3PEA Reports First Quarter Financial Results

First Quarter 2017 Revenue up 47% to $3.2 Million

HENDERSON, Nev.­­(BUSINESS WIRE)­­ 3PEA International, Inc. (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 first quarter ended March 31, 2017.

2017 First Quarter Financial Highlights vs. 2016

  • First quarter 2017 revenues increased 47% to $3.2 million compared to $2.18 million in the same year ago quarter.
  • First quarter 2017 gross profit increased to $1.36 million, or 43% of total revenue, compared to $1.0 million, or 41% of total revenue in the same year ago quarter.
  • First quarter 2017 net income increased 351% to $369,394, or $0.01 per diluted share, compared to net income of $81,940, or $(0.00) per share in the same year ago quarter.
  • The Company has eliminated all debt associated with notes payable and legal settlement payable, and is currently debt free.
  • Surpassed 1,150,000 PaySign Cardholders.

Management Commentary

“We are pleased with our first quarter results, particularly the growth in the number of PaySign cardholders,” said Mark Newcomer, Chief Executive Officer, 3PEA International. “Our pipeline remains strong, and our financial discipline has paid off, as we are now debt free, all of which enhances our ability to generate free cash flow and earnings growth.”

“Our results in the first quarter of 2017 reinforce our revenue growth expectations for 2017, as we continue to expect revenue growth in 2017 to outpace the previous year’s revenue growth rate of 28%. Despite the seasonality normally experienced in the first quarter, we recorded a 47% increase in revenue when compared to the previous year’s first quarter as we continue to expand the PaySign cardholder base,” said Brian Polan, Chief Financial Officer, 3PEA International. “Our earnings for the quarter were slightly impacted by an increase in selling, general and administrative expenses as the Company added necessary staff required to facilitate the onboarding of new prepaid card programs expected to launch later in the year.”

Q1 2017 Financial Results

Total revenues in the first quarter of 2017 increased 47% to $3,200,895 from $2,181,359 in the same quarter of 2016. The increase is primarily due to the increase in the number of PaySign cardholders, as well as an increase in the number of card products in the Company’s portfolio.

Gross profit in the first quarter of 2017 increased to $1,367,346, or 43% of total revenue, compared to $888,680, or 41% of total revenue, in the year­ago quarter.

Selling, general and administrative expenses in the first quarter of 2017 were $814,277, or 25% of total revenue, compared to $713,894 or 33% of total revenue, in the year­ago quarter.

Total operating expenses in the first quarter of 2017 were $1,029,544 compared to $837,527 in the year­ago quarter.

Net income in the first quarter of 2017 was $369,394, or $0.01 per diluted share, compared to net income of $81,940, or $0.00 per diluted share, in the year­ago quarter.

Shareholder Update

Currently, our revenues continue to grow at an accelerated rate when compared to 2016. As of March 31, 2017, the Company had over 1,150,000 PaySign Cardholders participating in 126 card products, and continues to increase the number of card products in its portfolio and expects to surpass 200 card products in the current year. In the first quarter, the company’s focus on debt reduction has resulted in the elimination of all debt associated with notes payable and legal settlement payable, and is currently debt free.

 

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. 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, 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 and Facebook.

Forward-­Looking Statements

Certain statements in this news release may contain forward-­looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b­6 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 forward-­looking 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.

3PEA INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016 (UNAUDITED)
(AUDITED)
For the three months ended March 31,
2017 2016
Revenues $ 3,200,895 $ 2,181,359
Cost of revenues (excluding depreciation and amortization) 1,833,549 1,292,679
Gross profit 1,367,346 888,680
Operating expenses
Depreciation and amortization 215,267 123,633
Selling, general and administrative 814,277 713,894
Total operating expenses 1,029,544 837,527
Income from operations 337,802 51,153
Other income (expense)
Gain on debt extinguishment
Other income 20,096 3,831
Legal settlement
Interest expense (15,556 )
Total other income (expense) 20,096 (11,725 )
Income (loss) before provision for income taxes and noncontrolling interest 357,898 39,428
Provision for income taxes 3,000
Net income before noncontrolling interest 354,898 39,428
Net loss attributable to the noncontrolling interest 14,496 42,512
Net income attributable to 3PEA International, Inc. $ 369,394 $ 81,940
Net income per common share ­ basic 0.01
Net income per common share ­ fully diluted 0.01
Weighted average common shares outstanding – basic 43,185,765 42,676,562
Weighted average common shares outstanding – fully diluted 44,159,996 42,676,562
3PEA INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2017 AND DECEMBER 31, 2016
March 31, December 31,
2017 2016
ASSETS
Current assets
Cash $ 1,433,505 $ 1,631,943
Cash restricted 11,274,795 10,002,505
Accounts receivable 106,614 110,269
Prepaid Expenses and other assets 330,276 270,634
Total current assets 13,145,190 12,015,351
Fixed assets, net 326,609 300,761
Intangible and other assets
Deposits 4,551 5,551
Intangible assets, net 1,553,028 1,550,044
Total assets $ 15,029,378 $ 13,871,707
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 651,038 $ 765,596
Customer card funding 11,274,795 10,002,505
Legal settlement payable – current portion 254,900
Stocks payable – related parties 71,586 71,586
Notes payable – related parties
Notes payable 124,168
Total current liabilities 11,997,419 11,218,755
Long-term liabilities
Notes Payable 0 27,892
Legal settlement payable – long-term portion
Total long-term liabilities 0 27,892
Total liabilities 11,997,419 11,246,647
Stockholders’ equity
Common stock: $0.001 par value; 150,000,000 shares authorized, 43,185,765 and
43,185,765 issued and outstanding at March 31, 2017 and December 31, 2016, respectively
43,186 43,186
Additional paid-in capital 6,778,174 6,726,173
Treasury stock at cost, 303,450 shares (150,000 ) (150,000 )
Accumulated deficit (3,430,219 ) (3,799,613 )
Total 3PEA International, Inc.’s stockholders’ equity 3,241,141 2,819,746
Noncontrolling interest (209,182 ) (194,686 )
Total stockholders’ equity 3,031,959 2,625,060
Total liabilities and stockholders’ equity $ 15,029,378 $ 13,871,707

 

Contacts

3PEA International, Inc.
Brian Polan, 1-702-749-7234
Chief Financial Officer
bpolan@3pea.com
www.3pea.com