USA Technologies, a leader in the networking of wireless cashless transactions, 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(R) 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.
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.
USA TECH EARNINGS
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.