3Pea International Reports Record Second Quarter and Six Month 2012 Results

3Pea International Reports Record Second Quarter and Six Month 2012 Results

Second Quarter 2012 Highlights

• Revenues increased 383% to $2,549,003 for the second quarter of 2012 up from $665,033 for the second quarter of 2011.
• Operating income increased 477% to $360,468 for the second quarter of 2012, up from $75,513 for the second quarter of 2011.
• Net Income increased to $1,480,820 or .04 per basic and diluted share, up from $59,656 or .00 per share in the second quarter of 2011

Results of Operations

Three Months ended June 30, 2012 and 2011

Revenues for the three months ended June 30, 2012 were $2,549,003, an increase of $1,883,970 compared to the same period in the prior year, when revenues were $665,033. The increase in revenue is due to increased processing and the launch of eight new plasma donation centers utilizing a new incentive rewards programs during the second quarter which we believe will contribute to an increase in overall revenues for 2012. Our pharmaceutical marketing cards continue to make up a majority of our revenues and will continue to do so for the next 24 months. Over the longer term, we expect our revenues to trend upward as the economy improves and as we roll out additional debit card products utilizing our processing platform.

Gross profit for the three months ended June 30, 2012 was $515,739, an increase of $282,880 compared to the same period in the prior year, when gross profit was $232,859. Our overall gross profit percentage approximated 20% and 35% during the fiscal years 2012 and 2011 which is consistent with our overall expectations.

In the three months ended June 30, 2012, we recorded operating income of $360,468, as compared to operating income of $75,513 in the same period in the prior year, an improvement of $284,955.

Other income (expense) for the three months ended June 30, 2012 was $1,120,349, an increase in net other income (expense) of $1,136,206 compared to the same period in the prior year when other income (expense) was ($15,857). The overall increase in net other income (expense) in 2012 is primarily due to a gain on debt extinguishment totaling $1,136,055 arising from the conversion of two outstanding promissory notes totaling $1,667,750 in exchange for a total of 3,335,500 shares of common stock and warrants for 3,335,500 shares of common stock with an exercise price of $0.50.

Our net income for the three months ended June 30, 2012 was $1,480,820, an increase of $1,421,164 compared to the same period in the prior year, when we recorded net income of $59,656. The increase in our net income is attributable to the aforementioned factors.

Six Months ended June 30, 2012 and 2011

Revenues for the six months ended June 30, 2012 were $4,033,595, an increase of $2,430,994 compared to the same period in the prior year, when revenues were $1,602,601. The increase in revenue is due to increased processing and the launch of sixteen new plasma donation centers utilizing a new incentive rewards programs during the first six months of 2012 which we believe will contribute to an increase in overall revenues for 2012. Our pharmaceutical marketing cards continue to make up a majority of our revenues and will continue to do so for the next 24 months. Over the longer term, we expect our revenues to trend upward as the economy improves and as we roll out additional debit card products utilizing our processing platform.

Gross profit for the six months ended June 30, 2012 was $778,526, an increase of $359,085 compared to the same period in the prior year, when gross profit was $419,441. Our overall gross profit percentage approximated 19% and 26% during the fiscal years 2012 and 2011 which is consistent with our overall expectations.

In the six months ended June 30, 2012, we recorded operating income of $452,556, as compared to operating income of $97,656 in the same period in the prior year, an improvement of $354,900.

Other income (expense) for the six months ended June 30, 2012 was $1,104,596, an increase in net other income (expense) of $1,136,136 compared to the same period in the prior year when other income (expense) was ($31,540). The overall increase in net other income (expense) in 2012 is primarily due to a gain on debt extinguishment totaling $1,136,055 arising from the conversion of two outstanding promissory notes totaling $1,667,750 in exchange for a total of 3,335,500 shares of common stock and warrants for 3,335,500 shares of common stock with an exercise price of $0.50.

Our net income for the six months ended June 30, 2012 was $1,557,152, an increase of $1,491,036 compared to the same period in the prior year, when we recorded net income of $66,116. The increase in our net income is attributable to the aforementioned factors.

According to the Company's Chief Financial Officer, Arthur de Joya, "We are very pleased with our results and look forward to the remaining six months in 2012. Under the leadership and vision of our Chief Executive Officer, Mark Newcomer, we will continue to develop and seek out new card programs and to create customizable payment solutions to take advantage of our proprietary processing platform."