Press release

Paysign, Inc. Reports Record First Quarter 2019 Revenues and Net Income

Sponsored by Businesswire

a vertically integrated provider of innovative prepaid card programs and
processing services for corporate, consumer and government applications,
today reported financial results for the first quarter ended March 31,

Financial Highlights

  • Revenue for the first quarter ended March 31, 2019 was $7,257,290, an
    increase of 55.2% percent compared to $4,676,320 for the same period
    last year. The increase in revenue is attributable to continued growth
    with our existing programs, and the addition of new card programs.
  • Gross profit increased 68.3% to $3.8 million or 52.0% of revenues,
    compared to $2.2 million or 48.0% of revenue in first quarter 2018.
    Gross margin increased primarily driven by the addition of higher
    margin card programs.
  • Total operating expenses were $3.0 million compared to $2.9 million in
    the prior quarter, and to $1.8 million first quarter 2018. The
    increase compared to the same period the prior year is primarily
    attributable to increases in leadership and staffing, investments in
    infrastructure, and increased stock-based compensation.
  • Net Income was $871,671, an increase of 111.3% compared to $412,548 in
    the same period prior year. Basic and fully diluted earnings per share
    were $.02 versus $.01 the prior year.
  • Non-GAAP Adjusted EBITDA was $1,717,479, an increase of 121.5%
    compared to $775,387. Non-GAAP EPS was $.04 as compared to $.02 the
    prior year.
  • Our revenue conversion rate of gross dollar volume loaded on cards for
    the quarter was 3.79% or 379 bps compared to 3.68% or 368 bps the same
    period the prior year.

Management Commentary

“We are very pleased with our first quarter operating and financial
performance, delivering record first quarter earnings and net profit,”
said Mark Newcomer, Chief Executive Officer, Paysign. “Our results
exceeded our expectations, as we continue to execute on all fronts. Our
non-Pharma business has continued its growth trajectory, and our new
Pharma clientele are beginning to materially contribute to revenues and
earnings, as expected.”

“During the first quarter we continued to have strong results across the
board,” commented Dan Henry, Chairman, Paysign. “We continue to execute
on our strategic initiatives. As we look ahead, we remain focused on
long-term profitability, sustainable performance and maximizing
shareholder value.”

“As anticipated, we experienced a solid expansion of our gross and net
margins, benefitting from higher margin industry mix and the beginnings
of improved operating leverage,” stated Mark Attinger, Chief Financial
Officer, Paysign.

Financial Guidance

The Company’s full year financial guidance for 2019 remains unchanged.

Conference Call

A conference call and live webcast is scheduled for 5:00pm ET, and will
be available for at least 90 days at
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About Paysign, Inc.

Paysign, Inc. (NASDAQ: PAYS) is an experienced and trusted prepaid debit
card payment solutions provider and integrated payment processor with
over 2.5 million cardholders in its portfolio. Paysign designs and
develops payment solutions, prepaid card programs, and customized
payment services for consumer, corporate and public sector applications.

Paysign’s corporate incentive prepaid cards are changing the way
corporations reward, motivate, and engage their current and potential
customers, employees, and agents. Paysign’s customizable solutions offer
significant cost savings while improving brand recognition and customer
loyalty. For over 15 years, healthcare companies, major pharmaceutical
companies, multinationals, prestigious universities, and social media
companies have relied on Paysign to provide state of the art prepaid
payment programs tailored to their unique requirements. Paysign® is a
registered trademark of 3PEA Technologies, Inc. in the United States and
other countries. For more information visit us at
or follow us on LinkedIn,
and Facebook.

Forward-Looking Statements

Certain statements in this news release may contain forward-looking
information within the meaning of Rule 175 under the Securities Act of
1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are
subject to the safe harbor created by those rules. All statements, other
than statements of fact, included in this release, including, without
limitation, statements regarding potential future plans and objectives
of the companies, are forward-looking statements that involve risks and
uncertainties. There is no assurance that such statements will prove to
be accurate, and actual results and future events could differ
materially. Paysign undertakes no obligation to publicly update or
revise any statements in this release, whether as a result of new
information, future events, or otherwise.


For the three months ended

March 31,

2019           2018
Revenue $ 7,257,290 $ 4,676,320
Cost of revenues   3,482,136     2,433,210  
Gross profit   3,775,154     2,243,110  
Operating expense
Depreciation & amortization 333,761 246,038
Selling, general & administrative   2,704,949     1,579,019  
Total operating expenses   3,038,710     1,825,057  
Income from operations   736,444     418,053  
Other income/ (expense)
Other (expense) (28,000 )
Interest income   119,173     20,600  
Total Other Income/ (expense)   119,173     (7,400 )
Income before noncontrolling interest 855,617 410,653
Income tax benefit   (15,490 )    
Net Income before income tax benefit and noncontrolling interest   871,107     410,653  
Net loss attributable to non-controlling interest   564     1,895  
Net income attributable to Paysign, Inc. $ 871,671   $ 412,548  
Net income per common share – basic $ 0.02   $ 0.01  
Net income per common share – fully diluted $ 0.02   $ 0.01  
Weighted average common shares outstanding – basic   46,961,079     44,990,765  
Weighted average common shares outstanding – fully diluted   54,508,835     50,880,765  
MARCH 31, 2019 and DECEMBER 31, 2018
March 31, December 31,
2019 2018
Current Assets
Cash $ 5,211,161 $ 5,615,073
Cash restricted 45,928,136 26,050,668
Accounts receivable 667,852 337,303
Prepaid expenses and other assets   1,066,357     1,175,241  
Total current assets 52,873,506 33,178,285
Fixed assets, net 1,009,359 883,490

Intangible assets, net

  2,215,718     2,115,933  
Total assets $ 56,098,584   $ 36,177,708  
Current liabilities
Accounts payable and accrued liabilities $ 579,052 $ 1,327,497
Customer card funding   45,112,478     25,960,974  
Total current liabilities 45,691,530 27,288,471
Total liabilities   45,691,530     27,288,471  
Stockholders’ equity

Common stock $0.001 par value; 150,000,000 authorized (46,731,912
and 46,440,765 issued and outstanding at March 31,2019 and
December 31, 2018, respectively)

46,732 46,441

Additional paid-in-capital

9,266,563 8,620,144
Treasury stock at cost, 303,450 shares (150,000 ) (150,000 )
Retained earnings   1,451,253     579,582  
Total Paysign, Inc’s stockholders’ equity 10,614,548 9,096,167
Non-controlling interest   (207,494 )   (206,930 )
Total stockholders’ equity   10,407,054     8,889,237  
Total liabilities and stockholders’ equity $ 56,098,584   $ 36,177,708  

Paysign, Inc. Non-GAAP Measures

To supplement Paysign’s financial results presented on a GAAP basis, we
use a non-GAAP measure of Adjusted EBITDA defined as net income less the
following cash and non-cash items: interest, taxes, stock-based
compensation, amortization and depreciation. We believe this non-GAAP
measure helps investors better evaluate our past financial performance
and potential future results. Non-GAAP measures should not be considered
in isolation or as a substitute for comparable GAAP accounting and
investors should read them in conjunction with the Company’s financial
statements prepared in accordance with GAAP.

“EBITDA” is defined as earnings before interest, taxes, depreciation and
amortization expense. “Adjusted EBITDA” reflects the adjustment to
EBITDA to exclude stock-based compensation charges. Adjusted EBITDA is
not intended to represent cash flows from operations, operating income
(loss) or net income (loss) as defined by U.S. GAAP as indicators of
operating performance.

Management cautions that amounts presented in accordance with Paysign’s
definition of Adjusted EBITDA or any other non-GAAP measures may not be
comparable to similar measures disclosed by other companies because not
all companies calculate Adjusted EBITDA and non-GAAP measures in the
same manner.

Three months ended March 31,
2019 2018
Net income attributable to Paysign, Inc. $ 871,671 $ 412,548
Income tax benefit (15,490 )
Interest (119,173 ) (20,600 )
Depreciation and amortization   333,761     246,038  
EBITDA 1,070,769 637,986
Stock-based compensation   646,710     137,401  
Adjusted EBITDA   1,717,479     775,387  
Non-GAAP EPS – basic $ 0.04   $ 0.02  
Non-GAAP EPS – fully diluted $ 0.03   $ 0.02