VersaPay Announces Q1 2016 Financial Results

- Solutions Business Grows by 85% Year over Year -

TORONTO, May 25, 2016 /CNW/ - VersaPay Corporation (TSXV: VPY) ("VersaPay" or the "Company"), a leading provider of cloud-based invoicing, accounts receiv­able management and payment solutions, today announced the Company's first quarter (Q1) financial results for the three month period ended March 31, 2016.

"We are very pleased with the increase in the number of newly signed suppliers on the ARCTM platform as well as the growth in use from established customers resulting in an 85% increase in revenue compared to this time last year," said Craig O'Neill, CEO of VersaPay. "In the first three months of this year, we closed 17 new deals while continuing to expand the pipeline for new ARCTM suppliers. This is a good indicator of healthy revenue growth in the coming quarters."

Financial Highlights:

  • VersaPay Solutions revenue for the three months ended March 31, 2016 increased by 85% to $0.29 million compared to $0.16 million for the three months ended March 31, 2015.
  • Total revenue for Q1 2016 increased by 17% to $1.45 million compared to $1.24 million in Q1 2015.
  • POS Merchant Services revenue for the three months ended March 31, 2016 was $1.16 million compared to $1.08 million for the three months ended March 31, 2015.
  • Gross margin percentage for the three-month period ended March 31, 2016 was 59%, compared to 60% in Q1 2015.
  • Cash operating expense for the three months ended March 31, 2016 increased by 39% to $1.36 million compared to $0.98 million for the three months ended March 31, 2015. The increase reflects the Company's strategy of building the VersaPay Solutions business and the timing of receivable and payable accounts.
  • Adjusted EBITDA(1) loss of $1.39 million in Q1 2016, compared to loss of $1.08 million in Q1 2015, in accordance with the Company's plans to invest in the VersaPay Solutions business.
  • Total comprehensive loss for Q1 2016 was $1.51 million compared to a loss of $1.20 million for Q1 2015.
  • As at March 31, 2016, the Company had cash on hand of $2.03 million compared to $3.34 million as at December 31, 2015.

 

(1) Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, share-based payments, other income and expense, and other comprehensive income. Adjusted EBITDA is a non-IFRS financial measure which does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers. It should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS. Please refer to the Company's management's discussion and analysis for the quarter ended March 31, 2016 for further information on the Company's use of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net earnings. 

Conference Call Details:

Date: Thursday, May 26, 2016
Time: 9:00 AM Eastern Time

Participant Dial-in Numbers:
Local – Toronto (+1) 416 764 8609
Toll Free – North America (+1) 888 390 0605
Conference ID: 56124394

Recording Playback Numbers:
Toronto (+1) 416 764 8677
Toll Free – North America (+1) 888 390 0541
Passcode: 124394 #
Expiry Date: Thursday, June 2, 2016 11:59 PM

A live audio webcast and archive of the conference call will be available by visiting the Company's website at http://www.versapay.com/company/investor-relations/. Please connect at least 15 minutes prior to the conference call to ensure time for any software download that may be needed to hear the webcast.

The Company also announced the grant of incentive stock options to directors of the Company to purchase up to 125,000 common shares in the capital stock of the Company under its stock option plan.  The options are exercisable at a price of 1.01 per share on or before May 26, 2021, subject to the approval of the TSX Venture Exchange and applicable hold and vesting periods.

About VersaPay

VersaPay is a leading cloud-based invoice presentment and payment provider for businesses of all sizes. VersaPay's ARC software-as-a-service offering allows businesses to easily deliver customized electronic invoices to their customers, to accept credit card and EFT payments and automatically reconcile payments to their ERP and accounting software. VersaPay is headquartered in Toronto, Canada and has operations in Montreal.

More information about VersaPay can be found on the Company's website at www.versapay.com or under the Company's profile on SEDAR at www.sedar.com.

Forward Looking and Other Cautionary Statements

This news release contains "forward-looking information" which may include, but is not limited to, statements with respect to the activities, events or developments that the Company expects or anticipates will or may occur in the future. Such forward-looking information is often, but not always, identified by the use of words and phrases such as "plans," "expects," "is expected," "budget," "scheduled," "estimates," "forecasts," "intends," "anticipates," or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved.

These forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business. Management believes that these assumptions are reasonable. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include, among others, risks related to the speculative nature of the Company's business, the Company's formative stage of development and the Company's financial position.

Forward-looking statements contained herein are made as of the date of this news release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE VersaPay Corporation

For further information: John McLeod, Vice President, Marketing, VersaPay Corporation, 647-258-9406, john.mcleod@versapay.com; Babak Pedram, Investor Relations, Virtus Advisory Group Inc., 416-644-5081, bpedram@virtusadvisory.com

RELATED LINKS
www.versapay.com

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