SOURCE: PAID Inc.

direct-to-customer, brand management, Celebrity Marketing, VIP Experience, Merchandising, web design

November 10, 2010 08:30 ET

PAID Inc. Q3 2010 Results: Revenue Up 98%, Cash Flow Positive

BOSTON, MA--(Marketwire - November 10, 2010) - PAID Inc. (OTCBB: PAYD) reported third quarter 2010 revenue of $4,186,700 for the quarter ended September 30, 2010, a 98% increase from the same period of the prior year. At September 30, 2010, PAID's total assets were $4,057,000 compared to $2,983,000 at December 31, 2009. As previously projected, PAID was cash flow positive for the nine months ended September 30, 2010.

PAID Inc. revenue sources for the indicated periods:

                                         Three Months Ended September 30,
                                           2010        2009      % Change
                                        ----------- ----------- ----------
Online merchandise and fulfillment      $   743,900 $   525,300         42%
Film and video services                      90,500      47,100         92%
Tour merchandise and VIP services         3,352,300   1,544,100        117%
                                        ----------- ----------- ----------
                                        $ 4,186,700 $ 2,116,500         98%
                                        =========== =========== ==========

                                          Nine Months Ended September 30,
                                           2010        2009      % Change
                                        ----------- ----------- ----------
Online merchandise and fulfillment      $ 1,773,800 $ 1,299,100         37%
Film and video services                     218,900     249,700        -12%
Tour merchandise and VIP services         4,466,600   2,515,500         78%
                                        ----------- ----------- ----------
                                        $ 6,459,300 $ 4,064,300         59%
                                        =========== =========== ==========

"Our revenue is reflecting the increased breadth and strength of our client base that has resulted from our business development efforts," said Christopher Culross, PAID Inc. CFO. "Greater percentages of our revenue are now coming from multiple clients in each area, lessening our reliance on any one client. Providing a broad range of services to a larger number of clients is helping us create a solid base of revenue throughout the year. In the third quarter we started to really see the efficiencies of scale we had previously projected from our growing client base. We expect that efficiencies of scale will further improve as our client base expands and help us continue to move toward profitability. As we grow, we have succeeded in our efforts to maintain the highest quality of service in every area."

PAID CEO Greg Rotman noted, "PAID is continuing its attempts to monetize its intellectual property through licensing and/or sale of its patent assets. At this time, revenue generated from patent licensing is reported under merchandise fulfillment. I believe our patent has value and we have been pursuing approval on a related child patent application through the U.S. Patent & Trademark Office. We are focusing substantial effort on realizing the value of our patent assets for the benefit of PAID Inc. and its shareholders."

                                PAID INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)

                        Three Months Ended          Nine Months Ended
                          September 30,               September 30,
                    --------------------------- --------------------------
                        2010          2009          2010          2009
                    ------------  ------------- ------------  ------------
Revenues            $  4,186,737  $   2,116,536 $  6,459,282  $  4,064,317
Cost of revenues       2,907,215        766,201    4,148,997     1,921,118
                    ------------  ------------- ------------  ------------
Gross profit           1,279,522      1,350,335    2,310,285     2,143,199

Operation expenses     1,623,475      1,141,206    4,242,498     3,881,901
                    ------------  ------------- ------------  ------------
  Income (loss)
   from operations      (343,953)       209,129   (1,932,213)   (1,738,702)

Other Income
 (expense)
  Interest expense          (241)             -         (241)       (2,500)
  Other income                 -            677           50         5,376
                    ------------  ------------- ------------  ------------
    Total other
     income
     (expense), net         (241)           677         (191)        2,876

Income (loss)
 before taxes           (344,194)       209,806   (1,932,404)   (1,735,826)
Provision for
 income taxes                  -              -            -             -
                    ------------  ------------- ------------  ------------ 
Net income (loss)   $   (344,194) $     209,806 $ (1,932,404) $ (1,735,826)
                    ============  ============= ============  ============

Gross profit for the nine months ended September 30, 2010 was $2,310,000 compared to $2,143,000 for the comparable period in 2009. The overall gross margin percentage decreased to 36% for the first three quarters of 2010, compared to 53% for the first three quarters of 2009. This 17% decrease is primarily the result of the Company generating non-recurring convenience fee revenue associated with a tour cancellation in the third quarter of 2009 without all the typical expenses relating to touring. In contrast, in the third quarter of 2010, as part of a fundraising event, PAID sold a very large volume of merchandise that had narrower margins than typical for a client.

Culross noted, "The extremely high volume coupled with the narrower margins of the merchandise for this event was sufficient to squeeze gross margins for 2010, particularly when compared against the margins recorded in 2009. We are expecting improvements in gross margin for the remainder of 2010 and thereafter. Improving margins and turning the corner to profitability is definitely our focus."

He concluded, "PAID will continue to invest in business development, as that is where our future lies. At the same time, we are working to contain our costs and negotiate business contracts that are fair -- providing value to the client, while enabling PAID to grow profitably, as every sound business should."

                                PAID INC.
                              BALANCE SHEETS

                                              September 30, December 31,
                                                  2010          2009
                                     ASSETS   (Unaudited)     (Audited)
                                              ------------- -------------
                            Current assets:
                  Cash and cash equivalents   $   1,230,355 $     730,433
                   Accounts receivable, net         524,738       182,266
                           Inventories, net       1,131,669     1,042,700
  Prepaid expenses and other current assets         267,268       518,722
                          Prepaid royalties         755,414       439,879
                         Due from employees          87,185        19,640
                                              ------------- -------------

                       Total current assets       3,996,629     2,933,640

                Property and equipment, net          52,180        40,517
                      Intangible asset, net           8,242         8,948
                                              ------------- -------------

                               Total assets   $   4,057,051 $   2,983,105
                                              ============= =============

For the full third quarter 2010 10-Q financial report for PAID Inc., please visit http://www.sec.gov

About PAID Inc.:

PAID Inc., publicly traded under the ticker PAYD, is a one-stop brand management and marketing resource for music, entertainment and sports personalities and organizations, and offers AuctionInc™ online shipping calculation and shopping cart software employing its patented technology to streamline ecommerce. Known for quality and customer service, PAID offers turnkey online, mobile, social media and traditional marketing campaigns, as well as award-winning video & film production, VIP ticketing, website design, merchandising, ecommerce and fan community management programs. More details are available at www.paid.com.

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995:

Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the markets, variations in the company's cash flow, competition, celebrity programs, business development efforts, technology availability and cost of materials and other risk factors. Factors that could cause actual results to differ materially are discussed in the Company's most recent filings with the Securities and Exchange Commission.

Contact Information

  • Contacts:
    For PAID Inc.:
    Julie Shepherd
    Accentuate PR
    815 479 1833
    Email Contact