PAYS - Earnings call transcript Q4 2018

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Operator

Greetings, and welcome to the 3PEA International 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.

International let may you future the make and for please call on expectations, Private begin, statements prospects company forward-looking Act the various XPEA Securities we Litigation me purposes of that remind today's plans for Reform Before the constitute XXXX. of that remarks about ended a XPEA's may factors year including various differ indicated XX, annual Actual for of on December from results XX-K by these subsequent made discussed in and result those materially forward-looking report Form with statements in as the by XXXX those the fiscal filings SEC. company the press non-GAAP measures releases To reconciliations various the company on in website. company's provided that extent and the will utilizes be once again you that, us. thank joining With for for presentation. discussion his part I'll turn now of Mark and the call to the over

Mark Newcomer

and XPEA review a first call. annual to direction behalf I of Thank afternoon. our XXXX. share Chief I'll earnings of and sharing and International. On begin our outlook strategic XPEA brief Executive welcome for to you of would good XXXX Officer will you then Newcomer, I'm Mark like by

will XXXX. it Following XXXX I the to for Financial guidance take us turn Attinger remarks over through numbers Chief to and on touch Officer, my Mark for our to

Following questions. we then Mark's review field your will

or provide of at investor visit may from of processor copy presentation history and We manager. a to these programs. in the XX%, XXXX have February million, Mark you and of Net summary new and consumer prepaid both we to government increased increased X, and had increase minutes. million our $X.X we elaborate few to I'm quick learn solutions XX%. adjusted or Some want or you saw income Investors as XPEA To numbers record more on to to to a support a $XX.X not is in In growth and the investor and very million $X.X EBITDA be seeing so company therefore card the revenues service listen our for XX%. www.Xpea.com. a develop stock the in a trading of including industry. may in presentation achieved milestones, commencement may with about following as pleased NASDAQ clients, website section traction Capital new common our In our of of to opportunity XX, review the XXXX, background payment the several on August and our our to corporate, program innovative XXXX. customized a Market we're the new the we pharmaceutical will and programs

experienced was very Chairman, Board was CEO includes that Henry the NetSpend; Bank. UMB a assembled CEO Dennis Dan at we Health who who of our of Additionally, and former Services the Triplett, former

additions our phase for preparing revenue. XXXX increase and now $XX XXXX continued like growth. XXXX would senior next at year million revenues We now actual organization to to I full to XX% our to key the in management versus our This strategic on us direction. In million. and strengthening touch to a briefly for XXXX make team of XX% February, represents we $XX guided

to the contribute completed. has to by growth materially Most continued this our non-pharma to be programs pharmaceutical in positions been growth strategic our our expect We professional for of and hiring business. complemented

it us like Mark? of a to quarter corporate to acquisition candidates we synergies time, numbers. culture growth. programs to Furthermore market focus make in and our our of that diversify over have in introduce to through will and growth products. to Mark At have to end of continue incremental new support reiterate our will card at statements this my to demonstrated take continued and would will we provides seek investments innovation, we However, that continue and will pursue personnel profitability. turn expected we two broaden for the the Strategically, prepaid I

Mark Attinger

Thanks appreciate Mark. that. I

guidance. us So Mark’s including I'll comments some our top-line through to pertaining add earnings I'll and XXXX, and confirming to numbers XXXX commentary take variance then provide

in December exclude annualization XX% cost XX from expenses when The $X.X profit, in and XX.X% So represented will increased be improvement was XXXX resulted and full revenues, that XX to set of employees guidance new prior were to in card prior operating At which XXXX in revenue to employees from XX.X% company end respect half increase for clients, million of of sales in compensation. year and ending compared the investments for client interchange and to those basis grew year new higher the at improved addition existing in attributable of had for you mix. yearend and stock-based programs With employees second of of XX.X% million was headcount $X.X to leadership year from is been compared range last infrastructure to in care card and was results. of year. The PIN revenues primarily debit XX, XX XXXX. the XXX $XX.X staffing million, attributable Mark related on, to year the margins XX% the $X.X $XX.XX it up The The has million increase increase million. touched increased growth XXXX. customer programs. SG&A is XXXX to to December in increased $XX,XXX,XXX and and the compared increase in million primarily which the transactions $XX.XX XXXX recognized $XX,XXX,XXX point both The net revenues the XX gross in hires an new of

$X.XX Net EBITDA $X,XXX,XXX to increase $X,XXX,XXX the was compared XX.X% per to XX.X% slow of year holder versus hand of rate EBITDA the doubled million, year to on an to compared million, XX.X% $X,XXX,XXX [XX.X%] cash, card adjusted earnings cash to prior year. However, a the an year. and the funds year. an Basic balance share the compared increase up were adjusted income $X.XX Furthermore, we $X,XXX,XXX, do ended sheet the expect XXXX. from in $XX.X XXXX. record prior growth year. Non-GAAP improved high at of of the the $X.X for restricted to prior prior SG&A perspective in increase margin client and the a From was XX.X%

liquidity prior excluding X.X side by restricted balance the measured adjusted And was to from both sheet year. the ratio cash X.X debt from up the of Our on finally, as current an no balance we have continue sheet.

is up results. $XX to in both the growth we Mark’s XXX% the represents million margins It the $XX as over non-pharma a adjusted EBITDA EBITDA The non-GAAP announcement solutions $X.X to shifting just in to and factored like to XX% million. XXX% and Just the products to for XXXX. XX%, This to reiterate and concludes reentrance margin are earnings come adding increase to the the the XXXX our $XX in an note also adjusted revenue moderator new in an of that That pharmaceutical at what we $XX question-and-answer I growth the million revenue session. represents would continued We million from begin it comments. and to XXXX remarks. to into from revenue will guidance industry million. not Please business. from released my projections. Today, also also comparison XX.X% that our turn guided to back will

Operator

[Operator Instructions].

from Jon Thalmann. is today coming Ladenburg Hickman from question first Our

live. line is now Your

Jon Hickman

to I the For growth expense you know XXXX modeling me some it’s be? going said give in purposes indication might XXXX you slow. can you of think over what

Mark Newcomer

that that second are hires a half do revenue a some we not mean see in in basically growth incremental continue we don’t hires -- hires we expense the I of in planning you positions have hired look on into communicate the same if on want the going take the that out platform that percentage give the XX% second we technology information the annualized to Jon level. not the in investment the are Yes, you new probably but you those that of the at new officers case you at communicated you the the to as are and We year. the and XXXX point. hired but the And specific there do this and But level the some we But XXXX half know are to There make if into year infrastructure will of some we we were XX%. at is effect. of for we that to have in have investments need environment. incremental

Operator

[Operator Instructions] William Our is question coming Gibson from today Partners. Capital next from Roth

Your live. line is now

William Gibson

question. accounting an had I

You’ve determined on was volume the release gross conversion on the cards. rate, dollar loaded determined? that the How revenue

Mark Newcomer

percentage simply cards. it’s loaded revenue as have the the onto on our revenues of dollars been a so that prepaid Yes,

William Gibson

often number manual that’s so And or is that determined? how

Mark Newcomer

of And appreciate at industries reported rates as that dollars types evaluate number will. in different to a that of you percentage the loaded. of can that quarters support has you different and we prior can you do you We also. and looking if have been So products as revenue and quoted imagine we the that conversion course

And will our as so diversify to that we portfolio. number continue evolve

Operator

coming next is Oak [Operator Instructions] question Our from Colin Black Capital. O'Donnell today from

is Your line live. now

Colin O'Donnell

if think should questions. of And that, the we sort to interest cash, kind slope? about the we modeling the that income think two that’s of One should kind how second related from you can CapEx free flow think how about use cash we EBITDA don’t capital? the including to free know want metric I about to of conversion then So a in how question. So or is or

Mark Attinger

who one interest goes I the not see The that. it more have of of is more all terms in you But answering, release but press the what second see into and attachments you the do as the you interest first feel XXX,XXX. income to see and today in you may one comfortable detail

see other increase of cash. sheet plus balance restricted One an is the the on you in XX% things

and case be we funds to on of restricted customers funds in being again prepared client our and clients. do bit loaded of cards cash of for that that a to client restricted funds the interest the little cash cardholder is funds, earn So it’s

income I in to making and converting in additional for interest and as instead of for P&L revenue interest year $XXX,XXX cash $XXX,XXX With for make in you restricted investments model increase you expect the by net incremental XXXX adjustments by so a couple so And What historically cash you question, of you our can given project adjustments tell CapEx XXXX. you CapEx real probably mind don't income will $X in we cash. to affecting. second see make or with and I billion of coming revenues are a we your of adjusted will be to then from answer to we that CapEx your good EBITDA to obviously of do make respect some projections that on the income do the is that. XXXX And north have

you that’s so item might the on. one adjustments And some that make

significant a have the business. to in or AR piece keep low days AR the very of companies, other to other we not are unlike AP due just The and AP, mind the do days nature

balance the pretty sheet and So are income clean. statement

Colin O'Donnell

talk you about when taxes cash pay Could start to taxes? you and too

Mark Newcomer

at and any and time. this looking still modeling we we on response We don’t are don’t that at to-date tax have have a are for that XXXX and implications

Operator

from next question Our coming from is Maxim Michael Diana Group.

is now line live. Your

Michael Diana

going You issue XXXX mentioned the pharmaceutical be is the industry. to focused on

what's you there non-pharmaceutical. Is can also anything there? going on think mentioned I about you tell us

Mark Newcomer

the also our obviously we side. on on market. is science out are there health to pharmaceutical side life Yes, continuing are non-pharma and pharmaceutical side really plasma go we the focus And

more after areas of general just market are incentive, corporate incentive market. corporate and overall, other going We the hospitality a of a

as that will we after So go well. to continue

Operator

session. further We or have for turn of like I our floor question-and-answer the comments. to would reached closing any management over end back to

Mark Newcomer

well on message really questions. and we call the first appreciate just on our the the opportunity certainly this as convey as XPEA appreciate interest earnings we behalf Yes, of to

you. thank So

Operator

It you. conclude webinar. does teleconference Thank today's and

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

PaySign (PAYS) 11 Mar 192018 Q4 Earnings call transcript