Attached files
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| 8-K - FORM 8-K - Paysign, Inc. | pea3_8k.htm |
Exhibit 99.1
3PEA Reports Third Quarter 2016 Financial Results
HENDERSON, Nev.--(BUSINESS WIRE)-- 3PEA International, Inc. (“3PEA” or the “Company") (OTCQB: TPNL), a vertically integrated provider of innovative prepaid card programs and processing services for corporate, consumer and government applications, reported financial results for the third quarter ended September 30, 2016.
Q3 2016 Highlights
| · | Third quarter 2016 revenue increased 38% to $2.81 million compared to $2.03 million in the same year ago quarter. Revenue for the nine months ended September 30, 2016 increased 24% to $7.36 million from $5.94 million for the same period last year. |
| · | Gross profit for the three months ended September 30, 2016 increased to $1.42 million compared to $1.10 million in the same year ago quarter. Gross profit for the nine months ended September 30, 2016 increased to $3.68 million from $2.98 million for the same period last year. |
| · | Net income for the three months ended September 30, 2016 was $480,429, or $.01 per share, compared to a net loss of $(2,612,296) or $(0.06) per share in the same year ago quarter. Net income for the nine months ended September 30, 2016 was $898,048 or $0.02 per share compared to a net loss of $(2,612,296) or $(0.06) per share in the same period last year. |
| · | 3PEA expects current revenue and profitability trends to continue. |
Management Commentary
“The increase in revenue in the third quarter and nine month period was primarily a result of growth in our cardholder base throughout our portfolio of prepaid debit card programs,” said Brian Polan, Chief Financial Officer of 3PEA International. “We have developed a robust sales pipeline and remain focused on expanding our product offerings in new and existing markets. Additionally, we have successfully reduced our selling, general and administrative costs. As a result, we expect continued top and bottom line improvement as we continue to add new prepaid card programs to the PaySign platform.”
Three Months Ended September 30, 2016
Revenues for the three months ended September 30, 2016 were $2,812,536, an increase of $778,988 compared to the same period in the prior year, when revenues were $2,033,548. The increase in revenue is due to growth of our cardholder base throughout our incentive prepaid card programs. The company expects revenues to continue to trend upward in the long term.
Gross profit for the three months ended September 30, 2016 was $1,423,946, an increase of $319,405 compared to the same period in the prior year, when gross profit was $1,104,541.
Selling, general and administrative expenses for the three months ended September 30, 2016 were $794,424, a decrease of $476,368 compared to the same period in the prior year, when selling, general and administrative expenses were $1,270,792. Selling, general and administrative expenses in the quarter ended September 30, 2015 were impacted by expenses related to our legal settlement of October 2, 2015 which did not reoccur in the current period. A reduction in expenses related to our planned expansion in Europe also contributed to the year over year decrease in selling, general and administrative costs.
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Other income (expense) for the three months ended September 30, 2016 was $(15,497), a decrease in net other income (expense) of $2,494,108 compared to the same period in the prior year when other income (expense) was $(2,509,605) and largely attributable to the legal settlement expense of $2,500,000 for the three months ended September 30, 2015.
Our net income for the three months ended September 30, 2016 was $480,429, an increase of $3,092,725 compared to the same period in the prior year, when we recorded a net loss of $(2,612,296). The increase in our net income is attributable to the aforementioned factors.
Nine Months Ended September 30, 2016
Revenues for the nine months ended September 30, 2016 were $7,369,540, an increase of $1,426,375 compared to the same period in the prior year, when revenues were $5,943,165. The increase in revenue is primarily due to the expansion of our cardholder base throughout our various prepaid card programs.
Gross profit for the nine months ended September 30, 2016 was $3,687,326, an increase of $699,032 compared to the same period in the prior year, when gross profit was $2,988,294.
Selling, general and administrative expenses for the nine months ended September 30, 2016 were $2,434,199, a decrease of $422,033 compared to the same period in the prior year, when selling, general and administrative expenses were $2,856,737.
Other income (expense) for the nine months ended September 30, 2016 was $(47,848), an increase in net other income (expense) of $2,471,604 compared to the same period in the prior year when other income (expense) was $(2,519,452) which is within our overall expectations and was largely attributable to the legal settlement expense of $2,500,000 for the nine months ended September 30, 2015.
Our net income for the nine months ended September 30, 2016 was $898,048, or $0.02 per share, an increase of $3,376,924 compared to the same period in the prior year, when we recorded a net loss of $(2,478,876) or $(0.06) per share. The increase in our net income is attributable to the aforementioned factors.
About 3PEA International
3PEA International (OTCQB:TPNL) is an experienced and trusted prepaid debit card payment solutions provider as well as an integrated payment processor that has millions of prepaid debit cards in its portfolio. Through its PaySign brand, 3PEA designs and develops payment solutions, prepaid card programs, and customized payment services. 3PEA’s corporate incentive prepaid cards are changing the way corporations reward, motivate, and engage their current and potential customers, employees, and agents. 3PEA’s customizable prepaid solutions offer significant cost savings while improving brand recognition and customer loyalty. 3PEA’s customers include healthcare companies, major pharmaceutical companies and source plasma providers, large multinationals, prestigious universities, and social media companies. PaySign is a registered trademark of 3PEA Technologies, Inc., in the United States and other countries. For more information visit us at www.3pea.com or follow us on LinkedIn, Twitter andFacebook.
Forward-Looking Statements
Certain statements in this news release may contain forwardlooking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the companies, are forwardlooking statements that involve risks and uncertainties. There is no assurance that such statements will prove to be accurate, and actual results and future events could differ materially. 3PEA undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events, or otherwise.
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3PEA INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2016 AND DECEMBER 31, 2015
| September 30, 2016 (Unaudited) | December 31, 2015 (Audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 1,333,104 | $ | 1,389,494 | ||||
| Cash restricted | 8,790,072 | 7,063,945 | ||||||
| Accounts receivable | 110,273 | 16,742 | ||||||
| Prepaid Expenses and other assets | 250,197 | 254,225 | ||||||
| Total current assets | 10,483,646 | 8,724,406 | ||||||
| Fixed assets, net | 263,536 | 271,967 | ||||||
| Intangible and other assets | ||||||||
| Deposits | 5,551 | 3,551 | ||||||
| Intangible assets, net | 1,469,813 | 1,264,151 | ||||||
| Total assets | $ | 12,222,546 | $ | 10,264,075 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 587,602 | $ | 465,318 | ||||
| Customer card funding | 8,790,072 | 7,063,945 | ||||||
| Legal settlement payable - current portion | 507,704 | 915,475 | ||||||
| Stocks payable - related parties | 67,268 | 125,987 | ||||||
| Notes payable - related parties | – | – | ||||||
| Notes payable | 173,920 | 174,098 | ||||||
| Total current liabilities | 10,126,566 | 8,744,823 | ||||||
| Long-term liabilities | ||||||||
| Notes Payable | 18,150 | – | ||||||
| Legal settlement payable - long-term portion | – | 339,183 | ||||||
| Total long-term liabilities | 18,150 | 339,183 | ||||||
| Total liabilities | 10,144,716 | 9,084,006 | ||||||
| Stockholders' equity | ||||||||
| Common stock: $0.001 par value; 150,000,000 shares authorized, 42,498,965 and 42,510,765 issued and outstanding at September 30, 2016 and December 31, 2015 | 42,948 | 42,511 | ||||||
| Additional paid-in capital | 6,677,881 | 6,579,508 | ||||||
| Treasury stock at cost, 303,450 shares | (150,000 | ) | (150,000 | ) | ||||
| Accumulated deficit | (4,302,364 | ) | (5,200,412 | ) | ||||
| Total 3PEA International, Inc.'s stockholders' equity | 2,268,465 | 1,271,607 | ||||||
| Noncontrolling interest | (190,635 | ) | (91,538 | ) | ||||
| Total stockholders' equity | 2,077,830 | 1,180,069 | ||||||
| Total liabilities and stockholders' equity | $ | 12,222,546 | $ | 10,264,075 | ||||
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3PEA INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015
(UNAUDITED)
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenues | $ | 2,812,536 | $ | 2,033,548 | $ | 7,369,540 | $ | 5,943,165 | ||||||||
| Cost of revenues | 1,388,590 | 929,007 | 3,682,214 | 2,954,871 | ||||||||||||
| Gross profit | 1,423,946 | 1,104,541 | 3,687,326 | 2,988,294 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Depreciation and amortization | 149,342 | 74,973 | 406,328 | 219,780 | ||||||||||||
| Selling, general and administrative | 794,424 | 1,270,792 | 2,434,199 | 2,856,737 | ||||||||||||
| Total operating expenses | 943,766 | 1,345,765 | 2,840,527 | 3,076,517 | ||||||||||||
| Income (loss) from operations | 480,180 | (241,224 | ) | 846,799 | (88,223 | ) | ||||||||||
| Other income (expense) | ||||||||||||||||
| Gain on debt extinguishment | – | – | – | 11,338 | ||||||||||||
| Other income | 4,986 | (5,325 | ) | 10,900 | (5,325 | ) | ||||||||||
| Legal settlement | – | (2,500,000 | ) | – | (2,500,000 | ) | ||||||||||
| Interest expense | (20,483 | ) | (4,280 | ) | (58,748 | ) | (25,465 | ) | ||||||||
| Total other income (expense) | (15,497 | ) | (2,509,605 | ) | (47,848 | ) | (2,519,452 | ) | ||||||||
| Income (loss) before provision for income taxes and noncontrolling interest | 464,683 | (2,750,829 | ) | 798,951 | (2,607,675 | ) | ||||||||||
| Provision for income taxes | – | – | – | – | ||||||||||||
| Net income (loss) before noncontrolling interest | 464,683 | (2,750,829 | ) | 798,951 | (2,607,675 | ) | ||||||||||
| Net (income) loss attributable to the noncontrolling interest | 15,746 | 138,533 | 99,097 | 128,799 | ||||||||||||
| Net income (loss) attributable to 3PEA International, Inc. | $ | 480,429 | $ | (2,612,296 | ) | $ | 898,048 | $ | (2,478,876 | ) | ||||||
| Net income (loss) per common share - basic | $ | 0.01 | $ | (0.06 | ) | $ | 0.02 | $ | (0.06 | ) | ||||||
| Net income (loss) per common share - fully diluted | $ | 0.01 | N/A | $ | 0.02 | N/A | ||||||||||
| Weighted average common shares outstanding - basic | 42,948,265 | 42,156,110 | 42,844,570 | 38,675,142 | ||||||||||||
| Weighted average common shares outstanding - fully diluted | 43,138,279 | – | 42,991,542 | – | ||||||||||||
Contacts
3PEA International, Inc.
Brian Polan, 1-702-749-7234
Chief Financial Officer
bpolan@3pea.com
www.3pea.com
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