Summary of Q3 Key Factors:
Since many investors misinterpret the results; here are some key factors to keep in mind and that actually shows an overall positive picture for the 3 Pea.
- Revenue is up over 2012s Q3 by 70% from 622k to 1.061M
- Cost of sales were up representing 69% of revenue compare to 49% in 2012 but note that most this is attributable to non-recurring start up costs ('A significant portion of the increase in cost of sales for the three months ended September 30, 2013 can be attributed to a non-recurring start-up expenditure to an independent sales organization related to one of our newer card programs approximating $200,000, which caused our cost of revenues to increase above historical norms.')
- adjusted cost of sales comes in near 50% (adjusted for the 200k non recurring portion) which is in line with the previous years trend.
-Note that G&A expenses are also up alot on the increased infrastructure cost added by the call centre and now the added sales and marketing staff which in the long run will materialize nicely. Therefore the net loss is considered a non issue to me and as some would say Short term pain for long term gain.
- over the past 9 months;
- you will see that gross profit margins increased to 29% from 23% during the fiscal years 2013 and 2012 which was a result of better economies of scale for the revenue.
- Revenue slightly down but is all due to the timing of the contracts and the way that revenue is accounted for.
- I think the following forward looking statement speaks volumes:
"Having invested in the necessary infrastructure and manpower to fuel our future growth, 3PEA is confident that we will capitalize on the market opportunities that await us. We anticipate a rapid increase in revenue from our plasma donation center card programs, as we will be adding a significant number of new plasma donation centers to our platform in the fourth quarter of 2013 and beyond," said Arthur De Joya, Chief Financial Officer, 3PEA International. "3PEA has started building its internal sales and marketing team and are in the final stages of developing a sales and marketing strategy. We are paving the way for our expansion into the European market, and have invested significant resources into our business development plans for both in the United States and abroad."
- The companies increased infrastructure is not without reason the European markets are filled with very large opportunities for prepaid card programs coupled with a large increase in plasma donation centers in the US in my opinion 2014 should be a stellar year for the company.
- Afterspeaking to company reps on multiple occasions I know the company would not raise capital without reason or without it bewing worth a higher return for investors. From what I have seen, the company would only raise capital if the cost of capital is lower than what the projected return will be for shareholders. Some may see the past quarters as mediocre, but if you are in this to make a good return the returns are not made over night, the train will leave the station and it will catch many by surpries. All it takes is one large contract to hit and the companies earnings will explode, I believe this may be found internationaly.
Best of Luck to all investors, patience will be rewarded.
Erik,
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