Q1 2022 Paysign Inc Earnings Call
Hello, and welcome to the Pacer in first quarter 2022 earnings conference call. As a reminder, this conference is being recorded.
Presentation may include comments that may be deemed to be forward looking statements under federal securities laws and the company turns that such forward looking statements be subject to the safe Harbor created thereby all statements other than statements of fact included in this release are forward looking statements such forward looking statements include among others.
Our unrestricted cash anticipated revenues and profits will be sufficient to sustain operations for the next 12 months that do you expect the total revenue gross profit margins operating expenses.
Depreciation and amortization stock based compensation adjusted EBITDA plasma revenues in pharma revenues for 2020 to meet our expectations that the company will continue to post year over year improvements that the company's gross profit bricks and plasma pharma and other prepaid business materialize and that the company will continue.
To be affected by COVID-19 related to labor shortages.
We caution that these statements are qualified under <unk>.
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.
Hillary to continue our current growth rate in future periods that a downturn in the economy, including as a result of COVID-19 and variants.
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 our business partners to comply with applicable laws and regulations changes in the laws.
<unk> 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 2021.
Except to the extent extent required by federal Securities laws. The company undertakes no obligation to publicly update or revise any statements made today, whether as a result of new information future events or otherwise. This presentation. Also includes adjusted EBITDA, a non-GAAP financial measure that is neither prepared in accordance with nor.
An alternative to financial measures prepared in accordance based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies.
Now my pleasure to turn the call over to Mark Newcomer. Please go ahead.
Thank you good afternoon, everyone and thank you for joining us for <unk> first quarter 2022 earnings call I'm, Mark Newcomer Chief Executive Officer, and with me. This afternoon is Jeff Baker, our Chief Financial Officer.
First I would like to say that we're pleased with our first quarter results. As we reported Q1 2022 revenue of $8 2 million, an increase of $1 9 million or 31% over Q1 2021 throughout the first quarter, we saw our load and spending trends continue to improve as the number of plasma donations increase.
As well as seen an increase in average donor compensation fund.
Funds loaded on cards was up 16, 2% over first quarter last year and up seven 6% over last quarter. The first quarter spend volume increased 24, 7% from last year and was slightly down at one 3% over last quarter. This is consistent with the normal seasonality we see in <unk>.
Plasma donor spending habits in the first quarter, we on boarded nine new plasma centers ending the quarter with a total of 375 centers with the increase in new centers and the increase in transaction volumes, we saw 37% increase in plasma revenues and an increase in monthly revenue per center to 6006 hundred.
72% or up from 5260 in the first quarter of 2021.
On the patient affordability side, we on boarded for new pharma co pay programs. Additionally, we developed two new patient affordability products to address the pending regulatory changes would come into effect in 2023 that will impact pharmaceutical manufacturers, we devoted our sales and product resources and the pharma vertical to raising awareness.
These products ahead of the Assembly at 2022 conference that took place. The first week of May during the conference our sales product and account management teams were fully booked and received excellent feedback from current and potential clients based upon feedback that was received during and immediately following the conference. We believe our products place us in the best position to.
To assist current and potential clients with appropriate mitigation strategies regarding future best price implications imposed by the new regulations. This is an area, where we are truly seeing our fintech and health care expertise converging to maximize our effectiveness in the marketplace generate additional interest within our target.
<unk> and develop new products and strategies to navigate a rapidly changing regulatory environment within the healthcare space. Finally for the remainder of 2022, we continue to have a strong pipeline across all of our product verticals as we execute on our strategy. Our Q1 key performance indicators are showing that we are returning to pre pandemic nor.
And we'll see for the business with that I'll pass it over to Jeff to give you more insight on our financials for the quarter.
Thank you Mark good afternoon, everyone as Mark pointed out we were pleased with the start of our 2022 operating results with revenues loss from operations EBITDA, adjusted EBITDA and transactional trends all improving year over year, our business appears to be returning to a more seasonal operating pattern.
Our plasma revenues declined sequentially from the fourth quarter due to the tax season, and then increase as we move throughout the year with all of the details we provided in the press release and that will be available in our 10-Q Tomorrow I will simply hit the financial highlights for the first quarter 2022 relative to the first quarter of 2021.
Total revenue of $8 2 million increased one 9 million or 31% versus the year ago period of that amount plasma revenue was $7 4 million an increase of 37% pharma revenue was 800000, a decrease of 9% and other revenue was 20000, an increase of 40 <unk>.
7%.
The average revenue per month per plasma center was $6672 versus $5260 last year, we added nine centers during the quarter ending with 375 centers versus 343 centers at the end of Q1 2021 also up.
Note, we have added an additional 11 centers since the end of March bringing our total number of plasma centers to 386 to date.
Gross profit margin for the quarter was 68% versus 45, 1% an increase of over 15 percentage points as we mentioned during our last conference call. This was expected due to the renewal and restructuring of an agreement this quarter along with continued operating leverage inherent in our business model.
SG&A increased 21% to $3 4 million and total operating expenses were up 19, 3% to $5 3 million.
Including in these numbers were unusual legal settlement costs of $354000 without these legal settlement costs SG&A would have increased 15, 4% to $3.0 million adjusted EBITDA, which adds back stock compensation to EBITDA was 900.
$27000 or two cents per diluted share and marks the fourth consecutive quarter of positive adjusted EBITDA if.
If not for the unusual legal settlement costs mentioned, adjusted EBITDA would've been $1.3 million for the quarter.
Regarding the health of our company, we exited the quarter with eight and a half million dollars in unrestricted cash and zero debt, which is an increase of $1.1 million of unrestricted cash from our fourth quarter ending cash balance.
We remain optimistic that the headwinds our business faced during COVID-19 are behind us as we return to a more normalized business environment. While we are not changing our guidance for 'twenty 'twenty. Two at this time, there appears to be positive trends evolving with our plasma business.
Additionally, we were happy to learn on Tuesday that the U S Court of Appeals for the D. C circuit overturned a prior ruling whereby a judge had rolled the plasma companies lack standing to bring suit against the U S customs and border protection, who had stopped Mexican nationals from donating plasma would be one visa.
Now it appears the plasma companies will get to move forward with their lawsuit also as Mark mentioned, we are well positioned with our pharma business and the solutions we have in place in anticipation of the upcoming CMS rule change January one 2023.
With that I would like to turn the call back over to the moderator for questions and answers.
Thank you well now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to have your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing star one.
One moment, please while we poll for questions.
Our first question today is coming from Gary pressed the Pinot from Barrington. Your line is now live.
Thanks, Good afternoon, everyone.
Couple of things here it looks like as I annualize your revenue for plasma center. It looks like it's about 80000 versus 63000 and by my math, that's still below 2019. It is all of that attributed really to what's going on on the southern border or or is it still.
More or less a part of that is that you know people are still getting.
Not not doing anything as much because of the government transfer programs for instance.
No Gary a lot of that is on the on the southern border I mean, if you look at it we think it gets about another 10% per per month end and the average revenue per center per month.
So that would be one and we are still seeing some labor shortages are at the donation centers. So people are just unwilling to wait long times to donate plasma so where we're making good headway you know in the industry overall and there are some good trends that are evolving are.
Even through to date, but you know I would say, we're not we're not hitting on all six cylinders right now from an industry perspective.
And then you mentioned, how the increase in expenses, which obviously we're in a.
Inflationary period here what are some of the increases in people and the investments that you're going to be making is it a lot of sales and marketing.
Well, where we're at where we are with the CMS rule and to build up our business yeah, we'll be continuing to invest on the sales and kind of operation side. We're also investing continue to invest in technology as we bring these new products and services to light you know it's it's.
<unk> development, so it's really across the board and you're right I mean inflationary pressures you know where were seeing it on insurance, we're seeing it from a you know we're turning more to a normalized travel travel world TNT is going up so everything relative to the previous year is going up now I will turn your attention.
Tension to the fact that you know we had some some settlement legal settlements. There that you know made it a little bit higher than normal where on an adjusted basis. The increase would have been around 15%.
Right, but but there still costs or costs are going to go up.
Is there anything you guys can do on your fee structures too.
To try and mitigate some of this inflationary pressure. This is a question due to my unfamiliarity with the business.
Martin do you want to take that one.
Yeah, I mean, you know we.
We tend to a point based on our competition, but at this at this at this point I would say that we're fairly comfortable where we're at we will raise some of our prices on implementations and some.
Overall management fees I think that would be the area that we have RASM.
Okay. Thank you.
The other thing Gary I would add to that is I mean, even despite the increase in the AR and the costs on the SG&A side I mean, we still have you know very good operating leverage that you're seeing flow through the numbers. So the increase on the top line you know is definitely flowing down to the bottom line.
Thank you we've reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.
Thanks, Kevin I want to thank everyone for your participation. We appreciate you jumping on the call today, and we'll look forward to speaking to you next quarter.
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.