Payment Data Systems Announces Record First Quarter Results

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Revenues up 13% to a Quarterly Record $6.6 Million

SAN ANTONIO, May 15, 2019 (GLOBE NEWSWIRE) -- Payment Data Systems (NASDAQ:), an integrated electronic payment solutions provider, today announced financial results for the first quarter 2019, which ended March 31, 2019.

Louis Hoch, President and Chief Executive Officer of Payment Data Systems, said, “The new year is off to a good start, sustaining the momentum we have created across our ACH, prepaid and card processing businesses.  We believe this is the foundation for another year of continued growth.  In ACH, we recorded our seventh consecutive quarter of sequential growth in transactions processed.  Prepaid also had another growth quarter of growth due to newly implemented card programs that are now producing additional recurring revenue.  Revenue is now being recognized on the PayFac platform, which is the natural progression we anticipated after boarding merchants of software vendors that have been integrated over the last several months.  Our success continues to be based on our robust technology.  And, in the first quarter we maintained our commitment to investing in technology to further advance our competitive advantages. We are proud our investments remain internally funded from the consistent, predictable positive cash flow generated by our ACH business.  As electronic payments continue to become an integral and larger part of our economy, we believe Payment Data Systems’ comprehensive portfolio of products is ideally positioned to capitalize on this growing trend.”

Revenues were $6.6 million for the first quarter, up 13% compared to the same period last year.  The drivers of growth included growth in our profitable ACH business coupled with revenue growth in our prepaid and PayFac initiatives.

Gross profits were $1.34 million, up 5.1% from $1.27 million in the same period last year.  Gross margins were 20.3%, down from 21.7% in the same period last year.   The primary driver for the change in gross margin came from a shift in volume from our profitable ACH business to our Credit Card revenues, which has a lower profit margin.

Operating loss was $1.1 million for the quarter, essentially unchanged from the same period last year.

Adjusted EBITDA was a loss of $326,000 compared to an adjusted EBITDA loss of $228,000 a year ago.

Net loss was $1.1 million, or ($0.09) per share, compared to a net loss of $1.1 million or ($0.09) per share, essentially unchanged from the same period last year.  In fiscal 2019, earnings per share were based on approximately 12.6 million shares outstanding compared to approximately 12.0 million shares used in the first quarter 2018 calculation.

More than $856 million of total dollars were processed in the first quarter, up 9% year-over-year.

Payment Data Systems continues to be in solid financial condition.  Cash and cash equivalents at March 31, 2019 were $4.5 million, which includes $1.8 million net of fees of additional equity capital the Company raised in the first quarter.  The Company is debt free.

Payment Data Systems’ management will host a conference call with a live webcast on Wednesday, May 15, 2019 at 5:00 p.m. Eastern time to 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 Payment Data Systems conference call. The conference call will also be available through a live webcast, which can be accessed via the company’s websites: .

A replay of the call will be available approximately one hour after the end of the call through May 29, 2019. 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 10131549.Payment Data Systems, Inc. (NASDAQ: PYDS), a leading integrated payment solutions provider, offers a wide range of payment solutions to merchants, billers, banks, service bureaus, and card issuers. The Company operates credit, debit/prepaid, and ACH payment processing platforms to deliver convenient, world-class payment solutions and services to their clients. 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 prepaid sector.  Payment Data Systems is headquartered in San Antonio, Texas and has offices in Franklin, Tennessee, just outside of Nashville.  Websites: , , ,  and . Find us on Facebook® and Twitter.

Management believes EBITDA and adjusted EBITDA 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 and adjusted EBITDA are supplemental non-GAAP measures, which have limitations as an analytical tool. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Non-GAAP financial measures do not reflect a comprehensive system of accounting, may differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. For a description of our use of EBITDA and adjusted EBITDA, and a reconciliation of EBITDA and adjusted EBITDA to operating income (loss), see the section of this press release titled "Non-GAAP Reconciliation."

Contact: Joe Hassett, Investor Relations610-228-2110

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Globe Newswire: 21:09 GMT Wednesday 15th May 2019

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