PaySign (PAYS) 13 Aug 202020 Q2 Earnings call transcript

Hello, and welcome to the PaySign 2020 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. This presentation may include forward-looking statements. of the or in business or expectations of the that financial presentation plans, otherwise, extent equity, forward-looking. operations, information on future projections, about impact statements make the statements information margins, events, this presented discusses results expected about To gross returns such markets are COVID-XX, the Company's and believes, use as should, such forward-looking can estimates, forecasts, Such projects, words statements be of identified proposes. expects, plans intends, by anticipates, the may,

expectations and reflected forward-looking on results the these could Although forward-looking are based the that materially statements. Company actual are in reasonable a statements believes from cause differ to number uncertainties there assumptions, of risks that

the XXXX You consider are the cautionary and heading urged Form and statements under any Risk in elsewhere XX-K. carefully disclosures, Factors and our to review other made including statements

presentation as duty which in does Forward-looking by measure, accepted in the statements that and they not update an accordance is non-GAAP principles, the prepared as speak be to with generally GAAP. undertake also accounting except financial the alternative any and in or prepared are only the date statements, may with, nor U.S. Company accordance of EBITDA document not includes any This law. of contained, financial to, measures adjusted required forward-looking

to based measures by conference presented the In please by addition, would not other necessarily ahead. Mark, Mark titled turn similarly adjusted CEO, companies. EBITDA methodology on like prescribed standardized now not any go to is over GAAP and Newcomer. comparable I to is

and Officer. all staying joining Attinger, afternoon safe at are call. COVID-XX I'm Mark for our this thank Chief for and families President us earnings second of everyone, is Chief PaySign’s quarter and afternoon, Good your Newcomer, here me XXXX hope the Financial PaySign; Executive during Officer Kevin. pandemic. We you you you, Thank and Mark joining

PaySign. safety our focusing clients the long-term health employees and to of to of the success on and continue We and cardholders work our ensure while supporting

quarter, compared compared income second net revenues the year our quarter million for prior a was $X.X of year. prior million, $X.X XX% million. the Net to million of a income For the the million to was in decrease of prior $X.X EBITDA the $X.X adjusted our year. And to million loss $X.X second $X.X were of compared for

lifted Our anticipated be business federal related more benefits. line, new a see was imposed patient the pharmaceutical affordability partial of as programs expiration by recovery unemployment as end-to-end beginning our than various plasma May several restrictions processing full the as the effects quarter, unemployment added COVID-XX the Act restrictions by In program as Patient of late new the impacted state pharma to well of and second Act governments, Affordability did to of we effects recent and the the as added pandemic, the local improvements CARES claims first the program, the in medical our We CARES case pipeline. and the collections, business one more benefits. in well to to and began

to plasma center XXXX. achieved locations, By centers plasma XX are we plans by the assisted XX and six an Subsequently, space, footprint go center adding centers. plasma and with their to continue We in XX new a and centers, early also quarter, from are fourth complete of quarter. lives expand number on client fourth blood expecting XX the our the have we program continuity blood in plasma by mature onboarding new centers. an additional Of early card go-live to exceed pace XXX provider, existing with transitions XX business

can distribute This called cetera. pay manage product as disbursements use large scenarios. funds used their day-to-day as linked business et and businesses PaySign new bank their accounts innovative They to the is card. expenses other a to small, well to incoming launch product by suppliers, receive in to expect various We medium,

in We strengthened landscape. I'd times recent more long-term At company emerge in focused value. Our robust, CFO, to as by remains to to like changes these take who financials remain a the on it we will extremely pipeline us stronger from maximizing trying competitive detail. over our the positioned this Mark shareholder Attinger, optimistic PaySign time, turn as through

you, time, this results evening. through Thank provide variance quarter take commentary. At Mark. second or the you Good I will some afternoon and

million. loss the first variance loaded of quarter, the unfavorable an decrease months higher the margin revenues management. consisted favorable XXXX to the XX, decreased margin XX% total to or $X.X $X.X million, from industries in consolidated XXXX smaller in June lower gross million revenues plasma conversion telecom of million Total XX.X% revenues XX.X% the XX% XX.X% million, decrease of million travel with decrease in compared resulting revenue or increase year-on-year amortization donations $XXX,XXX $XX.X June a in of from due to ending Depreciation $X,XXX,XXX, in and XX% to revenues otherwise to year to combined were rate. to and other half decrease X.X% an in consisted balances resulting salaries June leasehold Revenue and by XXXX. rate XX.X% increase expenses was decrease point Gross and XX.X% XXXX. for $X.X staffing and load primarily consisted The XXX occupancy by was million The or benefits and reduction three of unfavorable months degradation million comparison increased $X.X of COVID-XX. $XX,XXX; increase year-on-year cost ended increased or a an of wrote business. for in an $XXX,XXX. a XXXX, the and volume an to and decrease constituted decrease; or of $X.XX half references resulted of of the primarily or improvements client of a per variance X% million to $XX.X XXXX, $X.X improved prior profit compared to and basis $X.X As support for rate of were revenue year off compared was revenues prior in some a percents and SG&A and and versus and component unspent a $X.XX million rent $X.XX basic approximately compared I technologies $XXX,XXX of or of in or from revenues offset for and of same of of EBITDA transactions $XX,XXX, million ended $XXX,XXX; $XXX,XXX, of a industry, was respectively. XX% a also the due therefore, down operating $X.X we decreased per pharma, $X.XX the $X.X per cost prior a $XXX,XXX a $X.XX The were to six-month XXXX. a to and Cost $X.X or The in prior QX the a revenue adjusted impacted $XXX,XXX Both card from compared per of $XXX,XXX dollars variance share diluted for income Revenue revenue. period of same Non-GAAP share $X.XX offset revenue year. $X,XXX,XXX first XXXX adjusted basic $X,XXX,XXX or the lower EBITDA Including by basic XX% first margin EPS to compared XX, X.X% period. year. basic the decrease $XX,XXX. share three year. of referred same the was $XXX,XXX and was in $X.XX slowdown of in year. was share prior unless net And the basic basic strong to the consolidated dollars or to XX, PaySign’s quarter The as quarter EBITDA period XX.X% QX decreased changes XXXX stated or to decrease compared plasma of significant proceed, in and of XXXX for to quarter in in the period Fully compared $X,XXX,XXX $X.XX the per prior share XX.X% the pharma or net income volume, adjusted per $X,XXX,XXX to compared the share $X,XXX,XXX. prior

million $XXX was loaded cards down million volume the to loaded Our gross year, prior $XXX dollar XX%. versus

or Working From capital increased quarter $XX.X year-end a ending but or to resulted rate, compared consolidated XXXX. sheet the million XXXX million increased the to Our bps XXX on year. compared to pharma XXX or prior X.XX% revenue GDV, balances. $XX.X cash, XXX $X.X to the an conversion perspective, balance a including lower cash at conversion $X.X due restricted quarter, QX compared primarily lower the million divided X% was million two $XX.X from and of The decrease X.XX% decrease bps, points to revenue million XXXX a end compared ending at rate basis compared prior XXXX. unspent increase by revenue $XX.X to million has to to

reflected restricted card Our both of Operating as months was at coverage ratio, $X.X funding liability adjusted cash liquidity, June six balance year-end. an the ending current by the excluding sheet, XX, versus flow and X.Xx from X.Xx for measured million sides cash XXXX. the

quarter, a second year, trajectory the the At programs. productions an latter The to Looking begin over the coupled in anticipated similar in back number by client in in of our you. question-and-answer have recovery relief, this we seen time, I'll That it to to government onboarding current the give upturn partial of Kevin, to the to of with for a remainder my resulting Thank pipeline restrictions the us remarks. to some followed strong of the related and COVID easing our very a QX anticipate growth confidence session. results while moderator, quarter, portion QX, from we concludes XXXX. additions return our turn new

you. Thank

coming Heckmann question-and-answer now be Our today Peter from first will question We is [Operator Davidson. session. conducting a Instructions] from

now is line live. Your

Good afternoon, the question. for taking Thanks everyone.

and know can you end data talk decline that end trends volumes? most the year-over-year can about I might recent most that of be, in you've talk terms seen real that the CARES you the July. recently, the how to but You of noted at Act the don't in maybe went trends ended the time about of individuals stimulus your

Yes.

quarter. two. and better strong picked three July through quarter but saw a from it of two, from to a month kind on but The we bit quarter. We that than that look results, indications will the still May and June. did little little in little on expect and July a to a looks June, to has has relative firm. which just of books material, a bit early of in bit similar do the this quarter again, be up stated, as but think divergent we So our quarter pickup April low be to closing similar, I the But fourth the performed, we watermark case than as May, we're getting the the be how year-on-year more nothing appears

noted some you prescriptions dynamics Got regards pharma the whether And the you management as it. dynamics can some you improved have talk about longer-lasting that understand filled, of of than fewer and the just or I pandemic. to not comment then and are but within to those going be the program the of business? some just client

our to is he's for seeing. talk the probably Yes. to Affordability General – actually you Good Matt he Patient Vice And question. introduce He President overall and what can Turner. of I'm going Head Manager Program. the on

Hi. Yes.

So new I a be therapy. in going bit number the doctor accessing obviously going downturn little the think we are that that of of saw are to patients a to

as to a is So calling far have patient much going as therapy, little XX next that show money if the are not far to the drugs. job months. doctor's market already the know the can't as they back have in in a getting most in doctor, off, on a are as laid that's as for already the going refill as likely people more on afford uncertain, spending lenient it. to having are without the available people office area they prescription healthcare up be Patients newer Doctors are high-cost as more

I which products. new So an continues, recovery as volumes of our the continue think will claim acquisition to on see result patients, we'll higher in

business management helpful. model indicate in the – But that pharma. any of increase the the shift program in underlying terms business Okay. That's of doesn't of

in shift change does set? from it business An position maybe you just and little our like your a question product the better? Can clarify itself increasing this, resulting our

what added Affordability programs several. how program, or of smaller of they some and large coming type relatively relatively you in, those generating? are and you fees said curious just I I'm are think

with in in recall, pharma have added those XX two year one of programs and So the quarter. the one you last XX three after including that ended was we first added year. we and new programs we quarter, eight last ended today two And second that expiring, if were

three now, size the those kind XX of what's XX speak and and perhaps. pipeline of So can sitting space, and non-buy are bill in we're with in to the Matt

Yes.

on side. a the transactional And co-pay – are So talking fee. when the low the side, you're question had believe volumes on management around the you I co-pay program

we So what be that side difference. transactional as fees are amount to flipped And year the In latter our up concerned, we're the a far to very right this able part is amount in make then next percentage to of we've as on smaller pipeline a revenue think into pull it the be and we're revenue into have be a the that. through and as what where pharmacy-based now into year. fees and the smaller with of tends buy-and-bill pieces as that is a had make of to co-pay smaller those or to the confident hands, management pipeline up opportunities the far tends portion the transactional moving the majority substantial and the put of next the going year products, moving as are we

That's great. I'll in queue. the it. back I get appreciate

The Genuity. coming next Moldow question you. from Thank from Canaccord Austin is

live. now is line Your

my questions. Thanks for taking

or mentioned pharma. the for impact delayed COVID pipeline You But the deferred the Pharma Or any segment was of a impacted? indefinitely? on little contracts

Not client. you two we quarter began communicated the on that indefinitely. that one with of clients – fees, had that first that some only we into have we we the start-up We actually while from did recently funding one clients

of program taken before out. rolled out of of manufacturers the a behalf some and the require and temperature and they educate So as got and onboard programs those that manufacturers part to they the seem that. Many representatives on that can have to get physicians pause physicians

nothing them pipeline is actually So when that slow their And those their made suspended you biologics and pause down, and take the travel, for that any very can't offering a those as strong. are clients. has but medications of Matt patients. the physicians And conditions indicated,

to continued have yes, RFPs correct. The come And in.

Preemptive as as well RFPs.

absolutely. Yes,

Combination.

segments, Got it. elaborate a rates? those revenue basis what But little they on the you conversion impacts were trended how individually? individual major on the Can on more the a like-for-like or in

Sure.

conversion to first tighter, you on first stronger And revenue until down on that have particular and quarter, side loads cost conversion in those, markedly with to So picks rate increase we card still as our quarter was the the first side to projected revenue tends rate of settlement plasma in way come due on the loads to is programs funds tends when up saw was loads those actually your than are you ASC being works, pharma on start down, quarter, management up on forecast. the to the program back those rate expect and than but therefore, to the as to rates, on get second – to balances descending while recognition kind projected quarters revenue third as what the conversion had subsequent we the it just just better since card descending, you rate this lower the In revenue And customers XXX revenue money are that it conversion income quarter. left also the resulted those left the in and conversion expire. those the of sales using well of rates. remaining bring typically case,

lower question quarter, coping is expense management topline? and on your of QX, for talk it. expense you're And kind Got maybe last my as you in Can specifically management. about the with

Yes. Good question, Austin.

take unless was was and it travel that some or unless it limit contributing going to be growth. to measures topline infrastructure to revenue not to critical hiring expenses solid producing to did we suspend to were So all some reduce essential

kind identified that sure area. banking We the make and execute in to also quarter. the That established we had for these new what and of and invest gave going a the pricing. those been process favorable to we're executed that you can people do capabilities second year, we a business as were in moderate see agreement And all growth we the during all of which us that continue some products into us, can forecasting that And levers on rate budgeting that pipeline in implementing. of to allowed said, kind essentially

in we'll of a think pickup the third and do cautious on I right So see spend a we the now. bit our are fourth little quarter being OpEx, but very total with

questions. for Thanks taking Okay. the

you. Thank

BTIG. is today from Palmer coming question Next from Mark

now Your live. line is

And thank taking for questions. my you. Yes. Thank you

the First all, you going saga. recent Wirecard's of through landscape, in as obviously, have some there mentioned, been changes with competitive

coming many go centers into up balance about the then after such an for have potentially and If could XXXX, how XXXX during that opportunity talk those? be you'd you of can bid to

to a job going that, comment think, So I'm continue North Newcomer look this. on I solid to clients. great am to wants They retaining start going to and basically Wirecard I say a do Mark is America organization.

with are in have plasma on quoted, clear future. our numbers That it's entire Mark on be we there can the in had our other at from to, some of We And building business said, isn't business, their But those roadmap takeaways. competitor we any might competing are business which work. and success speak plasma the them a that how expense. many hard

in to – So do work answer probably Mark, more you're we're But well roadmap. that. a do on capable nimble hard, the nothing what clear continue much a and going to processor company, to we suited very as but

we with us. many though for we opportunity can smaller of as at look talks. right in at that's all Yes. companies about The now. larger, a number But point I remain And comment I mean, actually in from we're to obviously, positive talking range time. this it centers

end count quarter? housekeeping get And the market end what estimate you was perspective, back And total your share the of I'll queue. is the what centers the the at you. the Thank would at at, a on just of quarter? And from in

Give track get here. and me just back on I'll one moment

we think, other have it's roughly plasma seven essentially currently programs and XXX from I up XX% So – that pharma quarter that prior the and four centers, programs, right XXX. for XX That's in ballpark. represents

Thank you.

The is Thank from from next Jon Thalmann. coming Ladenburg you. Hickman question

Your line live. is now

what Can a centers that support for continuity are business taking plan? does What client's questions. these mean? explain Thanks you of in my Hi. XXX

nervous client It's they to the really is centers that – What that that and are were decision means of world on asked we make can't therefore, you what's what XXX respect provide tell end. in with going to what us did. They make in going one the those go-live. up what's they we going to and service to the in and on and which and, continuity plan providers their a

all think that they So point centers that yes, card product can card out decision. I of the make those of technology, the it's the packaging and product, and all conditions, important site. each in go-live immediately terms day to is received have The the

anything Okay. they need do to those XX have don’t XXX, But with go-live]… that [to centers

They do not. That's correct.

Okay.

healthy XX above doing are now. what right is a pretty you percentage So

Okay.

– answered. So that asked questions my been other and was actually my have

Instructions] follow-up [Operator next Peter from a question is Our you. Thank Heckmann from Davidson.

is line Your live. now

Great. That answer was last helpful.

related revenue no So those XXX. to

XX%, and think XX won been that's On about I XX% are increase. year-over-year have XX%, the that onboarded, going

as third – foot perform doesn't for to the the the have we're to up. second down third the some So donation expect seem things be in more, to units, volumes order plasma which have with those opening you'd to new quarter in quarter with of same quarter the

you they're loaded, is there or benefit don't just of of them of those maybe might up ramp be slower about third might else how something the new terms the where that centers they quarter? backend have any more in So in

how latter. to centers? just blood many Mark, were those Yes, more of the Also, clarify,

XX.

centers. have the roughly equivalent are two about blood Those XX of blood.

by revenue. more So all the volume X, And hit we then more loaded, more the plasma should be the a onboarded. on XX you it be generate little head back centers be October bit there, and should load will but

schedule. that's the Onboarded,

the schedule. That's

that rollout centers there's the when exactly of a most is specific essentially. of week, loaded. go-live So by back But

Got it.

Okay.

more suspect And monitor if rebound you'll that see but the the in – continue donation or recovery, rebound. then to that and volumes, traded monitor we of we expect kind should so see same we'll public companies,

Absolutely.

Thank Great. you.

You bet.

floor comments. We the like to to for over reached management turn or closing our you. Thank session. end any I'd the back of further question-and-answer

in that by and in you and Yes. Thanks, our we've to business Stay growth believe effects call. Thank pandemic, this interest, XXXX and your evening. a that our beyond. us you. trajectory safe significant Again, impacted enable will of resume nice was have questions Kevin. for we the your Thank earnings although participation made continued strides COVID-XX your

Thank does teleconference. today's That conclude you.

and you thank this your You a wonderful your time may have day. for disconnect at participation line today. We