Exhibit 99.1

 

 

 

3PEA REPORTS FULL YEAR 2018 FINANCIAL RESULTS

 

2018 Revenue up 53.8% to a Record $23.4 Million, DrivesNet Income of $2.6 Million and Adjusted EBITDA of $4.9 Million

 

3PEA International, Inc. (NASDAQ: TPNL), a vertically integrated provider of innovative prepaid card programs and processing services for corporate, consumer and government applications, reported financial results for the fourth quarter and full year ended December 31, 2018.

 

Financial Highlights

 

  Revenue for the year ending December 31, 2018 was $23.4 million, an increase of 54% compared to $15.2 million the prior year.
     
  Gross profit increased 70% to $11.4 million or 49% of revenues, compared to $6.7 million or 44% of revenues in 2017.
     
  Total operating expenses were $8.9 million compared to $4.9 million the prior year.
     
  Net Income attributable to 3PEA was $2.6 million, an increase of 44% compared to $1.8 million the prior year. Earnings per basic share was $.06 versus $.04 the prior year.
     
  Non-GAAP Adjusted EBITDA was $4.9 million, an increase of 65% compared to $3.0 million in 2017. Non-GAAP Fully Diluted EPS was $.09 as compared to $.06 the prior year.
     
  Our revenue conversion rate of gross dollar volume loaded on cards was 3.77%, or 377 bps in 2018 compared to 3.75% or 375 bps in the prior year.

 

Financial Guidance

 

 

The company reiterates its previously released revenue guidance for 2019 of $38.0 to $40.0 million, representing a 62% to 71% increase compared to $23.4 million for full year 2018.

     
   Today, the company sets Adjusted EBITDA guidance at $10.0 to $12.0 million, representing a 104% to 145% increase compared to $4.9 million for full year 2018.

 

2018 Financial Results

 

Revenues for the year ended December 31, 2018 were $23,423,675, an increase of $8,189,584 compared to the year ended December 31, 2017, when revenues were $15,234,091. The increase in revenue of 54% was primarily due to an increase in the number of new corporate incentive prepaid card programs and growth within our existing programs.

 

Cost of revenues were $12,026,452, an increase of $3,492,180 compared to 2017, when cost of revenues were $8,534,272. Cost of revenues were 51% and 56% of total revenues in 2018 and 2017, respectively. Our cost of revenues as a percentage of revenues decreased due to improved network interchange margins and a favorable client mix.

 

Selling, general and administrative expenses (“SG&A”) were $7,835,074, an increase of $3,779,238 compared to 2017, when selling, general and administrative expenses were $4,055,836. The increase in SG&A was primarily attributable to investments in infrastructure; additions to our executive leadership team, salesforce and staffing; and an increase in stock based compensation. The rate of increase is expected to slow in 2019.

 

Net income attributable to 3PEA International, Inc. was $2,588,054 as compared to net income of $1,791,141 in 2017, which represents an increase of $796,913. The overall change in net income is attributable to the aforementioned factors.

 

 

 

 1 
 

 

Management Commentary

 

“We are very pleased with our 2018 results. We recorded record revenue, opened new markets and produced record net profit,” said Mark Newcomer, Chief Executive Officer, 3PEA International. “In 2018 we achieved several milestones, including the commencement of trading our common stock on the NASDAQ Capital Market on August 10th, 2018. Additionally, we assembled a very experienced board that includes Dan Henry, the former CEO of Netspend as our Chairman, and Dennis Triplett, the former CEO of Health Services at UMB Bank. We broadened our industry focus towards the Pharmaceutical industry, where we are seeing our traditional card based and virtual payment solutions gain significant traction into 2019. While 2018 was an exceptional year for 3PEA, we are even more excited about our future prospects for growth and creating sustainable shareholder value.”

 

“The company expects continued growth and improved performance across a number of key financial and operating metrics in 2019. We anticipate further expansion of gross and net margins, as favorable industry and client mix contribute to improved cost of sales, and we benefit from improved operating leverage,” stated Mark Attinger, Chief Financial Officer, 3PEA International.

 

A conference call and live webcast is scheduled for 5:00pm ET, and will be available for at least three months at 3pea.com/IR.

 

About 3PEA International

 

3PEA International (NASDAQ:TPNL) is an experienced and trusted prepaid debit card payment solutions provider as well as an integrated payment processor that has managed millions of prepaid debit cards in its portfolio. Through its PaySign brand, 3PEA conceptualizes, develops and manages 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 https://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 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 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. Non-GAAP Measures

 

To supplement 3PEA’s financial results presented on a GAAP basis, we use non-GAAP measures of net income that excludes the following cash and non-cash items – interest, taxes, stock-based compensation, amortization and depreciation. We believe these non-GAAP measures help investors better evaluate our past financial performance and potential future results. Non-GAAP measures should not be considered in isolation or as a substitute for comparable GAAP accounting and investors should read them in conjunction with the Company’s financial statements prepared in accordance with GAAP. The non-GAAP measures of net income we use may be different from, and not directly comparable to, similarly titled measures used by other companies.

 

“EBITDA” is defined as earnings before interest, taxes, depreciation and amortization expense. “Adjusted EBITDA” reflects the adjustment to EBITDA to exclude stock-based compensation charges.

 

Adjusted EBITDA is not intended to represent cash flows from operations, operating income (loss) or net income (loss) as defined by U.S. GAAP as indicators of operating performances. Management cautions that amounts presented in accordance with 3PEA’s definition of Adjusted EBITDA may not be comparable to similar measures disclosed by other companies because not all companies calculate Adjusted EBITDA in the same manner.

 

 

 

 

 

 2 
 

 

CONSOLIDATED RESULTS

3PEA INTERNATIONAL, INC.,

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(Audited)

 

 

   For years ended December 31, 
   2018   2017 
Revenue  $23,423,675   $15,234,091 
           
Cost of Revenues   12,026,452    8,534,272 
           
Gross Profit   11,397,223    6,699,819 
Gross Margin %   48.7%    44.0% 
           
Operating Expense          
Selling, General & Administrative   7,835,074    4,055,836 
Depreciation & Amortization   1,089,521    876,191 
           
Total Operating Expense   8,924,595    4,932,027 
           
Operating Income   2,472,628    1,767,792 
           
Other Income/ (Expense)          
Other   (31,125)   16,315 
Interest   139,738    7,603 
           
Total Other Income/ (Expense)   108,613    23,918 
           
Income before noncontrolling interest   2,581,241    1,791,710 
Provision for Taxes       6,000 
           
Net Income before noncontrolling interest   2,581,241    1,785,710 
Net Loss Non-Controlling Interest   6,813    5,431 
           
3PEA NET INCOME  $2,588,054   $1,791,141 
           
Weighted Avg Shares Outstanding - Basic   45,483,693    43,397,477 
Weighted Avg Shares Outstanding - Fully Diluted   52,247,736    48,037,477 
           
Earnings Per Share - Basic   0.06    0.04 
Earnings Per Share - Fully Diluted   0.05    0.04 

 

 

 

 

 

 

 3 
 

 

CONSOLIDATED RESULTS

3PEA INTERNATIONAL, INC.,

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2018 AND DECEMBER 31, 2017

(Audited)

 

 

   for years ended December 31 
   2018   2017 
Assets          
           
Current Assets          
Cash  $5,615,073   $2,748,313 
Restricted Cash   26,050,668    14,416,444 
Accounts Receivable   337,303    165,523 
Prepaids and Other   1,175,241    578,340 
           
Total Current Assets   33,178,285    17,908,620 
           
Fixed Assets, net   883,490    854,402 
           
Intangible Assets, net   2,115,933    1,639,557 
           
Total Assets   36,177,708    20,402,579 
           
Liabilities and Stockholders Equity          
           
Current Liabilities          
Accounts Payable and Accrued Liabilities   1,327,497    1,145,083 
Customer Card Funding   25,960,974    14,416,444 
           
Total Current Liabilities   27,288,471    15,561,527 
           
Total Liabilities   27,288,471    15,561,527 
           
Stockholders Equity          
Common Stock $0.001 Par Value; 150,000,000 authorized (46,440,765 and 43,670,765 issued and outstanding 12/31/18 and 12/31/17, respectively)   46,441    43,671 
Additional Paid-in-Capital   8,620,144    7,155,970 
Treasury Stock (303,450 Shares for 2018 and 2017)   (150,000)   (150,000)
Retained Earnings (Deficit)   579,582    (2,008,472)
3PEA Stockholders Equity   9,096,167    5,041,169 
           
Non-controlling Interest   (206,930)   (200,117)
           
Total Stockholders Equity   8,889,237    4,841,052 
           
Total Liabilities and Stockholders Equity  $36,177,708   $20,402,579 

 

 

 

 

 4 
 

 

3PEA INTERNATIONAL, INC.,

RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   for years ended December 31 
   2018   2017 
Net income attributable to 3PEA International,Inc.  $2,588,054   $1,791,141 
Provision for Taxes        6,000 
Interest   (139,738)   (7,603)
Depreciation and amortization   1,089,521    876,191 
           
EBITDA   3,537,837    2,665,729 
           
Stock-based compensation   1,366,944    308,696 
           
Adjusted EBITDA   4,904,781    2,974,425 
           
Fully diluted average shares outstanding   52,247,736    48,037,477 
Non-GAAP EPS - fully diluted  $0.09   $0.06 

 

 

Contacts

 

3PEA International, Inc.

Jim McCroy, 1-702-749-7269
Investor Relations
ir@3pea.com
www.3pea.com
or

S&C Public Relations, Inc.
Suzanne Dawson
1-646-941-9140
sdawson@scprgroup.com

 

 

Source: 3PEA International, Inc.

 

 

 

 

 

 

 

 

 5 

View differences made from one to another to evaluate 3Pea International, Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by 3Pea International, Inc..

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account