FPAY - Earnings call transcript Q4 2018

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Operator

Greetings and welcome to the FlexShopper Fourth Quarter and Full Year 2018 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeremy Hellman of The Equity Group. Jeremy. ahead, go Please

Jeremy Hellman

This the forward-looking the Safe Act Litigation operator. made Private that pursuant Reform XXXX. to Harbor of presentation you, statements includes are Securities Thank provisions of

statements respect the factors, statements or operations a to could, in the risks can Forward-looking looking uncertainties projections on factors uncertainties One and cause quarterly seek, from as as terms differ could and including result management's would, sections and discussion results results look, which current for described annual subsequently and similar anticipate our on our terms. filed views reports most find historical report and future and many of may, such XX-K, experience filed by those involve in reflect and will, risks events expect, of risk analysis inherent to materially should, these belief, various intent, Company's but XX-Q. recently project, financial of actual estimate, of with not Form present plan, Form of expectations all and condition

estimates FlexShopper's change. would those assumptions events anticipate views time CEO, new listeners We our a Brad statements I reliance that may will forward-looking ahead, our the future no to that, to from any Go to risks the that historical statements like only and undue forward-looking consider I oral Our otherwise. whether cost, we than With statements, uncertainties developments financial Brad. as call and operations written our undertake conference forward-looking in law, by caution made our strategies, of as statements and over information, to to and other facts, prospects, condition, or this hereof. result not forward-looking time, date whether turn required or Bernstein. obligation as included represent Except developments plans evaluating subsequent cause of be which place to are statements. update to objectives call, We urge statements you upon including such statements. of during any regarding

Brad Bernstein

Thank you, Heiser, well by highlights over Then, providing Back And quarter fourth for the more full year as for quarter million. up capped $X.X loss Adjusted off year. the line top last million, guidance our and from EBITDA million, XXXX strong providing and our the that CFO, some open $XX.X revenue year FlexShopper, Russ and as year gross I'll discuss us originations will narrowed our XXXX full for we the lease up financial of call. fourth million, to who was business I everyone line led in our will before ahead XXXX we great well into hand January, return holiday from welcome comments by year. sheet to topped This result Jeremy. and XXXX. our early announced last in excellent full the earnings results on a at of was XX.X% your of quarter came I'll as heading earnings year adjusted originations $XX to provided $XX.X last record the questions. balance to fourth our start A call, momentum several our then detail an in season. we call XX.X% up profit

versus cost QX, customer $XXX was average $XXX a For year. last our acquire to

cost acquisition the For full $XXX. was customer year, versus $XXX our

with in XX,XXX is retail in channel, due ago was new added activities of of approximately which FlexShopper. in Our compared QX optimization cost to underwriting XX,XXX growing factors, source cost contribution quarter. from marketing great the continued our this including lower several We for BXB and with reducing a acquisition a success year coupled our approximately customers customers

XX,XXX approximately approximately of we XXXX, XX,XXX in new customers, from all up XXXX. added For

returning our customer As forward. a expand reminder, our base customers revenue potential going and these new ultimately

customers XXXX, and in offering business that lease represented As approximately originations resonates XX% our to a such, of our repeat be proving of segment with growing continue consumers.

channel, XXX own provide reaffirm for While great commenced approximately came retailers our XX% with quick to the of we progress chain and the and our continuing a consumer we retail direct mobile well. rollout XXXX. seamless FlexShopper.com, on wins to to by that quarter in from business the merits with lease basis. pilot that XXX to to is for see own completed tire to of store success, are separate we a in Each technology originations lease a business that a XXXX efforts, of our highlighted plus very sort performing our this process consumers third transact tire store lease Well,

entering key advantages is at competitive the the card a stores to retailers’ a start equipment and the point application item. has transaction no the integration it sale for consumers our completed through mobile number system. method of credit and executed requires in pay From finish, the point lease own with of virtual no since As reminder, sale to our to in

customer minimum Our program very initiatives received, effort retailers that centric employee a juggling are many always is promoting the strategy requires heavily. Logically in tire attractive. positively and actively has we approach no because are stores XXXX, to been targeting integration and

in represents saving XX for originations in a call in provide our XXXX are FlexShopper growing company solution. own want also our verticals, financial plus contacted like approximately are potential companies. primary is declined declines a open is also with credit converts ecommerce also are furniture some now FlexShopper. CFO, to in XXXX and and and acquisition the payment to e-retailer We party providers, credit incremental into retail so cost. Hence is to commentary online which success annualized help update also this with our days method before million their origination focused to patented very which going within illustrated detail lease XXXX over our targeting have methods X sales. to that at were call checkout we The month XXXX, of bet third apply May per sales we also customers lease traditionally for XXXX, e-retailers out lease at we integrated outlook. low diversified performance I'd directed FlexShopper, channel, own third our the Heiser, an which heavily on to save check sites. more what hand I’m similar [ph] us lease to build on with of I questions. Then, We metrics In box discuss to the retailers, in a Russ by our targeting to some of channel significant the payment Today, portfolio best fast story.

Russ Heiser

Brad. Thanks,

third year revenue of are I and prior how On call, great quarter explained profit. the predictor gross originations current year

or they and bottom XXXX XX XXX walk take me to Let presentation. out left the the some choosing conservative million and then those multiple mean our updated guidance lowest numbers a to X.Xx, in investor XXXX is for point of of through expected investor few revenue The pages time XX presentation, of million for the what of page revenue new generate originations by XXXX. most multiplied trailing gross of XXXX of

in origination guidance right since forecast XXXX to of revised gross million. Therefore, trailing million in is of XX, FlexShopper outperformed bottom approximately XX multiplied generate of gross expected the multiple for profit the XXXX metrics higher originations both lease those by XXXX. gross by the profit million has On $X page XX X.XXx of been

XX seen than million. can we as also on and addition, EBITDA has guidance initial the million originations to leases year. XX presentation, raised In XXXX X.X we greater have expect page this management of on given be minimum investor Moreover, guidance of

returns cash of Moving page annualized cash continues XX%. our XX benchmark pools back above x margins profit to our presentation, of on remain X.X for and produced historical to of approximately lease the gross

spends page continues efficiency right into a touches the made with opening at in on customers the marketing current the to customer bottom This of cost on the Brad FlexShopper that $X.X some chart XX, produce steadily in dollar the FlexShopper offering of our points that which his shown the frequently the remarks. coupled metrics on left, gross repeat testament to is decreasing the translate showing profit. on page relevance of to marketing to page, for FlexShopper’s the customers. as future seen the each continue of is Turning acquisition least at

seasonality. affects Before seasonality and it origination going a cover fourth that a theme statements. The quickly to financial synopsis subject recurring lives that back quarter quarter is period there's a as topic is call our first in difference the of quarterly recent holiday is I'm lease hand a The the how how to the Brad, a result and versus I investor questions. vast

the the lease be the fourth approximately XX% summary As calendar presentation, of page and the the on operating can for is for originations responsible quarter year. XX of seen in financial

show fourth those originations. revenue the last in until of Given of the full three originations from the months the holiday weeks that are doesn't Thanksgiving of all Christmas, quarter, most those six of quarter from

However, the higher the fourth fourth representation reduced lower quarter. approximately other seasonal revenue results show plus marketing in XX% words, full year's expense EBITDA marketing quarter the expense. does of in In

the calendar full hand, and seasonally of holiday year. lowest words, benefits will strongly portion of lower other originations revenue full from a other first quarterly the the and for the a expense produce the In spend revenue of quarter recognizing On large leases of the quarter by holiday EBITDA marketing representation full historically the the marketing has year.

first quarters the fourth in fall the expect, and represented third As the quarters. you might between second by and extremes

Brad some for Here's final thoughts.

Brad Bernstein

with XXXX growth believe Russ. growth. take and our where We In and we'd the line ensure combined long With model that, focused believe our balanced we closing, line on questions. will growth is and to sustainable and happy company, a top bottom with be you. Thank Thanks, year prudent results. achieving we've omni-channel management one delivering your strategy for scalable pivotal term profitable guidance

Operator

[Operator coming from from question is today first National Securities. [indiscernible] Instructions] Our

Unidentified Analyst

you How total this and currently? year having breakout have for past call on taking Yes. you year? a Thank customers congratulations really spectacular my many

Brad Bernstein

Yeah.

were for approaching we've the leases. way, been our XXX,XXX doors. your from you, XXX,XXX by since leases done And -- Rick inception over XXX,XXX and we So time over the We good we're served customers, opened And the question. sentiments. I appreciate served have approaching people thank

Unidentified Analyst

customers that far? purchases on average So XXX,XXX two so

Brad Bernstein

Effectively, average. that would be the

Unidentified Analyst

that because number everything forward. to an on keep is eye I want Okay, right, that customers of Is Brad? metric drives

Brad Bernstein

absolutely. Oh,

and to own we've and of to that a once replicate, been And, highly the things based able for remarket them. been six has business, repeat. been a consumer old stores XX year rent is an brick in We've constantly mortar in FlexShopper.com, years, to replicate one fashion. to at does online to the we own the obviously, So, able rent lease

store. So proven And, consumers. with than we from business, but only mortar value going that online better proven a we've a perspective, it that's a our also because have is resonating offering obviously brick proposition we've is repeat to and and this

to what consumer for is quality they want them can and enable and this mission to have allow want, Our to everyone products brands shop that to get. where the they of else

feel really to grow. only we target wants and to the is that of Obviously, also customer consumers. years old, so, continue continues resonating with we their And obviously our value being these customer lifetime that consumers, five

Unidentified Analyst

for Okay, I understand that. detail. Thanks the more

Going have have, very I think forward if could one us though, the I'm additional and can question forward. as metric update quarterly provide total we going go regular on and going you that'd Amazon, into Facebook asset queue. to be and as Netflix you number a helpful the of use like other that an with back customers

have a to doing model develop there was And wondered you habits, advertising and Facebook. Google forward customers that strategy more in somewhere going get shopping going terms and more of like some in more and just your know forward? that if As is might and you their

Brad Bernstein

then optimized become years, now in our online Google originations. lease it's our particularly been customers. it. in strategy. We’ve been for acquiring with actually, And terms really And is two digital great since very is the fact, what's proficient last Oh, FlexShopper.com, of half in we've

overall and that we've to in $XXX we're creating targeted seasonal from high likely the So $XXX. costs, our from see costs fourth platform, actually acquisition demand, the own particularly and able the could you company’s year ago acquisition our in-housed, are quarter for a declining bidding customers periods, get done how in there's to fact, where

to to So, a to your repeat last point good we in the added for XXXX. XX,XXX in new want and, again, numbers, to compared just year of had, getting just new growth the think significant back customer original point, pronounce terms year, approximately you XX,XXX those also we of could I full customer that's and kind metrics customers see approximately

business growth, new feel we gravy And feel XX% on of our So heavy strategy the that's very and said, was have now our obviously that you healthy of that with accelerate where can repeat, a with repeat business we with, our to very focus then business we customer the model, a business. business. tires kind as if I competitive couple healthy advantage great

Operator

from Capital. Walter [Operator is from our MAZ Instructions] Schenker next coming sorry, from I'm Our Walter Our question is, next Schenker is [Operator coming question MAZ question Instructions] from Capital.

Walter Schenker

customers, regard newer is or it whether yet the ratio not lower customer of tire than jeopardize? part to afford is in your like In can a is it's that too TVs to to people things for something default it's early it substantially car, loss know and furniture

Brad Bernstein

Yeah, question. thank you, Walter, for the

that So I state tires yeah, can better. currently perform

customer. like by higher segment. we’re state approval repeat and clearly rates But our happy that than well, that portfolio we're We can very getting actually tires, haven't disclosed rather I in that customer performs new the much performance a store

Walter Schenker

which to on want XXXX somewhat gross I would a but conservative, you incremental, basis net when basis take up million been million, X.X you I surprised instead however thought your scale might when I that gross of be question. dollars million, X want been but raised have you about realize be million. it contribution the or you incremental would guidance you have million second profit down contribution, by X higher. once have like to X I a And of $X talked $X million, thought revenues would on Okay. would that more have was

Russ Heiser

is Hey, Russ. Walter, this

to essentially guidance most the as we the relationship the of to the multiples trailing originations that sort representations essentially our and of choose into at guidance. of this the out gross that profit in the think to work revenue of in conservative on. past you the lowest we've as our then use then and sort I made between we future wanted stage, historical And and to, we obviously base further those with year, stick originations terms chose representation, using saw,

be As guidance through go year, to able to change we year to continue potentially out we'll that have forward. the additional information going

Operator

question today next [indiscernible]. is coming from Our

Unidentified Analyst

Congratulations your Brad. full exceeding on Hi, for guidance year. the

Brad Bernstein

you, Simon. Thank

Unidentified Analyst

Can back just question, up XXXX guidance. first into you XX So, kind lease originations looking the million with number? came your at how you of

Russ Heiser

how repeat Russ. have, and upon is combined they repeat how customers We amount we essentially quickly This of the quickly both repeat, dollar that perspective a the Sure. based represent curves those perspective a know from and time come means we’re expenditures prior conservative customers, we and see fairly what what our versus in in up represents as marketing essentially with what with XX% increase a XXXX new year. planned originations that for able to the

prudent to So be we XX% response, up in want the into than I million, XX the once again, last higher And similar XXXX. think we -- with our ended guidance. essentially back approximately with that's what but we to how

Unidentified Analyst

estimate? pilots wins And does kind how did that that wins account or the for retail of retail retail and fit into your

Russ Heiser

So the we count the in sort they're wins -- once once of they're book.

guidance will ongoing As pilots, as number Brad see full of we – into that rollouts, have mentioned, a I expand increase. hopefully those that we ongoing think

Unidentified Analyst

rates question, That some due know some the believe your and some you right you you generate interest of start have that or high possibly kind to any now, refinance reduce opportunities interest do positive as of looking picture of in debt debt I just of you I makes the to the end kind and June, sense. at middle debt have either rates, And going reduce EBITDA? then of forward, at kind year, see second

Russ Heiser

that always interest I rate. ways to think we're to looking find reduce

and pay think a ago. know, was a I -- subordinated facility know, or that the original that may credit into rate built our half the as you this debt we year

-- is so rate that fixed. there's So, somewhat

look disclosed, of overnight future, will through lower how in with we just couple that a position minimize that as means be end we not look a see component. hopefully expense. a in and but not up we've always obviously, can clear, total we I different It's the we’ll think interest yet go to process, and definitely

Operator

And closing you. Thank remarks. turn for to management the call now let's back

Brad Bernstein

very call. We're of forward we us speaking earnings our joining for each you Thank Thanks on everybody. again. with first you again about Thanks, XXXX and today. to excited look quarter

Operator

does you. today's conclude Thank teleconference. That

a time day. have this disconnect We participation you wonderful thank for your and your may line today. You at

FlexShopper (FPAY) 12 Mar 192018 Q4 Earnings call transcript