PAYSIGN INC (NASDAQ:PAYS) Q4 2019 Earnings Conference Call - Final Transcript

Apr 06, 2020 • 12:00 pm ET

Previous

PAYSIGN INC (NASDAQ:PAYS) Q4 2019 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

[Operator Instructions] Our first question comes from Peter Heckmann with Davidson. Please state your question.

Analyst
Peter Heckmann

Good morning, gentlemen. Good to get the call going. What -- in terms of the revenue conversion rate issue you talked about that popped up in the fourth quarter, can you give us a little bit more background on that, and anything that may have changed in terms of mix and how that -- what that implies for the next couple of quarters?

Executive
Mark Attinger

Yeah. Hey, Pete. Thank you for the question. So, that revenue conversion rate that I quoted was specifically plasma, and we saw a significantly lower revenue conversion rate for the new centers we brought on in the -- September 30. All of those turned up at the same time. We did see the loads that we were expecting -- in fact, Q4 loads were up a little more than 20% versus the plasma Q3 loads. But the conversion rate on those, due to the behavior of those particular customers and where they were located, led to less interchange revenue and cardholder transaction fee revenue. We have not been able to evaluate that just yet, since we're in our closing procedures for first quarter, to see how that may have changed. We expect that to improve as those performances -- and we did actually make some changes with our partners in banking in Mexico that should help with our overall gross margins on those centers, putting in place a bilateral agreement to improve the cost of ATM transactions that will help with the gross margin on those. But beyond that, I can't look too closely just yet at the revenue conversion rate for Q1.

Analyst
Peter Heckmann

Got it. That's helpful. And then, just as a follow-up question, in terms of investment spend, I'm sure it's a little bit hard to quantify, but can you talk about some of the investment spend that you had in 2019 on things like PaySign Premier, corporate loyalty, generally items that didn't generate much revenue? And then, how you're thinking about that number for 2020?

Executive
Mark Attinger

So I think that our CEO touched on new hires and the build-out of patient affordability. You also see -- as you look at the cash flow statement, you can see our investments and capital expenditures of about $3.2 million, $3.3 million. So there were investments last year that was a little higher than I anticipated early in the year of about $2.25 million to $2.5 million. Just to give you a little more insight, as we look to 2020, we've modeled in capex of $3.2 million to $3.7 million.

Analyst
Peter Heckmann

Great, thank you. I'll get back in the queue.

Operator
Operator

Thank you. Our next question comes from Austin Moldow with Canaccord Genuity. Please state your question.

Analyst
Austin Moldow

Hi, thanks for taking my questions. Of the seven pharma contracts in 2019, how many are those still active or renew in 2020? And how many new contracts have been signed for the remainder of 2020? And what does the pipeline