ShiftPixy, Inc. Reports Fiscal 2021 Q1 Results
January 14 2021 - 4:30PM
ShiftPixy, Inc. (NASDAQ: PIXY), a Florida-based staffing enterprise
that designs, manages, and sells access to a disruptive,
revolutionary platform that facilitates employment in the rapidly
growing Gig Economy, today announced results for the quarter ended
November 30, 2020 (“2021 First Quarter”).
2021 First Quarter Financial
Highlights
- Improved balance
sheet with cash position of $9.1 million and no long-term debt as
of November 30, 2020, compared to cash of $4.3 million and no
long-term debt as of August 31, 2020.
- Successfully
closed public equity offering yielding gross proceeds of $12
million on October 14, 2020.
- Net Loss
excluding non-recurring items was $6.9 million, or $0.22 per
share.
- Operating Loss
of $5.6 million for the 2021 First Quarter as compared to $4.2
million for the same period of the prior fiscal year ended August
31, 2020 (“Fiscal 2020”).
- Discontinued
operations charge of $1.3 million for increased workers’
compensation reserves related to January 2020 Asset Sale.
- Despite impacts
on our Southern California based restaurant customers from new
COVID-19 restrictions beginning in November 2020, gross billings
grew 15% to $19.8 million for the 2021 First Quarter, compared to
$17.2 million for the same period of Fiscal 2020.
- Revenues
increased 15% to $2.5 million for the 2021 First Quarter compared
to $2.2 million for the same period of Fiscal 2020.
- Gross profit was
$513,000 for the 2021 First Quarter, or 20% of revenues including a
$180,000 charge for additional workers’ compensation reserves,
compared to $221,000 for the same period of Fiscal 2020. Excluding
the COVID-19 related workers’ compensation charge, gross profit
would have been 27% of revenues compared to 10% of revenues for the
first quarter of Fiscal 2020.
- Operating
expenses were $6.1 million for the 2021 First Quarter compared to
$4.4 million for the first quarter of Fiscal 2020. Excluding
non-recurring charges, operating expenses were $4.9 million for the
2021 First Quarter. Excluding non-recurring charges and non-cash
charges, cash basis operating expenses were $4.3 million for the
2021 First Quarter compared to $4.2 million for the same period of
Fiscal 2020.
- No resolution of
Asset Sale working capital settlement due to COVID-19 delays.
2021 First Quarter Operational
Highlights and COVID -19 Impacts
- Despite the
impact of COVID-19, our customer count as of November 30, 2020
continued to increase with approximately 88 clients representing
over 500 customer locations and 3,400 billed worksite employees
(“WSEs”), an increase of 42% over the same period of Fiscal
2020.
- Additional
billed nurse WSEs pushed our location count to over 800 and total
billed WSEs to approximately 3,600 at the end of December 2020.
While we anticipate that our quick service restaurant (“QSR”)
related WSE growth will be negatively impacted by the renewed
COVID-19 restrictions implemented by the State of California and
elsewhere, we do not believe that the impact will be as significant
as when restrictions were first implemented earlier in the
year.
- Average
annualized gross billings per WSE decreased to $23,300 for the 2021
First Quarter from $28,300 during the same period of Fiscal 2020
due to lower per WSE billings caused by the COVID-19 pandemic, but
the decrease was partially offset by an increase in higher wage
healthcare WSEs.
- We believe that
COVID-19 negative impacts to our development cycles that had
delayed key features for our HRIS and mobile application launch are
now primarily behind us, with additional spending having taken
place during the 2021 First Quarter to complete key technology
initiatives.
- We did not apply
for PPP funds under the CARES Act. We elected to defer payment of
certain federal taxes as an alternative to PPP funds. These taxes
are accrued and will be paid beginning in the fiscal year ending
August 31, 2022.
Commenting on the Company’s 2021 First Quarter
results, Chief Executive Officer Scott Absher stated, “Despite
additional restrictions placed on our restaurant clients both
earlier in the year and more recently in November 2020, the impact
to our business was not as severe as in the second quarter of
Fiscal 2020, and we saw marked improvement to adoption in December
for our healthcare WSEs that is driving both revenue and gross
profit growth. Our key Fiscal 2020 customer wins - Washington
Hospitality Association and US Wellness - are beginning to bear
fruit with additional WSE and client locations driving billings and
gross profit growth, and we are well positioned to provide them key
support services. The addition of more billed nurses will drive
higher per WSE revenues and gross profit and with our renewed focus
on franchise operators as our target customers in the restaurant
space, we see an increased need for the delivery features of our
application as food operators increasingly move towards delivery as
an additional source of revenues. We continue to see strong demand
and new opportunities.
Mr. Absher continued, “Our recapitalization and
improved balance sheet have been instrumental in helping us address
opening and re-opening opportunities with larger customers and we
are excited to have a clean capital structure. We believe that
COVID-19 related delays in the launch of our mobile application
solution are now largely behind us as our team has migrated to add
features that will provide us with new revenue sources from new
markets. Our internal sales team has been streamlined and focused
to take advantage of the application and we are extremely excited
about our near-term opportunities for significantly larger
customers in new markets.”
About ShiftPixy
ShiftPixy is a disruptive human capital services
enterprise, revolutionizing employment in the Gig Economy by
delivering a next-gen platform for workforce management that helps
businesses with shift-based employees navigate regulatory mandates,
minimize administrative burdens and better connect with a
ready-for-hire workforce. With expertise rooted in management’s
nearly 25 years of workers’ compensation and compliance programs
experience, ShiftPixy adds a needed layer for addressing compliance
and continued demands for equitable employment practices in the
growing Gig Economy. ShiftPixy’s complete human capital management
ecosystem is designed to manage regulatory requirements and
compliance in such required areas as paid time off (PTO) laws,
insurance and workers’ compensation, minimum wage increases, and
Affordable Care Act (ACA) compliance.
ShiftPixy Cautionary
StatementThe information provided in this release includes
forward-looking statements, the achievement or success of which
involves risks, uncertainties, and assumptions. These
forward-looking statements are made pursuant to the safe harbor
provisions within the meaning of Section 27A of the Securities Act
of 1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Although such forwardlooking statements are based upon what our
management believes are reasonable assumptions, there can be no
assurance that forward-looking statements will prove to be
accurate. If any of the risks or uncertainties, including those set
forth below, materialize or if any of the assumptions proves
incorrect, our results could differ materially from the results
expressed or implied by the forward-looking statements we make. The
risks and uncertainties include, but are not limited to, risks
associated with the nature of our business model; our ability to
execute our vision and growth strategy; our ability to attract and
retain clients; our ability to assess and manage risks; changes in
the law that affect our business and our ability to respond to such
changes and incorporate them into our business model, as necessary;
our ability to insure against and otherwise effectively manage
risks that affect our business; risks arising from the COVID-19
pandemic or any other events that could cause wide-scale business
disruptions; competition; reliance on third-party systems and
software; our ability to protect and maintain our intellectual
property; and general developments in the economy and financial
markets. These and other risks are discussed in our filings with
the Securities and Exchange Commission (the “SEC”), including,
without limitation, our Annual Report on Form 10-K, filed on
November 30, 2020, our Quarterly Reports on Form 10-Q and our
Current Reports on Form 8-K. These documents, including the
sections therein entitled “Risk Factors,” identify important
factors that could cause actual results to differ materially from
those contained in forward-looking statements. All of our
forward-looking statements are expressly qualified by all such risk
factors and other cautionary statements. Statements made in
connection with any guidance may refer to financial statements that
have not been reviewed or audited. We undertake no obligation to
update forward-looking statements if circumstances or management's
estimates or opinions should change, except as required by
applicable securities laws. The information in this press release
shall not be deemed to be "filed" for the purpose of Section 18 of
the Exchange Act, or otherwise subject to the liabilities of that
section, and will not be deemed an admission as to the materiality
of any information that is required to be disclosed solely by
Regulation FD. Further information on these and other factors that
could affect our financial results is included in the filings we
make with the SEC from time to time. These documents are available
on the "SEC Filings" subsection of the "Investor Information"
section of our website at
https://ir.shiftpixy.com/financial-information/sec-filings, or
directly from the SEC’s website at https://www.sec.gov.
Consistent with the SEC’s April 2013 guidance on
using social media outlets like Facebook and Twitter to make
corporate disclosures and announce key information in compliance
with Regulation FD, we are alerting investors and other members of
the general public that we will provide updates on operations and
progress required to be disclosed under Regulation FD through the
Company’s social media on Facebook, Twitter, LinkedIn and YouTube.
Investors, potential investors, shareholders and individuals
interested in us are encouraged to keep informed by following us on
Facebook, Twitter, LinkedIn and YouTube.
INVESTOR
CONTACT:InvestorRelations@shiftpixy.com800.475.3655
ShiftPixy, Inc.Condensed Consolidated
Balance Sheets
|
|
November 30,2020 |
|
|
August 31,2020 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
9,080,000 |
|
|
$ |
4,303,000 |
|
Accounts receivable |
|
|
158,000 |
|
|
|
308,000 |
|
Unbilled accounts receivable |
|
|
2,460,000 |
|
|
|
2,303,000 |
|
Deposit – workers’ compensation |
|
|
288,000 |
|
|
|
293,000 |
|
Prepaid expenses and other current assets |
|
|
704,000 |
|
|
|
796,000 |
|
Current assets of discontinued operations |
|
|
960,000 |
|
|
|
1,030,000 |
|
Total current assets |
|
|
13,650,000 |
|
|
|
9,033,000 |
|
|
|
|
|
|
|
|
|
|
Fixed assets, net |
|
|
1,085,000 |
|
|
|
575,000 |
|
Note receivable, net |
|
|
4,004,000 |
|
|
|
4,045,000 |
|
Deposits – workers’ compensation |
|
|
730,000 |
|
|
|
736,000 |
|
Deposits and other assets |
|
|
712,000 |
|
|
|
449,000 |
|
Non-current assets of discontinued operations |
|
|
2,435,000 |
|
|
|
2,582,000 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
22,616,000 |
|
|
$ |
17,420,000 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and other current
liabilities |
|
$ |
3,358,000 |
|
|
$ |
3,831,000 |
|
Payroll related liabilities |
|
|
6,357,000 |
|
|
|
5,752,000 |
|
Accrued workers’ compensation costs |
|
|
529,000 |
|
|
|
497,000 |
|
Current liabilities of discontinued
operations |
|
|
1,764,000 |
|
|
|
1,746,000 |
|
Total current liabilities |
|
|
12,008,000 |
|
|
|
11,826,000 |
|
Non-current liabilities |
|
|
|
|
|
|
|
|
Accrued workers’ compensation costs |
|
|
1,342,000 |
|
|
|
1,247,000 |
|
Payroll related liabilities |
|
|
635,000 |
|
|
|
- |
|
Non-current liabilities of discontinued
operations |
|
|
4,475,000 |
|
|
|
4,377,000 |
|
Total liabilities |
|
|
18,460,000 |
|
|
|
17,450,000 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity (deficit) |
|
|
|
|
|
|
|
|
Preferred stock, 50,000,000 authorized shares; $0.0001 par
value |
|
|
- |
|
|
|
- |
|
Common stock, 750,000,000 authorized shares; $0.0001 par
value; 20,920,146 and 16,902,146 shares issued as of
November 30, 2020 and August 31, 2020 |
|
|
2,100 |
|
|
|
2,000 |
|
Additional paid-in capital |
|
|
130,552,000 |
|
|
|
119,430,000 |
|
Accumulated deficit |
|
|
(126,398,000 |
) |
|
|
(119,462,000 |
) |
Total stockholders’ equity (deficit) |
|
|
4,156,000 |
|
|
|
(30,000 |
) |
Total liabilities and stockholders’ equity
(deficit) |
|
$ |
22,616,000 |
|
|
$ |
17,420,000 |
|
These unaudited interim condensed consolidated
financial statements should be read with the accompanying notes and
Management Discussion and Analysis available on Form 10-Q filed on
January 14, 2021 with the Securities and Exchange Commission.
ShiftPixy Inc.Condensed
Consolidated Statements of
Operations(Unaudited)
|
|
For the Three Months Ended |
|
|
|
November 30,2020 |
|
|
November 30,2019 |
|
Revenues (gross billings of
$19.8 million and $17.2 million less worksite employee payroll cost
of $17.3 million and $15.0 million, respectively for the three
months ended) |
|
$ |
2,503,000 |
|
|
$ |
2,169,000 |
|
Cost of revenue |
|
|
1,990,000 |
|
|
|
1,948,000 |
|
Gross profit |
|
|
513,000 |
|
|
|
221,000 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Salaries, wages, and payroll taxes |
|
|
2,193,000 |
|
|
|
1,756,000 |
|
Stock-based compensation – general and administrative |
|
|
496,000 |
|
|
|
127,000 |
|
Commissions |
|
|
38,000 |
|
|
|
71,000 |
|
Professional fees |
|
|
707,000 |
|
|
|
840,000 |
|
Software development |
|
|
877,000 |
|
|
|
353,000 |
|
Depreciation and amortization |
|
|
62,000 |
|
|
|
79,000 |
|
General and administrative |
|
|
1,759,000 |
|
|
|
1,160,000 |
|
Total operating expenses |
|
|
6,132,000 |
|
|
|
4,386,000 |
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
|
(5,619,000 |
) |
|
|
(4,165,000 |
) |
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(3,000 |
) |
|
|
(1,161,000 |
) |
Change in fair value of derivative liability |
|
|
- |
|
|
|
942,000 |
|
Total other (expense) income |
|
|
(3,000 |
) |
|
|
(219,000 |
) |
Loss from continuing
operations |
|
|
(5,622,000 |
) |
|
|
(4,384,000 |
) |
(Loss) Income from
discontinued operations |
|
|
(1,314,000 |
) |
|
|
1,990,000 |
|
Total Income (Loss) from
discontinued operations, net of tax |
|
|
(1,314,000 |
) |
|
|
1,990,000 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(6,936,000 |
) |
|
$ |
(2,394,000 |
) |
|
|
|
|
|
|
|
|
|
Net Loss per share, Basic and
diluted |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.18 |
) |
|
$ |
(4.91 |
) |
Discontinued operations (loss)
income |
|
|
(0.04 |
) |
|
|
2.23 |
|
Net Loss per share of common
stock – Basic and diluted |
|
$ |
(0.22 |
) |
|
$ |
(2.68 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common stock
outstanding – Basic and diluted |
|
|
30,808,150 |
|
|
|
893,094 |
|
These unaudited interim condensed consolidated
financial statements should be read with the accompanying notes and
Management Discussion and Analysis available on Form 10-Q filed on
January 14, 2021 with the Securities and Exchange Commission.
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