3PEA International, Inc. Reports Second Quarter Earnings
3PEA International, Inc. Reports Second Quarter Earnings
HENDERSON, Nev.--(BUSINESS WIRE)-- 3PEA International, Inc. (OTCBB:TPNL), a payments solution company focused on prepaid debit card processing and program management, today announced financial results for the quarter ended June 30, 2013.
Results of Operations
Three Months ended June 30, 2013 and 2012
Revenues for the three months ended June 30, 2013 were $1,204,386, a decrease of $1,344,617 compared to the same period in the prior year, when revenues were $2,549,003. The decrease in revenue is primarily due to the timing of implementation and utilization of our pharmaceutical card programs, which makes up the majority of our revenues. We expect our revenues to trend upward as the economy continues to improve and as we roll out additional debit card programs utilizing our PaySign® processing platform, diversify our product line and increase the number of support services offered to our customers.
Cost of revenues for the three months ended June 30, 2013 were $799,559, a decrease of $1,233,705 compared to the same period in the prior year, when cost of revenues were $2,033,264. Cost of revenues constituted approximately 66% and 80% of total revenues in 2013 and 2012, respectively.
Gross profit for the three months ended June 30, 2013 was $404,827, a decrease of $110,912 compared to the same period in the prior year, when gross profit was $515,739. Our overall gross profit percentage approximated 34% and 20% during the fiscal years 2013 and 2012. The increase in our gross profit percentage can be attributed to a relative increase in higher margin revenue sources.
Selling, general and administrative expenses for the three months ended June 30, 2013 were $300,205, an increase of $156,210 compared to the same period in the prior year, when selling, general and administrative expenses were $143,995. The increase is primarily due to additional costs incurred related to our card program management and customer call center, which was launched during the first quarter of 2013. The increase is consistent with our overall expectations.
Other income (expense) for the three months ended June 30, 2013 was $(14,944), a decrease in net other income (expense) of $1,135,293 compared to the same period in the prior year when other income (expense) was $1,120,349. The overall decrease in net other income (expense) in 2012 is primarily due to gain on debt extinguishments of $1,136,055 in the prior year which is considered a non-recurring transaction.
Our net income for the three months ended June 30, 2013 was $79,839, a decrease of $1,400,981 compared to the same period in the prior year, when we recorded net income of $1,480,820. The decrease in our net income is attributable to the gain on debt extinguishments of $1,136,055 in the prior year, which is considered a non-recurring transaction, and the increase in selling, general and administrative costs related to our in-house call center.
"We are pleased with this quarter's financial performance despite the impact on our revenues due to the cyclical nature of our card programs," said Arthur De Joya, Chief Financial Officer of 3PEA International.
3PEA INTERNATIONAL, INC. | |||||||||||||
June 30, 2013 | December 31, 2012 | ||||||||||||
ASSETS | |||||||||||||
Current assets | |||||||||||||
Cash | $ | 865,635 | $ | 1,872,911 | |||||||||
Cash Restricted | 5,006,285 | 5,050,867 | |||||||||||
Accounts Receivable | 118,189 | 81,333 | |||||||||||
Prepaid Expenses and other assets | 81,838 | 16,050 | |||||||||||
Total current assets | 6,071,947 | 7,021,161 | |||||||||||
Fixed assets, net | 110,068 | 108,938 | |||||||||||
Intangible and other assets | |||||||||||||
Deposits | 4,896 | 3,551 | |||||||||||
Intangible assets, net | 416,134 | 326,625 | |||||||||||
Total assets | $ | 6,603,045 | $ | 7,460,275 | |||||||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||||
Current liabilities | |||||||||||||
Accounts payable and accrued liabilities | $ | 1,086,989 | $ | 2,212,312 | |||||||||
Customer card funding | 5,006,285 | 5,050,867 | |||||||||||
Notes payable-related parties | 538,000 | 538,000 | |||||||||||
Notes payable | 169,400 | 169,400 | |||||||||||
Total current liabilities | 6,800,674 | 7,970,579 | |||||||||||
Total liabilities | 6,800,674 | 7,970,579 | |||||||||||
Stockholders' deficit | |||||||||||||
Common stock; $0.001 par value; 150,000,000 shares authorized, | 38,936 | 38,912 | |||||||||||
Additional paid-in capital | 5,570,406 | 5,563,931 | |||||||||||
Treasury stock at cost, 303,450 shares | (150,000 | ) | (150,000 | ) | |||||||||
Accumulated deficit | (5,706,000 | ) | (6,012,243 | ) | |||||||||
Total 3PEA International, Inc.'s stockholders' deficit | (246,658 | ) | (559,400 | ) | |||||||||
Noncontrolling interest | 49,029 | 49,096 | |||||||||||
Total stockholders' deficit | (197,629 | ) | (510,304 | ) | |||||||||
Total liabilities and stockholders' deficit | $ | 6,603,045 | $ | 7,460,275 | |||||||||
3PEA INTERNATIONAL, INC. | ||||||||||||
For the three months ended June 30, | ||||||||||||
2013 | 2012 | |||||||||||
Revenues | $ | 1,204,386 | $ | 2,549,003 | ||||||||
Cost of revenues | 799,559 | 2,033,264 | ||||||||||
Gross profit | 404,827 | 515,739 | ||||||||||
Operating expenses | ||||||||||||
Depreciation and amortization | 9,899 | 11,276 | ||||||||||
Selling, general and administrative | 300,205 | 143,995 | ||||||||||
Total operating expenses | 310,104 | 155,271 | ||||||||||
Income from operations | 94,723 | 360,468 | ||||||||||
Other income (expense) Interest expense | (14,944 | ) | (15,706 | ) | ||||||||
Gain on debt extinguishment | -- | 1,136,055 | ||||||||||
Total other income (expense) | (14,944 | ) | 1,120,349 | |||||||||
Income before provision for income taxes and noncontrolling interest | 79,779 | 1,480,817 | ||||||||||
Provision for income taxes | -- | -- | ||||||||||
Net income before noncontrolling interest | 79,779 | 1,480,817 | ||||||||||
Net (income) loss attributable to the noncontrolling interest | (60 | ) | (3 | ) | ||||||||
Net income attributable to 3PEA International, Inc. | $ | 79,839 | $ | 1,480,820 | ||||||||
Net income per common share - basic | 0.00 | 0.04 | ||||||||||
Net income per common share - fully diluted | 0.00 | 0.04 | ||||||||||
Weighted average common shares outstanding - basic | 38,932,324 | 36,789,853 | ||||||||||
Weighted average common shares outstanding - fully diluted | 43,267,824 | 38,329,314 | ||||||||||
3PEA INTERNATIONAL, INC. | ||||||||||||
For the six months ended June 30, | ||||||||||||
2013 | 2012 | |||||||||||
Revenues | $ | 3,315,423 | $ | 4,033,595 | ||||||||
Cost of revenues | 2,391,030 | 3,255,069 | ||||||||||
Gross profit | 924,393 | 778,526 | ||||||||||
Operating expenses | ||||||||||||
Depreciation and amortization | 20,080 | 28,874 | ||||||||||
Selling, general and administrative | 568,810 | 297,096 | ||||||||||
Total operating expenses | 588,890 | 325,970 | ||||||||||
Income from operations | 335,503 | 452,556 | ||||||||||
Other income (expense) Interest expense | (29,327 | ) | (31,459 | ) | ||||||||
Gain on debt extinguishment | -- | 1,136,055 | ||||||||||
Total other income (expense) | (29,327 | ) | 1,104,596 | |||||||||
Income before provision for income taxes and noncontrolling interest | 306,176 | 1,557,152 | ||||||||||
Provision for income taxes | -- | -- | ||||||||||
Net income before noncontrolling interest | 306,176 | 1,557,152 | ||||||||||
Net (income) loss attributable to the noncontrolling interest | (67 | ) | (8 | ) | ||||||||
Net income attributable to 3PEA International, Inc. | $ | 306,243 | $ | 1,557,160 | ||||||||
Net income per common share - basic | 0.01 | 0.04 | ||||||||||
Net income per common share - fully diluted | 0.01 | 0.04 | ||||||||||
Weighted average common shares outstanding - basic | 38,932,324 | 36,038,449 | ||||||||||
Weighted average common shares outstanding - fully diluted | 43,267,824 | 36,826,506 | ||||||||||
3PEA INTERNATIONAL, INC. | |||||||||||
For the six months ended June 30, | |||||||||||
2013 | 2012 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 306,243 | $ | 1,557,160 | |||||||
Adjustments to reconcile net income to net | |||||||||||
Change in noncontrolling interest | (67 | ) | 8 | ||||||||
Depreciation and amortization | 20,080 | 28,874 | |||||||||
Stock based compensation | 83,252 | -- | |||||||||
Gain on extinguishment of debt-stock based | -- | (1,136,055 | ) | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Change in restricted cash | 44,582 | (64,577 | ) | ||||||||
