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JetPay® Corporation Announces First Quarter 2018 Financial Results
Quarterly Revenues Increase 9.5% including 14.4% Increase in Payment Services
Allentown, PA – May 14, 2018 – JetPay® Corporation (“JetPay” or the “Company”) (NASDAQ: “JTPY”) announced financial results for the first quarter ended March 31, 2018.
|·||JetPay adopted the new accounting standards requirements of ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606” or “ASC 606”), replacing ASC Topic 605, Revenue Recognition. The Company adopted the requirements of ASC 606 on January 1, 2018 using the full retrospective method, which required both the current and prior reporting periods to be presented under the same methodology. Accordingly, the March 31, 2017 and December 31, 2017 financial statements and related disclosures within this press release and within our Form 10-Q are presented on an “As Adjusted” basis.|
The adoption of ASC 606 had several significant impacts on JetPay financial statements and results, including:
|§||Under ASC 606, the Company reflects revenues net of certain fees that the Company pays to third parties, including interchange, which is earned by the cardholder’s issuing bank, and dues and assessments, which are earned by the credit card associations. The Company previously reported some of these items as revenues and cost of revenues under previous standards. This change in presentation will have no effect on the reported amount of gross profit and operating income; however, the Company’s total revenues and cost of revenues for the three months ended March 31, 2017 is each lower by $5.2 million.|
|§||Under ASC 606, the timing of recognition of certain revenue streams, including Form W-2 and annual and quarterly tax filing revenues, has changed from when delivery has occurred or services have been rendered to when a customer takes control of the goods or services. This change in the timing of revenue recognition resulted in an increase in revenues of $744,000 for the three months ended at March 31, 2017.|
|§||Under ASC 606, certain incremental direct costs of obtaining and fulfilling a contract, primarily inside commission costs, are deferred and recognized over the estimated terms of the Company’s customer relationships. This change in the timing of commission recognition resulted in a reduction of commission expenses of $148,000 for the three months ended March 31, 2017.|
The detailed impact of adopting ASC Topic 606 on revenues and financial results within the Payment Services Segment and the HR & Payroll Segment is more fully described in the chart below.
|§||Revenues, as reported under ASC 606, increased 9.5%, or $1.4 million, to $15.9 million for the three months ended March 31, 2018, as compared to $14.5 million for the same period in 2017. Under former ASC Topic 605, revenues would have increased 13.8% for the three months ended March 31, 2018 versus the same period in 2017.|
|·||Revenues within our Payment Services Segment increased 14.4% or $1.3 million, to $10.4 million for the three months ended March 31, 2018 as compared to $9.1 million for the same period in 2017.|
The following information was filed by Jetpay Corp (JTPY) on Tuesday, May 15, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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