Toronto, ON – November 15, 2017 – Versapay Corporation (TSXV: VPY) ("Versapay" or the "Company"), a leading provider of cloud-based invoicing, accounts receivable management and payment solutions, today announced third quarter ("Q3") financial results for the three and nine months ended September 30, 2017.
“We achieved several important objectives this quarter,” said Craig O’Neill, CEO of Versapay, “We established our US expansion plan, strengthened our sales leadership to execute the plan, and closed a private placement for $10.7 million to fund the plan. Meanwhile we continued to see strong growth in our revenues, gross margin and ARC metrics. These achievements are important steps on the path to achieving our longer term growth objectives.”
Q3 2017 Financial Results
The following highlights treat the Company’s POS Merchant Services business as a discontinued operation.
- Revenue for Q3 2017 increased by 97.5% to $0.78 million compared to $0.40 million in Q3 2016. Revenue for the nine months ended September 30, 2017 increased by 82.0% to $1.90 million compared to $1.04 million in the nine months ended September 30, 2016.
- Gross margin percentage for Q3 2017 was 73.3%, compared to 55.2% in Q3 2016. Gross margin percentage for the nine months ended September 30, 2017 was 68.6%, compared to 54.2% for the nine months ended September 30, 2016.
- Adjusted EBITDA(1) was ($2.11) million in Q3 2017, compared to ($0.88) million in Q3 2016. Adjusted EBITDA(1) was ($5.70) million for the nine months ended September 30, 2017, compared to ($3.42) million for the nine months ended September 30, 2016, in accordance with the Company’s plans to invest in its software business.
- Net earnings from discontinued operations was nil for the three months ended September 30, 2017, compared to $619 thousand for the three months ended September 30, 2016. Net earnings from discontinued operations was $8.92 million for the nine months ended September 30, 2017, compared to $1.29 million for the nine months ended September 30, 2016.
- Total comprehensive loss for the three months ended September 30, 2017 was ($2.19) million, compared to a loss of ($0.99) million for the three months ended September 30, 2016. Total comprehensive income for the nine months ended September 30, 2017 was $2.87 million, compared to a loss of ($4.12) million due to the large gain from the sale of the Company's POS Merchant Services businesses.
- Cash operating expense for the nine months ended September 30, 2017 increased by 23.4% to $5.49 million compared to $4.45 million for the nine months ended September 30, 2016.
- As at September 30, 2017, the Company had cash on hand of $6.74 million compared to $2.75 million as at December 31, 2016.
Key Leadership Changes to Accelerate Growth Plans
Since closing a $10.7M private placement in early October the Company has embarked on a US expansion plan to drive higher revenue growth in the US market in 2018. As the first step in this plan, the Company is pleased to announce two important leadership team changes. As previously announced, Ross Pellizzari has assumed the role of Chief Revenue Officer. Ross has over thirty years of experience developing go-to-market teams and driving results through customer success. Joining Ross on the team is Jason Read as Chief Product Officer. In this new position, Jason will be responsible for the Product Management, Sales Engineering, and Client Success teams. Jason is a software veteran with more than 15 years of experience building and delivering solutions for market leading companies including The Descartes Systems Group, a global leader in supply-chain software-as-a-service (SaaS) solutions.
“I’m pleased and excited to have Ross and Jason join our management team,” said Craig O’Neill, CEO of Versapay. “Together, they bring an extensive set of skills and experience selling into our core vertical markets and delivering innovative solutions to clients in the US and Canada. Their addition to the team rounds out our leadership capabilities and positions the Company well to execute on our expansion plans.”
Strong Growth in ARC Metrics
92,500 end customers are now using Versapay ARC to receive and pay invoices, representing growth of over 80% since the June 30, 2017, 60% since Sept 30, and 20% in the last four weeks alone. Half way through Q4, a number of other key metrics for the quarter are approaching or have surpassed those of Q3: 231,800 invoices have been delivered vs 290,600 in Q3; 76,400 invoices have been paid vs 72,300 in Q3; 35,800 payments have been completed for $42.4M vs 32,000 payments valued at $52.8M in Q3.
“We are seeing a nice acceleration of key usage metrics on the ARC platform,” stated Craig O’Neill, CEO of Versapay. “This acceleration is being driven by two factors, the larger size of new clients that are signing up to use ARC, and faster rollouts to those clients’ end-customers. This is a trend we expect to continue as we see an increasing mix of larger prospects in our pipeline.”
(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 three and nine months ended September 30, 2017 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, November 16, 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: 64801420
- Recording Playback Numbers:
- Toronto (+1) 416 764 8677
- Toll Free – North America (+1) 888 390 0541
- Passcode: 801420 #
- Expiry Date: Thursday, November 23, 2017 11:59 PM
A live audio webcast and archive of the conference call will be available by visiting the Company’s website at https://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 Fintech company and leading provider of cloud-based invoice-to-cash solutions, enabling businesses to provide a superior customer experience, get paid faster, streamline financial operations, and dramatically reduce DSO and costs. Versapay ARC is the new standard in accounts receivable and collections management with a customer self-service environment to view invoices online, collaborate on inquiries and disputes, and facilitate secure online payments (EFT/ACH and credit card). Businesses gain access to a suite of powerful tools that enable efficient collections, cash application and real-time insight into accounts receivable. Versapay ARC automatically reconciles payments and account information through integrations with a wide range of ERPs and accounting software providers.
More information about Versapay is available at www.versapay.com or under the Company's profile on SEDAR at www.sedar.com.
For additional information, please contact:
Vice President, Marketing
Virtus Advisory Group Inc.
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. The specific metrics referenced in this release are non GAAP measures.
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.