BOCA RATON, Fla., Nov. 09, 2020 (GLOBE NEWSWIRE) -- FlexShopper, Inc. (Nasdaq:FPAY), a leading national online lease-to-own retailer and LTO payment solution provider, today announced its financial results for the quarter ended September 30, 2020, highlighted by sharp growth in originations in the last month of the quarter.

Results for Quarter Ended September 30, 2020 vs. Quarter Ended September 30, 2019:

• Net lease revenues and fees increased 5.0% to $23.4 million from $22.3 million
• FlexShopper originated 47,317 gross leases, up 29.5% from 36,531
• Gross lease originations increased $5.6 million, or 32.8%, to $22.7 million from $17.1 million
• The average origination value increased by 2.5%, to $480 from $468
• Net income of $289 thousand compared with net income of $1.4 million
• Net loss attributable to common stockholders of $(0.3) million, or $(0.02) per diluted share, compared net income of $0.8 million, or $0.04 per diluted share
• Gross profit increased 8.4% to $8.9 million from $8.2 million
• Adjusted EBITDA¹ decreased to $2.1 million compared to $3.2 million

Results for Nine Months Ended September 30, 2020 vs. Nine Months Ended September 30, 2019:

• Net lease revenues and fees increased 9.4% to $69.9 million from $63.9 million
• FlexShopper originated 117,294 gross leases, up 22.5% from 95,731
• Gross lease originations increased $10.5 million, or 23.5%, to $55.1 million from $44.6 million
• The average origination value increased to $470 from $466
• Net income of $79 thousand compared with net income of $1.6 million
• Net loss attributable to common stockholders, inclusive of deemed dividend expense of $0.7 million in Q1, of $(2.4) million, or $(0.12) per diluted share, compared to $(0.2) million, or $(0.01) per diluted share
• Gross profit increased 15.5% to $24.3 million from $21 million
• Adjusted EBITDA¹ decreased to $6.2 million from $7.3 million

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

Third Quarter 2020 Highlights and Recent Developments

• Rate of origination growth accelerated through the quarter. FlexShopper recorded growth in gross lease originations of 32.8% in the third quarter with month of September originations representing the largest non-holiday month of originations in the Company’s history. The strong activity experienced in September followed market testing in August and into early September that was undertaken in order to confirm payment activity would conform to expectations.
• Payments activity continues to be firm. Continuing the trend cited by the Company on its Q2 earnings call, customer payment activity has remained firm. Additionally, market testing performed by the company beginning late in the second quarter and continuing through mid-third quarter demonstrated a continuation of this trend.
• B-to-B lease originations in September set a record high. The addition of new retail partners, the rebounding from COVID and optimizing of existing retail relationships made September our largest B-to-B lease origination month since inception. We are also successfully broadening our retail categories across tires, furniture and electronics.
• Investments in marketing during the third quarter and continuing in the fourth quarter. Following market testing noted earlier, FlexShopper began ramping up its digital marketing during the third quarter and expects to continue doing so in the fourth quarter. This marketing program began to yield results as originations accelerated into quarter-end and have continued into the fourth quarter.
• Enhanced underwriting methodologies are expected to drive improved returns. As noted on prior investor calls, the company has emphasized a focus on Return on Investment/Return on Capital-oriented management. The company has worked to bolster its underwriting algorithms which, coupled with renewed investment in marketing, are expected to produce revenue growth and further improvements in profitability.

Rich House, CEO, stated, “We have discussed previously our methodical approach to marketing and underwriting in response to the COVID-impacted landscape. In particular, we thought it prudent to conduct market testing before pursuing significant origination growth in the B-to-C channel. I am pleased to report that our testing yielded the results we desired and, as a result, we sharply increased our digital marketing efforts during the third quarter for the B-to-C segment. That push resulted in significant growth in originations in September, with the month’s originations of 13,575 leases, representing the best non-holiday month for B-to-C originations in the Company’s history.”

Mr. House continued, “Our historical retail partners are still contending with physical store activity that is roughly 20% below pre-COVID levels and that impacts the volume of originations we have seen in our B-to-B channel. At the same time, our new partners, that we mentioned on the last call, enabled September to be the largest B-to-B channel origination month in the Company’s history. Although significant, virus-driven macro uncertainty exists, we believe our business is poised for growth.”

Additionally, Adjusted EBITDA is a non-GAAP financial measure. Refer to the definition of this measure under “Non-GAAP Measures.”

About FlexShopper

FlexShopper, LLC, a wholly owned subsidiary of FlexShopper, Inc. (FPAY), is a financial and technology company that provides brand name electronics, home furnishings and other durable goods to consumers on a lease-to-own (LTO) basis through its e-commerce marketplace (www.FlexShopper.com) as well as its patented and patent pending systems. FlexShopper also provides LTO technology platforms to retailers and e-retailers to facilitate transactions with consumers that want to acquire their products, but do not have sufficient cash or credit. FlexShopper approves consumers utilizing its proprietary consumer screening model, collects from consumers under an LTO contract and funds the LTO transactions by paying merchants for the goods.