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JetPay® Corporation Reports Third Quarter Results; Revenues Increase 21.2%, EBITDA Increases 49.0%CENTER VALLEY, Pa., Nov. 10, 2017 (GLOBE NEWSWIRE) -- JetPay® Corporation (“JetPay” or the “Company”) (NASDAQ:JTPY) announced financial results for the third quarter and nine months ended September 30, 2017. Financial Highlights
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“With another quarter of 20% plus organic growth and a significant increase in EBITDA, JetPay has started to show the consistency in revenue and earnings growth that our technology and people can deliver,” stated Diane (Vogt) Faro, CEO of JetPay Corporation. “Our strategy has remained consistent, and we are confident we can deliver continued growth. In our Payments business, the Illinois e-Pay business is being launched and we have seen continued growth from our existing partners and have signed several new relationships. Additionally, our new products, including our Discount for Cash product, continue to contribute to our growth.” Ms. Faro continued, “In our HR & Payroll business, we are now seeing consistent double-digit growth as our human capital management market strategies continue to unfold. We are pleased with the strong progress we have made during the past nine months and are excited to bring this year to a strong close.” Financial Results, Third Quarter 2017 Compared to Third Quarter 2016 Revenues were $18.4 million for the three months ended September 30, 2017, compared to $15.2 million for the same period in 2016. Revenues for our Payment Services Segment increased $2.8 million, or 23.3%, for the three months ended September 30, 2017, compared to the same period in 2016. The increase was attributable to net revenue growth in our Government and Utilities, e-Commerce, and ISO/ISV sectors, including an increase in revenues in our Discount for Cash product. Revenues for our HR & Payroll Segment increased $485,000, or 14.4%, for the three months ended September 30, 2017, as compared to the same period in 2016. This increase was largely attributable increasing demand for our full-suite, human capital management services. Operating loss for the three months ended September 30, 2017 was $(206,000), compared to an operating loss of $(922,000) for the same period in 2016. Operating loss includes depreciation and amortization expense of $1.1 million and $1.0 million for the three months ended September 30, 2017 and 2016, respectively. The decrease in operating loss was partially related to the increase in revenues noted above and a decrease in the fair value of contingent consideration liability by $564,000. Net loss for the three months ended September 30, 2017 was $(575,000) or a net loss applicable to common stockholders of $(3.3) million after accretion of convertible preferred stock of $2.8 million, compared to a net loss of approximately $(1.3) million, or a net loss applicable to common stockholders of $(2.9) million after accretion of convertible preferred stock of $1.6 million for the same period in 2016. The decrease in net loss was primarily related to the decrease in operating loss described above. Financial Results, First Nine Months of 2017 Compared to First Nine Months of 2016 Revenues were $56.2 million for the nine months ended September 30, 2017, compared to $39.1 million for the same period in 2016. Revenues for our Payment Services Segment increased $15.9 million, or 56.8%, for the nine months ended September 30, 2017, compared to the same period in 2016. The increase was related to the acquisition of our Government and Utility payments operation, which contributed an incremental $9.4 million of revenue in the first nine months of 2017 and continued growth in our e-Commerce and ISO/ISV sectors, including growth in our Discount for Cash product. Revenue from our HR & Payroll Segment increased $1.3 million, or 11.3%, for the nine months ended September 30, 2017, as compared to the same period in 2016. This increase was attributable to increasing demand for our full-suite, human capital management services. Operating loss for the nine months ended September 30, 2017 was $(925,000), compared to a loss of $(8.2) million for the same period in 2016. Operating loss includes depreciation and amortization expense of $3.4 million and $2.9 million for the nine months ended September 30, 2017 and 2016, respectively. The decrease in operating loss was partially related to the acquisition of JetPay Payment Services, FL, which contributed an incremental $1.1 million of operating income in the first nine months of 2017, as well as a $5.4 million reduction in professional fees for non-repetitive matters and legal settlement costs, a decrease in the fair value of contingent consideration liability by $577,000, all partially offset by an increase in non-cash loss on disposal of fixed assets of $110,000. Net loss for the nine months ended September 30, 2017 was $(2.1) million or a net loss applicable to common stockholders of $(9.6) million after accretion of convertible preferred stock of $7.5 million, compared to a net loss of approximately $(7.9) million, or a net loss applicable to common stockholders of $(12.3) million after accretion of convertible preferred stock of $4.4 million for the same period in 2016. The decrease in net loss was primarily related to the decrease in operating loss described above. Conference Call JetPay will conduct a conference call on Wednesday, November 15, 2017 at 9:00 AM EST (6:00 AM PST) to discuss these results and conduct a question and answer session. The participant conference call number is (855) 446-8217 (International Dial-In (509) 960-9039, conference ID: 7888199. There will also be access to a digital recording of the teleconference by calling (855) 859-2056 and entering the conference ID: 7888199. This will be available from two hours following the teleconference until Wednesday, November 22, 2017. About JetPay Corporation JetPay Corporation, based in Center Valley, PA, is a leading provider of vertically integrated solutions for businesses including card acceptance, processing, payroll, payroll tax filing, human capital management services, and other financial transactions. JetPay provides a single vendor solution for payment services, debit and credit card processing, ACH services, and payroll and human capital management needs for businesses throughout the United States. The Company also offers low-cost payment choices for the employees of these businesses to replace costly alternatives. The Company's vertically aligned services provide customers with convenience and increased revenues by lowering payments-related costs and by designing innovative, customized solutions for internet, mobile, and cloud-based payments. Please visit www.jetpay.com for more information on what JetPay has to offer or call 866-4JetPay (866-453-8729). Non-GAAP Financial Measures This press release includes non-GAAP financial measures, EBITDA and adjusted EBITDA, as defined in Regulation G of the Securities Exchange Act of 1934, as amended. The Company reports its financial results in compliance with GAAP, but believes that also discussing non-GAAP measures provides investors with financial measures it uses in the management of its business. The Company defines EBITDA as operating income (loss), before interest, taxes, depreciation, amortization of intangibles, and non-cash changes in the fair value of contingent consideration liability. The Company defines adjusted EBITDA as EBITDA, as defined above, plus certain non-recurring items, including certain legal and professional costs for non-repetitive matters, legal settlement costs, non-cash stock option costs, and non-cash losses on the disposal of fixed assets. These measures may not be comparable to similarly titled measures reported by other companies. Management uses EBITDA and adjusted EBITDA as indicators of the Company’s operating performance and ability to fund acquisitions, capital expenditures and other investments and, in the absence of refinancing options, to repay debt obligations. Management believes EBITDA and adjusted EBITDA are helpful to investors in evaluating the Company’s operating performance because non-cash costs and other items that management believes are not indicative of its results of operations are excluded. EBITDA and adjusted EBITDA are supplemental non-GAAP measures, which have limitations as an analytical tool. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Non-GAAP financial measures do not reflect a comprehensive system of accounting, may differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. For a description of our use of EBITDA and adjusted EBITDA and a reconciliation of EBITDA and adjusted EBITDA to operating income (loss), see the section of this press release titled “EBITDA and adjusted EBITDA Reconciliation.” EBITDA and adjusted EBITDA Reconciliation
Forward-Looking Statements This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. JetPay’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Many of these factors are outside JetPay’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to, those described under the heading “Risk Factors” in the Company’s Annual Report filed with the Securities and Exchange Commission (“SEC”) on Form 10-K for the fiscal year ended December 31, 2016, the Company’s Quarterly Reports on Forms 10-Q and the Company’s Current Reports on Form 8-K. JetPay cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in JetPay’s most recent filings with the SEC. All subsequent written and oral forward-looking statements concerning JetPay or other matters and attributable to JetPay or any person acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. JetPay cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. JetPay does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Contacts?
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