- Customer Wins Begin to Accelerate -
TORONTO, Aug. 25, 2015 /CNW/ - VersaPay Corporation (TSXV: VPY) ("VersaPay" or the "Company"), a leading provider of cloud-based invoicing, accounts receivable management and payment solutions, today announced second quarter (Q2) financial results for the three and six-month period ended June 30, 2015.
"Following the success of our pilot program for ARC™ and the strong validation we received from the market, we have been making significant strides in signing up new ARC customers," said Craig O'Neill, CEO of VersaPay. "Since the end of Q1, we have brought in an additional 8 customers, and to date we have acquired 22 customers with close to 6,000 end users accessing the platform. We also made excellent progress accelerating ARC implementations, an important factor in scaling the business as sales closure rates increase."
"We continue to advance the business in line with our strategy, providing investors with a growth oriented software opportunity, backed by a stable POS merchant services business that delivers steady cash flows," continued Mr. O'Neill, "and although ARC revenues do not yet have a material impact on our financial results, the increasing momentum we are achieving in ARC adoption is expected to lead to revenue growth in the near term."
- VersaPay Solutions revenue for Q2 2015 increased by 55.8% to $0.20 million, compared to $0.13 million in Q2 2014. VersaPay Solutions revenue for the six months ended June 30, 2015 increased by 58.4% to $0.36 million compared to $0.23 million for the six months ended June 30, 2014.
- Total revenue for Q2 2015 was flat year-over-year at $1.41 million. Total revenue for six months ended June 30, 2015 increased to $2.65 million compared to $2.63 million for the six months ended June 30, 2014.
- POS Merchant Services revenue for Q2 2015 decreased to $1.21 million compared to $1.28 million in Q2 2014. POS Merchant Services revenue for the six months ended June 30, 2015 decreased to $2.29 million compared to $2.40 million for the six months ended June 30, 2014. The POS business was negatively impacted by seasonal factors and a weaker Canadian dollar, and the year-over-year comparison was impacted by an unexpectedly strong Q2 2014.
- Gross margin percentages for the three-month period ended June 30, 2015 were 57.8%, compared to 62.1% in Q2 2014. Gross margin percentages for the six-month period ended June 30, 2015 were 58.8%, compared to 62.5% for the six-month periods ended June 30, 2014.
- Cash operating expense (excluding non-cash operating items) increased to $1.98 million in Q2 2015 from $1.49 million in Q2 2014. Cash operating expense for the six-month ended June 30, 2015 increased to $3.82 million compared to $2.80 million for the six-months ended June 30, 2014. The increase reflects the Company's strategy of building the Solutions business.
- Adjusted EBITDA(1) of ($1.16) million in Q2 2015, compared to ($0.57) million in Q2 2014 and Adjusted EBITDA of ($2.24) million for the six-months ended June 30, 2015, compared to ($1.07) million for the same period in 2014, in keeping with the Company's plans to invest in the Solutions business.
- Total comprehensive loss for Q2 2015 was $(1.28) million compared to a loss of $(0.71) million for Q2 2014, and total comprehensive loss for the six-months ended June 30, 2015 of ($2.48) million compared to a loss of ($1.53) million for the same period in 2014, in keeping with the Company's plans to invest in the Solutions business.
- As at June 30, 2015, the Company had cash on hand of $5.16 million compared to $3.00 million as at March 31, 2015.
(1) Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, share-based payments, financing 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 June 30, 2015 for further information on the Company's use of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net earnings.
- VersaPay ARC's customer count, that is the number of suppliers signed up to publish invoices to their end-customers and to receive payment online, now stands at 22. When fully rolled out, and depending on end-customer sign-up rates, these 22 customers represent up to an estimated $800,000 of annual recurring revenue for the Company.
- During the quarter, the Company signed Metroland Media, Logistical Labs, Load Delivered and two US commercial real estate firms as ARC customers.
- The Company was ranked 131st of the 300 companies listed in the Branham300 industry ranking.
- The Company announced veteran Geoff Coutts joined VersaPay as Vice President of Sales.
- The Company announced a $4 million bought-deal private placement financing, and completed an over-subscribed deal for a total gross proceeds of over $4.8 million.
- The Company added a number of new features to ARC, which helped the Company acquire additional customers and accelerate implementations during the quarter.
- Today, the Company announces the grant of incentive stock options to certain employees to purchase up to 300,000 common shares in the capital stock of the Company under its share option plan, exercisable at a price of $1.00 on or before August 2020, subject to the approval of the TSX Venture Exchange and applicable hold and Company vesting periods.
The Company will hold its second quarter conference call on Wednesday, August 26, 2015, at 9:00am EDT. A question and answer session will follow the corporate update.
CONFERENCE CALL DETAILS
Date: Wednesday, August 26, 2015
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: 96917212
Recording Playback Numbers:
Toronto (+1) 416 764 8677
Toll Free - North America (+1) 888 390 0541
Expiry Date: Wednesday, September 2, 2015 11:59pm
A live audio webcast and archive of the conference call will be available by visiting the Company's website at www.versapay.com/investors/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.
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 also has operations in Montreal and New York.
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 revenues from the ARC platform and 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, end-customer sign-up rates for the ARC platform, 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: David CW Chan, Chief Financial Officer, VersaPay Corporation, 647-258-9475, [email protected]; Babak Pedram, Investor Relations, Virtus Advisory Group Inc., 416-644-5081, [email protected]