Full Year Revenues up
19%; Seventh Consecutive Year of Record Revenue
Adjusted EBITDA up Nearly
$3 Million in Fiscal 2023 as Compared to Fiscal 2022
Usio, Inc: (Nasdaq: USIO), a leading FinTech company that
operates a full stack of integrated, cloud-based electronic payment
and embedded financial solutions, today announced financial results
for the fourth quarter and year 2023, which ended December 31,
2023.
Louis Hoch, Chairman and Chief Executive Officer of Usio, said,
“For the seventh consecutive year, Usio achieved record revenues,
with full year 2023 revenues of $82.6 million, up 19%. In addition,
Adjusted EBITDA1 totaled $2.4 million for the year. Both of these
results met the fiscal 2023 Guidance established at the outset of
2023, illustrating our focus throughout the year on delivering on
our commitments to our shareholders. Results were achieved on the
strength of our 11th consecutive quarter of quarterly revenue
growth primarily attributable to a 21% increase in processing
volumes. We ended the year with our strongest ever balance sheet,
which provides the resources to support our growth strategy. We
believe that fiscal 2024 will be another year of revenue growth and
bottom-line improvement. In addition to the momentum created by the
recurring revenue of our many long-term clients, I am extremely
excited by large opportunities in the pipeline that, when
contracted, could change our growth trajectory and establish a
broader and deeper base in our markets to help us build shareholder
value over the long term.”
Full year revenue growth was led by Prepaid, where revenues were
up 105% as total dollars loaded on prepaid cards exceeded $100
million in both the third and fourth quarters. Output Solutions
revenues were up 11% in fiscal 2023. In the fourth quarter, Output
Solutions added new equipment and technology, significantly
expanding capacity, which is expected to power another year of
double-digit revenue growth. Card revenues were up 5% for the year.
More importantly, we made progress transitioning to a primarily
PayFac portfolio, with PayFac revenues up 25% for the year and now
comprising a much larger proportion of our credit card business,
which should support stronger future growth. And, our ACH business
has turned the corner. In the fourth quarter, ACH revenues grew 4%,
which enabled us to post full year ACH revenue growth and to build
momentum headed into 2024."
For 2023, total gross profits climbed 27% as gross margins
expanded 150 basis points to 22.5% from 21.0% in fiscal 2022.
Selling, general and administrative expense were up just 8% in the
year while total operating expenses were up just 4%, reflecting
continued strong expense control. For the year, the Company
generated nearly $1.7 million in interest income as a result of
negotiations with financial institutions that improved returns on
the company’s various cash accounts. The Company closed the 2023
fiscal year with $7.2 million cash on hand compared to year end
cash of $5.7 million and no significant debt at December 31, 2022.
The increase in cash was accomplished while $0.6 million was
utilized to repurchase shares during the year.
Mr. Hoch concluded, "I am very pleased with the progress
achieved across all of our businesses in 2023 and the strong
financial position in which it has placed us entering the new year.
I am encouraged with the prospects for 2024. Our Card pipeline is
extremely robust and we are on the precipice of potentially signing
some of the largest PayFac deals in the Company’s history. Output
Solutions has significantly expanded their capacity through a major
capital improvement program, which we expect will lead to further
growth and increased profitability. After its first ever $100
million card load volume quarter in the third quarter, prepaid set
a new record for load volume in the fourth quarter, a key indicator
of the underlying strength of their business. And, ACH grew in both
the fourth quarter and for the full year after a year of tough
comparables. Margins were up, costs grew significantly below the
rate of revenue, and we added $1.5 million of cash to the balance
sheet despite expending $0.6 million on share repurchases as the
Company demonstrates its belief in the value of our franchise. Our
commitment is to continue to grow the business and to improve
bottom line profitability. With seven consecutive years of growth,
we are confident we have the products, solutions and strategies
that are meeting the needs of a large and rapidly growing market
for electronic payments and adjacent services.”
Fiscal 2024 Guidance
The Company continues to expect strong 10-12% growth in revenue
in 2024 while also anticipating 70% - 90% growth in Adjusted
EBITDA1 to a range of $4 to $4.5 million and $0.05 to $0.07 EPS.
Guidance is conditioned on no appreciable deterioration in economic
conditions.
Fourth Quarter 2023 Financial
Summary
Revenues were $19.4 million for the fourth quarter, up 4%
compared to $18.7 million in the same period last year.
Three Months Ended December
31,
(in millions, except
percentages)
2023
2022
$ Change
% Change
ACH and complementary service revenue
$
3.9
$
3.8
$
0.1
4
%
Credit card revenue
6.9
6.6
0.2
3
%
Prepaid card services revenue
4.0
3.4
0.6
19
%
Output solutions revenue
4.6
4.9
(0.3
)
(7
)%
Total Revenue
$
19.4
$
18.7
$
0.7
4
%
Revenue growth was primarily attributable to a 19% increase in
Prepaid revenues as well as growth in our ACH and Credit card
businesses, compared to the same period last year.
Gross profits were $4.5 million, down 4% from $4.7 million for
the same period last year. Gross margins were 23.2% compared to
25.1% in the same period last year. Gross margins in the quarter
primarily reflect a shift in revenue mix, and some decrease in
prepaid profitability due to the wind down of a large, one-time
government card program.
The Company had an operating loss of $0.8 million, compared to
an operating loss of $0.1 million from the same period last
year.
Adjusted EBITDA1 was a positive $0.3 million in the quarter, up
approximately $0.4 million on a sequential basis, but down $0.7
million from $1.0 million in the same period a year ago.
For the quarter, the Company generated $871,000 of interest
income compared to $11,000 in the year ago quarter.
Net income for the fourth quarter of 2023 was $0.03 million, or
$0.00 per share, compared to net loss of $0.15 million or $(0.01)
per share for the same period last year.
During the quarter, the Company repurchased 211,000 shares of
its stock at an average price of $1.84 for a total cost of
$388,000.
1 See reconciliation of non-GAAP financial
measures below
Financial Results for Full Year
2023
Revenues for 2023 were $82.6 million, up 19% from $69.4 million
for the same period last year, in line with the Company's guidance
for the year.
Year Ended December
31,
(in millions, except
percentages)
2023
2022
$ Change
% Change
ACH and complementary service revenue
$
14.9
$
14.8
$
0.1
1
%
Credit card revenue
28.5
27.1
1.4
5
%
Prepaid card services revenue
18.7
9.1
9.6
105
%
Output solutions revenue
20.5
18.4
2.1
11
%
Total Revenue
$
82.6
$
69.4
$
13.2
19
%
The Company grew revenue in each of its business segments, with
Prepaid registering the strongest growth of $9.6 million, or 105%,
driven by the success of our disbursement program partnership,
including the significant increase in revenues recognized in a
large government card program. Output Solutions revenues were up
11%, attributable primarily to the success of cross-selling efforts
and the conversion of pipeline opportunities into programs.
Gross profit for the year ended December 31, 2023 was $18.6
million, up 27% from $14.6 million for the same period in 2022.
Gross margins were 22.5% for the year ended December 31, 2023
compared to 21.0% in the same period in 2022, generally reflecting
a shift in business mix over the year.
The Company significantly reduced its operating loss for the
year by $3.3 million to $1.9 million compared to $5.2 million for
fiscal 2022. More importantly, the Company reported a comparable
$2.8 million improvement in Adjusted EBITDA1 to $2.4 million for
the year ended December 31, 2023, compared to a loss of $0.4
million in 2022. Net loss for the year ended December 31, 2023 was
$0.5 million or $(0.02) per share compared to a net loss of $5.5
million or $(0.27) per share in the same period last year.
Conference Call and
Webcast
Usio, Inc.'s management will host a conference call with a live
webcast Wednesday, March 27, 2024 at 4:30 pm Eastern time to
provide a business update. To listen to the conference call,
interested parties within the U.S. should call +1-844-883-3890.
International callers should call + 1-412-317-9246. All callers
should ask for the Usio conference call. The conference call will
also be available through a live webcast, which can be accessed via
the company’s website at www.usio.com/invest.
A replay of the call will be available approximately one hour
after the end of the call through April 10, 2024. The replay can be
accessed via the Company’s website or by dialing +1-877-344-7529
(U.S.) or +1-412-317-0088 (international). The replay conference
playback code is 6591869.
About Usio, Inc.
Usio, Inc. (Nasdaq: USIO), is a leading Fintech that operates a
full stack of proprietary, cloud-based integrated payment and
embedded financial solutions in a single ecosystem to a wide range
of merchants, billers, banks, service bureaus and card issuers. The
Company operates credit/debit and ACH payment processing platforms,
as well as a turn-key card issuing platform to deliver convenient,
world-class payment solutions and services to their clients. The
company, through its Usio Output Solutions division offers services
relating to electronic bill presentment, document composition,
document decomposition and printing and mailing services. The
strength of the Company lies in its ability to provide tailored
solutions for card issuance, payment acceptance, and bill payments
as well as its unique technology in the prepaid sector. Usio is
headquartered in San Antonio, Texas, and has a development office
in Austin, Texas.
Websites: www.usio.com, www.payfacinabox.com, www.akimbocard.com
and www.usiooutput.com. Find us on Facebook® and Twitter.
About Non-GAAP Financial
Measures
This press release includes non-GAAP financial measures, EBITDA,
adjusted EBITDA, adjusted EBITDA margins and adjusted operating
cash flows, as defined in Regulation G of the Securities and
Exchange Act of 1934, as amended. The Company reports its financial
results in compliance with GAAP, but believes that also discussing
non-GAAP financial measures provides investors with financial
measures it uses in the management of its business. The Company
defines EBITDA as operating income (loss), before interest, taxes,
depreciation and amortization of intangibles. The Company defines
adjusted EBITDA as EBITDA, as defined above, plus non-cash stock
option costs and certain non-recurring items, such as costs related
to acquisitions. The Company defines adjusted operating cash flow
as net cash provided (used) by operating activities, less changes
in prepaid card load obligations, customer deposits, merchant
reserves and net operating lease assets and obligations. These
adjustments to net cash provided (used) by operating activities are
not inclusive of any regular expense items, and only include
changes in our assets and liabilities accounts on the balance
sheet. These measures may not be comparable to similarly titled
measures reported by other companies. Management uses EBITDA,
adjusted EBITDA, and adjusted operating cash flows as indicators of
the Company's operating performance and ability to fund
acquisitions, capital expenditures and other investments and, in
the absence of refinancing options, to repay debt obligations.
Management believes EBITDA, adjusted EBITDA, adjusted EBITDA
margins and adjusted operating cash flows are helpful to investors
in evaluating the Company's operating performance because non-cash
costs and other items that management believes are not indicative
of its results of operations are excluded.
EBITDA, adjusted EBITDA, adjusted EBITDA margins and adjusted
operating cash flow should be considered in addition to, not as a
substitute for, or superior to, financial measures calculated in
accordance with GAAP. They are not measurements of our financial
performance under GAAP and should not be considered as alternatives
to revenue, net income, or cash provided (used) by operating
activities, as applicable, or any other performance measures
derived in accordance with GAAP and may not be comparable to other
similarly titled measures of other businesses. EBITDA, adjusted
EBITDA, adjusted EBITDA margins and adjusted operating cash flow
have limitations as analytical tools and you should not consider
these Non-GAAP measures in isolation or as a substitute for
analysis of our operating results as reported under GAAP.
1 See reconciliation of non-GAAP financial
measures below
FORWARD-LOOKING STATEMENTS
DISCLAIMER
Except for the historical information contained herein, the
matters discussed in this release include forward-looking
statements which are covered by safe harbors. Those statements
include, but may not be limited to, all statements regarding
management's intent, belief and expectations, such as statements
concerning our future and our operating and growth strategy. These
forward-looking statements are identified by the use of words such
as "believe," "could," "should," "intend," "look forward,"
"anticipate," "schedule,” and "expect" among others.
Forward-looking statements in this press release are subject to
certain risks and uncertainties inherent in the Company's business
that could cause actual results to vary, including such risks
related to an economic downturn, the realization of opportunities
from the IMS acquisition, the management of the Company's growth,
the loss of key resellers, the relationships with the Automated
Clearinghouse network, bank sponsors, third-party card processing
providers and merchants, the security of our software, hardware and
information, the volatility of the stock price, the need to obtain
additional financing, risks associated with new legislation, and
compliance with complex federal, state and local laws and
regulations, and other risks detailed from time to time in the
Company's filings with the Securities and Exchange Commission
including its annual report on Form 10-K for the fiscal year ended
December 31, 2023. One or more of these factors have affected, and
in the future, could affect the Company’s businesses and financial
results in the future and could cause actual results to differ
materially from plans and projections. The Company believes that
the assumptions underlying the forward-looking statements included
in this release will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking
statements included herein, the inclusion of such information
should not be regarded as a representation by us or any other
person that the objectives and plans will be achieved. All
forward-looking statements made in this release are based on
information presently available to management. The Company assumes
no obligation to update any forward-looking statements, except as
required by law.
USIO, INC.
CONSOLIDATED BALANCE
SHEETS
December 31, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
7,155,687
$
5,709,117
Accounts receivable, net
5,564,138
4,371,640
Settlement processing assets
44,899,603
49,737,068
Prepaid card load assets
31,578,973
20,170,761
Customer deposits
1,865,731
1,554,122
Inventory
422,808
507,355
Prepaid expenses and other
444,071
450,389
Current assets before merchant
reserves
91,931,011
82,500,452
Merchant reserves
5,310,095
4,909,501
Total current assets
97,241,106
87,409,953
Property and equipment, net
3,660,092
3,222,816
Other assets:
Intangibles, net
1,753,333
2,625,360
Deferred tax asset
1,504,000
1,504,000
Operating lease right-of-use assets
2,420,782
2,795,483
Other assets
355,357
355,357
Total other assets
6,033,472
7,280,200
Total Assets
$
106,934,670
$
97,912,969
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Accounts payable
$
1,031,141
$
858,622
Accrued expenses
3,801,278
3,721,108
Operating lease liabilities, current
portion
633,616
617,319
Equipment loan, current portion
107,270
56,429
Settlement processing obligations
44,899,603
49,737,068
Prepaid card load liabilities
31,578,973
20,170,761
Customer deposits
1,865,731
1,554,122
Current liabilities before merchant
reserve obligations
83,917,612
76,715,429
Merchant reserve obligations
5,310,095
4,909,501
Total current liabilities
89,227,707
81,624,930
Non-current liabilities:
Equipment loan, non-current portion
718,980
14,994
Operating lease liabilities, non-current
portion
1,919,144
2,338,947
Total liabilities
91,865,831
83,978,871
Stockholders' Equity:
Preferred stock, $0.01 par value,
10,000,000 shares authorized; -0- shares issued and outstanding in
2023 and 2022
—
—
Common stock, $0.001 par value,
200,000,000 shares authorized; 28,671,606 and 27,044,900 issued and
26,332,523 and 25,097,963 outstanding in 2023 and 2022
197,087
195,471
Additional paid-in capital
97,479,830
94,048,603
Treasury stock, at cost; 2,339,083 and
1,946,937 shares in 2023 and 2022
(4,362,150
)
(3,749,027
)
Deferred compensation
(6,907,775
)
(5,697,900
)
Accumulated deficit
(71,338,153
)
(70,863,049
)
Total stockholders' equity
15,068,839
13,934,098
Total Liabilities and Stockholders'
Equity
$
106,934,670
$
97,912,969
USIO, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended
(unaudited)
Twelve Months Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Revenues
$
19,362,718
$
18,705,496
$
82,591,109
$
69,428,285
Cost of services
14,871,207
14,015,833
63,992,417
54,835,069
Gross profit
4,491,511
4,689,663
18,598,692
14,593,216
Selling, general and administrative:
Stock-based compensation
545,711
531,666
2,222,969
2,072,041
Other expenses
4,195,580
3,677,161
16,216,690
15,000,487
Depreciation and Amortization
521,932
571,650
2,081,533
2,735,118
Total operating expenses
5,263,223
4,780,477
20,521,192
19,807,646
Operating (loss)
(771,712
)
(90,814
)
(1,922,500
)
(5,214,430
)
Other income:
Interest income
871,261
10,762
1,695,122
15,237
Other income
—
—
50,000
—
Interest expense
(3,614
)
(807
)
(5,202
)
(4,051
)
Other income and (expense), net
867,647
9,955
1,739,920
11,186
Income (loss) before income taxes
95,935
(80,859
)
(182,580
)
(5,203,244
)
Federal income tax (benefit)
—
—
—
—
State income tax expense
70,000
70,000
292,524
280,000
Income taxes
70,000
70,000
292,524
280,000
Net Income (Loss)
$
25,935
$
(150,859
)
$
(475,104
)
$
(5,483,244
)
Earnings (Loss) Per Share
Basic (loss) per common share:
$
0.00
$
(0.01
)
$
(0.02
)
$
(0.27
)
Diluted (loss) per common share:
$
0.00
$
(0.01
)
$
(0.02
)
$
(0.27
)
Weighted average common shares
outstanding
Basic
20,118,351
20,548,742
20,105,968
20,379,386
Diluted
26,503,251
20,548,742
20,105,968
20,379,386
USIO, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
December 31, 2023
December 31, 2022
Operating Activities
Net (loss)
$
(475,104
)
$
(5,483,244
)
Adjustments to reconcile net (loss) to net
cash provided (used) by operating activities:
Depreciation
1,209,506
1,196,584
Amortization
872,027
1,538,534
Employee stock-based compensation
2,190,369
2,072,041
Vendor stock-based compensation
32,600
—
Amortization of warrant costs
—
20,963
Non-cash revenue from return of treasury
stock
(156,162
)
—
Changes in operating assets and
liabilities:
Accounts receivable
(1,192,498
)
607,853
Prepaid expenses and other
6,318
(23,426
)
Operating lease right-to-use assets
374,701
6,630
Other assets
—
(10,000
)
Inventory
84,547
(72,823
)
Accounts payable and accrued expenses
252,689
853,965
Operating lease liabilities
(403,506
)
(24,052
)
Prepaid card load obligations
11,408,212
(16,420,132
)
Merchant reserves
400,594
(1,471,652
)
Customer deposits
311,609
189,929
Deferred revenue
—
(17,647
)
Net cash provided (used) by operating
activities
14,915,902
(17,036,477
)
Investing Activities
Purchases of property and equipment
(834,964
)
(812,242
)
Net cash (used) by investing
activities
(834,964
)
(812,242
)
Financing Activities
Payments on equipment loan
(56,992
)
(54,771
)
Purchases of treasury stock
(456,961
)
(1,344,569
)
Net cash (used) by financing
activities
(513,953
)
(1,399,340
)
Change in cash, cash equivalents, prepaid
card load assets, customer deposits and merchant reserves
13,566,985
(19,248,059
)
Cash, cash equivalents, prepaid card load
assets, customer deposits and merchant reserves, beginning of
year
32,343,501
51,591,560
Cash, Cash Equivalents, Prepaid Card Load
Assets, Customer Deposits and Merchant Reserves, End of Year
$
45,910,486
$
32,343,501
Supplemental disclosures of cash flow
information
Cash paid during the period for:
Interest
$
5,202
$
4,051
Income taxes
116,204
269,500
Non-cash investing and financing
activities:
Issuance of deferred stock
compensation
2,650,505
166,229
Non-cash transaction for acquisition of
equipment in exchange for note payable
811,819
—
USIO, INC.
STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
Common Stock
Additional Paid- In
Treasury
Deferred
Accumulated
Total Stockholders'
Shares
Amount
Capital
Stock
Compensation
Deficit
Equity
Balance at December 31, 2021
26,807,145
$
195,235
$
93,100,129
$
(2,404,458
)
$
(6,842,195
)
$
(65,379,805
)
$
18,668,906
Issuance of common stock under equity
incentive plan
369,755
368
1,182,939
—
(166,329
)
—
1,016,978
Warrant compensation cost
—
—
20,963
—
—
—
20,963
Reversal of deferred compensation
amortization that did not vest
(132,000
)
(132
)
(255,428
)
—
145,498
—
(110,062
)
Deferred compensation amortization
—
—
—
—
1,165,126
—
1,165,126
Purchase of treasury stock
—
—
—
(1,344,569
)
—
—
(1,344,569
)
Net (loss) for the year
—
—
—
—
—
(5,483,244
)
(5,483,244
)
Balance at December 31, 2022
27,044,900
$
195,471
$
94,048,603
$
(3,749,027
)
$
(5,697,900
)
$
(70,863,049
)
$
13,934,098
Issuance of common stock under equity
incentive plan
1,731,506
1,731
3,619,315
—
(2,650,505
)
—
970,541
Reversal of deferred compensation
amortization that did not vest
(115,000
)
(115
)
(188,088
)
—
103,091
—
(85,112
)
Deferred compensation amortization
—
—
—
—
1,337,539
—
1,337,539
Non-cash return of treasury stock
—
—
—
(156,162
)
—
—
(156,162
)
Purchase of treasury stock
—
—
—
(456,961
)
—
—
(456,961
)
Net (loss) for the year
—
—
—
—
—
(475,104
)
(475,104
)
Balance at December 31, 2023
28,661,406
$
197,087
$
97,479,830
$
(4,362,150
)
$
(6,907,775
)
$
(71,338,153
)
$
15,068,839
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
Three Months Ended
(unaudited)
Twelve Months Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Reconciliation from Operating
Income/(Loss) to Adjusted EBITDA:
Operating Income/(Loss)
$
(771,712
)
$
(90,814
)
$
(1,922,500
)
$
(5,214,430
)
Depreciation and amortization
521,932
571,650
2,081,533
2,735,118
EBITDA
(249,780
)
480,836
159,033
(2,479,312
)
Non-cash stock-based compensation expense,
net
545,711
531,666
2,222,969
2,072,041
Adjusted EBITDA
$
295,931
$
1,012,502
$
2,382,002
$
(407,271
)
Calculation of Adjusted EBITDA
margins:
Revenues
$
19,362,718
$
18,705,496
$
82,591,109
$
69,428,285
Adjusted EBITDA
295,931
1,012,502
2,382,002
(407,271
)
Adjusted EBITDA margins
1.5
%
5.4
%
2.9
%
(0.6
)%
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
December 31, 2023
December 31, 2022
Reconciliation from Operating Cash Flow
(used) to Non-GAAP Adjusted Operating Cash Flow (used):
Net cash provided (used) by operating
activities
$
14,915,902
$
(17,036,477
)
Operating cash flow (used)
adjustments:
Prepaid card load obligations
(11,408,212
)
16,420,132
Customer deposits
(311,609
)
(189,929
)
Merchant reserves
(400,594
)
1,471,652
Operating lease right-of-use assets
(374,701
)
(6,630
)
Operating lease liabilities
403,506
24,052
Total adjustment of cash provided (used)
by operating activities
$
(12,091,610
)
$
17,719,277
Adjusted operating cash flows (used)
$
2,824,292
$
682,800
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240327653014/en/
Paul Manley Senior Vice President, Investor Relations
Paul.Manley@usio.com 612-834-1804
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