FlexShopper, Inc. (Nasdaq:FPAY) (“FlexShopper”), a leading national
online lease-to-own (“LTO”) retailer and LTO payment solution
provider, today announced its financial results for the quarter
ended September 30, 2022.
Results for Quarter Ended September 30,
2022 vs. Quarter Ended September 30, 2021:
- Total fundings increased 60.1% to $25.8 million from $16.1
million consisting of gross lease originations decreasing from
$15.9 to $15.7 million and loan participations up ~4,350% from $226
thousand to $10.1 million
- Total net lease revenues and fees decreased 20.3% to $24.5
million from $30.7 million
- Total net loan revenues and fees increased 1,249% to $1.6
million from $121 thousand
- Gross profit decreased 49.8% to $6.4 million from $12.7
million
- Adjusted EBITDA1 decreased to $(2.9) million compared to $4.8
million
- Net loss of $(6.3) million compared with net income of $1.7
million
- Net loss attributable to common stockholders of $(6.9) million,
or $(0.32) per diluted share, compared to net income attributable
to common stockholders of $1.1 million, or $0.05 per diluted
share
Results for Nine Months Ended September
30, 2022 vs. Nine Months Ended September 30, 2021:
- Total fundings increased 38.3% to $78.9 million from $57.0
million consisting of gross lease originations decreasing from
$56.6 to $51.9 million and loan participations up ~6,753% from $395
thousand to $27.0 million
- Total net lease revenues and fees decreased 12.1% to $82.7
million from $94.2 million
- Total net loan revenues and fees increased 4,864% to $8.9
million from $179 thousand
- Gross profit decreased 2.2% to $33.3 million from $34.0
million
- Adjusted EBITDA1 decreased to $3.4 million compared to $9.4
million
- Net income of $5.7 million compared with net income of $2.6
million
- Net income attributable to common stockholders of $3.9 million,
or $0.17 per diluted share, compared to net income attributable to
common stockholders of $810 thousand, or $0.03 per diluted
share
¹ Adjusted EBITDA is a non-GAAP financial
measure. Refer to the definition and reconciliation of this measure
under “Non-GAAP Measures”.
“FlexShopper is feeling the same headwind on
consumer demand experienced by both traditional retailers and our
peers in this challenging economic environment. As a result, we are
observing a decline in response rates and approval rates which has
created a gap in our near-term earnings. Despite the decrease in
the online marketplace business, our retail partnership channel and
repeat volume continue to grow in this environment.” said Richard
House, CEO of FlexShopper.
FlexShopper CEO, Richard House, FlexShopper CFO,
Russ Heiser and FlexShopper COO, John Davis will discuss the
Company’s recent quarter, including financial and operating
results, and strategic outlook on the Company’s earnings conference
call and webcast.
Conference Call and Webcast
Details
Conference call
Date: Friday, November 11, 2022Time: 9:30 a.m.
Eastern Time
Participant Dial-In Numbers:
Domestic callers: (877) 407-2988International
callers: (201) 389-0923
Webcast
The call will also be simultaneously webcast
over the Internet via the “Investor” section of the Company’s
website at www.flexshopper.com or by clicking on the conference
call link:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=Fpl90J10
An audio replay of the call will be archived on
the Company’s website.
FLEXSHOPPER,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited)
|
For the three months endedSeptember
30, |
|
|
For the nine months endedSeptember
30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Lease revenues and fees, net |
$ |
24,512,086 |
|
|
$ |
30,740,119 |
|
|
$ |
82,746,874 |
|
|
$ |
94,153,920 |
|
Loan revenues and fees, net of
changes in fair value |
|
1,629,365 |
|
|
|
120,816 |
|
|
|
8,897,964 |
|
|
|
179,238 |
|
Total revenues |
|
26,141,451 |
|
|
|
30,860,935 |
|
|
|
91,644,838 |
|
|
|
94,333,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of lease revenues and
merchandise sold |
|
18,746,897 |
|
|
|
18,005,170 |
|
|
|
56,114,813 |
|
|
|
59,959,590 |
|
Loan origination costs and
fees |
|
1,027,097 |
|
|
|
166,805 |
|
|
|
2,256,838 |
|
|
|
341,989 |
|
Marketing |
|
2,393,185 |
|
|
|
1,824,402 |
|
|
|
8,178,120 |
|
|
|
5,571,237 |
|
Salaries and benefits |
|
2,820,033 |
|
|
|
2,672,864 |
|
|
|
8,799,395 |
|
|
|
8,329,188 |
|
Operating expenses |
|
5,702,800 |
|
|
|
4,325,825 |
|
|
|
17,124,288 |
|
|
|
13,654,038 |
|
Total costs and
expenses |
|
30,690,012 |
|
|
|
26,995,066 |
|
|
|
92,473,454 |
|
|
|
87,856,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)/
income |
|
(4,548,561 |
) |
|
|
3,865,869 |
|
|
|
(828,616 |
) |
|
|
6,477,116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on extinguishment of
debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,931,825 |
|
Interest expense including
amortization of debt issuance costs |
|
(3,030,142 |
) |
|
|
(1,233,617 |
) |
|
|
(7,336,048 |
) |
|
|
(3,855,014 |
) |
(Loss)/income before income
taxes |
|
(7,578,703 |
) |
|
|
2,632,252 |
|
|
|
(8,164,664 |
) |
|
|
4,553,927 |
|
Benefit /(expense) from income
taxes |
|
1,298,269 |
|
|
|
(936,229 |
) |
|
|
13,892,516 |
|
|
|
(1,914,473 |
) |
Net (loss)/
income |
|
(6,280,434 |
) |
|
|
1,696,023 |
|
|
|
5,727,852 |
|
|
|
2,639,454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on Series 2
Convertible Preferred Shares |
|
609,778 |
|
|
|
609,777 |
|
|
|
1,829,332 |
|
|
|
1,829,322 |
|
Net income/(loss)
attributable to common and Series 1 Convertible Preferred
shareholders |
$ |
(6,890,212 |
) |
|
|
1,086,246 |
|
|
|
3,898,520 |
|
|
|
810,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
income/(loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.32 |
) |
|
$ |
0.05 |
|
|
$ |
0.18 |
|
|
$ |
0.04 |
|
Diluted |
$ |
(0.32 |
) |
|
$ |
0.05 |
|
|
$ |
0.17 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON
SHARES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
21,681,853 |
|
|
|
21,383,647 |
|
|
|
21,611,879 |
|
|
|
21,377,978 |
|
Diluted |
|
21,681,853 |
|
|
|
23,577,179 |
|
|
|
22,403,447 |
|
|
|
23,682,265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLEXSHOPPER,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS
|
September 30, |
|
|
December 31, |
|
|
2022 |
|
|
2021 |
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash |
$ |
5,274,219 |
|
|
$ |
4,986,559 |
|
Restricted cash |
|
481,867 |
|
|
|
108,083 |
|
Lease receivables, net |
|
33,425,123 |
|
|
|
25,473,154 |
|
Loan receivables at fair
value |
|
26,591,546 |
|
|
|
3,560,108 |
|
Prepaid expenses and other
assets |
|
1,478,800 |
|
|
|
1,823,256 |
|
Lease merchandise, net |
|
30,652,824 |
|
|
|
40,942,112 |
|
Total current assets |
|
97,904,379 |
|
|
|
76,893,272 |
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
7,416,249 |
|
|
|
5,490,434 |
|
Right of use asset, net |
|
1,445,159 |
|
|
|
1,553,330 |
|
Other assets, net |
|
1,726,443 |
|
|
|
875,020 |
|
Deferred tax asset, net |
|
13,607,949 |
|
|
|
- |
|
Total assets |
$ |
122,100,179 |
|
|
$ |
84,812,056 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
Accounts payable |
$ |
3,875,469 |
|
|
$ |
7,982,180 |
|
Accrued payroll and related
taxes |
|
703,465 |
|
|
|
391,078 |
|
Promissory notes to related
parties, net of $0 at 2022 and $1,274 at 2021 of unamortized
issuance costs, including accrued interest |
|
1,182,585 |
|
|
|
1,053,088 |
|
Accrued expenses |
|
3,243,570 |
|
|
|
2,987,646 |
|
Lease liability - current
portion |
|
198,853 |
|
|
|
172,732 |
|
Total current liabilities |
|
9,203,942 |
|
|
|
12,586,724 |
|
|
|
|
|
|
|
|
|
Loan payable under credit
agreement to beneficial shareholder, net of $338,113 at 2022 and
$413,076 at 2021 of unamortized issuance costs |
|
77,261,887 |
|
|
|
50,061,924 |
|
Promissory notes to related
parties, net of current portion |
|
10,750,000 |
|
|
|
3,750,000 |
|
Deferred income tax
liability |
|
178,160 |
|
|
|
495,166 |
|
Lease liabilities net of
current portion |
|
1,623,211 |
|
|
|
1,774,623 |
|
Total liabilities |
|
99,017,200 |
|
|
|
68,668,437 |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Series 1 Convertible Preferred
Stock, $0.001 par value - authorized 250,000 shares, issued and
outstanding 170,332 shares at $5.00 stated value |
|
851,660 |
|
|
|
851,660 |
|
Series 2 Convertible Preferred
Stock, $0.001 par value - authorized 25,000 shares, issued and
outstanding 21,952 shares at $1,000 stated value |
|
21,952,000 |
|
|
|
21,952,000 |
|
Common stock, $0.0001 par
value- authorized 40,000,000 shares, issued and outstanding
21,750,804 shares at September 30, 2022 and 21,442,278 shares at
December 31, 2021 |
|
2,176 |
|
|
|
2,144 |
|
Additional paid in
capital |
|
39,771,593 |
|
|
|
38,560,117 |
|
Accumulated deficit |
|
(39,494,450 |
) |
|
|
(45,222,302 |
) |
Total stockholders’
equity |
|
23,082,979 |
|
|
|
16,143,619 |
|
|
$ |
122,100,179 |
|
|
$ |
84,812,056 |
|
|
|
|
|
|
|
|
|
FLEXSHOPPER,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWSFor the nine months ended September 30, 2022
and 2021(unaudited)
|
2022 |
|
|
2021 |
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
Net income |
$ |
5,727,852 |
|
|
$ |
2,639,454 |
|
Adjustments to reconcile net
income to net cash (used in)/ provided by operating
activities: |
|
|
|
|
|
|
|
Depreciation and impairment of
lease merchandise |
|
56,114,813 |
|
|
|
59,959,590 |
|
Other depreciation and
amortization |
|
3,303,591 |
|
|
|
2,032,811 |
|
Amortization of debt issuance
costs |
|
163,169 |
|
|
|
177,647 |
|
Compensation expense related
to stock-based compensation and warrants |
|
950,003 |
|
|
|
1,417,699 |
|
Provision for doubtful
accounts |
|
42,639,102 |
|
|
|
30,566,352 |
|
Proceeds from sale of lease
receivables |
|
7,611,586 |
|
|
|
- |
|
Interest in kind added to
promissory notes balance |
|
128,223 |
|
|
|
9,460 |
|
Deferred income tax |
|
(13,924,955 |
) |
|
|
700,199 |
|
Gain on debt
extinguishment |
|
- |
|
|
|
(1,931,825 |
) |
Net changes in the fair value
of loan receivables at fair value |
|
1,938,570 |
|
|
|
54,236 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
Lease receivables |
|
(58,202,657 |
) |
|
|
(39,915,536 |
) |
Loan receivables at fair value |
|
(24,970,008 |
) |
|
|
(490,995 |
) |
Prepaid expenses and other assets |
|
344,766 |
|
|
|
(80,795 |
) |
Lease merchandise |
|
(45,825,525 |
) |
|
|
(50,470,104 |
) |
Security deposits |
|
(4,956 |
) |
|
|
(8,338 |
) |
Lease liabilities |
|
(8,732 |
) |
|
|
(2,595 |
) |
Accounts payable |
|
(4,106,711 |
) |
|
|
(4,563,434 |
) |
Accrued payroll and related taxes |
|
312,387 |
|
|
|
277,774 |
|
Accrued expenses |
|
264,019 |
|
|
|
788,228 |
|
Net cash (used in)/ provided
by operating activities |
|
(27,545,463 |
) |
|
|
1,159,828 |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
Purchases of property and
equipment, including capitalized software costs |
|
(4,855,150 |
) |
|
|
(2,998,044 |
) |
Purchases of data costs |
|
(1,220,722 |
) |
|
|
(461,379 |
) |
Net cash used in investing
activities |
|
(6,075,872 |
) |
|
|
(3,459,424 |
) |
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
Proceeds from loan payable
under credit agreement |
|
32,855,000 |
|
|
|
4,000,000 |
|
Repayment of loan payable
under credit agreement |
|
(5,730,000 |
) |
|
|
(6,575,000 |
) |
Debt issuance related
costs |
|
(86,932 |
) |
|
|
(529,608 |
) |
Proceeds from exercise of
stock options |
|
261,505 |
|
|
|
24,988 |
|
Proceeds from promissory
notes |
|
7,000,000 |
|
|
|
- |
|
Principal payment under
finance lease obligation |
|
(8,388 |
) |
|
|
(5,684 |
) |
Repayment of installment
loan |
|
(8,406 |
) |
|
|
(8,406 |
) |
Net cash provided by/(used in)
financing activities |
|
34,282,779 |
|
|
|
(3,093,710 |
) |
|
|
|
|
|
|
|
|
INCREASE / (DECREASE) IN CASH
and RESTRICTED CASH |
|
661,444 |
|
|
|
(5,393,306 |
) |
|
|
|
|
|
|
|
|
CASH and RESTRICTED CASH,
beginning of period |
|
5,094,642 |
|
|
|
8,541,232 |
|
|
|
|
|
|
|
|
|
CASH and RESTRICTED CASH, end
of period |
$ |
5,756,086 |
|
|
$ |
3,147,926 |
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information: |
|
|
|
|
|
|
|
Interest paid |
$ |
6,828,663 |
|
|
$ |
3,702,949 |
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
We regularly review a number of metrics,
including the following key metrics, to evaluate our business,
measure our performance, identify trends affecting our business,
formulate financial projections and make strategic decisions.
Adjusted EBITDA represents net income before
interest, stock-based compensation, taxes, depreciation (other than
depreciation of leased inventory), amortization, and one-time or
non-recurring items. We believe that Adjusted EBITDA provides us
with an understanding of one aspect of earnings before the impact
of investing and financing charges and income taxes.
Key performance metrics for the three and nine
months ended September 30, 2022 and 2021 were as follows:
|
Three months ended September
30, |
|
|
|
|
|
|
|
|
2022 |
|
|
2021 |
|
|
$ Change |
|
|
% Change |
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/income |
$(6,280,434 |
) |
|
$1,696,023 |
|
|
$(7,976,457 |
) |
|
|
(470.3 |
) |
Income taxes |
|
(1,298,269 |
) |
|
|
936,229 |
|
|
|
(2,234,498 |
) |
|
|
(238.7 |
) |
Amortization of debt issuance
costs |
|
56,283 |
|
|
|
43,067 |
|
|
|
13,216 |
|
|
|
30.7 |
|
Other amortization and
depreciation |
|
1,244,267 |
|
|
|
708,762 |
|
|
|
535,505 |
|
|
|
75.6 |
|
Interest expense |
|
2,973,859 |
|
|
|
1,190,550 |
|
|
|
1,783,309 |
|
|
|
149.8 |
|
Stock-based compensation |
|
387,298 |
|
|
|
265,407 |
|
|
|
121,891 |
|
|
|
45.9 |
|
Adjusted EBITDA |
$(2,916,996 |
) |
|
$4,840,038 |
|
|
$(7,757,034 |
) |
|
|
(160.3 |
) |
|
Nine months ended September
30, |
|
|
|
|
|
|
|
|
2022 |
|
|
2021 |
|
|
$ Change |
|
|
% Change |
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$5,727,852 |
|
|
$2,639,454 |
|
|
$3,088,398 |
|
|
|
117.0 |
|
Income taxes |
|
(13,892,516 |
) |
|
|
1,914,473 |
|
|
|
(15,806,989 |
) |
|
|
(825.7 |
) |
Amortization of debt issuance
costs |
|
163,169 |
|
|
|
177,647 |
|
|
|
(14,478 |
) |
|
|
(8.1 |
) |
Other amortization and
depreciation |
|
3,303,590 |
|
|
|
2,032,811 |
|
|
|
1,270,779 |
|
|
|
62.5 |
|
Interest expense |
|
7,172,879 |
|
|
|
3,677,367 |
|
|
|
3,495,512 |
|
|
|
95.1 |
|
Stock-based compensation |
|
950,003 |
|
|
|
894,892 |
|
|
|
55,111 |
|
|
|
6.2 |
|
Product/ infrastructure
expenses |
|
- |
|
|
|
10,000 |
|
|
|
(10,000 |
) |
|
|
|
|
Gain on debt
extinguishment |
|
- |
|
|
|
(1,931,825 |
) |
|
|
1,931,825 |
|
|
|
- |
|
Adjusted EBITDA |
$3,424,977 |
|
|
$9,414,819 |
|
|
$(5,989,842 |
) |
|
|
(63.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company refers to Adjusted EBITDA in the
above table as the Company uses this measure to evaluate operating
performance and to make strategic decisions about the Company.
Management believes that Adjusted EBITDA provides relevant and
useful information which is widely used by analysts, investors and
competitors in its industry in assessing performance.
About FlexShopper
FlexShopper, LLC, a wholly owned subsidiary of
FlexShopper, Inc. (FPAY), is a financial and technology company
that provides brand name electronics, home furnishings and other
durable goods to consumers on a lease-to-own (LTO) basis through
its e-commerce marketplace (www.FlexShopper.com) as well as its
patented systems. FlexShopper also provides LTO technology
platforms to retailers and e-retailers to facilitate transactions
with consumers that want to acquire their products, but do not have
sufficient cash or credit. FlexShopper approves consumers utilizing
its proprietary consumer screening model, collects from consumers
under an LTO contract and funds the LTO transactions by paying
merchants for the goods.
Forward-Looking Statements
All statements in this release that are not
based on historical fact are “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements, which are based on certain assumptions and describe our
future plans, strategies and expectations, can generally be
identified by the use of forward-looking terms such as “believe,”
“expect,” “may,” “will,” “should,” “could,” “seek,” “intend,”
“plan,” “goal,” “estimate,” “anticipate,” or other comparable
terms. Examples of forward-looking statements include, among
others, statements we make regarding expectations of lease
originations during the holiday season, the expansion of our
lease-to-own program; expectations concerning our partnerships with
retail partners; investments in, and the success of, our
underwriting technology and risk analytics platform; our ability to
collect payments due from customers; expected future operating
results and; expectations concerning our business strategy.
Forward-looking statements involve inherent risks and uncertainties
which could cause actual results to differ materially from those in
the forward-looking statements, as a result of various factors
including, among others, the following: our limited operating
history, limited cash and history of losses; our ability to obtain
adequate financing to fund our business operations in the future;
the failure to successfully manage and grow our FlexShopper.com
e-commerce platform; our ability to maintain compliance with
financial covenants under our credit agreement; our dependence on
the success of our third-party retail partners and our continued
relationships with them; our compliance with various federal, state
and local laws and regulations, including those related to consumer
protection; the failure to protect the integrity and security of
customer and employee information; and the other risks and
uncertainties described in the Risk Factors and in Management’s
Discussion and Analysis of Financial Condition and Results of
Operations sections of our Annual Report on Form 10-K and
subsequently filed Quarterly Reports on Form 10-Q. The
forward-looking statements made in this release speak only as of
the date of this release, and FlexShopper assumes no obligation to
update any such forward-looking statements to reflect actual
results or changes in expectations, except as otherwise required by
law.
Contact:
FlexShopper, Inc.Investor
Relationsir@flexshopper.com
FlexShopper, Inc.
FlexShopper (NASDAQ:FPAY)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
FlexShopper (NASDAQ:FPAY)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024