Toronto, ON – August 23, 2016 – VersaPay Corporation (TSXV: VPY) (“VersaPay” or the “Company”), a leading provider of cloud-based invoicing, accounts receivable management and payment solutions, today announced the Company’s second quarter (Q2) financial results for the three-month period ended June 30, 2016. During this reporting period the Company achieved record revenues in both of its lines of business in the quarter.
“In addition to strong performance from our Merchant Services business, we continue to see more and more organizations benefiting from ARCTM, our accounts receivable solution, as is evident by the 79% year over year growth in revenue from our software business,” said Craig O’Neill, CEO of VersaPay. “Our focus continues to be on adding companies and increasing monthly usage on the ARCTM platform. Not only did we add new 27 suppliers during the quarter, but 5 thousand end customers began using ARCTM for the first time, boosting invoices received in Q2 by 18% over Q1, from 122 thousand to 145 thousand, and payments made by 58% from $11.2 million to $17.7 million.”
Financial Highlights: Solutions
VersaPay Solutions revenue for the three months ended June 30, 2016 increased by 79% to $0.36 million compared to $0.2 million for the three months ended June 30, 2015.
- VersaPay Solution revenue for the six months ended June 30, 2016 increased by 81% to $0.65 million compared to $0.36 million for the six months ended June 30, 2015.
POS Merchant Services
POS Merchant Services revenue for the three months ended June 30, 2016 increased 13% to $1.37 million compared to $1.21 million for the three months ended June 30, 2015.
- POS Merchant Services revenue for the six months ended June 30, 2016 increased 10% totaling $2.52 million compared to $2.29 million for the six months ended June 30, 2015.
Total revenue for Q2 2016 increased by 23% to $1.72 million compared to $1.41 million in Q2 2015. Total revenue for the six months ended June 30, 2016 increased by 20% to $3.17 million compared to $2.65 million for the six months ended June 30, 2015.Gross margin percentage for the three-month period ended June 30, 2016 was 59%, compared to 58% in Q2 2015.
Adjusted EBITDA(1) loss was $1.14 million in Q2 2016, compared to loss of $1.16 million in Q2 2015, in accordance with the Company’s plans to invest in the VersaPay Solutions business. For the six months ended June 30, 2016 Adjusted EBITDA loss totaled $2.54 million compared to Adjusted EBITDA loss of $2.24 million as of June 30, 2015.
Total comprehensive loss for Q2 2016 was $1.61 million compared to a loss of $1.28 million for Q2 2015. Total comprehensive loss for the six months ended June 30, 2016 was $3.12 million compared to $2.48 million for the same period in 2015. This increase in loss primarily represents a sales tax accrual for a commission agent assessed by Revenue Quebec for GST/HST/QST.
Cash operating expense for the six months ended June 30, 2016 was $4.65 million compared to $3.80 million for the six months ended June 30, 2015. The increase reflects the Company’s strategy of building the VersaPay Solutions business and the timing of receivable and payable accounts.
- As at June 30, 2016, the Company had cash on hand of $4.56 million compared to $3.34 million as at December 31, 2015. The increase in cash is due to receipt of proceeds from financing completed in May 2016, less operating cash flows from the quarter.
(1) Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, share-based payments, other income and expense, and other comprehensive income and abnormal or unusual items that are not typical expenditures in our industry. 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, 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, August 24, 2016
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: 03364229
Recording Playback Numbers:
Toronto (+1) 416 764 8677
Toll Free – North America (+1) 888 390 0541
Passcode: 364229 #
Expiry Date: Wednesday, August 31, 2016 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/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.
More information about VersaPay can be found on the Company’s website 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.
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.