Paysign, Inc. Reports Record Second Quarter 2019 Revenues and Net Income

Paysign, Inc. (NASDAQ: PAYS), a vertically integrated provider of innovative prepaid card programs and processing services for corporate, consumer and government applications, today reported financial results for the second quarter ended June 30, 2019.

Financial Highlights

• Revenue for the quarter ended June 30, 2019 was $8,636,271, an increase of 58.2% percent compared to $5,460,723 for the same period last year. Revenue for the six months ended June 30, 2019 was $15,893,561, an increase of 56.8% compared to $10,137,042 for the same period last year. The increase in revenue is attributable to continued growth within our existing programs and the addition of new card programs in both existing and new industry verticals.

• Second quarter 2019 gross profit increased 92.3% to $5.0 million or 58.3% of revenues, compared to $2.6 million or 48.0% of revenue in second 2018. 2019 six month gross profit increased 81.2% to $8.8 million, or 55.5% of revenue, from $4.9 million or 48.0% of revenue in 2018. The increase was primarily driven by a favorable mix towards higher margin card programs.

• Total operating expenses in the second quarter were $3.4 million compared to $3.0 million in the prior quarter, and to $1.9 million in the second quarter of 2018. The increase compared to the same period the prior year is primarily attributable to increases in leadership and staffing, investments in infrastructure, and increased stock-based compensation.

• Net Income for the quarter ended June 30, 2019 was $1,738,791, or $0.04 per basic share, an increase of 137.5% compared to $732,056 or $.02 per basic share in the same period the prior year. 2019 six month net income was $2,610,462, or $0.06 per basic share, an increase of 128.1% compared to $1,144,563, or $03 per basic share in the same period the prior year. For the six month period fully diluted earnings per share was $.05 versus $.02 the prior year.

• Non-GAAP Adjusted EBITDA was $2,593,676, or $0.05 per basic share in the quarter ended June 30, 2019 an increase of 123.3% compared to $1,161,669, or $0.03 per basic share in the same period the prior year. Six month non-GAAP Adjusted EBITDA for 2019 was $4,311,154, or $0.09 per basic share, an increase of 122.6% compared to $1,936,609, or $.04 per basic share in the same period in the prior year.

• Our revenue conversion rate of gross dollar volume loaded on cards for the quarter was 4.21% or 421 bps compared to 3.66% or 366 bps the same period the prior year.

Management Commentary

“We are very pleased with our results, as we’ve delivered three and six month record revenue and net profit,” said Mark Newcomer, Chief Executive Officer, Paysign. “Our strong results demonstrate our continued ability to execute and to grow our new and existing business lines.”

“We delivered strong results across the board in the second quarter, as we continued to operationalize our strategic initiatives,” commented Dan Henry, Chairman, Paysign. “As we look ahead, we remain focused on execution, profitability and maximizing shareholder value.”

“As anticipated, we continue to experience an expansion in gross and net margins, as we benefit from higher margin industry mix and improved operating leverage,” stated Mark Attinger, Chief Financial Officer, Paysign.

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About Paysign, Inc.

Paysign, Inc. (NASDAQ: PAYS) is an experienced and trusted prepaid debit card payment solutions provider and integrated payment processor with over 2.5 million cardholders in its portfolio. Paysign designs and develops payment solutions, prepaid card programs, and customized payment services for consumer, corporate and public sector applications.

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 3PEA Technologies, Inc. in the United States and other countries. For more information visit us at paysign.com or follow us on LinkedIn, Twitter and Facebook.

Forward-Looking Statements

Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the companies, are forward-looking statements that involve risks and uncertainties. There is no assurance that such statements will prove to be accurate, and actual results and future events could differ materially. Paysign 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.
CONSOLIDATED STATEMENTS OF INCOME
FOR THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(Unaudited)
			For the three months ended							For the six months ended
			June 30,							June 30,
			2019			2018				2019			2018
Revenue			$	8,636,271		$	5,460,723			$	15,893,561		$	10,137,042
Cost of revenues				3,598,038			2,840,876				7,080,174			5,274,086
Gross profit				5,038,233			2,619,847				8,813,387			4,862,956
Operating expense
	Depreciation and amortization			395,510			250,447				729,271			496,079
	Selling, general and administrative			3,012,971			1,667,856				5,717,921			3,247,321
	Total operating expenses			3,408,481			1,918,303				6,447,192			3,743,400
Income from operations				1,629,752			701,544				2,366,195			1,119,556
Other income/ (expense)
	Other (expense)			-			(3,125	)			-			(31,125	)
	Interest income			131,811			33,015				250,985			53,615
	Total Other Income/ (expense)			131,811			29,890				250,985			22,490
Income before income tax expense and noncontrolling interest				1,761,563			731,434				2,617,180			1,142,046
	Income tax expense			23,276			-				7,786			-
Net income before income tax benefit and noncontrolling interest				1,738,287			731,434				2,609,394			1,142,046
	Net loss attributable to noncontrolling interest			504			622				1,068			2,517
Net income attributable to Paysign, Inc.			$	1,738,791		$	732,056			$	2,610,462		$	1,144,563
Net income per common share - basic			$	0.04		$	0.02			$	0.06		$	0.03
Net income per common share - fully diluted			$	0.03		$	0.01			$	0.05		$	0.02
Weighted average common shares outstanding - basic				47,310,209			45,560,692				47,136,608			45,359,479
Weighted average common shares outstanding - fully diluted				54,976,595			51,988,192				54,739,483			51,437,538

PAYSIGN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2019 and DECEMBER 31, 2018
			June 30,					December 31,
			2019					2018
			(Unaudited)					(Audited)
ASSETS
Current Assets
	Cash		$	6,289,008				$	5,615,073
	Cash restricted			42,600,430					26,050,668
	Accounts receivable			948,892					337,303
	Prepaid expenses and other assets			966,633					1,175,241
	Total current assets			50,804,963					33,178,285
Fixed assets, net				969,161					883,490
Intangible assets, net				2,268,611					2,115,933
Total assets			$	54,042,736				$	36,177,708
LIABILITIES AND EQUITY
Current liabilities
	Accounts payable and accrued liabilities		$	1,005,867				$	1,327,497
	Customer card funding			40,323,617					25,960,974
	Total current liabilities			41,329,484					27,288,471
Total liabilities				41,329,484					27,288,471
Equity
	Preferred stock: $0.001 par value; 25,000,000 shares authorized; none issued and outstanding			-					-
	Common stock: $0.001 par value; 150,000,000 shares authorized, 47,556,912 and 46,440,765 issued at June 30, 2019 and December 31, 2018, respectively			47,557					46,441
	Additional paid-in-capital			9,833,648					8,620,144
	Treasury stock at cost, 303,450 shares			(150,000	)				(150,000	)
	Retained earnings			3,190,044					579,582
	Total Paysign, Inc's stockholders' equity			12,921,249					9,096,167
	Non-controlling interest			(207,998	)				(206,930	)
	Total equity			12,713,251					8,889,237
Total liabilities and equity			$	54,042,735				$	36,177,708

Paysign, Inc. Non-GAAP Measures

To supplement Paysign’s financial results presented on a GAAP basis, we use a non-GAAP measure of Adjusted EBITDA defined as net income less the following cash and non-cash items: interest, taxes, stock-based compensation, amortization and depreciation. We believe this non-GAAP measure helps 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.

“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 performance.

Management cautions that amounts presented in accordance with Paysign’s definition of Adjusted EBITDA or any other non-GAAP measures may not be comparable to similar measures disclosed by other companies because not all companies calculate Adjusted EBITDA and non-GAAP measures in the same manner.

PAYSIGN, INC.
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME
FOR THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(Unaudited)
		For the three months ended									For the six months ended
		June 30,									June 30,
		2019				2018					2019				2018
Net income attributable to Paysign, Inc.		$	1,738,791			$	732,056				$	2,610,462			$	1,144,563
Income tax benefit			23,276				-					7,786				-
Interest			(131,811	)			(33,015	)				(250,985	)			(53,615	)
Depreciation and amortization			395,510				250,447					729,271				496,079
EBITDA			2,025,766				949,488					3,096,534				1,587,027
Stock-based compensation			567,910				212,181					1,214,620				349,582
Adjusted EBITDA			2,593,676				1,161,669					4,311,154				1,936,609
Non-GAAP EPS - basic		$	0.05			$	0.03				$	0.09			$	0.04
Non-GAAP EPS - fully diluted		$	0.05			$	0.02				$	0.08			$	0.04

 

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