SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________________
FORM
8-K
Current
Report Pursuant to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
______________________
Date of
report (Date of earliest event reported): February 28, 2008
USA
TECHNOLOGIES, INC.
(Exact
name of registrant as specified in its charter)
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Pennsylvania
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001-33365
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23-2679963
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(State
or other jurisdiction of incorporation or organization)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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100
Deerfield Lane, Suite 140
Malvern,
Pennsylvania 19355
(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:
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q
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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q
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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q
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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q
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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
February 28, 2008, USA Technologies, Inc. held its annual meeting of
shareholders. The full text of the speech of George R. Jensen, Jr., Chief
Executive Officer and Chairman, presented at the meeting is attached as an
Exhibit to this Current Report on Form 8-K.
Statements
in the Exhibit that are not strictly historical are "forward looking" statements
within the meaning of the safe harbor provisions of the federal securities laws.
Investors are cautioned that such statements are only predictions, and speak
only as of February 28, 2008, the date of the presentation. USA Technologies
does not assume any obligation to update such information in the future. USA
Technologies' actual results in the future may differ materially from those
projected in the forward looking statements due to risks and uncertainties that
exist in USA Technologies' operations and business environment, including but
not limited to, those risks and uncertainties set forth in the Company’s Form
10-K for the fiscal year ended June 30, 2007.
ITEM
9.01
(c)
Financial Statements and Exhibits
The
following Exhibit is filed with this Form 8-K:
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Exhibit
No.
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Description of
Exhibit
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99.1
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Speech
of George R. Jensen, Jr., Chief Executive Officer and
Chairman
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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.
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USA
TECHNOLOGIES, INC.
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By:
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/s/ George R. Jensen,
Jr.
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George
R. Jensen, Jr.
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Chief
Executive Officer
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Dated:
February 28, 2008
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Index to
Exhibits
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Exhibit
No.
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Description of
Exhibit
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Speech
of George R. Jensen, Jr., Chief Executive Officer and
Chairman
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Exhibit
99.1
George
Jensen
February
2008
Shareholders’
Meeting
_________________
Good
morning ladies and gentlemen.
It is a
pleasure to welcome you to our annual shareholders’ meeting.
We have
an exciting program planned.
But
before we get started, we first need to take care of some official
business.
(OFFICAL
BUSINESS)
Thank you
again for coming to our annual meeting.
I am
delighted to see so many familiar faces among our guests, as well as new
faces.
I stand
before you today as chairman of a company beginning to show dramatic growth in
revenue, and expanding margins.
We
enjoyed back-to-back record quarters so far in this fiscal year, and expect it
to continue.
For
current fiscal second quarter ending December 31, revenue was a record
$3,459,403, up 72% from the similar quarter last fiscal year.
Gross
profit was a record $1,042,910, up 267% from the similar quarter last fiscal
year.
And
margins expanded to 30% from 15%.
Recurring
license and transaction fees rose to a record $ 828,342 , up 132% from the
similar quarter last fiscal year.
During
the quarter we processed a record 2.4 million transactions representing $7.7
million dollars for our customers.
And this
quarter we took measures to reduce expenses that we expect will save
approximately $ 2.4 million dollars annually.
Our
installed base rose to 25,000 cashless terminals
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18,500
ePorts
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1,000
Business Express terminals.
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5,500
eSuds terminals.
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1
Major
bottlers and vending companies such as, Coca Cola Enterprises, Cadbury Schweppes
and Canteen are key customers.
In
addition, we have the good fortune of having three major card companies as
customers. Starting with MasterCard who did an historic rollout with us
purchasing 17,500 ePort terminals. And now, we are also doing business with Visa
and Discover on very similar pricing terms.
Customer
surveys show that card purchases on average are 30% higher than cash
purchases.
Cashless
payments are helping vending operators and bottlers provide …
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Greater
ease and convenience to customers.
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A
higher level of service.
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And,
improved revenue and profitability.
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A
significant contributor to customer enthusiasm was the Federal Reserve Board's
decision last July to eliminate the need to provide receipts for debit card
transactions under $15.
This was
a huge decision for us, and for our customers.
It
removed a major inhibitor for large-scale adoption of cashless acceptance in the
vending, kiosk, laundry and other small ticket self-serve markets that we are
targeting.
When the
“Fed” eliminated the restriction, we said it would be a powerful incentive to
encourage global players to enter these cashless vending and self-serve
markets.
Now, six
months later, we have already had two record revenue quarters.
We are
also seeing more wireless companies entering the payments market, offering
opportunity for consumers to make purchases from vending machines, and other
points of sale, with cellular phones, using NFC technology.
So, in
addition to sales wins with major customers, leading to a succession of record
revenues we are benefiting from important regulatory decisions.
USA
Technologies is a company rapidly entering the momentum stage of its
development leading to what we expect will be periods of continued
growth.
We are
also a company that has been able to attract significant new
investors.
Just last
October, William Blair & Co acted as agent in a private placement of 2.2
million shares of USAT common stock to institutional investors.
The price
was $7 per share, resulting in gross proceeds of $15 million for the
company.
Earlier
this month, Merriman Curhan & Ford initiated research coverage with a Buy
recommendation.
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Merriman
Curhan & Ford believes we are uniquely positioned for the wireless
machine-to-machine market.
We
believe they are right.
USA
Technologies now has more than 25,000 machines connected in the US, utilizing
our ePort cashless technology.
According
to a Nilson research report, we are 90% of such activity in US vending
machines.
There is
more exciting news …
Nilson is
forecasting some four million US vending machines will accept credit cards in
the next several years. If we could get on just 500,000 vending machines with
our current business model, the annual recurring revenue alone would be
approximately $100 million dollars.
Keep in
mind, there is a potential of eight million vending machines in the US and
a world market of thirty million vending machines.
So, you
can see we are in the early stages of what we believe will be a huge market for
us.
There
have been so many positive developments since our last meeting.
Beginning
with exciting new products, and new customers and partners helping to accelerate
our revenue growth.
We are
trading on the NASDAQ.
We are
40% institutionally owned by a handful of America’s most prestigious
institutions.
Our
balance sheet is very strong, and we had $39 million in positive shareholder
equity as of December 31, 2007.
Customers
are comforted by our healthy financial position.
And, it
is helping drive up sales.
Our new
products are generating considerably more interest:
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The
multi-functional e-Port Generation Six is
unequalled
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It
is the only cashless product in the market for vending machines that
accepts all cards
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o
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From
traditional magnetic stripe
and contactless
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To
NFC that allows consumers to make purchases from vending machines using
their cellular phones.
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Also
unequalled is our new e-Port Connect
service:
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o
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ePort
Connect offers the first complete portfolio of high-speed turnkey services
for unattended point-of-sale
markets
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Our
objective with ePort Connect is to further extend our reach into the
vending, kiosk, commercial laundry and office equipment
markets.
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All our
products are generating exciting new business opportunities for our
company.
We have
developed an extraordinary value proposition, beginning with:
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Greater
ease and convenience for the
consumer
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Higher
revenues for customers from credit card purchasing
power
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And,
faster and more efficient data to help customers run their business
better.
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This is a
value proposition USA Technologies can take all over the world.
We have
69 patents and many more pending relating to our technologies.
We also
reduced the costs of our products, and passed the savings on to our
customers.
Our
“flagship” e-Port G6 now sells for a little over $400. It sold for $800 not
that long ago.
We have
everything needed to respond to today’s emerging market.
We took
the risks. We invested aggressively.
We
positioned the company in the markets where we saw the most
opportunity.
Now, we
are beginning to reap the rewards.
We are
driving a long-term strategy for long-term growth with a sound business model of
selling hardware for known returns, and receiving recurring revenue from service
fees and credit card processing fees.
For the
recurring revenue we do not have to invoice for our services, and just take our
fees out of the electronic flow of funds. The flow of funds goes from the
consumer, to our credit card processor to us within 72 hours. We take out our
entitlement and electronically pay our customers. It does not get any
better.
Today, we
are a company with open-ended possibilities.
Meeting
the demands of today’s cashless, wireless networked world.
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This is
truly an exciting time for USA Technologies.
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With
rising sales
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With
the signing of more influential partners and
customers.
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Designing
revolutionary new technologies and
services.
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Dominating
the markets we currently serve.
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And,
expanding into new markets with unique products that respond to worldwide
mega trends.
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We are in
large markets that are only now beginning to open up to cashless
transactions.
And,
markets that offer the potential for decades of growth.
There is
so much to look forward to.
And, I
have never been more optimistic about our future and thank you for all your
support.
Now, here
to give you further insight into how we intend to grow our business is Steve
Herbert, our President and Chief Operating Officer.
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