Q2 2021 Paysign Inc Earnings Call
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Hello, and welcome to pay side second quarter 2021 conference call and webcast. At this time all participants are and if this can only mode and if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
A question and answer session will follow the formal presentation.
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Presentation may include forward looking statements to the extent that the information presented on this presentation discusses financial projections information or expectations about the company's business plans and results of operations the impact of COVID-19, and returns on equity expected gross margins markets or otherwise make statements.
About future events.
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Although the company believes that the expectations reflected in these forward looking statements are based on reasonable assumptions. There are a number of risks and uncertainties that could cause actual results to differ materially from such forward looking statements.
And should carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading risk factors and elsewhere and form 10-K forward looking statements speak only as of the day to the document and which they are contained and the company does not undertake any duty to update any forward looking statements, except as may be required by law.
This presentation also includes adjusted EBITDA and non-GAAP financial measure that is neither prepared in accordance with nor and alternative to financial measures prepared based on and any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies. It's now my pleasure to turn the call over.
The CEO Mark newcomer. Please go ahead Sir.
Thank you Kevin Good afternoon, everyone and thank you for joining us for pace on and second quarter of 2021 earnings call I'm, Mark Newcomer Chief Executive Officer, and joining me. This afternoon is Jeff Baker, Our Chief Financial Officer, We are pleased to report improvements and our revenue and operating results for the second quarter, our total net revenue.
For the quarter was $6.7 million a year over year increase of 3.2% throughout the quarter, we saw month to month improvements and our financial results as various pandemic related stimulus measures and it and consumers were once again incentivize to donate plasma and to supplement their income and our second quarter total gross funds loaded increased 34 points.
7% from the year ago period, and decreased 10, 9% from the previous quarter due to the seasonality of our pharma business plasma growth funds loaded increased 64, 5% year over year and 3.2% sequentially.
And throughout the quarter, we experienced improving trends each month with April being negatively impacted by stimulus payments and tax refunds and we're seeing these positive trends continue into July. Despite a recent U S customs and border protection decision limiting the ability for Mexican citizens to cross the border to donate plasma these border centers make up around 7% of our total plasma.
And the quarter, we on boarded 13 additional plasma centers, bringing our total number of centers to 356. This includes some of the centers from the 4 new plasma clients. We spoke about last quarter, we still expect to exit 2021 with at least 400 centers. We continue to focus on diversifying our business and investing for sustained long term growth and we continue.
And to advance our capabilities and value and the patient affordability space and the second quarter, we renewed our relationship with a major pharmaceutical hub customer and their co pay programs. Additionally, we launched a new co pay program and signed up 5 additional co pay programs that will launch between now and the end of 2021, we remain extremely.
Really bullish on the continued growth of the patient affordability vertical I'm very pleased to announce that we have made some additions to our leadership team Brad Cunningham joined US in July is on new CTO and he brings with him more than 17 years of experience and Republic Bank and Trust company, where he was the senior Vice President and managing director of strategy and services, Brad will be instrumental as we continue.
B and innovator and Fintech, we also expanded our client relationship team with the addition of Ellen Geiger as director of relationship management Ellen has been serving the plasma sector for 15 years with on B, formerly known as wildcard and finally, Richard Grub has joined US as director of product management, and Richard has more than 30 years' experience and the prepaid space with financial.
And as providers, such as National money Mart, United Financial Services Group and prepaid ventures. We are excited to have these 3 gentlemen on board and believe their industry knowledge and skills are and valuable resources that will benefit pace on before I turn the call over to Jeff I just wanted to say a few last words on the current and potential future impact of the pandemic, while the second quarter.
To be impacted by COVID-19, and the various government stimulus, especially in the first half of the quarter, we did see improving trends as we move through the quarter and into Q3. We expect this trend will continue as long as the U S does not enter another widespread shut down or the government doesn't provide additional stimulus to consumers with that I'll pass it.
Over to Jeff to give you more insight of our financials for the quarter. Thank you Mark good afternoon, everyone. The second quarter experienced a sequential increase in revenue and operating performance of the first quarter. Despite a weak month and April resulting from the broad distribution of government stimulus checks may improved over April.
June improved over May and as Mark mentioned the positive sequential improvement continued in July.
And of our total revenues of $6.7 million plasma revenue accounted for $5.9 million or 89%.
Pharma revenue was $641000 and other revenue was $63000 or gross margin for the quarter was 47, 4%, which was aided slightly by 1 pharmaceutical program ending allowing us to recognize settlement income of under $50000. We were able to renew that program under our non set.
On my income model SG&A expenses were $3.5 million and total operating expenses were $4.1 million or net loss for the quarter was $932000 and adjusted EBITDA, which we define as operating income plus depreciation and amortization and stock based compensation.
And as a non-GAAP metric used by management to gauge the operating performance of the business.
Was $219000 or just over breakeven for the quarter on a fully diluted shares outstanding of $52.6 million second quarter gross dollar volume loaded increased 34, 7% versus the year ago period, as we experienced an improvement and plasma donations. This momentum can be seen on our balance.
<unk> were restricted cash grew to $65.8 million during the quarter.
Second quarter purchase volume increased 44, 5% versus the year ago period, and our revenue conversion rate, which is revenue divided by gross dollar loads increased over the first quarter, taking a closer look at the plasma business for the quarter revenues of $5.9 million were up $1.4 million from the same peer.
Last year when the U S was under a lockdown and the average revenue per month per plasma center was $5633 versus $5295 last year.
However, if we exclude the month of April our average revenue per month per plasma center would have been $6138. So you can see the negative impact on our plasma business when stimulus checks are issued.
Additionally, we exited the quarter with 356 centers versus 290 centers at the end of Q2 last year, turning your attention to the pharma business second quarter 2021 revenues of $641000 decreased $1.1 million compared to the second.
<unk> of 2020, primarily driven by the change in accounting estimate last year and the termination of 1 program and December 2020, and 1 program and April 2021.
As Mark mentioned, we continue to win new mandates and the pharma business and expect 5 new programs to launch and the third and fourth quarters of this year, giving us good momentum into 2022 cost of revenues for the period increased $360000 compared to the same period and the prior year primarily driven.
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2 the increase and plasma transactions as many of the plasma transaction costs are variable in nature gross profit for the quarter decreased $152000 compared to the same period last year, resulting from the reduction and pharma revenue offset by the increase and plasma revenue we continue to make <unk>.
Significant investments and our business to give us the support and technological capabilities needed to efficiently grow the business and launch new prepaid programs, thus depreciation and amortization increased 21, 3% year over year to $614000 regarding the health of our company we are.
The quarter was $6.6 million and unrestricted cash and zero debt, which was unchanged from our first quarter ending cash and debt balances based on our forecast. We believe that we remain well capitalized and positioned to weather any further impact from COVID-19, and its variants.
Lastly.
I wanted to direct your attention to the press release, where we have updated our thoughts for 2021.
For the full year, we continue to expect total revenues to be and the range of $29 million to $32 million, reflecting growth of 20% to 32%. We are increasing the lower end of our adjusted EBITDA guidance to a range of $750000 to $1.9 million.
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Our gross profit margins are expected to remain over 47% each quarter through the remainder of the year.
Full year operating expenses are expected to increase modestly to $18 million to $18.5 million or 2% to 4.9% as we expect further operating investments and the second half of 2021.
This outlook presumes that the U S does not reenter into lockdown mode and that we continue to see a recovery and the plasma business and the third quarter. When unemployment subsidies are scheduled to and in early September and we rollout new pharma programs that have been signed.
With that I would like to turn the call over to the moderator for Q&A.
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And with Cardinal questions at this time I'd like to turn the floor back over to management at this time.
Thank you very much Kevin I'd like to reiterate that we're very pleased with our growing sales pipeline and the strides that we have made and our patient affordability offerings.
I would like to thank the pace on team for their dedication and for all their hard work.
Thank you for your continued interest your questions and your participation and this earnings call stay safe and have a nice evening and we look forward to next quarter's call.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.