ShiftPixy, Inc. Reports Fiscal 2019 Third Quarter Results
IRVINE, Calif., July 22, 2019 (GLOBE NEWSWIRE) -- 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 three months ended May 31, 2019 (“2019 Third Quarter”).
2019 Third Quarter Highlights
- Gross billings grew 57% to $94.2 million, compared to $60.2 million for the fiscal 2018 third quarter; gross billings increased sequentially 14% from $82.5 million the prior quarter.
- Revenues increased 53% to $14.3 million, compared to $9.4 million for the third quarter of fiscal 2018.
- The average number of worksite employees increased by approximately 3,610 to 10,860, compared to 7,250 for the quarter ended May 31, 2018.
- Gross profit was $2.7 million versus $1.5 million the prior year period, and diluted net loss per share was 15 cents versus a diluted net loss per share of 6 cents the prior year period.
- Subsequent to the quarter, on July 12, 2019 the company announced that its Board of Directors has authorized the repurchase of up to ten million shares of its outstanding common stock over an initial period of 18 months, extendable at the Board’s discretion.
“We’re quickly penetrating our target markets which is driving rapid growth across key operational and financial metrics. This is all the more exciting considering ShiftPixy is just now approaching a major inflection point,” stated Chief Executive Officer, Scott Absher. “Specifically, now that we’ve achieved critical mass on both the employer and employee sides of the equation, we can begin to unleash the robust functionality of our platform including self-delivery. The enhanced feature set and mobile technology are designed to help our operator clients remediate their sky-high turnover and greatly improve profitability, while further accelerating our own growth and benefitting our efforts to create shareholder value.”
ShiftPixy will host a webcast at 8:30 a.m. Eastern Time on Monday, July 22, 2019 to discuss financial results for its fiscal 2019 third quarter. Investors can access the webcast through the ShiftPixy website at https://ir.shiftpixy.com.
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.
|PART I — FINANCIAL INFORMATION|
|Item 1. Condensed Consolidated Financial Statements|
Condensed Consolidated Balance Sheets|
August 31, 2018
|Unbilled accounts receivable||6,700,054||6,192,631|
|Deposit – workers’ compensation||2,250,103||1,672,097|
|Other current assets||227,103||258,901|
|Total current assets||13,209,636||10,447,345|
|Fixed assets, net||3,013,062||3,032,325|
|Deposits – workers’ compensation||5,438,125||2,201,556|
|Deposits and other assets||94,083||120,606|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|Payroll related liabilities||14,311,903||9,476,641|
|Convertible note, net||1,407,340||6,171,315|
|Accrued workers’ compensation costs||1,027,043||305,217|
|Registration rights penalties accrual (Note 4)||-||3,500,000|
|Other current liabilities||1,670,997||1,955,921|
|Total current liabilities||22,172,962||22,655,555|
|Accrued workers’ compensation costs||3,000,732||900,978|
|Commitments and contingencies|
|Preferred stock, 50,000,000 authorized shares; $0.0001 par value; no shares issued
|Common stock, 750,000,000 authorized shares; $0.0001 par value; 36,038,219 and
28,851,787 shares issued and outstanding, respectively
|Additional paid-in capital||32,183,503||18,465,419|
|Total stockholders' deficit||(3,418,788||)||(7,754,701|
|Total liabilities and stockholders’ deficit||$||21,754,906||$||15,801,832|
Condensed Consolidated Statements of Operations |
For the Three Months Ended
For the Nine Months Ended
|Revenues (gross billings of $94.2m and $60.2m less worksite employee payroll cost of $79.9m and $50.8m, respectively for the three months ended; gross billings of $247.6m and $149.0m less worksite employee payroll cost of $209.6m and $125.2m, respectively for nine months ended)||$||14,303,816||$||9,375,492||$||38,012,069||$||23,773,871|
|Cost of revenue||11,591,990||7,825,500||28,693,394||20,099,218|
|Salaries, wages and payroll taxes||1,813,619||1,309,871||5,595,328||3,835,964|
|Stock-based compensation – general and administrative||(4,743||)||72,312||153,571||169,407|
|Depreciation and amortization||221,523||59,343||600,360||134,986|
|General and administrative||1,763,342||1,046,147||3,878,879||2,534,415|
|Total operating expenses||5,838,186||3,367,311||15,961,468||11,552,072|
|Other (expense) income:|
|Inducement loss from debt conversion||(2,273,000||)||-||(3,828,550||)||-|
|Change in fair value derivative and warrant liability||4,748,342||-||4,748,342||-|
|Settlement of registration rights penalties accrual||-||-||2,611,112||-|
|Total other expense||(1,869,662||)||-||(2,740,096||)||-|
|Net loss per common share,
|Weighted average number of common shares
Released July 22, 2019