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 2022.
“We closed out 2022 with strong financial results, and I am pleased with the opportunities that lie ahead of us for 2023,” said Mark Newcomer, Paysign CEO. “We saw continued growth in our plasma business with the addition of 91 centers in the year, leaving us with a net gain of 78 centers. We more than doubled the number of patient affordability programs ending the year with 19 active programs as well as receiving commitments to launch programs with three of the top 20 U.S. pharmaceutical companies. To date, we have launched seven programs in 2023 with an additional 19 program commitments spanning the next six months. 2023 is looking to be an exciting year across all of our product lines and we believe we are well prepared to capitalize on new opportunities.”
2022 Full-Year Results
The following additional details are provided to aid in understanding Paysign’s full-year 2022 results versus full-year 2021:
Quarterly Results
The following additional details are provided to aid in understanding Paysign’s fourth quarter 2022 results versus the year-ago period:
2022 Year Milestones
Balance Sheet at Year-End 2022
Unrestricted cash increased $2.3 million to $9.7 million from December 31, 2021, due to the improvement in our operating results throughout 2022. Restricted cash of $80.2 million are funds used for customer card funding with a corresponding offset under current liabilities. The increase of $18.9 million in 2022 versus 2021 was predominately related to increases in funds on cards, increased plasma deposits, and new plasma and pharma programs, 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 10 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. Our adjusted current ratio, which excludes restricted cash balances from assets and liabilities, remained steady at 2.1x.
2023 Outlook
“We had a solid 2022 coming out of the global pandemic with 29% revenue growth and a 175% increase in Adjusted EBITDA versus the prior year. We plan on continuing to add new plasma centers and believe that the increasing demand for plasma by the medical industry will facilitate the increase in donations and fuel the continued growth of our plasma business. Additionally, we are beginning to see real traction in our pharma copay business where we have built an industry reputation of providing reliable patient affordability programs to pharmaceutical companies as evident with the 10 new pharma copay programs we launched in 2022, seven new programs to date in 2023 and an additional commitment of 19 new programs over the next six months,” said Jeff Baker, Paysign CFO.
“For the full-year 2023, we expect total revenues to be in the range of $44.0 million to $46.0 million, reflecting year over year growth of 16% to 21%, with plasma making up approximately 90% of total revenue. These expectations account for one of our plasma customers rationalizing unprofitable centers, one of our plasma customers selling a number of their centers and one of our plasma customers shutting down. This impacts 16 of our centers with nine lost in the first quarter, six in the second quarter and one in the fourth quarter. We expect to add 45 to 55 new centers in 2023 with at least seven being added in the first quarter. Pharma revenue is expected to grow at least 30% year-over-year despite the loss of $1.5 million of pharma prepaid revenue in 2022. Full-year gross profit margins are expected to be between 52.5% to 55.0% reflecting lower pharma copay margins versus the pharma prepaid margins. Operating expenses are expected to be between $23.0 million and $25.0 million as we continue to make investments in people and technology and experience a full year of higher costs related to inflationary pressures experienced in the second half of 2022. This expense also takes into account expected legal expenses related to our outstanding litigation. Depreciation and amortization are expected to be between $3.5 million and $3.7 million, while stock-based compensation is expected to be approximately $2.5 million. Given our large unrestricted and restricted cash balances and the current interest rate environment, we expect to generate interest income of $2.0 million to $2.5 million. Taking all of the factors above into consideration, we expect net income to be in the range of $2.5 million to $3.5 million, or $0.05 to $0.06 per diluted share, and adjusted EBITDA to be in the range of $6.0 million to $7.5 million, or $0.11 to $0.14 per diluted share.”
“For the first quarter of 2023, we expect total revenue to be in the range of $10.2 million to $10.3 million with gross profit margins between 52.5% to 53.5%. Operating expenses are expected to be between $6.2 million to $6.4 million. Adjusted EBITDA is expected to be in the range of $0.7 million and $0.8 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 impact the economy of the United States and the rest of the world. While the direct disruption appears to have abated 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, and the economic repercussions are still manifesting themselves. 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. Additionally, labor shortages at plasma donation centers and restrictions preventing Mexican nationals with tourist visas from being compensated for donating plasma, have further impacted donations. Those developments have had an adverse impact on the company’s historical results of operations. On September 16, 2022, the United States District Court issued a preliminary injunction preventing the United States Customs and Border Protection from continuing to enforce its ban on plasma donations by Mexican nationals. Since then, we have seen an increase in donation activity from Mexican nationals in our plasma donation centers along the U.S.-Mexico border. Additionally, inflationary pressures for food, gasoline, rent and other products and services appear to be driving individuals back into the plasma donation centers based upon the increase we experienced in the number of loads per average donation center in the second half of 2022 as compared to all preceding quarters in 2022 and 2021. While we remain cautiously optimistic and have seen improvements in donation activity and our operating results on an aggregated basis, we cannot foresee what potential issues may impact our operating results as new COVID-19 variants continue to evolve. That being said, President Biden recently announced that the COVID-19 national emergency and public health emergency declarations will end on May 11, 2023, as most of the world has returned closer to normalcy. Given the remaining uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19 and variants, 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.
Fourth Quarter and Full-Year 2022 Financial Results Conference Call Details
The company will hold a conference call at 5:00 p.m. Eastern time today to discuss its fourth quarter and full-year 2022 financial 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 call replay will be available until June 21, 2023, and can be accessed by dialing 877.660.6853 (within the U.S.) and 201.612.7415 (outside the U.S.), using passcode 13736590.
Forward-Looking Statements
Certain statements in this press release may be considered forward-looking under federal securities laws, and the company intends that such forward-looking statements be subject to the safe harbor created thereby. All statements, besides statements of fact included in this release are forward-looking. Such forward-looking statements include, among others, that we are pleased with the opportunities that lie ahead of us for 2023; our belief that 2023 is looking to be an exciting year across all of our product lines, and our belief that we are well prepared to capitalize on new opportunities; our plan to continue to add new plasma centers and our belief that the increasing demand for plasma by the medical industry will facilitate the increase in donations and fuel the continued growth of our plasma business; our belief that we are beginning to see real traction in our pharma copay business where we have built an industry reputation of providing reliable patient affordability programs to pharmaceutical companies; our expectation for total revenues, plasma revenues, new centers, pharma revenues, gross profit margins, operating expenses, expected legal expenses for our outstanding litigation, depreciation and amortization, stock-based compensation, interest income, net income, net income per diluted share, Adjusted EBITDA and Adjusted EBITDA per diluted share for full year 2023; our expectation for total revenue, gross profit margins, operating expenses and Adjusted EBITDA for the first quarter of 2023; our belief that inflationary pressures for food, gasoline, rent and other products and services appear to be driving individuals back into the plasma donation centers; and our inability to estimate with reasonable accuracy COVID-19’s further impact on our results of operations, cash flows or financial condition. 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, 2022. 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 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, prepaid gift cards, 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 general purpose reloadable (GPR), payroll, and travel and expense reimbursement. For more information, visit paysign.com.
Paysign, Inc. Fourth Quarter and Full-Year 2022 |
|||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||
(Unaudited) | (Audited) | ||||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||
Revenues | |||||||||||||
Plasma industry | $ |
9,707,264 |
$ |
7,552,140 |
$ |
34,737,640 |
$ |
25,918,150 |
|
||||
Pharma industry |
|
733,908 |
|
1,177,671 |
|
3,007,140 |
|
3,361,869 |
|
||||
Other |
|
176,652 |
|
37,131 |
|
288,887 |
|
184,830 |
|
||||
Total revenues |
|
10,617,824 |
|
8,766,942 |
|
38,033,667 |
|
29,464,849 |
|
||||
Cost of revenues |
|
5,107,934 |
|
4,008,778 |
|
17,079,069 |
|
14,753,042 |
|
||||
Gross profit |
|
5,509,890 |
|
4,758,164 |
|
20,954,598 |
|
14,711,807 |
|
||||
Operating expenses | |||||||||||||
Selling, general and administrative |
|
4,417,006 |
|
3,995,703 |
|
17,700,651 |
|
14,953,322 |
|
||||
Depreciation and amortization |
|
778,378 |
|
659,564 |
|
2,909,612 |
|
2,497,918 |
|
||||
Total operating expenses |
|
5,195,384 |
|
4,655,267 |
|
20,610,263 |
|
17,451,240 |
|
||||
Income (loss) from operations |
|
314,506 |
|
102,897 |
|
344,335 |
|
(2,739,433 |
) |
||||
Other income | |||||||||||||
Interest income, net |
|
441,070 |
10,067 |
|
790,917 |
|
28,297 |
|
|||||
Income (loss) before income tax provision |
|
755,576 |
|
112,964 |
|
1,135,252 |
|
(2,711,136 |
) |
||||
Income tax provision |
|
42,481 |
|
7,798 |
|
107,477 |
|
10,198 |
|
||||
Net income (loss) | $ |
713,095 |
$ |
105,166 |
$ |
1,027,775 |
$ |
(2,721,334 |
) |
||||
Net income (loss) per share | |||||||||||||
Basic | $ |
0.01 |
$ |
0.00 |
$ |
0.02 |
$ |
(0.05 |
) |
||||
Diluted | $ |
0.01 |
$ |
0.00 |
$ |
0.02 |
$ |
(0.05 |
) |
||||
Weighted average common shares | |||||||||||||
Basic |
|
52,232,986 |
|
51,632,008 |
|
52,048,127 |
|
50,975,794 |
|
||||
Diluted |
|
53,773,758 |
|
52,355,856 |
|
52,933,255 |
|
50,975,794 |
|
||||
Paysign, Inc. Fourth Quarter and Full-Year 2022 | ||||||||
Condensed Consolidated Balance Sheets (Audited) | ||||||||
December 31, | December 31, | |||||||
|
2022 |
|
|
2021 |
|
|||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ |
9,708,238 |
|
$ |
7,387,156 |
|
||
Restricted cash |
|
80,189,113 |
|
|
61,283,914 |
|
||
Accounts receivable |
|
4,680,991 |
|
|
3,393,940 |
|
||
Other receivables |
|
1,439,251 |
|
|
1,019,218 |
|
||
Prepaid expenses and other current assets |
|
1,699,808 |
|
|
1,242,967 |
|
||
Total current assets |
|
97,717,401 |
|
|
74,327,195 |
|
||
Fixed assets, net |
|
1,255,292 |
|
|
1,642,981 |
|
||
Intangible assets, net |
|
5,656,722 |
|
|
4,086,962 |
|
||
Operating lease right-of-use asset |
|
3,614,838 |
|
|
3,993,655 |
|
||
Total assets | $ |
108,244,253 |
|
$ |
84,050,793 |
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ |
8,088,660 |
|
$ |
5,765,478 |
|
||
Operating lease liability, current portion |
|
361,408 |
|
|
340,412 |
|
||
Customer card funding |
|
80,189,113 |
|
|
61,283,914 |
|
||
Total current liabilities |
|
88,639,181 |
|
|
67,389,804 |
|
||
Operating lease liability, long term portion |
|
3,311,777 |
|
|
3,673,186 |
|
||
Total liabilities |
|
91,950,958 |
|
|
71,062,990 |
|
||
Stockholders' equity | ||||||||
Common stock: $0.001 par value; 150,000,000 shares authorized, |
|
52,650 |
|
|
52,095 |
|
||
52,650,382 and 52,095,382 issued at December 31, 2022, and | ||||||||
December 31, 2021, respectively | ||||||||
Additional paid-in-capital |
|
19,137,281 |
|
|
16,860,119 |
|
||
Treasury stock at cost, 303,450 shares |
|
(150,000 |
) |
|
(150,000 |
) |
||
Accumulated deficit |
|
(2,746,636 |
) |
|
(3,774,411 |
) |
||
Total stockholders' equity |
|
16,293,295 |
|
|
12,987,803 |
|
||
Total liabilities and stockholders' equity | $ |
108,244,253 |
|
$ |
84,050,793 |
|
||
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 (loss) 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.
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. Fourth Quarter and Full-Year 2022 |
||||||||||||||||
Adjusted EBITDA (Unaudited) | ||||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
||
Reconciliation of EBITDA and Adjusted EBITDA | ||||||||||||||||
to net income (loss): | ||||||||||||||||
Net income (loss) | $ |
713,095 |
|
$ |
105,166 |
|
$ |
1,027,775 |
|
$ |
(2,721,334 |
) |
||||
Income tax provision |
|
42,481 |
|
|
7,798 |
|
|
107,477 |
|
|
10,198 |
|
||||
Interest income, net |
|
(441,070 |
) |
|
(10,067 |
) |
|
(790,917 |
) |
|
(28,297 |
) |
||||
Depreciation and amortization |
|
778,378 |
|
|
659,564 |
|
|
2,909,612 |
|
|
2,497,918 |
|
||||
EBITDA |
|
1,092,884 |
|
|
762,461 |
|
|
3,253,947 |
|
|
(241,515 |
) |
||||
Stock-based compensation |
|
653,723 |
|
|
500,205 |
|
|
2,277,717 |
|
|
2,280,931 |
|
||||
Adjusted EBITDA | $ |
1,746,607 |
|
$ |
1,262,666 |
|
$ |
5,531,664 |
|
$ |
2,039,416 |
|
||||
Adjusted EBITDA per share | ||||||||||||||||
Basic | $ |
0.03 |
|
$ |
0.02 |
|
$ |
0.11 |
|
$ |
0.04 |
|
||||
Diluted | $ |
0.03 |
|
$ |
0.02 |
|
$ |
0.10 |
|
$ |
0.04 |
|
||||
Weighted average common shares | ||||||||||||||||
Basic |
|
52,232,986 |
|
|
51,632,008 |
|
|
52,048,127 |
|
|
50,975,794 |
|
||||
Diluted |
|
53,773,758 |
|
|
52,355,856 |
|
|
52,933,255 |
|
|
52,553,586 |
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230321005920/en/
Investor Relations
[email protected]
888.522.4810
paysign.com/investors
Media Relations
Alicia Ches
702.749.7257
[email protected]