- Software Revenue Grows by 71% Year over Year -
TORONTO, April 25, 2017 /CNW/ - VersaPay Corporation (TSXV: VPY) ("VersaPay" or the "Company"), a leading provider of cloud-based invoicing, accounts receivable management and payment solutions, today announced fourth quarter ("Q4") financial results for the three and twelve-month periods ended December 31, 2016.
"With the sale of our POS Merchant Services business in January, this is the first time we are reporting our results as a pure cloud-based software company in the fintech space," said Craig O'Neill, CEO of VersaPay. "We are pleased with the healthy level of growth in ARCTM revenues, up 71% year over year with 90 suppliers signed on to the platform and 73 live at the close of the quarter. We are also pleased to report the channel partnerships that we launched in Q4 have built good pipelines and we expect them to contribute to our revenue growth in 2017." Mr. O'Neill continued, "As we indicated at the time of the sale transaction, while the divestiture of our POS Merchant Services business meant selling off much of our existing revenue base, the sale provided the capital to allow the Company to focus on its core software business, which has higher growth potential. Our Q4 results have been adjusted to show the effect of the sale, and the higher revenue growth rate and gross margin are indicators of the trajectory the software business is on to start the 2017 year. With increased focus and capital, and with our channel partners now operational, we expect this trajectory to increase in the coming quarters."
The following highlights treat the Company's POS Merchant Services business as a discontinued operation.
- Revenue for Q4 2016 increased by 56.4% to $0.47 million compared to $0.30 million in Q4 2015.
- Revenue for the twelve months ended December 31, 2016 increased by 70.5% to $1.51 million compared to $0.89 million for the twelve months ended December 31, 2015.
- Gross margin percentage for Q4 2016 was 54.5%, compared to 46.6% in Q4 2015.
- Gross margin percentage for the twelve months ended December 31, 2016 was 54.3%, compared to 37.2% for the twelve months ended December 31, 2015.
- Adjusted EBITDA(1) was ($1.59) million in Q4 2016, compared to ($1.14) million in Q4 2015.
- Adjusted EBITDA was ($5.01) million for the twelve months ended December 31, 2016, compared to ($4.54) million for the twelve months ended December 31, 2015, in accordance with the Company's plans to invest in its software business.
- Net earnings from discontinued operations was $0.15 million in Q4 2016, compared to $0.46 million in Q4 2015.
- Net earnings from discontinued operations was $1.43 million for the twelve months ended December 31, 2016, compared to $1.81 million for the twelve months ended December 31, 2015.
- Total comprehensive loss for Q4 2016 was ($1.82) million compared to a loss of ($1.23) million for Q4 2015.
- Total comprehensive loss for the twelve-months ended December 31, 2016 was ($5.93) million compared to a loss of ($5.34) million for the twelve months ended December 31, 2015, in keeping with the Company's plans to invest in its software business.
- Cash operating expense for the twelve-months ended December 31, 2016 decreased by 3.7% to $6.00 million compared to $6.23 million for the twelve-months ended December 31, 2015.
- As at December 31, 2016, the Company had cash on hand of $2.75 million compared to $3.34 million as at December 31, 2015. This does not include cash proceeds of $10 million from the sale of the Company's POS Merchant Services business which was completed in January 2017.
(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 December 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: Wednesday, April 26, 2017
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: 13170349
Recording Playback Numbers:
Toronto (+1) 416 764 8677
Toll Free – North America (+1) 888 390 0541
Passcode: 170349 #
Expiry Date: Wednesday, May 3, 2017 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.
VersaPay is a leading cloud-based invoice presentment and payment provider for businesses of all sizes. VersaPay's ARCTM 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.
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 the Company's 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, [email protected]; Babak Pedram, Investor Relations, Virtus Advisory Group Inc., 416-644-5081, [email protected]