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.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2013 AND DECEMBER 31, 2012
(UNAUDITED)

       
June 30, 2013December 31, 2012
ASSETS
 
Current assets
Cash$865,635$1,872,911
Cash Restricted5,006,2855,050,867
Accounts Receivable118,18981,333
Prepaid Expenses and other assets 81,838  16,050 
Total current assets6,071,9477,021,161
 
Fixed assets, net110,068108,938
 
Intangible and other assets
Deposits4,8963,551
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 funding5,006,2855,050,867
Notes payable-related parties538,000538,000
Notes payable 169,400  169,400 
Total current liabilities6,800,6747,970,579
 
 
Total liabilities6,800,6747,970,579
 
Stockholders' deficit

Common stock; $0.001 par value; 150,000,000 shares authorized,
38,936,106 and 38,911,606 issued and outstanding
at June 30, 2013 and December 31, 2012, respectively

38,93638,912
Additional paid-in capital5,570,4065,563,931
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.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2013 AND 2012
(UNAUDITED)

    
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 amortization9,89911,276
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 interest79,7791,480,817
 
Provision for income taxes --  -- 
 
Net income before noncontrolling interest79,7791,480,817
 
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.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(UNAUDITED)

    
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 amortization20,08028,874
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 interest306,1761,557,152
 
Provision for income taxes --  -- 
 
Net income before noncontrolling interest306,1761,557,152
 
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.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(UNAUDITED)

    
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
cash provided by (used in) operating activities:

Change in noncontrolling interest(67)8
Depreciation and amortization20,08028,874
Stock based compensation83,252--
Gain on extinguishment of debt-stock based--(1,136,055)
Changes in operating assets and liabilities:
Change in restricted cash44,582(64,577)
Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

Markets

DJIA21,580.07-31.71-0.15%
NASDAQ6,387.75-2.25-0.04%
S&P 5002,472.54-0.91-0.04%
NIKKEI 22520,099.75-44.84-0.22%
HANG SENG26,706.09-34.12-0.13%
DAX12,240.06-207.19-1.66%
USD (per EUR)1.170.000.30%
USD (per CHF)0.950.000.01%
JPY (per USD)111.13-0.75-0.67%
GBP (per USD)1.300.000.23%
More to Explore
Fri, Jul 21
Set Your Location
City, State, or Zip