Usio(US:USIO)2020-05-15 03:37Financial Data and Key Metrics Changes - The company reported record revenues for Q1 2020, with an 18% increase to $7.8 million compared to the same period last year [9][30] - Adjusted EBITDA improved to a loss of approximately $200,000, an improvement of $400,000 from Q4 2019 [32] - The net loss for the quarter was $0.8 million or $0.06 per share, an improvement from a net loss of $1.1 million or $0.09 per share in the same period last year [33] Business Line Data and Key Metrics Changes - Revenue from the prepaid card division increased by 69%, while credit card revenue rose by 28% [10][30] - The PayFac division saw a 52% sequential increase in processing volumes from Q4 2019 [11][36] - ACH revenues remained relatively flat, but the division continues to generate strong margins and cash flow [30][14] Market Data and Key Metrics Changes - The ACH business experienced a decline in transaction volumes due to the COVID-19 pandemic, with a 7% decrease in April compared to the previous year [20][48] - The company onboarded 30 new accounts in March, indicating underlying strength despite the pandemic's impact [14] - The prepaid segment saw a significant uptick in disbursement sales related to COVID relief programs, potentially doubling activity over the next two quarters [25][27] Company Strategy and Development Direction - The company is focusing on enhancing revenue transparency and has delivered segmented revenue reporting in 2020 [9] - There is a strategic shift towards scalable solutions in the prepaid business, prioritizing partnerships and disbursement cards [23] - The company is exploring acquisition opportunities that are accretive and synergistic with existing business lines [62][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to resume growth as restrictions are lifted, despite the challenges posed by COVID-19 [21][34] - The company has implemented cost controls and is experiencing lower expenses during the pandemic [44] - Management anticipates that the second half of the year will see further acceleration in growth, particularly in the PayFac division [40] Other Important Information - The company secured $813,500 in funding through the Paycheck Protection Plan, which may be subject to forgiveness [33][77] - Leadership changes were announced within the Payment Facilitation division, with Greg Carter stepping into a key role [16][72] Q&A Session Summary Question: What were the prepaid sales growth and total credit card sales growth in the quarter? - Prepaid sales growth was 69% and total credit card sales growth was 28% [42] Question: How do you expect expenses to trend for the rest of the year? - Expenses are expected to remain at current levels, with no new hires and reduced travel costs [44] Question: What was the impact of COVID-19 on transaction volumes in March and April? - ACH transactions were down 7% in April compared to last year, with significant declines in the dentist portfolio [48][56] Question: How is the company positioned for future growth in the PayFac segment? - The PayFac segment is expected to continue its growth trajectory, with strong client signings and a healthy pipeline [39][40] Question: What is the company's approach to acquisitions during this period? - The company is looking for accretive acquisitions that complement existing business lines, although a recent potential acquisition was halted due to COVID-19 [69][70]