SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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Date of report (Date of earliest event reported): May 25, 2005
USA TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 33-70992 23-2679963
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation or
organization)
100 Deerfield Lane, Suite 140
Malvern, Pennsylvania 19355
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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: 610-989-0340
n/a
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 7.01 REGULATION FD DISCLOSURE
On May 25, 2005, the Company issued a letter to its security holders which is
attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) None.
(b) None.
(c) Exhibits.
99.1 Letter to USA security holders dated May 25, 2005
SIGNATURES
Pursuant to the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
USA TECHNOLOGIES, INC.
By: /s/ George R. Jensen, Jr.
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George R. Jensen, Jr.
Chief Executive Officer
Dated: May 25, 2005
EXHIBIT INDEX
Exhibit No. Description
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99.1 Letter to USA security holders dated May 25, 2005
[LOGO]
USA
TECHNOLOGIES
www.usatech.com
May 25, 2005
Dear Shareholders,
I am pleased to report that as we close out our current fiscal year ending June
30, 2005, our Company has never been better positioned for sustained growth.
Specifically, interest for our products is strong - including our Energy
Management, e-Port(R) Cashless Vending, e-Suds(TM) and Business Express(R)
offerings, and we are very excited about the marketplace's reception to our
latest products such as e-Port G-5, the internal VendingMiser (VM2IQ(TM)), our
next generation e-Suds, and the Business Express Mini. In addition, our profit
margin for the three months ended March 31, 2005 expanded to 50%. We feel these
achievements set the stage for what promises to be an exciting fiscal year of
growth and development beginning July 1, 2005.
Escalating Demand for Energy Management Products
We have received the initial schedule from PepsiCo pursuant to our recently
announced agreement. One of Pepsi's three largest bottlers in the US is the
first to submit a schedule for 10,050 VendingMisers that are intended to be
installed by Pepsi in a Fortune 50 retailer's vending machines nationwide. The
retailer has indicated a need for more than 100,000 VendingMisers and/or
EnergyMisers for both vending machines and coolers located in the company's
stores worldwide.
We saw the energy crisis worsen, and today energy costs are still at record
highs with little relief in sight. It caused governments and business to refocus
on the value of energy conservation technology. This has created a significant
opportunity for our energy management products.
Expanding International Customer Base
We received word from THS International S.r.l, of Milan, our Italian
distributor, that they were in advanced negotiations to sell VendingMisers and
CoolerMisers to significant customers in Germany and Spain, with more
anticipated orders coming from throughout Europe.
Over the past few months, we have seen an increase in interest from
international customers located in the United Kingdom, Japan, China, Australia,
New Zealand, Mexico, Brazil, Uruguay, Chile and Puerto Rico. We are rapidly
expanding our markets beyond the United States to countries where energy on
average costs two to three times that of the US.
We received word that the State of Texas is considering legislation making it
mandatory that all vending machines located in a State owned or leased building
be fitted with energy savings devices.
We have had a long relationship with Austin Energy, a Texas power utility that
offers VendingMisers, CoolerMisers, and SnackMisers free of charge, including
installation, to vending machine operators and locations in the city to install
in their machines. The State of Texas is committed to energy conservation, and
we anticipate its actions will quickly spread and be adopted by other states and
cities.
T 800.633.0340/610.989.0340 F 610.989.0344
100 Deerfield Lane, Suite 140, Malvern, PA 19355
"Greenbytes," the official magazine of the U.S. Environmental Protection Agency
(EPA), reported recently that VendingMisers were being installed in state owned
buildings in New England, where states are determined to implement energy
management to lower the drain on the energy grid and save on energy cost.
Exciting Developments in Cashless Vending
We are in the implementation phase with a leading vending and facilities
management provider to install our e-Port technology in college point of sale
(POS) systems. The company, with revenues in excess of $8 billion, provides
services to 500 colleges and universities across the US.
I'm also delighted to report that MEI, one of the world's largest manufacturers
of unattended payment systems, continues to work with our Company on bringing to
market its line of MEI branded cashless vending products -- utilizing our
cashless technology and Intellectual Property through a license from USA
Technologies. The product will be connected to our USALive(R) Network.
We recently reported that A&B Vending, a major vending machine operator in the
Northeast, had begun fitting vending machines at roadside rest stops with the
cashless e-Port to offer consumers greater convenience, and to stop theft and
vandalism. A&B Vending operates 4,000 vending machines.
There is more. We are collaborating with major players in the credit/debit card
industry such as American Express, MasterCard and others to bring contactless
payment technology to the vending market; and for us to further participate in
the $40 billion US vending business, considered one of the last major cashless
opportunities. These companies are conducting multi-million dollar advertising
campaigns and shipping millions of new credit cards to consumers with RFID
capability.
The contactless cards are activated by radio frequency identification (RFID)
technology, and are recognized by the e-Port terminal when the consumer either
passes the credit card in front of the vending machine, or taps the reader. Our
e-Port technology is also designed to continue to let consumers swipe their
cards.
We also anticipated that beverages would quickly rise above $1.00 in vending,
and that day has come. The beverage industry recently moved to a suggested
minimum selling price of $1.25 in most vending locations, which increases the
need for a cashless payment response. Recent surveys indicate that most
consumers prefer to use a cashless payment system rather than carrying large
amounts of bills or cash in their pockets.
Expanding e-Suds Services
Temple University in Philadelphia, one of the biggest universities in the US, is
installing e-Suds in 40 laundry rooms this summer to serve 34,000 students, and
we have plans in place to install e-Suds at more colleges, including Case
Western Reserve University, a world-renowned educational institution located in
Cleveland, Ohio.
We have a current backlog of orders for e-Suds, and our customers are delighted.
We expect to be busy throughout the summer installing e-Suds in a growing number
of colleges and universities - and with Case Western, Temple, University of
Cincinnati, and others which are planned - nearly 100,000 additional students
are expected to have access to the e-Suds service by the Fall Semester 2005.
Business Express Setting Sales Records
Our Business Express product line is breaking records each quarter, and we are
anticipating another outstanding year for fiscal 2005.
Patents Growing
We continue to safeguard our technology with patent protection, with our arsenal
of patents currently at 62 patents granted and 26 patents pending.
Expanding Margins
We have another piece of satisfying news, both for our customers and for
investors. We recently reorganized and restructured some of our manufacturing
processes allowing us to lower our per unit equipment cost. In addition, our
profit margin is no longer burdened by the amortization of costs from our
investment in software development, as this investment was fully amortized by
June 30, 2004. This, coupled with our lower per unit equipment costs, helped
raise our profit margin to 50 percent. We expect these margins to hold in the
near future - helping lead the way to profitability and beyond.
Never Stronger
We look forward to revenue growth and global distribution of our products.
Orders for all our products - specifically the Energy Miser, e-Port, e-Suds and
Business Express product lines -- are growing, and coming from all parts of the
world. Everyone is working harder than ever to respond to the demand, and I am
delighted to report that morale has never been higher. We are motivated and
excited by recent events, and by the opportunities, we see ahead. Again, I want
to thank you for your confidence and support, and for helping turn our vision
for USA Technologies into a reality.
Sincerely,
/s/ George R. Jensen Jr.
George R. Jensen Jr.
Chairman & CEO