USA Technologies, Inc. (NASDAQ:USAT), a premier payment
technology service provider of integrated cashless and mobile
transactions in the self-service retail market, today reported
results for its fourth quarter and fiscal year ended June 30,
2016.
Fourth Quarter Financial Highlights:
- Total quarterly revenue of $21.9
million, a year-over-year increase of 24%
- 429,000 connections to ePort service,
including 6,000 new connections attributable to the VendScreen
acquisition which closed on January 15, 2016, representing a
year-over-year increase of 29%
- Record 11,050 customers compared to
9,600 as of a year ago, a year-over-year increase of 15%
- Quarterly record license and
transaction fee revenue of $15.3 million, a year-over-year
increase of 28%
- $1.3 million of cash provided by
operating activities representing the sixth straight quarter of
positive operating cash flow
- Ended the quarter with $19.3 million in
cash and cash equivalents
- Quarterly GAAP net loss of $872
thousand, including the impact of a $432 thousand non-cash expense
for the write-down of trademarks to net realizable value of zero
and $258 thousand of non-recurring expenses related to the
acquisition and integration of the VendScreen business
- Quarterly Non-GAAP net loss of $1.4
million
- Quarterly adjusted EBITDA of $0.6
million
Fourth Quarter Financial Highlights, Connections &
Transaction Data:
Fiscal Year Financial Highlights:
- Record total revenue of $77.4
million, a year-over-year increase of 33%
- Record net connections of 96,000 for
the year
- Net loss for the fiscal year of 2016
was $6.8 million compared to a net loss of $1.1 million for the
fiscal year of 2015. The net loss for the fiscal year reflected a
$5.7 million non-cash charge for the change in the fair value of
warrant liabilities
- Non-GAAP net loss was $0.7 million for
the 2016 fiscal year compared to non-GAAP net loss of $0.5 million
for the 2015 fiscal year
Fiscal Year Financial Highlights,
Connections & Transaction Data:
Three months ended, unless noted
(Connections and $'s in thousands,
transactions in millions, eps is not rounded)
June 30,
2016 2015 # Change
% Change Revenues: License and transaction fees $ 15,263 $
11,938 $ 3,325 28 % Equipment sales 6,681
5,708 973 17 % Total revenues $ 21,944
$ 17,646 $ 4,298 24 % License and transaction
fees gross margin 30.5 % 34.1 % (3.6 %) (11 %) Equipment
sales gross margin 17.0 % 12.8 % 4.2 % 33 % Overall Gross
Margin 26.4 % 27.2 % (0.8 %) (3 %) Operating loss $ (1,578 )
$ (357 ) $ (1,221 ) 342 % Adjusted EBITDA $ 626 $ 1,251 $
(625 ) (50 %) Net loss $ (872 ) $ (201 ) $ (671 ) 856 %
Net loss per common share - basic and diluted $ (0.02 ) $
(0.01 ) $ (0.01 ) 177 % Net New Connections 28 31 (3 ) (10
%) Total Connections (at period end) 429 333 96 29 %
Total Number of Transactions (millions) 89 62 27 44 %
Transaction Volume ($millions) $ 169 $ 113 $ 56 50 %
Year ended, unless noted
June 30,
2016
2015
# Change
% Change
(Connections and $'s in thousands,
transactions in millions, eps is not rounded)
Revenues: License and transaction fees
$
56,589
$ 43,633 $ 12,956 30 % Equipment sales 20,819
14,444 6,375 44 % Total revenues $ 77,408
$ 58,077 $ 19,331 33 % License and
transaction fees gross margin 32.7 % 32.6 % 0.1 % 0 %
Equipment sales gross margin 16.7 % 18.1 % (1.4 %) (8 %)
Overall Gross Margin 28.4 % 29.0 % (0.6 %) (2 %) Operating
loss $ (1,467 ) $ (240 ) $ (1,227 ) 511 % Adjusted EBITDA $
5,984 $ 6,259 $ (275 ) (4 %) Net income (loss) $ (6,806 ) $
(1,089 ) $ (5,717 ) 525 % Net loss per common share - basic
and diluted $ (0.21 ) $ (0.05 ) $ (0.16 ) 318 % Net New
Connections 96 67 29 43 % Total Connections (at period end)
429 333 96 29 % Total Number of Transactions (millions) 316
217 99 46 % Transaction Volume ($millions) $ 584 $ 389 $ 195
50 %
“We ended the fiscal year with strong momentum as we continue to
drive growth by the adoption of our cashless payment solutions,”
said Stephen P. Herbert, USA Technologies’ chairman and
chief executive officer. “Our customers are increasingly realizing
the positive benefits of upgrading 100% of their locations with our
ePort Connect service to enable consumers the cashless payment
option. The addition of our ePort Interactive Service provides
additional value with the ability to provide a more robust consumer
experience and yields improved performance at the location. We’ve
grown our business substantially and are poised for the next phase
of growth as we work to improve profitability and scale our
business.”
As described in our Form 10-K for the fiscal year, to be filed
today, based on management’s assessment of the effectiveness of its
internal control over financial reporting as of June 30, 2016,
management identified control deficiencies, including three
significant deficiencies, in the design or operating effectiveness
of the Company’s internal control over financial reporting, which
when aggregated, represent a material weakness in internal control.
The Company is committed to remediating the control deficiencies
that gave rise to the material weakness. These internal controls
are being evaluated by management, and will be adjusted
appropriately as soon as is practical. Due its increased market
capitalization, this is the first fiscal year that the Company’s
internal control over financial reporting has been subject to audit
by its independent registered public accounting firm.
Fiscal 2017 Outlook
For full fiscal year 2017, management expects to add between
115,000 and 125,000 net new connections for the year, bringing
total connections to our service to a range of 544,000 to 554,000
and expects total revenue to be between $95 million and $100
million. We also expect to have year-over-year increases of
adjusted EBITDA and non-GAAP net income.
Webcast and Conference Call
Management will host a conference call and webcast the event
beginning at 8:30 a.m. Eastern Time today, September 13, 2016.
To participate in the conference call, please dial (866)
393-1608 approximately 10 minutes prior to the call.
International callers should dial (224) 357-2194. Please reference
conference ID # 75053191.
A live webcast of the conference call will be available at
http://investor.usatech.com/events.cfm. Please access the website
15 minutes prior to the start of the call to download and install
any necessary audio software.
A telephone replay of the conference call will be available from
11:30 a.m. Eastern Time on September 13, 2016 until 11:30 a.m.
Eastern Time on September 16, 2016 and may be accessed by calling
(855) 859-2056 (domestic dial-in) or (404) 537-3406 (international
dial-in) and reference conference ID # 75053191. An archived replay
of the conference call will also be available in the investor
relations section of the company's website.
About USA Technologies
USA Technologies, Inc. is a premier payment technology service
provider of integrated cashless and mobile transactions in the
self-service retail market. The company also provides a broad line
of cashless acceptance technologies including its NFC-ready ePort®
G-series, ePort Mobile™ for customers on the go, ePort®
Interactive, and QuickConnect, an API Web service for developers.
USA Technologies has 78 United States and foreign patents in force;
and has agreements with Verizon, Visa, Chase Paymentech and
customers such as Compass, AMI Entertainment and others. For more
information, please visit the website at www.usatech.com.
Forward-looking Statements:
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: All statements other than statements of
historical fact included in this release, including without
limitation the business strategy and the plans and objectives of
USAT's management for future operations, are forward-looking
statements. When used in this release, words such as "anticipate",
"believe", "estimate", "expect", "intend", and similar expressions,
as they relate to USAT or its management, identify forward looking
statements. Such forward-looking statements are based on the
beliefs of USAT's management, as well as assumptions made by and
information currently available to USAT's management. Actual
results could differ materially from those contemplated by the
forward-looking statements as a result of certain factors,
including but not limited to, the ability of management to
accurately predict or forecast future financial results, including
earnings or taxable income of USAT, or increased revenues at a
customer location; the incurrence by USAT of any unanticipated or
unusual non-operational expenses which would require us to divert
our cash resources from achieving our business plan; the ability of
USAT to retain key customers from whom a significant portion of its
revenues is derived; the ability of USAT to compete with its
competitors to obtain market share; whether USAT's customers
continue to utilize USAT's transaction processing and related
services, as our customer agreements are generally cancelable by
the customer on thirty to sixty days' notice; the ability of USAT
to raise funds in the future through the sales of securities or
debt financings in order to sustain its operations if an unexpected
or unusual non-operational event would occur; the ability of USAT
to use available data to predict future market conditions, consumer
behavior and any level of cashless usage; the ability to prevent a
security breach of our systems or services or third party services
or systems utilized by us; whether any patents issued to USAT will
provide USAT with any competitive advantages or adequate protection
for its products, or would be challenged, invalidated or
circumvented by others; the ability of USAT to operate without
infringing or violating the intellectual property rights of others;
whether USAT would be able to sell sufficient ePort hardware to
third party leasing companies as part of the QuickStart program in
order to continue to increase cash flows from operations; whether
USAT’s future remediation efforts in connection with the control
deficiencies that resulted in a material weakness in USAT’s
internal controls over financial reporting as of June 30, 2016
would be effective; whether USAT experiences additional material
weaknesses in its internal controls over financial reporting in
future periods, and USAT is not able to accurately or timely report
its financial condition or results of operations; and whether
USAT's existing or anticipated customers purchase, rent or utilize
ePort devices or our other products or services in the future at
levels currently anticipated by USAT. Readers are cautioned not to
place undue reliance on these forward-looking statements. Any
forward-looking statement made by us in this release speaks only as
of the date of this release. Unless required by law, USAT does not
undertake to release publicly any revisions to these
forward-looking statements to reflect future events or
circumstances or to reflect the occurrence of unanticipated
events.
Financial Schedules:
A. Statement of Operations for the 3 Months and Fiscal Years
Ended June 30, 2016 and June 30, 2015 B. Five Quarter Select Key
Performance Indicators in Process C. Comparative Condensed Balance
Sheets for Year Ended June 30, 2016 and Year Ended June 30, 2015 D.
Five Quarter Statement of Operations and Adjusted EBITDA E. Five
Quarter Selling, General, & Administrative Expenses – in
Process F. Five Quarter Condensed Balance Sheet and Other Data G.
Five Quarter Statement of Cash Flows H. Five Quarter Reconciliation
of Net Income/(Loss) to Non-GAAP Net Income (Loss) and Net
Earnings/(Loss) Per Common Share – Basic and Diluted to Non-GAAP
Net Earnings/(Loss) Per Common Share – Basic and Diluted I. Annual
Reconciliation of Net Loss to Non-GAAP Net Loss and Net Loss Per
Common Share – Basic and Diluted to Non-GAAP Net Loss Per Common
Share – Basic and Diluted
(A) Statement of Operations for
the 3 Months and Fiscal Years Ended June 30, 2016 and June 30,
2015
($ in thousands, except
share and per share data)
For the three months ended June
30, For the year ended June 30, (unaudited)
2016 2015 2016
2015 Revenues: License and
transaction fees $ 15,263 $ 11,938 $ 56,589 $ 43,633 Equipment
sales 6,681 5,708 20,819
14,444 Total revenues 21,944 17,646 77,408 58,077
Costs of sales/revenues: Cost of services 10,614 7,863
38,089 29,429 Cost of equipment 5,547 4,975
17,334 11,825 Total costs of
sales/revenues 16,161 12,838
55,423 41,254 Gross profit: License and
transaction fees 4,649 4,075 18,500 14,204 Equipment sales
1,134 733 3,485 2,619
Total gross profit 5,783 4,808
21,985 16,823 Operating
expenses: Selling, general and administrative 6,721 5,009 22,373
16,451 Depreciation 208 156 647 612 Impairment of intangible asset
432 - 432 -
Total operating expenses 7,361 5,165
23,452 17,063 Operating loss (1,578 )
(357 ) (1,467 ) (240 ) Other income (expense): Interest
income 182 42 320 83 Other Gain - 52 - 52 Interest expense (197 )
(92 ) (600 ) (302 ) Change in fair value of warrant liabilities
18 263 (5,674 ) (393 )
Total other income (expense), net 3 265
(5,954 ) (560 ) Loss before provision for
income taxes (1,575 ) (92 ) (7,421 ) (800 ) Benefit (provision) for
income taxes 703 (109 ) 615
(289 ) Net loss (872 ) (201 ) (6,806 ) (1,089 )
Cumulative preferred dividends - -
(668 ) (668 ) Net loss applicable to common shares $
(872 ) $ (201 ) $ (7,474 ) $ (1,757 ) Net loss per common share -
basic and diluted $ (0.02 ) $ (0.01 ) $ (0.21 ) $ (0.05 ) Basic
weighted average number of common shares outstanding 37,325,681
35,761,370
36,309,047 35,719,211 Adjusted EBITDA $ 626 $ 1,251
$ 5,984 $ 6,259 Non-GAAP net loss $
(1,373 ) $ (392 ) $ (713 ) $ (470 ) Total connections at
period-end
429
333
429 333 Net new connections in period 28
31
96 67
(B) Five Quarter Select Key Performance
Indicators
Three months ended (unaudited)
June 30,
March 31, December 31, September 30, June
30, March 31, 2016 2016 2015
2015 2015 2015 Connections: Gross New
Connections 33,000 34,000 24,000 19,000 34,000 24,000 % from
Existing Customer Base 81% 91% 89% 86% 89% 82% Net New Connections
28,000 32,000 20,000 16,000 31,000 14,000 Total Connections 429,000
401,000 369,000 349,000 333,000 302,000
Customers:
New Customers Added 225 75 350 675 675 475 Total Customers 11,050
75 10,625 10,275 9,600 8,925
Volumes: Total Number of
Transactions (millions) 89.0 82.0 76.0 68.8 62.2 54.8 Transaction
Volume ($millions) $169.0 $151.0 $138.0 $126.4 $112.8 $97.7
Financing Structure of Connections: JumpStart 6.5% 7.4%
10.1% 10.2% 6.0% 11.3% QuickStart & All Others * 93.5% 92.6%
89.9% 89.8% 94.0% 88.7% Total 100.0% 100.0% 100.0% 100.0% 100.0%
100.0%
(C) Comparative Balance Sheets June 30,
2016 to June 30, 2015
($ in thousands)
June 30,
June 30,
2016
2015
$ Change
% Change
Assets Current assets: Cash $ 19,272 $ 11,374 $ 7,898 69 %
Accounts receivable, less allowance 4,899 5,971 (1,072 ) -18 %
Finance receivables 3,588 941 2,647 281 % Inventory, net 2,031
4,216 (2,185 ) -52 % Prepaid expenses and other current assets 987
574 413 72 % Deferred income taxes 2,271 1,258
1,013 81 % Total current assets 33,048 24,334
8,714 36 % Finance receivables, less current portion 3,718
3,698 20 1 % Other assets 348 350 (2 ) -1 % Property and equipment,
net 9,765 12,869 (3,104 ) -24 % Deferred income taxes 25,453 25,788
(335 ) -1 % Intangibles, net 798 432 366 85 % Goodwill
11,703 7,663 4,040 53 % Total
assets $ 84,833 $ 75,134 $ 9,699 13 %
Liabilities and shareholders' equity Current liabilities: Accounts
payable $ 12,356 $ 10,542 $ 1,814 17 % Accrued expenses 3,456 2,108
1,348 64 % Line of credit, net 7,119 4,000 3,119 78 % Current
obligations under long-term debt 629 478 151 32 % Income taxes
payable 18 54 (36 ) -67 % Warrant liabilities 3,739 - 3,739 100 %
Deferred gain from sale-leaseback transactions 860
860 - 0 % Total current liabilities
28,177 18,042 10,135 56 % Long-term liabilities Long-term debt,
less current portion 1,576 1,854 (278 ) -15 % Accrued expenses,
less current portion 15 49 (34 ) -69 % Warrant liabilities, less
current portion - 978 (978 ) -100 % Deferred gain from
sale-leaseback transactions, less current portion 40
900 (860 ) -96 % Total long-term liabilities
1,631 3,781 (2,150 ) -57 % Total
liabilities 29,808 21,823 7,985
37 % Shareholders' equity: Preferred stock, no par
value 3,138 3,138 - 0 % Common stock, no par value 233,394 224,874
8,520 4 % Accumulated deficit (181,507 ) (174,701 )
(6,806 ) 4 % Total shareholders' equity 55,025
53,311 1,714 3 % Total liabilities and
shareholders' equity $ 84,833 $ 75,134 $ 9,699
13 % Total current assets $ 33,048 $ 24,334 $ 8,714 36 %
Total current liabilities 28,177 18,042
10,135 56 % Net working capital $ 4,871 $ 6,292 $
(1,421 ) -23 %
* Accounts receivable, net ofallowance for
doubtful accounts andaccounts payable have increased bythe
following amounts due toreclassifications
$ - $ 1,299
(D) Five Quarter Statement of
Operations and Adjusted EBITDA
($ in thousands)
For the three months ended (unaudited)
June 30,2016
% of Sales
March 31,2016
% of Sales
December 31,2015
% of Sales
September 30,2015
% of Sales
June 30,2015
% of Sales
Revenues:
License and transaction fees $ 15,263 69.6 %
$
14,727
72.3 % $ 13,674 73.9 % $ 12,925 77.9 % $ 11,938 67.7 % Equipment
Sales 6,681 30.4 % 5,634 27.7 %
4,829 26.1 % 3,675 22.1 % 5,708
32.3 % Total revenue 21,944 100.0 % 20,361 100.0 % 18,503 100.0 %
16,600 100.0 % 17,646 100.0 % Costs of sales/revenues:
License and transaction fees $ 10,614 69.5 % 9,703 65.9 % 9,067
66.3 % 8,705 67.4 % 7,863 65.9 % Equipment sales 5,547
83.0 % 4,986 88.5 % 3,953 81.9 %
2,848 77.5 % 4,975 87.2 % Total costs
of sales/revenues 16,161 73.6 % 14,689 72.1 % 13,020 70.4 % 11,553
69.6 % 12,838 72.8 % Gross Profit: License and transaction
fees 4,649 30.5 % 5,024 34.1 % 4,607 33.7 % 4,220 32.6 % 4,075 34.1
% Equipment sales 1,134 17.0 % 648 11.5
% 876 18.1 % 827 22.5 % 733
12.8 % Total gross profit 5,783 26.4 % 5,672 27.9 % 5,483
29.6 % 5,047 30.4 % 4,808 27.2 % Operating expenses:
Selling, general and administrative $ 6,721 30.6 % 6,094 29.9 %
4,762 25.7 % 4,796 28.9 % 5,009 28.4 % Depreciation 208 0.9 % 173
0.8 % 127 0.7 % 139 0.8 % 156 0.9 % Impairment of intangible asset
432 2.0 % - 0.0 % - 0.0 %
- 0.0 % - 0.0 % Total operating
expenses 7,361 33.5 % 6,267 30.8 % 4,889 26.4 % 4,935 29.7 % 5,165
29.3 % Operating income (loss)
(1,578 ) -7.2 % (595 ) -2.9 % 594 3.2 %
112 0.7 % (357 ) -2.0 % Other income
(expense): Interest income 182 0.8 % 67 0.3 % 20 0.1 % 51 0.3 % 42
0.2 % Other income - 0.0 % - 0.0 % - 0.0 % - 0.0 % 52 0.3 %
Interest expense (197 ) -0.9 % (180 ) -0.9 % (104 ) -0.6 % (119 )
-0.7 % (92 ) -0.5 % Change in fair value of warrant liabilities
18 0.1 % (4,805 ) -23.6 % (1,230 ) -6.6
% 343 2.1 % 263 1.5 % Total other
income (expense), net 3 0.0 % (4,918 ) -24.2 % (1,314 ) -7.1 % 275
1.7 % 265 1.5 % Loss before provision for income taxes
(1,575 ) -7.2 % (5,513 ) -27.1 % (720 ) -3.9 % 387 2.3 % (92 ) -0.5
% Benefit (provision) for income taxes 703 3.2 % 93 0.5 % (154 )
-0.8 % (27 ) -0.2 % (109 ) -0.6 %
Net income (loss) (872 ) -4.0 % (5,420 ) -26.6
% (874 ) -4.7 % 360 2.2 % (201 ) -1.1 %
Less interest income (182 ) -0.8 % (67 ) -0.3 % (20 ) -0.1 %
(51 ) -0.3 % (42 ) -0.2 % Plus interest expenses 197 0.9 % 180 0.9
% 104 0.6 % 119 0.7 % 92 0.5 % Plus income tax expense (703 ) -3.2
% (93 ) -0.5 % 154 0.8 % 27 0.2 % 109 0.6 % Plus depreciation
expense 1,272 5.8 % 1,190 5.8 % 1,323 7.2 % 1,350 8.1 % 1,381 7.8 %
Plus amortization expense 44 0.2 % 44 0.2 % - 0.0 % - 0.0 % - 0.0 %
Plus (less) change in fair value of warrant liabilities (18 ) -0.1
% 4,805 23.6 % 1,230 6.6 % (343 ) -2.1 % (263 ) -1.5 % Plus
stock-based compensation 198 0.9 % 142 0.7 % 237 1.3 % 272 1.6 %
175 1.0 % Plus intangible asset impairment 432 2.0 % - 0.0 % - 0.0
% - 0.0 % - 0.0 % Plus VendScreen non-recurring charges 258 1.2 %
461 2.3 % 106 0.6 % 17 0.1 % - 0.0 % Plus litigation related
professional fees - 0.0 % 105 0.5 %
- 0.0 % - 0.0 % - 0.0 %
Adjusted EBITDA $ 626 2.9 % $ 1,347 6.6 % $ 2,260
12.2 % $ 1,751 10.6 % $ 1,251 7.1 %
See discussion of Non-GAAP financial
measures later in this document
(E) Five Quarter Selling, General,
& Administrative Expenses
Three months ended ($ in thousands)
June 30,2016
% ofSG&A
March 31,2016
% ofSG&A
December 31,2015
% ofSG&A
September 30,2015
% ofSG&A
June 30,2015
% ofSG&A
(unaudited)
Salaries and benefit costs $ 3,050 45.4 % $ 2,761 45.4 % $
2,786 58.6 % $ 2,685 56.0 % $ 2,295 45.8 % Marketing related
expenses 635 9.4 % 362 5.9 % 335 7.0 % 333 6.9 % 580 11.6 %
Professional services 1,533 22.8 % 1,256 20.6 % 839 17.6 % 782 16.3
% 844 16.8 % Bad debt expense 470 7.0 % 505 8.3 % 239 5.0 % 236 4.9
% 497 9.9 % Premises, equipment and insurance costs 555 8.3 % 460
7.5 % 347 7.3 % 399 8.3 % 475 9.5 % Research and development
expenses 123 1.8 % 131 2.1 % 37 0.8 % 191 4.0 % 154 3.1 %
VendScreen non-recurring charges 258 3.8 % 461 7.6 % 106 2.2 % 17
0.4 % - 0.0 % Litigation related professional fees 51 0.8 % 105 1.7
% - 0.0 % - 0.0 % - 0.0 % Other expenses 46
0.7 % 53 0.9 % 73
1.5 % 153 3.2 %
164 3.3 % Total SG&A expenses $ 6,721
100 % $ 6,094 100 % $ 4,762
100 % $ 4,796 100 % $
5,009 100 % Total Revenue 21,944 20,361 18,503
16,600 17,646 SG&A expenses as a percentage of revenue 30.6 %
29.9 % 25.7 % 28.9 % 28.4 %
(F) Five Quarter Condensed Balance
Sheet and Other Data
($ in thousands)
June 30, March 31,
December 31, September 30, June 30,
(unaudited)
2016 2016 2015 2015
2015 Assets Current assets: Cash $ 19,272 $ 14,901 $
14,809 $ 11,592 $ 11,374 Accounts receivable, less allowance *
4,899 8,345 6,976 6,448 5,971 Finance receivables 3,588 1,677 1,503
946 941 Inventory 2,031 2,341 2,849 3,718 4,216 Other current
assets 3,258 2,336 2,160 1,883
1,832 Total current assets 33,048 29,600 28,297 24,587
24,334 Finance receivables, less current portion 3,718 3,042
2,435 3,525 3,698 Other assets 348 337 326 342 350 Property and
equipment, net 9,765 10,584 10,856 11,890 12,869 Deferred income
taxes 25,453 25,701 25,607 25,761 25,788 Goodwill and intangibles
12,501 12,976 8,095 8,095
8,095 Total assets $ 84,833 $ 82,240 $ 75,616 $ 74,200 $
75,134 Liabilities and shareholders' equity Current
liabilities: Accounts payable and accrued expenses * $ 15,812 $
15,368 $ 9,992 $ 11,615 $ 10,542 Line of credit 7,119 6,980 7,000
4,000 2,108 Warrant Liabilities 3,739 5,964 - - - Other current
liabilities 1,507 1,485 1,384
1,497 5,392 Total current liabilities 28,177 29,797 18,376
17,112 18,042 Long-term liabilities
Total long-term liabilities 1,631 2,016
3,945 3,116 3,781 Total liabilities
29,808 31,813 22,321 20,228
21,823 Shareholders' equity:
Total shareholders' equity 55,025 50,427
53,295 53,972 53,311 Total liabilities
and shareholders' equity $ 84,833 $ 82,240 $ 75,616 $ 74,200
$ 75,134 Total current assets $ 33,048 $ 29,600 $ 28,297 $
24,587 $ 24,334 Total current liabilities 28,177
29,797 18,376 17,112 18,042 Net working
capital $ 4,871 $ (197 ) $ 9,921 $ 7,475 $ 6,292
* Accounts receivable, net ofallowance for
doubtful accountsand accounts payable haveincreased by the
followingamounts due to reclassifications
$ - $ - $ - $ - $ 1,299
(G) Five Quarter Statements of Cash
Flows
Three months ended June 30, March 31, December
31, September 30, June 30, ($ in thousands) 2016 2016
2015 2015 2015 (unaudited) OPERATING
ACTIVITIES: Net (loss) income (872 ) (5,420 ) (874 ) 360 (201 )
Adjustments to reconcile net (loss) income
to net cash provided by (used in) operating activities:
Charges incurred in connection with the
vesting and issuance of common stock for employee and director
compensation
198 142 237 272 175 Gain on disposal of property and equipment (110
) (15 ) (41 ) (1 ) (4 ) Non-cash interest and amortization of debt
discount 13 - - - - Bad debt expense 470 506 238 236 497
Depreciation 1,272 1,190 1,323 1,350 1,381 Amortization of
intangible assets 43 44 - - - Impairment of intangible asset 432 -
- - - Change in fair value of warrant liabilities (18 ) 4,805 1,230
(343 ) (263 ) Deferred income taxes, net (748 ) (93 ) 154 27 31
Gain on sale of finance receivables - - - - (52 ) Recognition of
deferred gain from sale-leaseback transactions (215 ) (215 ) (215 )
(215 ) (215 ) Changes in operating assets and liabilities: Accounts
receivable 2,977 (1,872 ) (767 ) (713 ) (1,223 ) Finance
receivables (2,587 ) (154 ) 533 168 (332 ) Inventory (82 ) 250 649
219 (639 ) Prepaid expenses and other assets (397 ) (160 ) (254 )
48 (97 ) Accounts payable 328 4,154 (1,624 ) (1,044 ) 3,492 Accrued
expenses 115 1,166 (13 ) (2 ) 93 Income taxes payable 453
- (70 ) - 37
Net change in operating assets and liabilities 807
3,384 (1,546 ) (1,324 )
1,331 Net cash provided by operating activities 1,272
4,328 506 362 2,680 INVESTING ACTIVITIES: Purchase and
additions of property and equipment (207 ) (164 ) (117 ) (49 ) (6 )
Proceeds from sale of property and equipment 265 19 101 4 8 Cash
paid for assets acquired from VendScreen -
(5,625 ) - - - Net
cash provided by (used in) investing activities 58 (5,770 ) (16 )
(45 ) 2 FINANCING ACTIVITIES: Cash used for the retirement
of common stock (173 ) - (40 ) - - Proceeds from exercise of common
stock warrants 3,237 1,652 - 29 - Proceeds (payments) from line of
credit 4,130 33 3,000 - - Repayment of line of credit (3,992 )
Repayment of long term debt (162 ) (151 ) (233 ) (128 ) (97 )
Proceeds from long-term debt - - - - 304 Excess tax benefits from
share-based compensation - - -
- 10 Net cash provided by
(used in) financing activities 3,040 1,534
2,727 (99 ) 217
Net increase in cash 4,371 92 3,217 218 2,899 Cash at
beginning of period 14,901 14,809
11,592 11,374 8,475
Cash at end of period $ 19,272 $ 14,901 $
14,809 $ 11,592 $ 11,374 Supplemental
disclosures of cash flow information: Interest paid in cash $ 147
$ 191 $ 107 $ 106 $ 99 Income
taxes paid by cash $ 501 $ - $ - $ - $
- Depreciation expense allocated to cost of services $ 1,139
$ 1,051 $ 1,186 $ 1,199 $ 1,179
Reclass of rental program property to inventory, net $ 415 $
347 $ 777 $ (279 ) $ (718 ) Prepaid items financed
with debt $ - $ - $ - $ 103 $ -
Warrant issuance for debt discount $ 52 $ - $ -
$ - $ - Debt financing cost financed with debt
$ - $ 79 $ - $ - $ - Equipment
and software acquired under capital lease $ - $ 409 $
- $ 35 $ - Disposal of property and equipment
$ 555 $ 189 $ 238 $ 99 $ 447
Disposal of property and equipment under sale-leaseback
transactions $ (52 ) $ 52 $ - $ - $ -
* Accounts Receivable
·Reclassification of cash provided by and
included in accounts payable to accounts receivable
$ - $ - $ - $ - $ 543 * Accounts
Payable
·Reclassification of cash provided by and
included in accounts payable to accounts receivable
$ - $ - $ - $ - $ (543 )
(H) Five Quarter Reconciliation of Net
Income/(Loss) to Non-GAAP Net Income (Loss) and Net Earnings/(Loss)
Per Common Share – Basic and Diluted to Non-GAAP Net
Earnings/(Loss) Per Common Share – Basic and Diluted
Three months ended ($ in thousands) June 30, March 31,
December 31, September 30, June 30, (unaudited) 2016
2016
2015 2015 2015 Net income (loss) $ (872 ) $ (5,420 ) $ (874
) $ 360 $ (201 ) Non-GAAP adjustments: Non-cash portion of income
tax provision (792 ) (38 ) 224 27 72 Change in fair value of
warrant adjustment (18 ) 4,805 1,230 (343 ) (263 ) VendScreen
non-recurring charges 258 461 106 17 - Litigation related
professional fees 51 105 -
- - Non-GAAP net income (loss) $
(1,373 ) $ (87 ) $ 686 $ 61 $ (392 ) Net
income (loss) $ (872 ) $ (5,420 ) $ (874 ) $ 360 $ (201 )
Cumulative preferred dividends - (334 )
- (334 ) - Net income (loss) applicable
to common shares $ (872 ) $ (5,754 ) $ (874 ) $ 26 $ (201 )
Non-GAAP net income (loss) $ (1,373 ) $ (87 ) $ 686 $ 61 $
(392 ) Cumulative preferred dividends - (334 )
- (334 ) - Non-GAAP net income
(loss) applicable to common shares $ (1,373 ) $ (421 ) $ 686
$ (273 ) $ (392 ) Net earnings (loss) per common share -
basic $ (0.02 ) $ (0.16 ) $ (0.02 ) $ 0.00 $ (0.01 )
Non-GAAP net earnings (loss) per common share - basic (0.04 ) (0.01
) 0.02 (0.01 ) (0.01 ) Basic weighted average number of common
shares outstanding 37,325,681 36,161,626 35,909,933 35,848,395
35,761,370
Net earnings (loss) per common share - diluted $ (0.02 ) $
(0.16 ) $ (0.02 ) $ - $ (0.01 ) Non-GAAP net earnings (loss)
per common share - diluted $ (0.04 ) $ (0.01 ) $ 0.02 $ (0.01 ) $
(0.01 ) Diluted weighted average number of common shares
outstanding 37,325,681 36,161,626 35,909,933 36,487,879 35,651,732
See discussion of Non-GAAP financial measures later in this
document
(I) Reconciliation of Net Loss to
Non-GAAP Net Loss and Net Loss Per Common Share – Basic and Diluted
to Non-GAAP Net Loss Per Common Share – Basic and Diluted
Year ended
June 30,2016
June 30,2015
($ in thousands)
Net loss $ (6,806 ) $ (1,089 ) Non-GAAP adjustments:
Non-cash portion of income tax provision (579 ) 226 Fair value of
warrant adjustment 5,674 393 VendScreen non-recurring charges 842 -
Litigation related professional fees 156 -
Non-GAAP net loss $ (713 ) $ (470 ) Net loss $ (6,806
) $ (1,089 ) Cumulative preferred dividends (668 )
(668 ) Net loss applicable to common shares $ (7,474 ) $ (1,757 )
Non-GAAP net loss $ (713 ) $ (470 ) Cumulative preferred
dividends (668 ) (668 ) Non-GAAP net loss applicable
to common shares $ (1,381 ) $ (1,138 ) Net loss per common
share - basic and diluted $ (0.21 ) $ (0.05 ) Non-GAAP net loss per
common share - basic and diluted $ (0.04 ) $ (0.03 ) Basic and
diluted weighted average number of common shares outstanding
36,309,047 35,719,211
Discussion of Non-GAAP Financial Measures:
This press release contains certain non-GAAP financial measures.
Generally, a non-GAAP financial measure is a numerical measure of a
company's performance, financial position or cash flows that either
excludes or includes amounts that are not normally excluded or
included in the most directly comparable measure calculated and
presented in accordance with GAAP. Reconciliations between non-GAAP
and GAAP measures are set forth above in Financial Schedules (E)
and (J).
The following non-GAAP financial measures are discussed herein:
adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net
earnings (loss) per common share – basic and diluted. The
presentation of these additional financial measures is not intended
to be considered in isolation from, or superior to, or as a
substitute for the financial measures prepared and presented in
accordance with GAAP (Generally Accepted Accounting Principles),
including the net income or net loss of USAT. Management recognizes
that non-GAAP financial measures have limitations in that they do
not reflect all of the items associated with USAT's net income or
net loss as determined in accordance with GAAP. These non-GAAP
financial measures are not required by or defined under GAAP and
may be materially different from the non-GAAP financial measures
used by other companies. USAT has provided above in Financial
Schedules (E) and (J) the reconciliations of the non-GAAP financial
measures to the most directly comparable GAAP financial
measures.
As used herein, non-GAAP net income (loss) represents GAAP net
income (loss) excluding costs or benefits relating to any
adjustment for fair value of warrant liabilities and non-cash
portions of the Company’s income tax benefit (provision),
non-recurring fees and charges that were incurred in connection
with the acquisition and integration of the VendScreen business,
and professional fees incurred in connection with the class action
litigation and the SLC investigation. Non-GAAP net earnings (loss)
per common share - diluted is calculated by dividing non-GAAP net
income (loss) applicable to common shares by the number of diluted
weighted average shares outstanding. Management believes that
non-GAAP net income (loss) is an important measure of USAT’s
business. Non-GAAP net income (loss) is a non-GAAP financial
measure which is not required by or defined under GAAP (Generally
Accepted Accounting Principles). The presentation of this financial
measure is not intended to be considered in isolation or as a
substitute for the financial measures prepared and presented in
accordance with GAAP, including the net income or net loss of the
Company or net cash used in operating activities. Management
recognizes that non-GAAP financial measures have limitations in
that they do not reflect all of the items associated with the
Company’s net income or net loss as determined in accordance with
GAAP, and are not a substitute for or a measure of the Company’s
profitability or net earnings. Management believes that non-GAAP
net income (loss) and non-GAAP net earnings (loss) per share are
important measures of the Company's business. Management uses the
aforementioned non-GAAP measures to monitor and evaluate ongoing
operating results and trends and to gain an understanding of our
comparative operating performance. We believe that this non-GAAP
financial measure serves as a useful metric for our management and
investors because they enable a better understanding of the
long-term performance of our core business and facilitate
comparisons of our operating results over multiple periods, and
when taken together with the corresponding GAAP (United States’
Generally Accepted Accounting Principles) financial measures and
our reconciliations, enhance investors’ overall understanding of
our current and future financial performance. Additionally, the
Company utilizes non-GAAP net income (loss) as a metric in its
executive officer and management incentive compensation plans.
As used herein, Adjusted EBITDA represents net income (loss)
before interest income, interest expense, income taxes,
depreciation, amortization, non-recurring fees and charges that
were incurred in connection with the acquisition and integration of
the VendScreen business, professional fees incurred in connection
with the class action litigation incurred during the third quarter
of the fiscal year, impairment charges related to our EnergyMiser
asset trademarks, and change in fair value of warrant liabilities
and stock-based compensation expense. We have excluded the
non-operating item, change in fair value of warrant liabilities,
because it represents a non-cash gain or charge that is not related
to the Company’s operations. We have excluded the non-cash expense,
stock-based compensation, as it does not reflect the cash-based
operations of the Company. We have excluded the non-recurring costs
and expenses incurred in connection with the VendScreen transaction
in order to allow more accurate comparison of the financial results
to historical operations. We have excluded the professional fees
incurred in connection with the class action litigation as well as
the trademark impairment charges because we believe that they
represent a charge that is not related to the Company's operations.
Adjusted EBITDA is a non-GAAP financial measure which is not
required by or defined under GAAP (Generally Accepted Accounting
Principles). The presentation of this financial measure is not
intended to be considered in isolation or as a substitute for the
financial measures prepared and presented in accordance with GAAP,
including the net income or net loss of the Company or net cash
used in operating activities. Management recognizes that non-GAAP
financial measures have limitations in that they do not reflect all
of the items associated with the Company’s net income or net loss
as determined in accordance with GAAP, and are not a substitute for
or a measure of the Company’s profitability or net earnings.
Adjusted EBITDA is presented because we believe it is useful to
investors as a measure of comparative operating performance.
Additionally, the Company utilizes Adjusted EBTIDA as a metric in
its executive officer and management incentive compensation
plans.
F-USAT
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160913005845/en/
Investor Contact:The Blueshirt GroupMike Bishop, +1
415-217-4968mike@blueshirtgroup.com
USA Technologies (NASDAQ:USAT)
Historical Stock Chart
From Aug 2024 to Sep 2024
USA Technologies (NASDAQ:USAT)
Historical Stock Chart
From Sep 2023 to Sep 2024