revenue to be in the
range of $35.25 million to $38.35 million, reflecting growth of 20%
to 30%, with plasma making up approximately 90% of total revenue.
Pharma revenue is expected to be relatively flat year over year as
the loss of programs and settlement income in 2021 are offset with
new pharma copay programs. Adjusted EBITDA is expected to at least
double to $4.0 million over 2021’s adjusted EBITDA of $2.0 million.
Full year gross profit margins are expected to be approximately
50.0% to 52.5%, with Q1 2022 gross profit margin expected to be
approximately 60% before returning to a more normalized gross
profit margin experienced in 2021. We expect this will result in Q1
2022 operating results to be somewhat skewed relative to historical
Q1 results. Operating expenses are expected to increase to
approximately $20.0 million as we continue to make investments in
people and technology, and experience higher costs in insurance,
travel and entertainment and other inflationary pressures.
Depreciation and amortization is expected to be between $3.0
million and $3.25 million while stock-based compensation is
expected to be approximately $2.0 million,” Baker concluded.
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 our results of operations. While we remain
cautiously optimistic and have seen improvements in our operating
results, we cannot foresee how long it may take us to attain
pre-pandemic operating levels as COVID-19 related labor shortages
at plasma donation centers, Mexican nationals being prevented to
give plasma with a B2 Tourist Visa and other effects continue to
weigh on our 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 our results of
operations, cash flows or financial condition.
Fourth Quarter and Full Year 2021 Financial Results
Conference Call Details
At 5:00 p.m. ET today, the company will host a conference call
to discuss its fourth quarter and full year 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 June 22, 2022, and can be accessed by dialing
877.660.6853 (within the U.S.) and 201.612.7415 (outside the U.S.),
using passcode 13726029.
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,
depreciation and amortization, stock-based compensation, adjusted
EBITDA, plasma revenues and pharma revenues for 2022 meet our
expectations; the company’s growth prospects in plasma, pharma and
other prepaid business materialize; 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, 2021. 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. Incorporated
in 1995 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.
Consolidated Statements of
Income
(Unaudited)
(Audited)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
Revenues Plasma industry
$
7,552,140
$
6,298,653
$
25,918,150
$
23,401,068
Pharma industry
1,177,671
921,644
3,361,869
326,699
Other
37,131
33,140
184,830
392,667
Total revenues
8,766,942
7,253,437
29,464,849
24,120,434
Cost of revenues
4,008,778
3,541,270
14,753,042
14,817,028
Gross profit
4,758,164
3,712,167
14,711,807
9,303,406
Operating expenses Selling, general, and
administrative
3,995,703
3,792,396
14,953,322
15,091,432
Impairment of intangible asset
-
-
-
382,414
Loss on abandonment of assets
-
-
-
42,898
Depreciation and amortization
659,564
578,117
2,497,918
2,124,762
Total operating expenses
4,655,267
4,370,513
17,451,240
17,641,506
Income (loss) from operations
102,897
(658,346
)
(2,739,433
)
(8,338,100
)
Other income Interest income, net
10,067
13,245
28,297
90,720
Income (loss) before income tax provision
112,964
(645,101
)
(2,711,136
)
(8,247,380
)
Income tax provision
7,798
3,666,057
10,198
894,182
Net income (loss)
$
105,166
$
(4,311,158
)
$
(2,721,334
)
$
(9,141,562
)
Net income (loss) per share Basic
$
0.00
$
(0.09
)
$
(0.05
)
$
(0.19
)
Diluted
$
0.00
$
(0.09
)
$
(0.05
)
$
(0.19
)
Weighted average common shares Basic
51,632,008
49,918,782
50,975,794
49,272,494
Diluted
52,355,856
49,918,782
50,975,794
49,272,494
Paysign, Inc.
Consolidated Balance
Sheets
December 31,
2021
2020
ASSETS Current assets Cash
$
7,387,156
$
7,829,453
Restricted cash
61,283,914
48,100,951
Accounts receivable
3,393,940
512,097
Other receivables
1,019,218
142,762
Prepaid expenses and other current assets
1,242,967
1,375,364
Total current assets
74,327,195
57,960,627
Fixed assets, net
1,642,981
1,849,164
Intangible assets, net
4,086,962
3,699,033
Operating lease right-of-use asset
3,993,655
4,324,682
Total assets
$
84,050,793
$
67,833,506
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities Accounts payable and accrued liabilities
$
5,765,478
$
2,162,256
Operating lease liability, current portion
340,412
320,636
Customer card funding
61,283,914
48,100,951
Total current liabilities
67,389,804
50,583,843
Operating lease liability, long term portion
3,673,186
4,013,598
Total liabilities
71,062,990
54,597,441
Stockholders' equity Common stock: $0.001 par value;
150,000,000 shares authorized, 52,095,382 and 50,251,607 issued at
December 31, 2021 and 2020, respectively
52,095
50,252
Additional paid-in-capital
16,860,119
14,388,890
Treasury stock at cost, 303,450 shares December 31, 2021 and 2020
(150,000
)
(150,000
)
Accumulated loss
(3,774,411
)
(1,053,077
)
Total stockholders' equity
12,987,803
13,236,065
Total liabilities and stockholders' equity
$
84,050,793
$
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, stock-based compensation, impairment of
intangible asset and loss on abandonment of assets. 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 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 as indicators of operating performances. 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.
Adjusted EBITDA
(Unaudited)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
Reconciliation of EBITDA and Adjusted EBITDA to net income (loss):
Net income (loss)
$
105,166
$
(4,311,158
)
$
(2,721,334
)
$
(9,141,562
)
Income tax provision
7,798
3,666,057
10,198
894,182
Interest income, net
(10,067
)
(13,245
)
(28,297
)
(90,720
)
Depreciation and amortization
659,564
578,117
2,497,918
2,124,762
EBITDA
762,461
(80,229
)
(241,515
)
(6,213,338
)
Impairment of intangible asset
-
-
-
382,414
Loss on abandonment of assets
-
-
-
42,898
Stock-based compensation
500,205
847,970
2,280,931
2,971,777
Adjusted EBITDA
$
1,262,666
$
767,741
$
2,039,416
$
(2,816,249
)
Adjusted EBITDA per share Basic
$
0.02
$
0.02
$
0.04
$
(0.06
)
Diluted
$
0.02
$
0.01
$
0.04
$
(0.06
)
Weighted average common shares Basic
51,632,008
49,918,782
50,975,794
49,272,494
Diluted
52,355,856
53,671,904
52,553,586
49,272,494
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220322006080/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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