SAN ANTONIO, March 29, 2018 (GLOBE NEWSWIRE) -- Payment Data Systems (NASDAQ:PYDS), an integrated electronic
payment solutions provider, today announced fourth quarter and 2017 Fiscal Year End financial results for the period ended December
31, 2017, which featured record revenues for both the quarter and the year, compared to the previous periods in 2016.
Fourth Quarter 2017 and Year-End Financial Summary
- Revenues were $5.6 million for 4Q2017 and $14.6 million for YE 2017, which were all-time record highs for the company
- Gross margin was $1.3 million, or 23.2% of revenues during the fourth quarter and $3.8 million, or 25.9% for the year
- 4Q2017 operating loss was $1.1 million and $2.8 million at year’s end
- Adjusted EBITDA was a loss of $274,161 or -4.9 percent during the fourth quarter and a loss of $610,743 or -4.2 percent for
year-end 2017
- Net loss for 2017 was $3.0 million or $0.33 per basic and diluted share and $1.3 million or $0.13 per basic and diluted share
during the 4Q2017
- More than 10 million total transactions processed during 2017
- More than 2.8 billion dollars were processed during 2017
- Achieved a company high 78 percent increase in dollars processed through credit cards and 34 percent increase in total credit
card transactions compared to 2016
Payment Data Systems continues to be in solid financial condition with $4.8 million in cash and cash equivalents. The
company’s credit card transaction volumes during the fourth quarter set company records, with transactions up 199 percent compared
to Q4 2016. Credit card dollars processed during the quarter were up 274 percent compared to the same period. In terms
of year-end, the company also reached a company high increase of 34 percent in credit card transactions and a 78 percent increase
over year-end 2016, also a company record.
During the fourth quarter of 2017, electronic check transaction volumes were down 13 percent and returned check transactions
processed down 18 percent, both compared to the fourth quarter 2016. However, compared to the third quarter, electronic check
transactions were up seven percent and returned check transactions were flat. Year-end electronic check transactions were
down 15 percent and returned check transactions were down 13 percent compared to year-end 2016.
“During the fourth quarter of 2017 we experienced record transactions and associated revenues. This is due to the execution of
our revenue growth plan that included both organic growth and growth through acquisition,” said Louis Hoch, president and CEO of
Payment Data Systems. “We expect that the continued execution of our revenue growth plan coupled with our recent product
innovations positions 2018 to exceed 2017’s record revenue.”
Financial Results
Three Months and Year-Ended December 31, 2017
As of December 31, 2017, the company possessed $4.8 million in cash and cash equivalents, compared to $4.1 million in
2016. Revenues were $5.6 million compared to $2.9 million at the end of Q4 2016. Year-end revenues were $14.6 million
compared to $12.1 million in 2016.
Gross margin dollars in the fourth quarter were $1.3 million, or 23.2% of revenues, compared to $0.9 million, or 30.7% of
revenues in the fourth quarter of last year. Gross margin dollars for the year ended December 31, 2017 were $3.8 million, or 25.9%
of revenues, compared to $3.8 million, or 31.3% of revenues, in the corresponding prior-year period.
Our fourth quarter operating loss was $1.1 million compared to an operating loss of $0.3 million in the fourth quarter of last
year. Operating losses for the year ended December 31, 2017 were $2.8 million compared to an operating loss of $1.4 million
for the 12 months ended December 31, 2016.
Adjusted EBITDA in the fourth quarter of 2017 was a loss of $0.3 million compared to positive adjusted EBITDA of $0.2 million in
the fourth quarter of last year. Adjusted EBITDA for the 12 months ended December 31, 2017 was a loss of $0.6 million, or (4.2
percent) of revenue, compared with positive $0.9 million, or 4.9 percent of revenue, in the 12 months ended December 31,
2016.
Net loss for the fourth quarter of 2017 was $1.3 million, or $0.13 per basic and diluted share, compared to a net loss of $0.2
million, or $0.03 per basic and diluted share for the fourth quarter of last year. Net loss for the 12 months ended December
31, 2017 was $3.0 million, or $0.33 per basic and diluted share, compared to a net loss of $1.2 million, or $0.15 per basic and
diluted share in the 12 months ended December 31, 2016. Operating expenses (including CoGS) were $17.4 million for the 12 months
ended December 31, 2017 versus the $13.4 million during the same prior year period.
| |
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| PAYMENT DATA SYSTEMS, INC. |
| CONDENSED CONSOLIDATED BALANCE
SHEETS |
| |
|
|
|
|
| |
|
December 31, |
|
December 31, |
| |
2017 |
|
|
2016 |
|
| |
|
|
|
|
| |
|
|
|
|
| ASSETS |
|
|
|
|
| Cash and cash equivalents |
|
$ |
4,800,554 |
|
|
$ |
4,120,738 |
|
| Accounts receivable, net |
|
|
969,674 |
|
|
|
907,750 |
|
| Settlement processing assets |
|
|
38,027,984 |
|
|
|
43,851,311 |
|
| Prepaid expenses and other |
|
|
176,945 |
|
|
|
142,029 |
|
| Notes receivable |
|
|
150,000 |
|
|
|
200,000 |
|
| Current assets before restricted cash |
|
|
44,125,157 |
|
|
|
49,221,828 |
|
| Restricted cash |
|
|
14,977,468 |
|
|
|
15,803,641 |
|
| Total current assets |
|
|
59,102,625 |
|
|
|
65,025,469 |
|
| |
|
|
|
|
| Property and equipment, net |
|
|
2,105,186 |
|
|
|
2,494,510 |
|
| |
|
|
|
|
| Other assets: |
|
|
|
|
| Intangibles, net |
|
|
4,676,427 |
|
|
|
172,899 |
|
| Deferred tax asset |
|
|
1,394,000 |
|
|
|
1,621,000 |
|
| Other assets |
|
|
157,565 |
|
|
|
200,808 |
|
| Total other assets |
|
|
6,227,992 |
|
|
|
1,994,707 |
|
| |
|
|
|
|
| Total Assets |
|
$ |
67,435,803 |
|
|
$ |
69,514,686 |
|
| |
|
|
|
|
| |
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
| Current Liabilities: |
|
|
|
|
| Accounts payable |
|
$ |
300,736 |
|
|
$ |
145,044 |
|
| Accrued expenses |
|
|
1,006,262 |
|
|
|
703,322 |
|
| Settlement processing obligations |
|
|
38,027,984 |
|
|
|
43,851,311 |
|
| Current liabilities before restricted cash |
|
|
39,334,982 |
|
|
|
44,699,677 |
|
| Restricted cash |
|
|
14,977,468 |
|
|
|
15,803,641 |
|
| Total current liabilities |
|
|
54,312,450 |
|
|
|
60,503,318 |
|
| |
|
|
|
|
| Stockholders' Equity: |
|
|
|
|
| Preferred stock, $0.01 par value, 10,000,000 shares authorized; -0-
shares issued and outstanding at December 30, 2017 and December 31, 2016, respectively |
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
| Common stock, $0.001 par value, 200,000,000 shares authorized;
16,874,235 and 12,392,288 issued, and 16,201,634 and 11,795,939 outstanding at December 31, 2017 and December 31, 2016,
respectively |
|
|
186,299 |
|
|
|
181,818 |
|
| Additional paid in capital |
|
|
74,041,083 |
|
|
|
63,881,365 |
|
| Treasury stock, at cost; 672,601 and 596,349 shares at December 31,
2017 and December 31, 2016, respectively |
|
|
(831,059 |
) |
|
|
(718,149 |
) |
| Deferred compensation |
|
|
(7,012,544 |
) |
|
|
(4,082,025 |
) |
| Accumulated deficit |
|
|
(53,260,426 |
) |
|
|
(50,251,641 |
) |
| Total stockholders' equity |
|
|
13,123,353 |
|
|
|
9,011,368 |
|
| |
|
|
|
|
| Total Liabilities and Stockholders' Equity |
|
$ |
67,435,803 |
|
|
$ |
69,514,686 |
|
| |
|
|
|
|
|
|
|
|
| PAYMENT DATA SYSTEMS, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
| |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended December
31, |
|
Twelve Months Ended December
31, |
| |
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
| |
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
5,621,120 |
|
|
$ |
2,890,332 |
|
|
$ |
14,571,158 |
|
|
$ |
12,076,358 |
|
| |
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
| Cost of services |
|
|
4,316,345 |
|
|
|
2,002,282 |
|
|
|
10,802,932 |
|
|
|
8,293,354 |
|
| Selling, general and administrative: |
|
|
|
|
|
|
|
|
| Stock-based compensation |
|
|
312,256 |
|
|
|
479,188 |
|
|
|
968,141 |
|
|
|
1,314,778 |
|
| Cancellation of Stock-based compensation |
|
|
- |
|
|
|
(216,333 |
) |
|
|
- |
|
|
|
(261,208 |
) |
| Other expenses |
|
|
1,578,936 |
|
|
|
683,174 |
|
|
|
4,378,969 |
|
|
|
3,188,407 |
|
| Depreciation and amortization |
|
|
487,525 |
|
|
|
226,064 |
|
|
|
1,258,132 |
|
|
|
901,600 |
|
| Total operating expenses |
|
|
6,695,062 |
|
|
|
3,174,375 |
|
|
|
17,408,174 |
|
|
|
13,436,931 |
|
| |
|
|
|
|
|
|
|
|
| Operating income (loss) |
|
|
(1,073,942 |
) |
|
|
(284,043 |
) |
|
|
(2,837,016 |
) |
|
|
(1,360,573 |
) |
| |
|
|
|
|
|
|
|
|
| Other income: |
|
|
|
|
|
|
|
|
| Interest income |
|
|
12,037 |
|
|
|
24,584 |
|
|
|
100,964 |
|
|
|
97,322 |
|
| Other income (expense) |
|
|
1,704 |
|
|
|
2,077 |
|
|
|
1,583 |
|
|
|
99,277 |
|
| Other income (expense), net |
|
|
13,741 |
|
|
|
26,661 |
|
|
|
102,547 |
|
|
|
196,599 |
|
| |
|
|
|
|
|
|
|
|
| Income (loss) before income taxes |
|
|
(1,060,201 |
) |
|
|
(257,382 |
) |
|
|
(2,734,469 |
) |
|
|
(1,163,974 |
) |
| Income taxes (benefit) expense |
|
|
237,639 |
|
|
|
(14,000 |
) |
|
|
274,316 |
|
|
|
32,668 |
|
| |
|
|
|
|
|
|
|
|
| Net Income (Loss) |
|
$ |
(1,297,840 |
) |
|
$ |
(243,382 |
) |
|
$ |
(3,008,785 |
) |
|
$ |
(1,196,642 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Earnings (Loss) Per Share |
|
|
|
|
|
|
|
|
| Basic earnings (loss) per common share: |
|
$ |
(0.13 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.15 |
) |
| Diluted earnings (loss) per common share: |
|
$ |
(0.13 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.15 |
) |
| Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
| Basic |
|
|
10,072,034 |
|
|
|
8,015,875 |
|
|
|
8,995,883 |
|
|
|
7,838,197 |
|
| Diluted |
|
|
10,072,034 |
|
|
|
8,015,875 |
|
|
|
8,995,883 |
|
|
|
7,838,197 |
|
| |
| PAYMENT DATA SYSTEMS, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
| |
| |
|
|
|
|
| |
|
Twelve Months Ended December
31, |
| |
|
|
2017 |
|
|
|
2016 |
|
| |
|
|
|
|
| Operating Activities |
|
|
|
|
| Net (loss) |
|
$ |
(3,008,785 |
) |
|
$ |
(1,196,642 |
) |
| Adjustments to reconcile net income (loss) to net cash provided (used) by operating
activities: |
|
|
|
|
| Depreciation |
|
|
761,660 |
|
|
|
738,461 |
|
| Amortization |
|
|
496,472 |
|
|
|
163,139 |
|
| Goodwill |
|
|
- |
|
|
|
5,777 |
|
| Bad debt expense |
|
|
71,667 |
|
|
|
- |
|
| Non-cash stock based compensation |
|
|
968,141 |
|
|
|
1,314,778 |
|
| Cancellation of stock based compensation |
|
|
- |
|
|
|
(261,208 |
) |
| Issuance of stock to consultant |
|
|
40,200 |
|
|
|
51,700 |
|
| Issuance of stock to Akimbo to settle Indemnification liability |
|
|
- |
|
|
|
419,221 |
|
| Deferred income tax |
|
|
227,000 |
|
|
|
- |
|
| Changes in operating assets and liabilities: |
|
|
|
|
| Accounts receivable |
|
|
(133,591 |
) |
|
|
227,634 |
|
| Prepaid expenses and other |
|
|
(34,916 |
) |
|
|
7,089 |
|
| Other assets |
|
|
43,243 |
|
|
|
2,041 |
|
| Accounts payable and accrued expenses |
|
|
458,632 |
|
|
|
(623,552 |
) |
| Net cash (used) provided by operating activities |
|
|
(110,277 |
) |
|
|
848,438 |
|
| |
|
|
|
|
| Investing Activities |
|
|
|
|
| Purchases of property and equipment |
|
|
(372,337 |
) |
|
|
(155,551 |
) |
| Purchase of Singular Payments, LLC |
|
|
(900,000 |
) |
|
|
- |
|
| Advance to Singular Payments, LLC |
|
|
(600,000 |
) |
|
|
- |
|
| Note receivable |
|
|
50,000 |
|
|
|
(200,000 |
) |
| Net cash (used) by investing activities |
|
|
(1,822,337 |
) |
|
|
(355,551 |
) |
| |
|
|
|
|
| Financing Activities |
|
|
|
|
| Proceeds from public offering, net of expenses |
|
|
2,725,340 |
|
|
|
- |
|
| Purchases of treasury stock |
|
|
(112,910 |
) |
|
|
(431,755 |
) |
| Net cash (used) provided by financing activities |
|
|
2,612,430 |
|
|
|
(431,755 |
) |
| |
|
|
|
|
| Change in cash and cash equivalents |
|
|
679,816 |
|
|
|
61,132 |
|
| Cash and cash equivalents, beginning of year |
|
|
4,120,738 |
|
|
|
4,059,606 |
|
| |
|
|
|
|
| Cash and Cash Equivalents, End of Year |
|
$ |
4,800,554 |
|
|
$ |
4,120,738 |
|
| |
|
|
|
|
| Supplemental disclosure of cash flow information: |
|
|
|
|
| Cash paid during the year for: |
|
|
|
|
| Cash paid for interest |
|
$ |
- |
|
|
$ |
- |
|
| Cash paid for income taxes |
|
|
45,000 |
|
|
|
48,164 |
|
| Non-cash transactions: |
|
|
|
|
| Non-cash purchase of Singular Payments, LLC |
|
|
3,500,000 |
|
|
|
- |
|
| Forgiveness of note receivable in exchange for purchase of Singular
Payments, LLC |
|
|
600,000 |
|
|
|
- |
|
| Issuance of deferred stock compensation |
|
|
3,713,688 |
|
|
|
- |
|
| |
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES |
| |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Twelve Months Ended |
| |
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
| |
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
| |
|
|
|
|
|
|
|
|
| Reconciliation from Operating (Loss) to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
| Operating (Loss) |
|
$ |
(1,073,942 |
) |
|
$ |
(284,043 |
) |
|
$ |
(2,837,016 |
) |
|
$ |
(1,360,573 |
) |
| Depreciation and amortization |
|
|
487,525 |
|
|
|
226,064 |
|
|
|
1,258,132 |
|
|
|
901,600 |
|
| EBITDA |
|
|
(586,417 |
) |
|
|
(57,979 |
) |
|
|
(1,578,884 |
) |
|
|
(458,973 |
) |
| Non-cash stock-based compensation expense, net |
|
|
312,256 |
|
|
|
262,855 |
|
|
|
968,141 |
|
|
|
1,053,570 |
|
| Adjusted EBITDA |
|
$ |
(274,161 |
) |
|
$ |
204,876 |
|
|
$ |
(610,743 |
) |
|
$ |
594,597 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Calculation of Adjusted EBITDA margins: |
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
5,621,120 |
|
|
$ |
2,890,332 |
|
|
$ |
14,571,158 |
|
|
$ |
12,076,358 |
|
| Adjusted EBITDA |
|
|
(274,161 |
) |
|
|
204,876 |
|
|
|
(610,743 |
) |
|
|
594,597 |
|
| Adjusted EBITDA margins |
|
|
-4.9 |
% |
|
|
7.1 |
% |
|
|
-4.2 |
% |
|
|
4.9 |
% |
| |
|
|
|
|
|
|
|
|
Conference Call and Webcast
Payment Data Systems, Inc.’s management will host a conference call on the same day at 5:00 p.m. Eastern Time to
review financial results and provide a business update. Following management’s formal remarks, there will be a question and answer
session. If you would like to submit a question via email in advance please contact John Marco at johnm@coreir.com
To listen to the conference call, interested parties within the U.S. should call 1-844-883-3890. International callers should
call +1-412-317-9246. All callers should ask for the Payment Data Systems conference call. The conference call will also be
available through a live webcast, which can be accessed via the company’s website at www.paymentdata.com/invest.
A replay of the call will be available approximately one hour after the end of the call through April 12, 2018. The replay can
be accessed via the Company’s website or by dialing 1-877-344-7529 (U.S.) or +1-412-317-0088 (international). The replay conference
playback code is 10117790.
About Payment Data Systems, Inc.
Payment Data Systems, Inc. (NASDAQ:PYDS), a leading integrated payment solutions provider, offers a wide range of payment solutions
to merchants, billers, banks, service bureaus, and card issuers. The Company operates credit, debit/prepaid and ACH payment
processing platforms to deliver convenient, world-class payment solutions and service to their clients. The strength of the Company
lies in its ability to provide tailored solutions for card issuance, payment acceptance, and bill payments as well as its unique
technology in the prepaid sector. Payment Data is headquartered in San Antonio, Texas, and has offices in New York, New York; Long
Beach, California; and Nashville, Tennessee. Websites: www.paymentdata.com, www.singularpayments.com, www.payfacinabox.com,
www.akimbocard.com, and www.ficentive.com. Find us on Facebook®.
Forward-Looking Statements Disclaimer
Except for the historical information contained herein, the matters discussed in this release include forward-looking statements
which are covered by safe harbors. Those statements include, but may not be limited to, all statements regarding management's
intent, belief and expectations, such as statements concerning our future and our operating and growth strategy. These
forward-looking statements are identified by the use of words such as "believe," "intend," "look forward," "anticipate,"
"schedule", and "expect" among others. Forward-looking statements in this press release are subject to certain risks and
uncertainties inherent in the Company's business that could cause actual results to vary, including such risks related to the
realization of the anticipated opportunities from the Singular acquisition, the management of the Company's growth, the loss of key
resellers, the relationships with the Automated Clearinghouse network, bank sponsors, third-party card processing providers and
merchants, the security of our software, hardware and information, the volatility of our stock price, the need to obtain additional
financing, risks associated with new tax legislation, and compliance with complex federal, state and local laws and regulations,
and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission including its
annual report on Form 10-K for the fiscal year ended December 31, 2017. One or more of these factors have affected, and in the
future, could affect our businesses and financial results in the future and could cause actual results to differ materially from
plans and projections. We believe that the assumptions underlying the forward-looking statements included in this release will
prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans
will be achieved. All forward-looking statements made in this release are based on information presently available to our
management. We assume no obligation to update any forward-looking statements, except as required by law.
Contacts
Investor Relations:
CORE IR
John Marco, +1-516-222-2560
Managing Director
www.coreir.com
