Total payment dollars processed through all
payment channels up 19% versus the prior year period
Reiterates Full Year 2024 Expectation of
10 – 12% Revenue Growth
Separately, Usio Today Announced Entry into
Contract with Potential to Ultimately Add $20 Million in Annual
Recurring Revenues
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 first quarter, which ended March 31, 2024.
Louis Hoch, President and Chief Executive Officer of Usio, said,
“It’s been a good start to the new year, with volumes up across
almost all business segments and first quarter financial
performance is on track to meet our 2024 top and bottom line
guidance. More importantly, we expect our sales growth to continue
this year, and recently announced what could potentially be the
largest single program in the Company’s history. This particular
opportunity has the potential to nearly double our annual Credit
Card revenues. While this opportunity wasn't explicitly included in
our full year 2024 guidance, we did anticipate additional volume
from new independent software vendors. Revenues were within $100
thousand of our internal forecast, however the quarterly comparison
from last year was unfavorably skewed by a large Prepaid program.
If the impact of this prepaid card program was excluded, Usio first
quarter revenues would have been up from a year ago. Our business
is fundamentally strong and our growth prospects are bright. The
increasing awareness we have been earning by delivering exceptional
financial solutions for our customers continues to bring new
opportunities and the amount of potential new business has never
been greater for Usio. We can be creative and capitalize on these
opportunities in part because the Company is also in an excellent
financial position with over $7 million in cash at quarter end with
the expectation of positive cash flow for the year, including an
estimated $3 million in interest income. With the first quarter’s
volume growth, an extremely robust pipeline and one of our largest
ever programs now in implementation, it is clear we continue to
provide the services and solutions in high demand in the market
that will enable us to grow both this year as well as over the long
term. Consequently, we are reiterating our full year 2024
Guidance.”
For the first quarter, ACH & Complementary Services revenues
were up 16% on strong processing volume growth, with electronic
check dollars processed up 22% and returned check transactions
processed up 9% as compared to the same quarter in 2023. Credit
card revenues were also up primarily due to PayFac revenue growth
of 14%. Total credit card dollars processed were an all-time
record, and were up 8% with transactions up 18%, also a new
all-time record, with Payfac volume and transactions up 12% as
compared to the same quarter in 2023. The decrease in Prepaid card
services revenues is attributable to the planned wind down of a
large New York City COVID Incentive Program. Notably, in the
quarter, prepaid card load volume more than doubled from a year ago
this quarter, to a record $116 million, and exceeded $100 million
for the third consecutive quarter. Revenues for Output Solutions
were down for the quarter, though once again underlying volumes
were up. The decrease is due to a strong year ago first quarter.
Output Solutions revenues were up sequentially from the fourth
quarter of 2023, which led to a significant improvement in business
unit profitability as we are now leveraging our recently installed,
higher volume equipment.
Gross profit for the quarter ended March 31, 2024 was $4.2
million, and gross margins contracted 2.2% compared to the first
quarter of 2023 reflecting a less favorable sales mix and a
decrease in the margins on NYC COVID Incentive Program prepaid card
breakage and spoilage. Other selling, general and administrative
expenses were up moderately due to increases in professional fees
and marketing, including increased sales-related travel, and salary
and benefit increases and, on an annual basis, are expected to be
nominally up versus the prior year to support the anticipated
acceleration in revenue growth. The Company reported a net loss of
$0.3 million, or ($0.01) per share, compared to net income of
$0.015 million, or $0.00 per share, a year ago. Adjusted EBITDA1
was $0.1 million, a $0.9 million decline from the $1.0 million
Adjusted EBITDA1 a year ago. The Company’s financial position
remains strong as the Company generated $0.1 million in Adjusted
Operating Cash Flows1 over the first three months of this fiscal
year, while significantly reducing our accounts payable and accrued
expenses by $1.2 million.
Quarterly Processing and Transaction
Volumes
Total payment transactions processed in the first quarter of
2024 were 9.8 million, an increase of 14% over the same quarter of
last year. Total payment dollars processed through all payment
channels in the first quarter of 2024 were $1.5 billion, an
improvement of 19% over last year's first quarter $1.2 billion
volume.
We set all-time records in operating metrics for both our Credit
card and Prepaid business units. In our Credit card segment,
dollars processed were up 8% and transactions processed were up 18%
from a year ago. Prepaid card load volume was up 108%, transactions
processed were up 26% and purchase dollars processed were up 42%,
in each case, from the same quarter a year ago. ACH electronic
check transaction volume was up 4%, electronic check dollars
processed were up 22% and return check transactions processed were
up 9%, all compared to the same quarter a year ago.
First Quarter 2024 Revenue Detail
Revenues for the quarter ended March 31, 2024 were $20.3
million, down 5% compared to the prior year quarter, primarily
reflecting a decrease in Prepaid revenues due to the planned wind
down of our NYC COVID Incentive program.
Three Months Ended March
31,
2024
2023
$ Change
% Change
ACH and complementary services
$
3,881,734
$
3,340,722
$
541,012
16
%
Credit card
7,560,734
7,339,898
220,836
3
%
Prepaid card services
3,341,224
4,807,404
(1,466,180
)
(30
)%
Output Solutions
5,537,923
5,958,220
(420,297
)
(7
)%
Total Revenue
$
20,321,615
$
21,446,244
$
(1,124,629
)
(5
)%
Gross profit for the first quarter of 2024 was $4.2 million
compared to $4.9 million for the first quarter of 2023, while gross
margins were 20.7%, which was 2.2% lower than the same period a
year ago. This decrease in gross margins reflects the impact of
lower residual revenues generated from prepaid card breakage and
spoilage, offsetting growth in our highly profitable ACH and
complementary service line of business.
Other selling, general and administrative expenses were $4.1
million for the quarter ended March 31, 2024, up slightly compared
to $3.9 million in the prior year period. The increase was
primarily attributable to increases in professional fees and
marketing, including increased sales-related travel, alongside
general salary and benefits increases. While we expect full year
expenses to be nominally higher from a year ago to support our
anticipated growth in revenues and implementations, we are
committed to achieving our goal to improve operating leverage as a
means to accelerate the improvement of profitability.
For the quarter, we reported an operating loss of $0.9 million
compared to positive $6.0 thousand in operating income for the same
quarter a year ago. Adjusted EBITDA1 was $0.1 million for the
quarter, compared to Adjusted EBITDA1 of $1.0 million a year ago.
Net loss for the quarter ended March 31, 2024 was $0.3 million, or
($0.01) per share, compared to net income of $0.015 million, or
$0.00 per share, for the same period in the prior year.
Adjusted Operating Cash Flows1 (excluding merchant reserve
funds, prepaid card load assets, customer deposits and net
operating lease assets and obligations) was $0.1 million for the
three months ended March 31, 2024. Cash flows used in operating
activities was $2.8 million for the three months ended March 31,
2024, compared to cash flows used in operating activities of $0.2
million in the same period a year ago, with the difference driven
primarily by the decrease in accounts payable and accrued expenses,
alongside lower merchant reserves.
We continue to be in solid financial condition with $7.1 million
in cash and cash equivalents as of March 31, 2024, despite using
$1.2 million to reduce accounts payable and accrued expenses,
aggregating to a $0.1 million decrease in cash balances over the
first quarter of the year. The Company generated over $0.7 million
in interest income in the first quarter of 2024.
1
Please see reconciliation of GAAP
to Non-GAAP Financial Measures
Conference Call and
Webcast
Usio, Inc.'s management will host a conference call on
Wednesday, May 15, 2024, at 4:30 pm Eastern time to review
financial results and 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/investors.
A replay of the call will be available approximately one hour
after the end of the call through May 29, 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 5884852.
About Usio, Inc.
Usio, Inc. (Nasdaq: USIO), a leading, cloud-based, integrated
FinTech electronic payment solutions provider, offers a wide range
of payment solutions to merchants, billers, banks, service bureaus,
integrated software vendors and card issuers. The Company operates
credit, debit/prepaid, and ACH payment processing platforms to
deliver convenient, world-class payment solutions and services to
clients through its unique payment facilitation platform as a
service. 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 card
issuing sector. Usio is headquartered in San Antonio, Texas, and
has offices in Austin, Texas. Websites: www.usio.com,
www.payfacinabox.com, www.akimbocard.com and www.usiooutput.com.
Find us on Facebook® and Twitter.
Comparisons
Unless otherwise indicated, all comparisons and growth rates
represent year-over-year comparisons, with the quarterly period of
this year compared to the corresponding quarter of the prior
year.
About Non-GAAP Financial
Measures
This press release includes non-GAAP financial measures, as
defined in Regulation G adopted by the Securities and Exchange
Commission, of EBITDA, adjusted EBITDA, adjusted EBITDA margins and
adjusted operating cash flows. 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 EBITDA margins as the
adjusted EBITDA, as defined above, divided by total revenues. The
Company defines adjusted operating cash flow as net cash provided
by (used in) 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 by (used in) operating activities are not inclusive
of any regular expense items, and only include changes in our
assets and liabilities accounts on our consolidated balance sheet.
These measures may not be comparable to similarly titled measures
reported by other companies. Management uses EBITDA, adjusted
EBITDA, adjusted EBITDA margins 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 by (used in) 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 financial 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 press 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," "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 Clearing House
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 and could
cause actual results to differ materially from plans and
projections. Although the Company believes that the assumptions
underlying the forward-looking statements included in this press
release are reasonable, the Company can give no assurance such
assumptions will prove to be correct. 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
press 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
March 31, 2024
December 31, 2023
(Unaudited)
ASSETS
Cash and cash equivalents
$
7,053,812
$
7,155,687
Accounts receivable, net
4,862,227
5,564,138
Settlement processing assets
41,030,860
44,899,603
Prepaid card load assets
28,698,878
31,578,973
Customer deposits
1,808,263
1,865,731
Inventory
429,577
422,808
Prepaid expenses and other
687,415
444,071
Current assets before merchant
reserves
84,571,032
91,931,011
Merchant reserves
5,322,095
5,310,095
Total current assets
89,893,127
97,241,106
Property and equipment, net
3,478,654
3,660,092
Other assets:
Intangibles, net
1,535,366
1,753,333
Deferred tax asset, net
1,504,000
1,504,000
Operating lease right-of-use assets
2,318,388
2,420,782
Other assets
335,357
355,357
Total other assets
5,693,111
6,033,472
Total Assets
$
99,064,892
$
106,934,670
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
896,293
$
1,031,141
Accrued expenses
2,778,067
3,801,278
Operating lease liabilities, current
portion
490,184
633,616
Equipment loan, current portion
180,906
107,270
Settlement processing obligations
41,030,860
44,899,603
Prepaid card load obligations
28,698,878
31,578,973
Customer deposits
1,808,263
1,865,731
Current liabilities before merchant
reserve obligations
75,883,451
83,917,612
Merchant reserve obligations
5,322,095
5,310,095
Total current liabilities
81,205,546
89,227,707
Non-current liabilities:
Equipment loan, net of current portion
630,913
718,980
Operating lease liabilities, net of
current portion
1,955,333
1,919,144
Total liabilities
83,791,792
91,865,831
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value,
10,000,000 shares authorized; -0- shares outstanding at March 31,
2024 (unaudited) and December 31, 2023, respectively
—
—
Common stock, $0.001 par value,
200,000,000 shares authorized; 28,779,206 and 28,661,406 issued,
and 26,412,259 and 26,332,523 outstanding at March 31, 2024
(unaudited) and December 31, 2023, respectively
197,194
197,087
Additional paid-in capital
97,632,948
97,479,830
Treasury stock, at cost; 2,366,947 and
2,339,083 shares at March 31, 2024 (unaudited) and December 31,
2023, respectively
(4,406,973
)
(4,362,150
)
Deferred compensation
(6,561,728
)
(6,907,775
)
Accumulated deficit
(71,588,341
)
(71,338,153
)
Total stockholders' equity
15,273,100
15,068,839
Total Liabilities and Stockholders'
Equity
$
99,064,892
$
106,934,670
USIO, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
2024
2023
Revenues
$
20,321,615
$
21,446,244
Cost of services
16,116,691
16,544,429
Gross profit
4,204,924
4,901,815
Selling, general and administrative
expenses:
Stock-based compensation
499,273
504,574
Other SG&A
4,060,225
3,873,219
Depreciation and amortization
576,154
518,029
Total selling, general and
administrative
5,135,652
4,895,822
Operating income (loss)
(930,728
)
5,993
Other income and (expense):
Interest income
764,125
92,928
Interest expense
(13,585
)
(662
)
Other income, net
750,540
92,266
Income (Loss) before income tax
expense
(180,188
)
98,259
Income tax expense
70,000
83,426
Net income (Loss)
$
(250,188
)
$
14,833
Income (Loss) Per Share
Basic income (loss) per common share:
$
(0.01
)
$
0.00
Diluted income (loss) per common
share:
$
(0.01
)
$
0.00
Weighted average common shares
outstanding
Basic - common stock
19,990,862
20,122,972
Basic - restricted stock awards
6,384,900
6,385,900
Weighted average shares used to compute
basic earnings per share
26,375,762
26,508,872
Diluted
26,375,762
27,454,471
USIO, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
Three Months Ended March 31,
2024
2023
Operating Activities
Net (loss)
$
(250,188
)
$
14,833
Adjustments to reconcile net income (loss)
to net cash (used in) operating activities:
Depreciation
358,187
300,061
Amortization
217,967
217,968
Employee stock-based compensation
499,273
504,574
Changes in operating assets and
liabilities:
Accounts receivable
701,911
(846,609
)
Prepaid expenses and other
(243,344
)
(10,616
)
Operating lease right-of-use assets
102,394
(31,459
)
Inventory
(6,769
)
12,898
Accounts payable and accrued expenses
(1,158,059
)
1,128,251
Operating lease liabilities
(107,243
)
4,548
Prepaid card load obligations
(2,880,095
)
(1,357,807
)
Merchant reserves
12,000
(164,886
)
Customer deposits
(57,468
)
20,953
Net cash (used in) operating
activities
(2,811,434
)
(207,291
)
Investing Activities
Purchases of property and equipment
(176,750
)
(217,735
)
Net cash (used in) investing
activities
(176,750
)
(217,735
)
Financing Activities
Payments on equipment loan
(14,431
)
(13,488
)
Purchases of treasury stock
(44,823
)
(8,529
)
Net cash (used in) financing
activities
(59,254
)
(22,017
)
Change in cash, cash equivalents, prepaid
card loads, customer deposits and merchant reserves
(3,047,438
)
(447,043
)
Cash, cash equivalents, prepaid card
loads, customer deposits and merchant reserves, beginning of
year
45,910,486
32,343,501
Cash, Cash Equivalents, Prepaid Card
Loads, Customer Deposits and Merchant Reserves, End of Period
$
42,863,048
$
31,896,458
Supplemental disclosures of cash flow
information
Cash paid during the period for:
Interest
$
13,585
$
662
Income taxes
—
13,426
Non-cash financing activity:
Issuance of deferred stock
compensation
—
2,444,054
USIO, INC.
STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
(UNAUDITED)
Common Stock
Additional Paid- In
Treasury
Deferred
Accumulated
Total Stockholders'
Shares
Amount
Capital
Stock
Compensation
Deficit
Equity
Balance at December 31, 2023
28,671,606
$
197,087
$
97,479,830
$
(4,362,150
)
$
(6,907,775
)
$
(71,338,153
)
$
15,068,839
Issuance of common stock under equity
incentive plan
107,600
107
153,118
—
—
—
153,226
Deferred compensation amortization
—
—
—
—
346,047
—
346,047
Purchase of treasury stock costs
—
—
—
(44,823
)
—
—
(44,823
)
Net (loss) for the period
—
—
—
—
—
(250,188
)
(250,188
)
Balance at March 31, 2024
28,779,206
$
197,194
$
97,632,948
$
(4,406,973
)
$
(6,561,728
)
$
(71,588,341
)
$
15,273,100
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
1,421,250
1,421
2,638,529
—
(2,444,054
)
—
195,896
Deferred compensation amortization
—
—
—
—
308,676
—
308,676
Purchase of treasury stock costs
—
—
—
(8,529
)
—
—
(8,529
)
Net income for the period
—
—
—
—
—
14,833
14,833
Balance at March 31, 2023
28,466,150
$
196,892
$
96,687,132
$
(3,757,556
)
$
(7,833,278
)
$
(70,848,216
)
$
14,444,974
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three Months Ended March 31,
2024
2023
Reconciliation from Operating income
(Loss) to Adjusted EBITDA:
Operating income (Loss)
$
(930,728
)
$
5,993
Depreciation and amortization
576,154
518,029
EBITDA
(354,574
)
524,022
Non-cash stock-based compensation expense,
net
499,273
504,574
Adjusted EBITDA
$
144,699
$
1,028,596
Calculation of Adjusted EBITDA
margins:
Revenues
$
20,321,615
$
21,446,244
Adjusted EBITDA
$
144,699
$
1,028,596
Adjusted EBITDA margins
0.7
%
4.8
%
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
March 31, 2024
March 31, 2023
Reconciliation from net cash (used in)
operating activities to Non-GAAP Adjusted Operating Cash Flows:
Net cash provided by (used in) operating
activities
$
(2,791,434
)
$
(207,292
)
Operating cash flow adjustments:
Prepaid card load obligations
2,880,095
1,357,807
Customer deposits
57,468
(20,953
)
Merchant reserves
(12,000
)
164,886
Operating lease right-of-use assets
(102,394
)
31,459
Operating lease liabilities
107,243
(4,548
)
Total adjustments to net cash provided by
operating activities
$
2,930,412
$
1,528,651
Adjusted operating cash flows provided
$
138,978
$
1,321,359
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240515351868/en/
Paul Manley Senior Vice President, Investor Relations
paul.manley@usio.com 612-834-1804
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