FlexShopper, Inc.

Greetings. Welcome to Flex Shopper First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Carlos Sanchez, Investor Relations. Thank you. You may begin.

Thank you, and good morning. Welcome to Flex Shopper's first quarter 2023 financial results conference call. With me today are Russ Heiser, our chief executive officer, and John Davis, our chief operating officer. We issued our earnings release on Thursday of last week and corresponding investor relations presentation this morning, and we'll be referencing these during the call today. Both can be found in our investor relations section of our website. We will be available for Q&A following today's prepared remarks. Before we begin, I would like to remind everyone that this call will contain forward-looking statements regarding future events and our financial performance, including statements regarding our market opportunity, the impact of our growth initiatives, and future financial performance. These should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent periodic SEC reports, including our annual report and quarterly report 10-Q for the quarter ending March 31st, 2023. These statements reflect management's current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. Except as required by law, we undertake no obligation to publicly update or revise any of these statements, whether as a result of any new information, future events or otherwise. During today's discussion, of our financial performance, we will provide certain financial information that contains non-GAAP financial measures under SEC rule. These include measures such as EBITDA, net income, and adjusted net income. These non-GAAP financial measures should not be considered replacements and should be read together with our GAAP results. Reconciliation to GAAP measurements and certain additional information are also included in today's earnings release, which is available on our investor section of our website. This call is being recorded and a webcast will be available for replay on our investor relations section of our website. I will now turn the call over to our CEO, Russ Heiser.

Thanks, Carlos. Good morning. I appreciate everyone dialing in this morning. Today, I'll discuss a few highlights and some new initiatives before handing off to John Davis, our COO, so he can share further insights on the operational metrics. And then we will open the call to questions. First quarter, 2023 was off to a good start with net revenue of over $30 million, gross profit of $13 million, and EBITDA of over $6 million. Our substantial adjustments to our underwriting and risk management have resulted in solid improvements to loss rates. Additionally, we have seen a decline in early payoffs, which also increases the yield on the portfolio. We expect that with no other substantive changes to the macro environment, loss rates will continue to improve over the next two quarters as we cycle through the historical portfolio that was originated at the height of last year's inflationary increases before we had tightened underwriting to our current levels. With what we hope are the most negative consequences for our customers of this inflationary environment behind us, we are now focused on positioning ourselves to take advantage of opportunities. Additional upside should come from stronger credit profiles applying for lease to own as the more traditional providers of consumer credit continue to tighten their own underwriting. So far, we have yet to see a meaningful improvement in the risk profiles in new applicants. However, by making some adjustments to our pricing model, we hope to be a compelling source of liquidity for these types of customers going forward. On top of the contract extension with our largest partner mentioned on the last call, Our enterprise sales team has been progressing with a few large retail partners, and we are approaching the finish line. As a result, we expect a meaningful impact on the amount of new customer originations onboarded through retailers in the second half of this year. Furthermore, as many of our longtime investors are aware, that outside of a few select initiatives, we have yet to focus on small and medium businesses. Now that macro environment is showing some stabilization, we believe this is the time to launch a sales team focused on this segment that will complement our enterprise sales efforts as well as our FlexShopper.com marketplace. On the lending front, the Revolution Storefront platform will be onboarding its first new virtual locations with Liberty Tax franchisees this quarter. It took almost six months, longer than I expected to get to this point, but we now have the necessary infrastructure enhancements and regulatory framework to begin rolling out new locations. While it will take a while to grow the portfolio size at each new location, the magnitude of potential locations should provide lift as the rollouts speed up. Now I'll turn the call over to John to discuss our operations. Thanks, Russ.