2019 Revenue up 48% to a Record $34.7 Million, Drives Record
Net Income of $7.5 Million, an increase of 188%, and Adjusted
EBITDA of $10.1 Million, an increase of 106%
Paysign, Inc. (NASDAQ: PAYS), a vertically integrated provider
of innovative prepaid card programs, digital banking and processing
services for corporate, consumer and government applications, today
reported financial results for the full year ended December 31,
2019.
Financial Highlights
- Revenues for the year ended December 31, 2019 were $34.7
million, an increase of 48% compared to $23.4 million for the prior
year.
- Gross profit increased 69% to $19.2 million, or 56% of
revenues, compared to $11.4 million, or 49% of revenues, in
2018.
- Total operating expenses were $13.1 million compared to $8.9
million for the prior year.
- Net Income attributable to Paysign was $7.5 million, an
increase of 188% compared to $2.6 million for the prior year.
Earnings per basic share was $0.16 versus $0.06 for the prior
year.
- Non-GAAP Adjusted EBITDA was $10.1 million, an increase of 106%
compared to $4.9 million in 2018. Non-GAAP Fully Diluted EPS was
$0.19 as compared to $0.09 for the prior year.
- Our revenue conversion rate of gross dollar volume loaded on
cards was 4.04%, or 404 bps, in 2019 compared to 3.77%, or 377 bps,
in the prior year.
2020 Financial Guidance
- Although the company has not determined there to be any
material adverse impact from the COVID-19 outbreak to date, the
company has determined to refrain from providing 2020 financial
guidance at this time, to allow for further evaluation.
2019 Financial Results
2019 revenues grew 48% vs. 2018, but were below management’s
guidance. This shortfall was primarily due to both lower spending
and a lower revenue conversion rate for dollars loaded to cards on
the plasma centers onboarded in late September 2019.
Revenues for the year ended December 31, 2019 were $34,666,653,
an increase of $11,242,978 compared to the year ended December 31,
2018, when revenues were $23,423,675. The increase in revenue of
48% was primarily due to an increase in the number of new corporate
incentive prepaid card programs and growth within our existing
programs.
Cost of revenues was $15,425,178, an increase of $3,398,726
compared to 2018, when cost of revenues was $12,026,452. Cost of
revenues was 44% and 51% of total revenues in 2019 and 2018,
respectively. Our improvement to this ratio was due to a favorable
client mix.
Selling, general and administrative expenses (“SG&A”) were
$11,656,681, an increase of $3,821,607 compared to 2018, when
selling, general and administrative expenses were $7,835,074. The
increase in SG&A was primarily attributable to additions to
technologies, sales, operations and leadership positions, as well
as an increase in stock- based compensation.
Net income attributable to Paysign, Inc. was $7,454,319 as
compared to net income attributable to Paysign, Inc. of $2,588,054
in 2018, which represents an increase of $4,866,265, or 188%. The
significant overall improvement in net income is attributable to
the aforementioned factors.
Coronavirus Disease Update
“As the Coronavirus Disease (“COVID-19”) continues to expand
within the United States and around the world, our highest priority
remains the safety of our employees, cardholders and customers,”
said Mark Newcomer, President and Chief Executive Officer Paysign.
“We have taken immediate actions to protect our people, customers
and business. With the mission-critical nature of our business, it
was imperative that we execute our contingency plans to ensure
business continuity as many of our clients are deemed critical
infrastructure and remain open for source plasma collection or
serve the critical health needs of the general public. We have
implemented measures to manage potential disruptions and maintain
real-time communication across our entire organization and with our
clients and cardholders. To date, we have not had any work
stoppages. Further, as of this time, we have not had any employees
who have tested positive for COVID-19,” continued Mr. Newcomer.
”Although we are not currently seeing any significant
disruptions to our operations, we are aware of the potential
disruptions beyond our control, and we will continue to monitor
this situation very closely,” Mr. Newcomer continued. “We believe
we are well-prepared to ensure continuity of service to our clients
and cardholders during this uncertain period. We remain committed
to keeping our people safe and addressing our customers’
needs.”
Management Commentary
“Overall, we are pleased with the company’s full year revenue
and earnings growth. However, we are certainly disappointed with
the fourth quarter’s performance and its contribution to missing
our full year revenue guidance. We remain enthusiastic about the
long-term trajectory of the company, and continue to focus on
maximizing shareholder value,” said Mr. Newcomer. “We expect
continued growth in both revenue and net income in 2020, as source
plasma collection has been deemed critical infrastructure, and we
do not anticipate a decline in the demand for pharmaceutical
patient affordability products. In 2019, we expanded our footprint
in pharmaceutical payment solutions to include additional patient
affordability products and services. As a result, we have
established a Patient Affordability Division that offers our
established pharmaceutical payments as well as new products and
services that go beyond our traditional pharmaceutical payment
cards.”
“With continued plasma and pharma strength, expansion into new
industry verticals, and the launch of new products, the company
expects to see continued revenue and earnings growth in 2020, and
similar gross margins to 2019,” stated Mark Attinger, Chief
Financial Officer.
About Paysign, Inc.
Paysign, Inc., (NASDAQ: PAYS), is an experienced and trusted
prepaid debit card payment solutions provider as well as an
integrated payment processor that has managed millions of prepaid
debit cards in its portfolio. Paysign conceptualizes, develops and
manages payment solutions, prepaid card programs, and customized
payment services. Paysign’s corporate incentive prepaid cards are
changing the way corporations reward, motivate, and engage their
current and potential customers, employees, and agents. Paysign’s
customizable solutions offer significant cost savings while
improving brand recognition and customer loyalty. 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 Facebook, Twitter, and LinkedIn.
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,
the company’s belief in its ability to ensure continuity during the
COVID-19 outbreak; that the company remains enthusiastic about the
long term trajectory of the company; that the company expects
continued growth in both revenue and net income in 2020; that the
company does not anticipate a decline in the demand for
pharmaceutical patient affordability products; that the company
expects to see continued revenue and earnings growth; and that the
company expects similar gross margins to 2019. 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; identified material
weaknesses in our internal control over financial reporting which
could, if not remediated, adversely affect our ability to report
our financial condition and results of operations in a timely and
accurate manner; that a downturn in the economy, including as a
result of COVID-19, 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, 2019. 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.
PAYSIGN, INC. FORMERLY KNOWN AS 3PEA INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME FOR YEARS ENDED December 31, 2019
AND 2018 (Audited) For the years ended December 31,
2019
2018
Revenue Plasma industry
26,994,929
23,031,823
Pharma industry
7,372,990
366,442
Other
298,734
25,410
$
34,666,653
$
23,423,675
Cost of revenues
15,425,178
12,026,452
Gross profit
19,241,475
11,397,223
Operating expense Selling, general and administrative
11,656,681
7,835,074
Depreciation and amortization
1,483,140
1,089,521
Total operating expenses
13,139,821
8,924,595
Income from operations
6,101,654
2,472,628
Other income/(expense) Other (expense)
-
(31,125
)
Interest income
441,116
139,738
Total other income/(expense)
441,116
108,613
Income before income tax benefit
6,542,770
2,581,241
Income tax benefit
(909,976
)
-
Net income
7,452,746
2,581,241
Net loss attributable to noncontrolling interest
1,573
6,813
Net income attributable to Paysign, Inc.
$
7,454,319
$
2,588,054
Net income per common share - basic
$
0.16
$
0.06
Net income per common share - fully diluted
$
0.14
$
0.05
Weighted average common shares outstanding - basic
47,436,754
45,449,254
Weighted average common shares outstanding - fully diluted
54,550,369
51,986,505
PAYSIGN, INC. FORMERLY KNOWN AS 3PEA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 and
DECEMBER 31, 2018 December 31, December 31,
2019
2018
(Audited) (Audited) ASSETS Current Assets Cash
$
9,663,746
$
5,615,073
Restricted cash
35,908,559
26,050,668
Accounts receivable
891,936
337,303
Prepaid expenses and other assets
1,413,208
1,167,737
Total current assets
47,877,449
33,170,781
Fixed assets, net
937,185
883,490
Intangible assets, net
3,816,232
2,115,933
Deferred tax asset
917,480
7,504
Total assets
$
53,548,346
$
36,177,708
LIABILITIES AND EQUITY Current liabilities Accounts
payable and accrued liabilities
$
1,523,604
$
1,327,497
Customer card funding
32,723,227
25,960,974
Total current liabilities
34,246,831
27,288,471
Total liabilities
34,246,831
27,288,471
Stockholders' equity Common stock: $0.001 par value;
150,000,000 shares authorized, 48,577,712 and 46,440,765 issued at
December 31, 2019 and December 31, 2018, respectively
48,578
46,441
Additional paid-in-capital
11,577,539
8,620,144
Treasury stock at cost, 303,450 shares
(150,000
)
(150,000
)
Retained earnings
8,088,485
579,582
Total Paysign, Inc.'s stockholders' equity
19,564,602
9,096,167
Noncontrolling interest
(263,087
)
(206,930
)
Total stockholders' equity
19,301,515
8,889,237
Total liabilities and stockholders' equity
$
53,548,346
$
36,177,708
Paysign, Inc. Non-GAAP Measures
To supplement Paysign’s financial results presented on a GAAP
basis, we use non-GAAP measures of net income that excludes the
following cash and non-cash items – interest, taxes, stock-based
compensation, amortization and depreciation. We believe these
non-GAAP measures 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 of net income 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 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. FORMERLY KNOWN AS 3PEA INTERNATIONAL, INC.
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME FOR YEAR ENDED
DECEMBER 31, 2019 AND 2018 (Audited) For the years ended
December 31,
2019
2018
Net income attributable to Paysign, Inc.
$
7,454,319
$
2,588,054
Income tax benefit
(909,976
)
-
Interest income
(441,116
)
(139,738
)
Depreciation and amortization
1,483,140
1,089,521
EBITDA
7,586,367
3,537,837
Stock-based compensation
2,528,613
1,366,944
Adjusted EBITDA
$
10,114,980
$
4,904,781
Non-GAAP EPS - basic
$
0.21
$
0.11
Non-GAAP EPS - fully diluted
$
0.19
$
0.09
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200403005083/en/
Paysign, Inc. Jim McCroy, 1-702-749-7269 Investor Relations
ir@Paysign.com www.Paysign.com
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