BOCA RATON, Fla., Nov. 14, 2023 (GLOBE NEWSWIRE) -- FlexShopper, Inc. (NASDAQ:FPAY) ("FlexShopper"), a leading national online lease-to-own ("LTO") retailer and payment solution provider for underserved consumers, today announced its financial results for the quarter ended September 30, 2023.

Results for Quarter Ended September 30, 2023, vs. Quarter Ended September 30, 2022:

Total fundings increased 10.7% to $28.9 million from $26.1 million consisting of gross lease originations decreasing 10.8% from $15.7 to $14.0 million, loan participations decreasing 99.3% from $10.4 million to $77 thousand, and loan originations increasing from $0 to $14.8 million
Total net lease and loan revenues and fees increased 20.3% to $31.4 million from $26.1 million
Gross profit increased 164.1% to $16.9 million from $6.4 million
Adjusted EBITDA¹ increased 389.7 to $8.4 million compared to ($2.9) million
Net income of 940 thousand compared with net loss of $6.3 million
Net loss attributable to common stockholders of $(129) thousand, or $(0.01) per diluted share, compared to net loss attributable to common stockholders of ($6.9) million, or ($0.32) per diluted share

Results for Nine Months Ended September 30, 2023, vs. Nine Months Ended September 30, 2022:

Total fundings increased 6.0% to $85.0 million from $80.2 million consisting of gross lease originations decreasing 19.3% from $51.9 million to $41.9 million, loan participations decreased 98.6% from $28.3 million to $397 thousand, and loan originations increasing from $0 to $42.7 million
Total net lease and loan revenues and fees decreased 5.3% to $86.7 million from $91.6 million
Gross profit increased 16.8% to $38.9 million from $33.3 million
Adjusted EBITDA¹ increased 344.1% to $15.1 million compared to $3.4 million
Net loss of $4.6 million compared with net income of $5.7 million
Net loss attributable to common stockholders of $7.6 million, or $(0.35) per diluted share, compared to net income attributable to common stockholders of $3.9 million, or $0.17 per diluted share

¹ Adjusted EBITDA is a non-GAAP financial measure. Refer to the definition and reconciliation of this measure under "Non-GAAP Measures".

Conference Call and Webcast Details

Conference call

Date: Wednesday November 15, 2023

Time: 8:00 a.m. Eastern Time

Participant Dial-In Numbers:

Domestic callers: (877) 407-2988

International callers: +1 (201) 389-0923

Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=As6vTenB

The call will also be simultaneously webcast over the Internet via the "Investor" section of the Company's website at www.flexshopper.com or by clicking on the conference call link:

https://hd.choruscall.com/InComm/?callme=true&passcode=13730035&h=true&info=company&r=true&B=6

An audio replay of the call will be archived on the Company's website.

FLEXSHOPPER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
	2023			2022			2023			2022

Revenues:
Lease revenues and fees, net	$	21,082,199		$	24,512,086		$	68,703,201		$	82,746,874
Loan revenues and fees, net of changes in fair value		10,304,247			1,629,365			18,001,057			8,897,964
Total revenues		31,386,446			26,141,451			86,704,258			91,644,838

Costs and expenses:
Depreciation and impairment of lease merchandise		13,061,958			18,746,897			42,893,163			56,114,813
Loan origination costs and fees		1,389,107			1,027,097			4,878,158			2,256,838
Marketing		1,671,137			2,393,185			4,258,904			8,178,120
Salaries and benefits		3,231,100			2,820,033			8,933,998			8,799,395
Operating expenses		6,080,725			5,702,800			17,666,366			17,124,288
Total costs and expenses		25,434,027			30,690,012			78,630,589			92,473,454

Operating income/ (loss)		5,952,419			(4,548,561	)		8,073,669			(828,616	)

Interest expense including amortization of debt issuance costs		(4,746,801	)		(3,030,142	)		(13,846,685	)		(7,336,048	)
Income/ (loss) before income taxes		1,205,618			(7,578,703	)		(5,773,016	)		(8,164,664	)
(Loss)/ benefit from income taxes		(265,517	)		1,298,269			1,185,247			13,892,516
Net income/ (loss)		940,101			(6,280,434	)		(4,587,769	)		5,727,852

Dividends on Series 2 Convertible Preferred Shares		(1,069,456	)		(609,778	)		(3,034,182	)		(1,829,332	)
Net (loss)/ income attributable to common and Series 1 Convertible Preferred shareholders	$	(129,355	)		(6,890,212	)		(7,621,951	)		3,898,520

Basic and diluted (loss)/ income per common share:
Basic	$	(0.01	)	$	(0.32	)	$	(0.35	)	$	0.18
Diluted	$	(0.01	)	$	(0.32	)	$	(0.35	)	$	0.17

WEIGHTED AVERAGE COMMON SHARES:
Basic		21,716,852			21,681,853			21,740,027			21,611,879
Diluted		21,716,852			21,681,853			21,740,027			22,403,447

FLEXSHOPPER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2023			2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	5,732,483		$	6,051,713
Restricted cash		5,326			121,636
Lease receivables, net		41,421,040			35,540,043
Loan receivables at fair value		31,679,882			32,932,504
Prepaid expenses and other assets		2,839,591			3,489,136
Lease merchandise, net		23,596,608			31,550,441
Total current assets		105,274,930			109,685,473

Property and equipment, net		9,011,047			8,086,862
Right of use asset, net		1,281,918			1,406,270
Intangible assets, net		13,833,595			15,162,349
Other assets, net		1,809,511			1,934,728
Deferred tax asset, net		13,206,051			12,013,828
Total assets	$	144,417,052		$	148,289,510

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	4,010,544		$	6,511,943
Accrued payroll and related taxes		603,838			310,820
Promissory notes to related parties, including accrued interest		192,009			1,209,455
Accrued expenses		2,834,954			3,988,093
Lease liability - current portion		236,628			208,001
Total current liabilities		7,877,973			12,228,312
Loan payable under credit agreement to beneficial shareholder, net of unamortized issuance costs of $141,148 at September 30, 2023 and $352,252 at December 31, 2022		86,063,852			80,847,748
Promissory notes to related parties, net of unamortized issuance costs of $764,651 at September 30, 2023 and $0 at December 31, 2022 and net of current portion		9,985,349			10,750,000
Promissory note related to acquisition, net of discount of $987,313 at September 30, 2023 and $1,165,027 at December 31, 2022		3,191,272			3,158,471
Loan payable under Basepoint credit agreement, net of unamortized issuance costs of $102,580 at September 30, 2023		7,310,025			-
Purchase consideration payable related to acquisition		-			8,703,684
Lease liabilities, net of current portion		1,386,769			1,566,622
Total liabilities		115,815,240			117,254,837

STOCKHOLDERS' EQUITY
Series 1 Convertible Preferred Stock, $0.001 par value - authorized 250,000 shares, issued and outstanding 170,332 shares at $5.00 stated value		851,660			851,660
Series 2 Convertible Preferred Stock, $0.001 par value - authorized 25,000 shares, issued and outstanding 21,952 shares at $1,000 stated value		21,952,000			21,952,000
Common stock, $0.0001 par value - authorized 40,000,000 shares, issued and outstanding 21,752,304 shares at September 30, 2023 and 21,750,804 shares at December 31, 2022		2,176			2,176
Treasury shares, at cost – 100,775 shares at September 30, 2023		(100,225	)		-
Additional paid in capital		42,074,553			39,819,420
Accumulated deficit		(36,178,352	)		(31,590,583	)
Total stockholders' equity		28,601,812			31,034,673
	$	144,417,052		$	148,289,510

Non-GAAP Measures

We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.

Adjusted EBITDA represents net income before interest, stock-based compensation, taxes, depreciation (other than depreciation of leased merchandise), amortization, and one-time or non-recurring items. We believe that Adjusted EBITDA provides us with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes.

Key performance metrics for the three months ended September 30, 2023, and 2022 are as follows:

	Three months ended September 30,
	2023			2022			$ Change			% Change
Gross Profit:
Gross lease billings and fees	$	31,266,666		$	38,580,116		$	(7,313,450	)		(19.0	)
Provision for doubtful accounts		(10,038,122	)		(15,075,109	)		5,036,987			(33.4	)
Gain / (loss) on sale of lease receivables		(146,345	)		1,007,079			(1,153,424	)		(114.5	)
Net lease billing and fees	$	21,082,199		$	24,512,086		$	(3,429,887	)		(14.0	)
Loan revenues and fees		3,208,920			6,025,786			(2,816,866	)		(46.7	)
Net changes in the fair value of loans receivable		7,095,327			(4,396,421	)		11,491,748			(261.4	)
Net loan revenues	$	10,304,247		$	1,629,365		$	8,674,882			532.4
Total revenues	$	31,386,446		$	26,141,451		$	5,244,995			20.1
Depreciation and impairment of lease merchandise		(13,061,958	)		(18,746,897	)		5,684,939			(30.3	)
Loans origination costs and fees		(1,389,107	)		(1,027,097	)		(362,010	)		35.2
Gross profit	$	16,935,381		$	6,367,457		$	10,567,924			166.0
Gross profit margin		54	%		24	%

	Three months ended September 30,
	2023		2022			$ Change		% Change
Adjusted EBITDA:
Net income/ (loss)	$	940,101	$	(6,280,434	)	$	7,220,535		(115.0	)
Income taxes		265,517		(1,298,269	)		1,563,786		(120.5	)
Amortization of debt issuance costs		194,682		56,283			138,399		245.9
Amortization of discount on the promissory note related to acquisition		59,238		-			59,238
Other amortization and depreciation		1,964,229		1,244,267			719,962		57.9
Interest expense		4,492,881		2,973,859			1,519,022		51.1
Stock-based compensation		471,819		387,298			84,521		21.8
Adjusted EBITDA	$	8,388,467	$	(2,916,996	)	$	11,305,463		(387.6	)

Key performance metrics for the nine months ended September 30, 2023 and 2022 are as follows:

	Nine months ended September 30,
	2023			2022			$ Change			% Change
Gross Profit:
Gross lease billings and fees	$	98,023,406		$	117,774,390		$	(19,750,984	)		(16.8	)
Provision for doubtful accounts		(32,123,950	)		(42,639,102	)		10,515,152			(24.7	)
Gain on sale of lease receivables		2,803,745			7,611,586			(4,807,841	)		(63.2	)
Net lease billing and fees	$	68,703,201		$	82,746,874		$	(14,043,673	)		(17.0	)
Loan revenues and fees		11,742,778			10,836,534			906,244			8.4
Net changes in the fair value of loans receivable		6,258,279			(1,938,570	)		8,196,849			(422.8	)
Net loan revenues	$	18,001,057		$	8,897,964		$	9,103,093			102.4
Total revenues	$	86,704,258		$	91,644,838		$	(4,940,580	)		(5.4	)
Depreciation and impairment of lease merchandise		(42,893,163	)		(56,114,813	)		13,221,650			(23.6	)
Loans origination costs and fees		(4,878,158	)		(2,256,838	)		(2,621,320	)		116.2
Gross profit	$	38,932,937		$	33,273,187		$	5,659,750			17.0
Gross profit margin		45	%		36	%

	Nine months ended September 30,
	2023			2022			$ Change			% Change
Adjusted EBITDA:
Net (loss)/ income	$	(4,587,769	)	$	5,727,852		$	(10,315,621	)		(180.1	)
Income taxes		(1,185,247	)		(13,892,516	)		12,707,269			(91.5	)
Amortization of debt issuance costs		376,857			163,169			213,688			131.0
Amortization of discount on the promissory note related to acquisition		177,714			-			177,714
Other amortization and depreciation		5,674,931			3,303,590			2,371,341			71.8
Interest expense		13,292,114			7,172,879			6,119,235			85.4
Stock-based compensation		1,336,367			950,003			386,364			40.7
Adjusted EBITDA	$	15,084,967		$	3,424,977		$	11,659,990			340.4

The Company refers to Adjusted EBITDA in the above table as the Company uses this measure to evaluate operating performance and to make strategic decisions about the Company. Management believes that Adjusted EBITDA provides relevant and useful information which is widely used by analysts, investors and competitors in its industry in assessing performance.

About FlexShopper

FlexShopper, Inc. (FPAY) is a financial technology company that provides electronics, home furnishings and other durable goods to underserved consumers on a lease-to-own (LTO) basis through its patented e-commerce marketplace (www.FlexShopper.com). FlexShopper also provides LTO and loan technology platforms to a growing number of retailers and e-retailers to facilitate transactions with consumers without access to traditional financing.

Forward-Looking Statements

All statements in this release that are not based on historical fact are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "goal," "estimate," "anticipate," or other comparable terms. Examples of forward-looking statements include, among others, statements we make regarding expectations of lease originations, the expansion of our lease-to-own program; expectations concerning our partnerships with retail partners; investments in, and the success of, our underwriting technology and risk analytics platform; our ability to collect payments due from customers; expected future operating results and expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including, among others, the following: our ability to obtain adequate financing to fund our business operations in the future; the failure to successfully manage and grow our FlexShopper.com e-commerce platform; our ability to maintain compliance with financial covenants under our credit agreement; our dependence on the success of our third-party retail partners and our continued relationships with them; our compliance with various federal, state and local laws and regulations, including those related to consumer protection; the failure to protect the integrity and security of customer and employee information; and the other risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. The forward-looking statements made in this release speak only as of the date of this release, and FlexShopper assumes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as otherwise required by law.

Contact:

FlexShopper, Inc.

Investor Relations

ir@flexshopper.com

FlexShopper, Inc.

FlexShopper, Inc. Reports Third Quarter 2023 Financial Results