PYDS Reports The Continuation Of Profits For Fourth Consecutive Quarter

Payment Data Systems, Inc. (OTCBB: PYDS), an integrated electronic payments solutions provider, today announced financial results for the quarter ended June 30, 2012.

Revenues increased 91% to $1,469,702 for the second quarter of 2012 up from $768,359 for the second quarter of 2011 due to higher transaction growth. The operating income for the quarter ended June 30, 2012 was $134,873 compared to operating loss of $169,084 for the second quarter of 2011. Net income for the quarter ended June 30, 2012 was $104,306 up from a net loss of $238,481 for the second quarter of 2011.

Highlights for the second quarter of 2012 include:
  • Gross profit increased 231% to $561,609 from $169,817 from the second quarter of 2011
  • Cash and cash equivalents grew to $1,896,487 up from $318,471 in the second quarter of 2011
  • Total current assets grew to $2,217,202 from $516,422 in the second quarter of 2011

Commenting on the results for the quarter, Michael R. Long, Chairman and Chief Executive Officer of Payment Data Systems, said, “The continued growth we experienced this quarter has caused us to remain very positive about the remaining months of 2012 and beyond. We are particularly excited about the growth we anticipate in the third quarter. As of the date of this press release, we have already processed 30% more transactions than we did in the whole second quarter.”

Mr. Long continued, “All of our metrics, both financial and operational, remained at positive levels. As you recall, we experienced tremendous growth in the prior year with record growth in revenues and income from operations, and we have now established four consecutive quarters of profitability. We are continuing our strong outlook for the remainder of 2012.”
         
 

PAYMENT DATA SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)
 
Three Months Ended June 30, Six Months Ended June 30,

2012

2011

2012

2011
 
Revenues $ 1,469,702 $ 768,359 $ 2,765,571 $ 1,553,620
 
Operating expenses:
Cost of services 908,093 598,542 1,680,471 1,209,502
Selling, general and administrative:
Stock-based compensation 87,192 87,192 174,384 174,384
Other expenses 338,365 250,637 715,252 480,490
Depreciation   1,179     1,072     1,610     2,345  
Total operating expenses   1,334,829     937,443     2,571,717     1,866,721  
 
Operating income (loss) 134,873 (169,084 ) 193,854 (313,101 )
 
Other income (expense):
Unrealized (loss) on marketable securities

(15,151

)

(91,738

)

(15,151

)

(91,738

)
Other income (expense)   (416 )   22,341     9,675     22,341  
Total other income (expense), net   (15,567 )   (69,397 )   (5,476 )   (69,397 )
 
Income (loss) before income taxes 119,306 (238,481 ) 188,378 (382,498 )
Income taxes   15,000     -     15,000     -  
 
Net income (loss) $ 104,306   $ (238,481 ) $ 173,378   $ (382,498 )
 
 
Basic and diluted earnings (net loss) per common share:

$

0.00
 

$

0.00
 

$

0.00
 

$

0.00
 
Weighted average common shares outstanding
Basic   137,725,833     136,851,933     137,725,833     136,569,700  
Diluted   137,725,833     136,851,933     137,725,833     136,569,700  
 

About Payment Data Systems, Inc.

Payment Data Systems is an integrated payment solutions provider to merchants and billers. The organization provides an extensive set of products to deliver world-class payment acceptance. Payment Data has solutions for merchants, billers, banks, service bureaus and card issuers. The strength of the company is its ability to offer specifically tailored solutions for card issuance, payment acceptance and bill payments.

For additional information, visit www.paymentdata.com. Contact Michael Long for Investor Relations information at 210.249.4040 or email at ir@paymentdata.com.

Website: www.paymentdata.com, www.ficentive.com, www.zbill.com

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FORWARD-LOOKING STATEMENTS DISCLAIMER

Except for the historical information contained herein, the matters discussed in this release include certain forward-looking statements, which are intended to be covered by safe harbors. Those statements include, but may not be limited to, all statements regarding our and management’s intent, belief and expectations, such as statements concerning our future and our operating and growth strategy. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, the factors detailed from time to time in our filings with the Securities and Exchange Commission. One or more of these factors have affected, and in the future could affect, our businesses and financial results and could cause actual results to differ materially from plans and projections. We believe that the assumptions underlying the forward-looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. All forward-looking statements made in this release are based on information presently available to our management. We assume no obligation to update any forward-looking statements, except as required by law.

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