USA Technologies, Inc. (NASDAQ: USAT) a leader in the networking
of wireless cashless transactions, today reported results for the
fiscal year ended and for the quarter ended June 30, 2010.
Results for Fourth
Quarter
Total revenue for the quarter increased by 23% to $4.5 million,
compared to $3.6 million in the fourth quarter of the prior year.
Gross profit more than doubled to a record $1.5 million, versus
$690,000, from last year’s fiscal fourth quarter. Gross profit
margin expanded to 34.0%, compared to 18.9% a year ago. Earnings
before interest, taxes, depreciation and amortization (EBITDA)
improved to a loss of $1.6 million for the quarter, the smallest
EBITDA loss in more than three years. The prior year fourth quarter
EBITDA loss was $2.5 million.
During the fourth quarter the Company recorded significant
growth across its operating performance metrics as compared to the
fourth quarter of the prior year:
- Increased the number of devices
connected to its network by 58%, bringing the total number of
devices connected at quarter end to approximately 82,000, compared
to approximately 52,000 as of June 30, 2009.
- The number of cashless
transactions processed during the quarter increased by 73% to
11,655,000, compared to 6,736,000 transactions processed during the
prior year’s fiscal fourth quarter.
- The dollar value of transactions
processed during the fiscal fourth quarter increased by 54% to
$20.8 million, compared to $13.5 million during the fiscal fourth
quarter last year.
- Approximately 150 new customers
were added to its USALive® Network during the three months ended
June 30, 2010 bringing the total number of such customers to 1,050
as of June 30, 2010. By comparison, the company had 525 customers
as of June 30, 2009, representing a 100% increase during fiscal
2010.
Results for Fiscal
Year
Total revenue for the fiscal year increased by 31% to $15.8
million, compared to $12.0 million for the prior fiscal year. Gross
profit grew 64%, to $4.9 million, versus $2.8 million, from last
year’s fiscal year. Gross profit margin expanded to 30.8%, compared
to 23.7% for the fiscal year ago. Earnings before interest, taxes,
depreciation and amortization (EBITDA) improved to a loss of $9.8
million which includes $1.6 million in proxy contest and related
litigation expenses, for the fiscal year from a loss of $12.2
million in the prior fiscal year.
During the fiscal year the Company recorded significant growth
across its operating performance metrics as compared to the prior
fiscal year:
- The number of cashless
transactions processed during the fiscal year increased by 65% to
36,878,000, compared to 22,361,000 transactions processed during
the prior fiscal year.
- The dollar value of transactions
processed during the fiscal year increased by 44% to $67.6 million,
compared to $47.1 million during the prior fiscal year.
“Our fiscal fourth quarter was our best quarter ever in terms of
gross profit, and capped a year of great accomplishments for USA
Technologies,” said George Jensen, Chairman and CEO of USA
Technologies. “Our operating and performance metrics continued to
improve as our products gained increased market acceptance and the
proliferation of our cashless payment devices continued to drive
adoption rates higher.”
“We continue to believe that we will attain 100,000 network
connections by December 31, 2010 and that we will report our first
positive EBITDA quarter in our fiscal second quarter ending
December 31, 2010,” continued Jensen.
“Over the past several years we have focused on developing
innovative wireless cashless terminals, spending heavily on
research and development, and on building relationships with
customers, strategic partners and market sponsors,” said Jensen.
“Today, we boast a customer base numbering over 1000 customers; and
we are working closely with key market influencers in the
transaction services industry to drive consumer acceptance of
cashless transactions in unattended locations such as vending
machines, kiosks, commercial laundry and the like.”
“As the acceptance for wireless cashless transactions in our
markets moves mainstream, we will continue to attempt to increase
penetration in our target markets, apply our solutions to new
markets and introduce new applications. Our objective is to
solidify our market leadership position through increased revenue
with existing customers, new customer relationships, new products
and new channels of distribution,” concluded Jensen.
USA Technologies’ industry leadership was recognized earlier
this month by The Nilson Report, a leading source of research on
global consumer payment systems, which again ranked the company 6th
in the United States for shippers of POS terminals, and 31st among
the world’s leading shippers of POS terminals, an improvement of
three positions from the previous year. The Company also reported
that on September 2, 2010, it had reached a new record of over
200,000 transactions processed in a single day, and that as of
August 2010, it had reached a run rate of $100 million in
transaction processing for its customers on the ePort Connect
Service. The Company believes these milestones may indicate a
“tipping point” (i.e., accelerated adoption) of wireless cashless
payment systems in the markets that it serves.
Non-GAAP Financial Measures: EBITDA
This press release includes the following financial measure
defined as a non-GAAP financial measure by the Securities and
Exchange Commission: EBITDA. This supplemental financial measure is
not required by GAAP, nor is the presentation of this financial
information intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with GAAP. Management recognizes that non-GAAP financial
measures have limitations in that they do not reflect all of the
items associated with USA Technologies Inc.'s (USAT) earnings
results as determined in accordance with GAAP. However, for the
reasons described below, we used this non-GAAP measure to evaluate
the performance of USAT's business. See "Reconciliation of GAAP Net
Earnings to Earnings Before Interest, Taxes, Depreciation, and
Amortization (EBITDA)" table included in this press release for
further information regarding these non-GAAP financial measures. In
addition, EBITDA is presented because the Company has a publically
stated goal of achieving positive EBITDA for the quarter ended
December 31, 2010 and believes it is frequently used by securities
analysts, investors and others in the evaluation of companies.
EBITDA is calculated by adding income taxes, interest expense,
depreciation and amortization to net earnings, EBITDA is not
defined under GAAP and should not be considered in isolation or as
a substitute for net earnings and other consolidated earnings data
prepared in accordance with GAAP or as a measure of USAT's
profitability.
Reconciliation of GAAP Net
Earnings to Earnings Before Interest, Taxes, Depreciation, and
Amortization (EBITDA)
Q4
FY10
Q4
FY09
FY10
FY09
Net Loss $ (2,089,803 ) $ (2,918,336 ) $ (11,571,496 ) $
(13,731,818 ) Interest Income (48,281 ) (19,693 ) (85,144 )
(282,930 ) Interest Expense 12,184 20,050 60,942 96,992 Taxes - - -
- Depreciation 264,273 161,566 783,415 632,408 Amortization
258,600 258,600 1,034,400
1,040,379 EBITDA $ (1,603,027 ) $
(2,497,813 ) $ (9,777,883 ) $ (12,244,969 )
About USA
Technologies:
USA Technologies is a leader in the networking of wireless
non-cash transactions, associated financial/network services and
energy management. USA Technologies provides networked credit card
and other non-cash systems in the vending, commercial laundry,
hospitality and digital imaging industries. The Company has been
granted 77 patents and has agreements with AT&T, Visa, Compass
and others. Visit our 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 anticipated “tipping point” in the markets in which
the Company serves, future financial results of the Company, and
the number of devices predicted to be connected to its network in
the future are forward-looking statements. When used in this
release, words such as "anticipate", "believe", "estimate",
"expect", "intend", and similar expressions, as they relate to the
Company or its management, identify forward-looking statements.
Such forward-looking statements are based on the beliefs of the
Company's management, as well as assumptions made by and
information currently available to the Company'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, whether or not the marketplace
continues to adopt cashless transaction processing; whether or not
the marketplace continues to purchase the Company’s products in the
future; the ability of the Company to retain key customers from
whom a significant portion of its revenues is derived; the ability
of the Company to compete with its competitors to obtain market
share in the future; the ability of the Company to obtain
widespread commercial acceptance of it products in the future;
whether the Company's existing or anticipated customers lease or
purchase ePort devices in the future at levels currently
anticipated by the Company; whether customers participate in the
Jump Start program in the future at levels currently anticipated by
the Company; or whether the Company’s shares or publicly traded
warrants would continue to meet the eligibility requirements for
continued listing on The NASDAQ Stock Market, LLC. 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, the Company 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.
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