PaySign (PAYS) 9 Nov 222022 Q3 Earnings call transcript

Hello and welcome to the PaySign Third Quarter 2022 Earnings Conference Call.

As a reminder, this conference call is being recorded. This call may include statements that may be deemed to be 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 beside statements of fact included on this call are forward-looking. Such forward-looking statements include, among others, that our unrestricted cash, anticipated revenues and operating profits will be sufficient to sustain operations for the next 12 months; that the expected total revenue, gross profit margin, operating expenses, depreciation and amortization, stock-based compensation, adjusted EBITDA, plasma revenues, and pharma revenues for 2022 meet our expectations; that the company will continue to post year-over-year improvements; that the company's growth prospects in plasma, pharma and other prepaid business materialize; and that the company will continue to be affected by COVID-19. such statements that by to could from reflected these and risks, differ that those factors other cause by caution are important qualified uncertainties materially We statements. forward-looking actual results rate as among include, as downturn to current that the Such of in economy, COVID-XX factors periods; including others, future the well result continue inability our growth a in variance a and adverse measures demand which stimulus government flows. could on an for could products further customer cash and reduce financial as base business, services our and have and condition, effect our our profitability our could regulated Operating card in credit changes a or forth failure in December highly Form and year business; the to cost XX, with security in environment, association us XXXX. in protracted the comply a a rules partners applicable regulations, our set law business and and affecting to or regulations, us data other factors other ended litigation breach expose XX-K for laws, by standards risk industry liability that securities otherwise. revise of extent no update publicly Except to today, to obligation events by or undertakes company laws, statements future or information, as required a the new whether made result any the federal similarly neither a alternative by This GAAP non-GAAP with accordance any includes measures prescribed methodology prepared is by on adjusted titled standardized financial comments presented that in is and conference necessarily measures call an about prepared to financial also other EBITDA, to comparable in measure nor companies. accordance not based call turn now It’s my to over to the Mr. pleasure Mark Newcomer, CEO. sir. ahead go Please

and Earlier financial we third thank Financial Newcomer, I'm quarter Baker, afternoon to Kevin. today’s PaySign's afternoon Chief with outstanding results. today call Officer. is this Mark and Chief you, Jeff joining results. our for me our Good announced Thank Executive Officer you XXXX review

previous a a from million XX% improvement. the XX% Third increase quarter XXXX X.X increase an X was an QX from which improvement of translates quarter, and XX.X million, of million, revenue to

share. fully XXX,XXX, net or income diluted we $X.XX of reported Additionally, per

the profitability. hard our of the reflect to PaySign we results quarter team work dedication entire third Our return achieve as to and goal

onboard quarter the with a XX During and benefited centers the tail quarter. both existing our from services. centers centers in quarter, centers generated additional of We exceed revenue we from plasma of growth the increase an the total XXX end our the organic added utilizing of at in the second

up preliminary to began this September centers also XX, effects decision. U.S. effected We a the after Mexican donating the in ramp the BX, the injunction resume nationals allowing Courts shortly of BX visa District as U.S. donation see valid to with plasma to began on

aggressive segment. companies plasma continue we execute growth Source prospects our to to confidence for their collection continue this growth have strategies and in

see trends up to on centers the and Looking expect centers XX.X% increased. the spin to four up XXXX. and new quarter, over of donations our year of remainder we at continue XX over Funds month total loaded improve card in year, to to quarter an load XX a the additional last for as third quarter. plasma Throughout each number last of we onboard the three XX.X% was

year last XX.X% was from XX.X% and over increased volume spend quarter last third quarter. The up

saw patient launches for affordability two QX vertical. to our Turning this business, additional program

programs. to add specialty our we as and pharmaceutical continue claims We products of retail volume daily more list see to active increase

thrilled in the trust providers. these addition we Hubs service In to programs, are are service additional providers onboarding and integration to providers. our new success, gained hubs have have partners completed we with critical of

encourage form we that on confident continued partnerships trust are growth. that that build lasting to We continue will and

the in spread industry. affordability inquiries patient busy on pricing QX to webinar teams data the for based analysis conducting in been Our potential and hosted have fielding clients we related

topic. a white the our for the on this website visit would the webinar to we webinar, link If to I you you and haven't published seen encourage paper

strategies pricing having impact transparent potential positive are business. new on a Our

I patient for the for additional with impacting looks QX U.S. think healthcare pipeline several ecosystem. robust industry how QX. the The are several to process rethink and plan affordability strategies pricing program these forcing launches and

to poised to Looking solutions. to we of XXXX believe growth of in the patient with leading as this beyond, PaySign vertical continued are position and the providers see we ability one affordability ahead

We two payment are as we for support In new disbursement to to well verticals. always prepaid quarter, into expand business new our as signed third looking ways programs. existing clients our the other

of per additional employer DM an existing second The is And first payout program one clients. plasma our card for is an for corporate the program.

organization of we their to membership to RFP a sponsored brick-and-mortar provide were business reloadable by awarded an gift purpose locations. in general nationwide and cards Additionally, the XXX over

to to expect with insight ensure into Overall, you enhancement Jeff the quarter. we third blocks we very we the fourth growth quarter. in the programs to pleased these of have our and results more We the are give our it financials launch of place pass quarter over building during PaySign that, for value. to believe the I'll the With and long-term shareholder

Thank you, everyone. afternoon, Mark. Good

continue quarter was an our per was Total of from plasma year. the in X.X in details will our in As per XX month, highest I COVID XXX income quarter to market pharma million to first XX%, all points. with are XXX,XXX, and of the an for the XX.X versus year-over-year. of profit EBITDA, plasma XXXX. Of X.X their XX year Mark increased we business third was million. This SG&A for XX.X% center increase Q plasma XX% increased amount, provided X%. was centers, results incomes. The XX.X% for the basis million, revenue centers our financial was $X,XXX be revenue out, month With Gross and up XX.X% press individuals marks transactional supplement were EBITDA sequentially, benefit average and adjusted or XXXX and since from available operating simply hit to increase of in third company's the QX the that relative and built revenue our all center million versus ending we tomorrow, share grow release, operations XXX XX,XXX, revenue X% pointed increase per to the was of for foundation versus ago other This and quarter per into improved in at of to last We XXXX needs highlights an million with as and XXX trends versus operating plasma period. our quarter quarter will XXXX. of we end began the during XX.X% best quarter X.X third revenue XXXX. expenses the margin the the that increase and of have we revenue the pleased XXXX. centers history quarter an $X,XXX total added Revenue the X.X

or back more As Adjusted million per mentioned, positive $X.XX adds we income EBITDA, net doubled X.X during period XXX,XXX $X.XX which of is than or share diluted year. the adjusted last consecutive we versus compensation It adjusted a Mark same was and diluted per XXX,XXX to EBITDA or diluted also per a marks EBITDA. sixth the quarter of posted EBITDA share. of the net $X.XX posted stock share loss

cash we exited and in quarter $XXX,XXX cash fourth the quarter Regarding million balance. ending the company, with from of of health unrestricted increase is zero our an our debt, which $X

current was fourth the liability the at and X.XX end quarter. versus adjusted of X.XX Our which ratio funding excludes restricted card cash

now $XX.XX XXXX. to guidance XX% to Now XX% to turning one of Plasma a revenue to prepaid of pharma your updated account ending for attention over total in for total estimated XXXX. for our revenue $XX.XX to up our We over to of XX% of consolidating expectations million. customers These grow make XXXX expect mid-November. to centers, XX range and million and is closing their plasma programs

total compensation the is over be higher to is inflationary XXX million $X.XX pressures. and and approximately and million year approximately continue EBITDA as operating technology expenses, Adjusted plasma to approximately $X.X and expected pharma We expected expect profit be prepaid be between invest $X.XX to $X.X $XX entertainment with million, be depreciation expected over other experience and and XX insurance, and and to operating Full are stock-based gross centers active while is expected million costs Within travel expenses expected million. in amortization million. to we XX% to to programs. with to end margins people $XX.XX be year

for tax We be to our expect $XXX,XXX approximately XXXX. provision

With we providing guidance on I over back plan would March. XXXX call to the Lastly, answers. questions that, like for turn moderator in and during for QX earnings the call our to

Thank you.

Gary Now, [Operator a we question-and-answer is question from Our be from Prestopino coming Research. Barrington first will session. today Instructions] conducting

is now line live. Your

Good afternoon all. here. Couple questions of

you're some new in purpose of reloadable and idea of the can for First combined you of some each of with an for out cards give kind cards of nationwide, you to looking gift payroll what will or programs processing of terms combined basis? magnitude of issuing, be us general some of companies, that RFP of volume kind customer, all, these on then a idea that get of these processing the

Its Gary. is of to days Mark. kind Hey, just getting we're early It's implement those. ready

time mean, a we'll not locations, can volumes or next But at associated. to of it's card But been it retail in quarter. further decent expecting this reloadable, comfortable we're gift you with guessed volume point have once talking general about we're So do of talk really I numbers about kind that and spend XXX implemented.

--? is payroll national client organization, the plus or processing Is of a large it more

be able at this nicely. to ramping detail, that lot in time, No, we'll it's more a And discuss well. smaller QX, hopefully, they're come And organization. as a

ramp November district the Mexican of donate has Okay. border, the terms the early southern to business that sites the in been into plasma. And was of court the terms then, obviously, in October getting back in and QX. the on end nationals How at of decision

over and this probably Gary, at continuing nicely Jeff, increase they where at centers, idea, give have an a at? were roughly -- they XXXX increase, we were now that some we percentage increase now are which from ever since. some since at those in I day. donations And it, mean, you immediately to the saw of to are been donations ramping announced an point. doing, we ramp per you XX considerable Ever do It's

on about going what's there. over positive pretty we're So

whole Yes, on the those also would amounts we're across on loaded slightly the I are data seeing, donations based organization. that than say, we're and lower seeing what the

to load the being addition it So a dollars a less. the up nice be numbers are forward. are But in all financials while all, little going should unloaded the

late lot that. As implementation given a September quarter you of September, there's really the in impact in know, from not

in you many with cleared is can up didn't you XXXX. believe the potentially and RFP Okay. And that QX, then onboarding begin have RFP, time you you want insight you onto how an that something any that early talk about? comment sites you has had a in I client, to new an get can expected can

think towards more somewhere leaning at Not start probably lower time, the a range the we of like will have centers. this then, a of we're in range really, point. we that I mean, some see between in of a probably And clients solid number that from think I be growth have, I -- you'll to -- out, the there. XX starting And most

ask question. somebody a let else I'll Okay.

you. Thank

do Thank you. Gary [Operator Research. Instructions] Barrington for Prestopino follow We up have a from

now Your live. line is

comment is profit QX, in Okay. going or Can margin you the is XX% after you gross to on, your said is think that correct I year? be about

Gary And you're XX% than we just What mix. seeing to the that's nothing for were year. XX%. initially more there's

pharma are the third see growth where just the like in plasma been the the coming looks It's on we business, into mix. outperforming we're to relative literally that when and it have prepaid the like copay. in fourth off going and to fallen quarter we're programs quarter So

looks full to around come it year. at the for now going So we're like XX%

around XXXX, it at that to up going hold level in? can as And expect that can into actually or the we revenues go ramping you

mix is, Actually, to it'll what's it's again, go going driven. down happen probably

but doing. ending same copay, farmer have the doing all So which as prepaid business. pharma I any level this that's business any that's margins, still not good And in the month. XXXX, it's plasma, then prepaid what And been Like won't said, has we at pharma longer.

my plasma expect to steady, remain though. pretty I mixed. is it margins So

could going on closing Okay. the that that's XX you entity what's share there, with And consolidating us? and centers, then

But whole a acquisitions been Sure. a things. space. the of of It's in there's combination really lot

multiple to. they And found that be centers given better have they and city so for they just them centers of found it a in not had would bunch that that a basically, were --

their center So something additional decision the them this [determined] I went [ph]. made It from closures through it was at a time. see was by just don't and organization. they process

So you servicing the those centers centers or keeping any in that that still centers they're closing, those they're are cities?

Yes.

Okay.

the facilities business has and the issue of to So actual for consolidating. not them. they're of a an more got somewhere is business It's thing. good that's go It's why not

nothing It's no, consolidation. to that. no, No, do with just

right. much. very Thank Okay. you All

very welcome. You're

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

you, time the Thank good pleased about and results the for on finish you, our We very the out everyone for we taking with We're this pipeline potential in XXXX. quarter. everyone very and appreciate year excited support. and third call. Thanks growth really the thank Kevin, have to the the a enter And listen all and as one. we're

Thank you. That conclude webcast. today's and does teleconference

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