CORRECTION: ShiftPixy, Inc. Reports Fiscal 2019 Results
IRVINE, Calif., Dec. 18, 2019 (GLOBE NEWSWIRE) -- In the release distributed Friday, December 13, 2019 by ShiftPixy, Inc., we were informed the first bullet of the press release in '2019 Financial Highlights' should read “Loss per share improved to $0.57 in 2019 compared to $0.58 for 2018.” Completed corrected text follows.
ShiftPixy, Inc. (NASDAQ: PIXY), a California-based staffing enterprise that designs, manages, and sells access to a disruptive, revolutionary platform that facilitates employment in the rapidly growing Gig Economy, today announced operating results for the year ended August 31, 2019 (“2019”).
2019 Financial Highlights
- Loss per share improved to $0.57 in 2019 compared to $0.58 for 2018.
- Gross billings grew 59% to $353 million, compared to $222 million for 2018. Q4 billings exceeded $100 million for the first quarter in our history at $105 million for an exit annualized billings rate of over $420 million.
- Revenues increased 53% to $53 million, compared to $35 million for 2018.
- Gross profit was $12.4 million, increasing 125% over 2018 gross profit of $5.5 million due to improving margins and workers compensation cost savings. Gross profit per worksite employee improved to $1,200 for 2019 from $800 for 2018.
- Loss from Operations improved to $9.7 million from $11.6 million in 2018.
- EBITDAS Loss (Operating Loss excluding depreciation and share-based compensation) improved to $8.3 million for 2019 from $11.0 million for 2018 due to improved margins and reduced spending on our mobile application, offset by increased operations costs.
- Investment in our mobile application and technology solution deployment decreased to $4.9 million in 2019 from $7.5 million in 2018 due to reduced costs relating to movement to our new in-sourced development team. Total Human Resource Information System (HRIS) and mobile application investment is $15.5 million to date.
2019 Operational highlights
- The number of employees billed during the year and retained in our employee HRIS exceeded 25,000.
- The active number of worksite employees billed increased to 13,100 at August 31, 2019, a 54% increase, from 8,500 at August 31, 2018.
- Average gross billings per worksite employee increased by 4.3% to $33,600 in 2019 from $32,200 in 2018
- Average operating support costs per billed worksite employee improved in 2019. We have staffed to manage up to 50,000 active worksite employees with our current corporate overhead.
- Our dispute with our outsourced software development partner delayed our HRIS and mobile application launch in 2019 and necessitated our move towards in-house development.
“We continue to see strong growth in our legacy business which has driven top line expansion and improvement in our operating metrics, including gross billings and gross profits for 2019,” stated Chief Executive Officer, Scott Absher. ”Delays in the launch of our mobile application solution are now behind us and the project is now back on track and well received by our initial launch customers. We believe it will support revenue growth in 2020 from both significantly higher worksite employee counts and added technology features. The reception from our target customers has been phenomenal and we expect to see a significant increase in our business activity levels as we move into calendar 2020 and continue our focus on creating long-term shareholder value.”
ShiftPixy is a disruptive human capital services enterprise, revolutionizing employment in the Gig Economy by delivering a next-gen platform for workforce management that helps businesses with shift-based employees navigate regulatory mandates, minimize administrative burdens and better connect with a ready-for-hire workforce. With expertise rooted in management’s nearly 25 years of workers’ compensation and compliance programs experience, ShiftPixy adds a needed layer for addressing compliance and continued demands for equitable employment practices in the growing Gig Economy. ShiftPixy’s complete HCM ecosystem is designed to manage regulatory requirements and compliance in such required areas as paid time off (PTO) laws, insurance and workers’ compensation, minimum wage increases, and the Affordable Care Act (ACA) compliance.
ShiftPixy Cautionary Statement
The information provided in this release includes forward-looking statements, the achievement or success of which involves risks, uncertainties, and assumptions. Although such forward-looking statements are based upon what management of the Company believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate. If any of the risks or uncertainties, including those set forth below, materialize or if any of the assumptions proves incorrect, the results of ShiftPixy, Inc., could differ materially from the results expressed or implied by the forward-looking statements we make. The risks and uncertainties include, but are not limited to, risks associated with the nature of our business model; our ability to execute the Company's vision and growth strategy; our ability to attract and retain clients; our ability to assess and manage risks; changes in the law that affect our business and our ability to respond to such changes and incorporate them into our business model, as necessary; our ability to insure against and otherwise effectively manage risks that affect our business; competition; reliance on third-party systems and software; our ability to protect and maintain our intellectual property; and general developments in the economy and financial markets. Statements made in connection with any guidance may refer to financial statements that have not been reviewed or audited. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, except as required by applicable securities laws. The information in this press release shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and will not be deemed an admission as to the materiality of any information that is required to be disclosed solely by Regulation FD. Further information on these and other factors that could affect the financial results of ShiftPixy, Inc., is included in the filings on Forms 1-A and 10-Q and in other filings we make with the Securities and Exchange Commission from time to time. These documents are available on the "SEC Filings" subsection of the "Investor Information" section of our website at https://ir.shiftpixy.com/financial-information/sec-filings.
Consistent with the SEC’s April 2013 guidance on using social media outlets like Facebook and Twitter to make corporate disclosures and announce key information in compliance with Regulation FD, ShiftPixy is alerting investors and other members of the general public that ShiftPixy will provide updates on operations and progress required to be disclosed under Regulation FD through its social media on Facebook, Twitter, LinkedIn and YouTube. Investors, potential investors, shareholders and individuals interested in our Company are encouraged to keep informed by following us on Facebook, Twitter, LinkedIn and YouTube.
|Consolidated Balance Sheets|
|Unbilled accounts receivable||9,478,000||6,193,000|
|Other current assets||244,000||259,000|
|Total current assets||14,031,000||10,447,000|
|Fixed assets, net||3,360,000||3,032,000|
|Deposits- workers’ compensation||6,281,000||2,202,000|
|Deposits and other assets||124,000||121,000|
|LIABILITIES AND STOCKHOLDERS’ DEFICIT|
|Accrued payroll and related liabilities||16,412,000||9,477,000|
|Convertible Notes, Net||3,351,000||6,171,000|
|Accrued workers’ compensation costs||1,957,000||305,000|
|Default penalties accrual||1,800,000||3,500,000|
|Other current liabilities||1,850,000||1,956,000|
|Total current liabilities||32,187,000||22,656,000|
|Accrued workers’ compensation costs||4,379,000||901,000|
|Commitments and contingencies|
|Preferred stock, 50,000,000 authorized shares; $0.0001 par value; no shares issued and
|Common stock, 750,000,000 authorized shares; $0.0001 par value; 36,281,894 and 28,851,787
shares issued as of August 31, 2019 and 2018, respectively
|Additional paid-in capital||32,501,000||18,465,000|
|Treasury stock, at cost - 558,132 shares and no shares as of August 31, 2019 and 2018, respectively||(325,000||)||-|
|Total stockholders’ deficit||(12,770,000||)||(7,755,000||)|
|Total liabilities and stockholders’ deficit||$||23,796,000||$||15,802,000|
|Consolidated Statements of Operations|
|For the Years Ended|
|Revenues (gross billings of $352.6 million and $222.4 million (unaudited) less worksite
employee payroll cost of $299.2 million and $187.5 million, (unaudited) respectively)
|Cost of revenue||41,046,000||29,458,000|
|Salaries, wages and payroll taxes||7,702,000||5,383,000|
|Share-based compensation - general and administrative||632,000||363,000|
|Marketing and advertising||1,208,000||547,000|
|General and administrative||3,823,000||3,005,000|
|Depreciation and amortization||839,000||274,000|
|Total operating expenses||22,063,000||17,072,000|
|Other income (expense)|
|Loss on debt extinguishment||(3,927,000||)||-|
|Change in fair value of derivative||2,569,000||-|
|Gain (Loss) associated with note defaults, net||811,000||(3,500,000||)|
|Total Other income (expense)||(9,054,000||)||(5,251,000||)|
|Net loss per common share|
|Basic and diluted||$||(0.57||)||$||(0.58||)|
|Weighted average number of common shares|
|Basic and diluted||32,708,800||28,810,103|
Released December 18, 2019