ShiftPixy, Inc. Reports Fiscal 2019 First Quarter Results

Wall Street Business News

IRVINE, Calif., Jan. 11, 2019 (GLOBE NEWSWIRE) — ShiftPixy, Inc. (NASDAQ: PIXY), a developing, proprietary next-gen technology platform for workforce engagement and management, today announced operating results for the three months ended November 30, 2018 (“2019 First Quarter”).

2019 First Quarter Highlights

  • Gross billings grew 77% to $70.9 million, compared to $40.2 million for the fiscal 2018 first quarter; gross billings for the quarter decreased 3.4% sequentially from $73.4 million in the prior quarter.
  • Revenues increased 62% to $10.5 million for the quarter, compared to $6.5 million for the first quarter of fiscal 2018.
  • Worksite employees increased by 3,520 to an average of 8,990 compared to an average of 5,470 for the quarter ended November 30, 2017; the number of employees at the end of the quarter also represented a sequential increase of approximately 740 over the number of employees at the end of the fourth quarter of fiscal 2018.
  • Gross profit for the quarter was $3.4 million versus $1.2 million in the prior year period, and net loss per share was 7 cents during the quarter, versus a net loss of 12 cents the prior year period.

“It’s an exciting time for ShiftPixy and it’s gratifying to see the rapid adoption of our platform driving strong growth in both our client base and our number of worksite employees,” stated Chief Executive Officer, Scott Absher. “We are pleased with the pace of our growth and anticipate that our rapidly developing technology platform will further enhance our service offerings and better enable us to meet the needs of our assigned workforce and clients as we endeavor to create value for our shareholders.”

Webcast

ShiftPixy will host a webcast at 8:30 a.m. Eastern Time on Friday, January 11, 2019, to discuss financial results for its 2019 fiscal first quarter. Investors can access the webcast through the ShiftPixy website at https://ir.shiftpixy.com.

About ShiftPixy

ShiftPixy is a disruptive human capital management (HCM) services provider, 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.

CONTACT:
Media:
Clark Wilson
clark.wilson@shiftpixy.com
888.798.9100

Investors:
InvestorRelations@shiftpixy.com
800.475.3655

ShiftPixy, Inc.
Condensed Consolidated Balance Sheets 
 
 
 
    November 30,
2018
    August 31,
2018
 
ASSETS    (Unaudited)        
Current assets                
Cash   $   227,454     $ 1,649,783  
Accounts receivable     129,452       110,931  
Unbilled accounts receivable     4,759,141       6,192,631  
Deposit – workers’ compensation     1,923,465       1,672,097  
Prepaid expenses     378,525       563,002  
Other current assets     351,555        258,901  
Total current assets     7,769,592       10,447,345  
                 
Fixed assets, net     3,337,861       3,032,325  
Deposits – workers’ compensation     2,841,882       2,201,556  
Deposits and other assets     94,375       120,606  
                 
Total assets   $   14,043,710      $ 15,801,832  
 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

               
                 
Current liabilities                
Accounts payable   $  1,486,581     $ 1,246,461  
Payroll related liabilities     7,488,262       9,476,641  
Convertible note, net     6,309,104       7,156,515  
Accrued workers’ compensation costs     634,697       305,217  
Registration rights penalties accrual (Note 9)     3,500,000       3,500,000  
Other current liabilities     1,230,418       1,955,921  
Total current liabilities     20,649,062       23,640,755  
 

Non-current liabilities

               
Accrued workers’ compensation costs     1,639,900       900,978  
Total liabilities     22,288,962       24,541,733  
                 
Commitments and contingencies                
                 
Stockholders’ deficit                
Preferred stock, 50,000,000 authorized shares; $0.0001 par value; no shares issued and outstanding            
Common stock, 750,000,000 authorized shares; $0.0001 par value; 29,822,822 and 28,851,787 shares issued and outstanding, respectively     2,983       2,886  
Additional paid-in capital     19,728,657       17,233,919  
Accumulated deficit     (27,976,892 )     (25,976,706 )
Total stockholders’ deficit     (8,245,252 )     (8,739,901 )
Total liabilities and stockholders’ deficit   $   14,043,710     $ 15,801,832  

 
ShiftPixy Inc.
Condensed Consolidated Statements of Operations 
(Unaudited)
 
 
    For the Three Months
Ended November 30,
    2018     2017
                   
Revenues (gross billings of $70.9 million and $40.2 million less worksite employee payroll cost of $60.4 million and $33.7 million, respectively)   $ 10,519,990       $ 6,511,919  
                   
Cost of revenue     7,134,168          5,266,403  
Gross profit     3,385,822         1,245,516  
Operating expenses:                  
Salaries, wages and payroll taxes     1,794,965         1,180,489  
Stock-based compensation – general and administrative     77,222         70,296  
Commissions     553,216         271,630  
Professional fees     624,045         492,455  
Software development     310,000         1,900,000  
Depreciation and amortization     187,723         17,695  
General and administrative     1,127,915         654,168  
Total operating expenses     4,675,086         4,586,733  
Operating Loss     (1,289,264 )       (3,341,217 )
 Other Expense                  
Interest expense     (710,922        –  
                   
Net Loss    $ (2,000,186     $  (3,341,217
                   
Net loss per common share                  
Basic and diluted   $ (0.07     $ (0.12
                   
Weighted average number of common shares                  
Basic and diluted     28,921,300         26,767,850  
 

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