Pennsylvania
|
001-33365
|
23‑2679963
|
(State or other jurisdiction of incorporation or organization)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02.
|
Results of Operations and Financial Condition
|
Item 9.01.
|
Financial Statements and Exhibits
|
Exhibit 99.1
|
Press Release of the Company dated November 14, 2014
|
|
USA TECHNOLOGIES, INC.
|
|
Dated: November 18, 2014
|
By:
|
/s/ Stephen P. Herbert
|
Stephen P. Herbert,
|
||
Chairman and Chief Executive Officer
|
Exhibit No.
|
Description of Exhibit
|
Press Release of the Company dated November 14, 2014
|
• | Total revenue of $12.3 million, a year-over-year increase of 21.0%. |
• | License and transaction fee revenue of $10.2 million, a year-over-year increase of 19.4%. |
• | Adjusted EBITDA of $0.9 million, a year-over-year decrease of 35%. |
• | GAAP net loss of $0.1 million, or $(0.01) per share. |
• | Non-GAAP net loss of $0.4 million compared to non-GAAP net income of $0.1 million for first quarter of fiscal 2014. |
Three Months Ended September 30
|
|||||||||
2014
|
2013
|
%Change
|
|||||||
Gross New Connections ('000s)
|
13
|
14
|
(7.1)%
|
||||||
% from Existing Customer Base
|
84%
|
58%
|
NA
|
||||||
Net New Connections ('000s)
|
10
|
3
|
233.3%
|
||||||
Total Connections ('000s)
|
276
|
217
|
27.2%
|
||||||
New Customers Added
|
600
|
550
|
9.1%
|
||||||
Total Customers
|
7,900
|
5,600
|
41.1%
|
||||||
Total Number of Transactions (millions)
|
48.7
|
38.6
|
26.2%
|
||||||
Transaction Volume ($millions)
|
$89.2
|
$67.9
|
31.4%
|
• | Of the 13,000 gross new connections, approximately 83% were from traditional ePort vending, and 17% were primarily from adjacent vertical markets, such as kiosk, amusement and gaming and laundry. Of the new gross connections, 84% were sold to existing customers. |
• | Reached 1,100 connections on the ePort Connect Service on Navy bases throughout the U.S. via our relationship with NEXCOMM. |
• | New connections under the Jump Start program declined to approximately 20% of the new connection mix compared to approximately 66% in the fourth quarter of fiscal 2014. New connections under the trial of the QuickStart 5-year capital lease program accounted for approximately 35% and purchases of terminals accounted for approximately 30% of the sales mix compared to 0% and 20% in the fourth quarter of fiscal 2014, respectively. |
•
|
On November 13, 2014 it was announced that USA Technologies was included on the 2014 Deloitte Technology Fast 500™, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America.
|
Three months ended
September 30, |
||||||||
2014
|
2013
|
|||||||
Revenues:
|
||||||||
License and transaction fees
|
$
|
10,156,222
|
$
|
8,507,044
|
||||
Equipment sales
|
2,096,380
|
1,616,014
|
||||||
Total revenues
|
12,252,602
|
10,123,058
|
||||||
Cost of services
|
7,251,107
|
5,409,463
|
||||||
Cost of equipment
|
1,866,257
|
1,130,824
|
||||||
Gross profit
|
3,135,238
|
3,582,771
|
||||||
Operating expenses:
|
||||||||
Selling, general and administrative
|
3,632,487
|
3,295,344
|
||||||
Depreciation and amortization
|
169,403
|
158,509
|
||||||
Total operating expenses
|
3,801,890
|
3,453,853
|
||||||
Operating income (loss)
|
(666,652
|
)
|
128,918
|
|||||
Other income (expense):
|
||||||||
Interest income
|
10,082
|
13,526
|
||||||
Interest expense
|
(74,911
|
)
|
(60,976
|
)
|
||||
Change in fair value of warrant liabilities
|
310,052
|
219,097
|
||||||
Total other income, net
|
245,223
|
171,647
|
||||||
Income (loss) before benefit (provision) for income taxes
|
(421,429
|
)
|
300,565
|
|||||
Benefit (provision) for income taxes
|
360,473
|
(6,911
|
)
|
|||||
Net income (loss)
|
(60,956
|
)
|
293,654
|
|||||
Cumulative preferred dividends
|
(332,226
|
)
|
(332,226
|
)
|
||||
Net loss applicable to common shares
|
$
|
(393,182
|
)
|
$
|
(38,572
|
)
|
||
Net loss per common share (basic and diluted)
|
$
|
(0.01
|
)
|
$
|
-
|
|||
Weighted average number of common shares outstanding (basic and diluted)
|
35,586,455
|
33,324,295
|
September 30,
2014 |
June 30,
2014 |
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
10,916,078
|
$
|
9,072,320
|
||||
Accounts receivable, less allowance for uncollectible accounts of $129,000 and $63,000, respectively
|
2,444,748
|
2,683,579
|
||||||
Finance receivables
|
279,216
|
119,793
|
||||||
Inventory
|
2,629,361
|
1,486,777
|
||||||
Prepaid expenses and other current assets
|
376,823
|
363,367
|
||||||
Deferred income taxes
|
907,691
|
907,691
|
||||||
Total current assets
|
17,553,917
|
14,633,527
|
||||||
Finance receivables, less current portion
|
948,833
|
352,794
|
||||||
Other assets
|
382,563
|
190,703
|
||||||
Property and equipment, net
|
17,780,294
|
21,138,580
|
||||||
Deferred income taxes
|
26,713,803
|
26,353,330
|
||||||
Intangibles, net
|
432,100
|
432,100
|
||||||
Goodwill
|
7,663,208
|
7,663,208
|
||||||
Total assets
|
$
|
71,474,718
|
$
|
70,764,242
|
||||
Liabilities and shareholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
7,632,643
|
$
|
7,753,911
|
||||
Accrued expenses
|
1,779,037
|
1,915,799
|
||||||
Line of credit
|
5,000,000
|
5,000,000
|
||||||
Current obligations under long-term debt
|
207,383
|
172,911
|
||||||
Income taxes payable
|
-
|
21,021
|
||||||
Deferred gain from sale-leaseback transactions
|
860,390
|
380,895
|
||||||
Total current liabilities
|
15,479,453
|
15,244,537
|
||||||
Long-term liabilities:
|
||||||||
Long-term debt, less current portion
|
222,907
|
249,865
|
||||||
Accrued expenses, less current portion
|
137,045
|
186,174
|
||||||
Warrant liabilities
|
275,157
|
585,209
|
||||||
Deferred gain from sale-leaseback transactions, less current portion
|
1,545,641
|
761,790
|
||||||
Total long-term liabilities
|
2,180,750
|
1,783,038
|
||||||
Total liabilities
|
17,660,203
|
17,027,575
|
||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, no par value:
|
||||||||
Authorized shares- 1,800,000 Series A convertible preferred- Authorized shares- 900,000 Issued and outstanding shares- 442,968 (liquidation preference of $17,022,682 and $16,690,456, respectively)
|
3,138,056
|
3,138,056
|
||||||
Common stock, no par value: Authorized shares- 640,000,000 Issued and outstanding shares- 35,637,706 and 35,514,685, respectively
|
224,349,001
|
224,210,197
|
||||||
Accumulated deficit
|
(173,672,542
|
)
|
(173,611,586
|
)
|
||||
Total shareholders’ equity
|
53,814,515
|
53,736,667
|
||||||
Total liabilities and shareholders’ equity
|
$
|
71,474,718
|
$
|
70,764,242
|
Three months ended
September 30, |
||||||||
2014
|
2013
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
(60,956
|
)
|
$
|
293,654
|
|||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||
Charges incurred in connection with the vesting and issuance of common stock and common stock options for employee and director compensation
|
138,804
|
84,392
|
||||||
(Gain) Loss on disposal of property and equipment
|
(3,284
|
)
|
14,935
|
|||||
Non-cash interest and amortization of debt discount
|
-
|
2,095
|
||||||
Bad debt expense
|
158,716
|
26,431
|
||||||
Depreciation
|
1,473,412
|
1,218,071
|
||||||
Amortization
|
-
|
21,953
|
||||||
Change in fair value of warrant liabilities
|
(310,052
|
)
|
(219,097
|
)
|
||||
Deferred income taxes, net
|
(360,473
|
)
|
6,911
|
|||||
Recognition of deferred gain from sale-leaseback transactions
|
(188,327
|
)
|
-
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
80,115
|
705,115
|
||||||
Finance receivables
|
(755,462
|
)
|
(38,671
|
)
|
||||
Inventory
|
(1,138,319
|
)
|
78,017
|
|||||
Prepaid expenses and other current assets
|
(110,755
|
)
|
(51,960
|
)
|
||||
Accounts payable
|
(121,268
|
)
|
(1,247,786
|
)
|
||||
Accrued expenses
|
(185,891
|
)
|
17,764
|
|||||
Income taxes payable
|
(21,021
|
)
|
-
|
|||||
Net cash provided by (used in) operating activities
|
(1,404,761
|
)
|
911,824
|
|||||
INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
(31,490
|
)
|
(14,626
|
)
|
||||
Purchase of property for rental program
|
(1,641,993
|
)
|
(2,074,975
|
)
|
||||
Proceeds from sale of rental equipment under sale-leaseback transactions
|
4,993,879
|
-
|
||||||
Proceeds from sale of property and equipment
|
23,734
|
-
|
||||||
Net cash provided by (used in) investing activities
|
3,344,130
|
(2,089,601
|
)
|
|||||
FINANCING ACTIVITIES:
|
||||||||
Net proceeds from the issuance of common stock and exercise of common stock warrants
|
-
|
85,654
|
||||||
Proceeds from line of credit
|
-
|
1,000,000
|
||||||
Repayment of long-term debt
|
(95,611
|
)
|
(76,977
|
)
|
||||
Net cash provided by (used in) financing activities
|
(95,611
|
)
|
1,008,677
|
|||||
Net increase (decrease) in cash and cash equivalents
|
1,843,758
|
(169,100
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
9,072,320
|
5,981,000
|
||||||
Cash and cash equivalents at end of period
|
$
|
10,916,078
|
$
|
5,811,900
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
79,199
|
$
|
69,735
|
||||
Depreciation expense allocated to cost of sales
|
$
|
1,295,445
|
$
|
1,081,515
|
||||
Reclass of rental program property to inventory, net
|
$
|
4,265
|
$
|
20,661
|
||||
Prepaid items financed with debt
|
$
|
103,125
|
$
|
101,850
|
||||
Equipment and software acquired under capital lease
|
$
|
-
|
$
|
22,036
|
||||
Disposal of property and equipment
|
$
|
52,658
|
$
|
174,204
|
||||
Disposal of property and equipment under sale-leaseback transactions
|
$
|
3,873,275
|
$
|
-
|
Reconciliation of Net Income (Loss) to Non-GAAP Net Income (loss) and loss Per Common Share to Non-GAAP loss Per Common Share
|
||||||||
Three months ended September 30,
|
||||||||
2014
|
2013
|
|||||||
Net income (loss)
|
$
|
(60,956
|
)
|
$
|
293,654
|
|||
Non-GAAP adjustments:
|
||||||||
Fair value of warrant adjustment
|
(310,052
|
)
|
(219,097
|
)
|
||||
Non-GAAP net income (loss)
|
$
|
(371,008
|
)
|
$
|
74,557
|
|||
Net income (loss)
|
$
|
(60,956
|
)
|
$
|
293,654
|
|||
Non-GAAP net income (loss)
|
$
|
(371,008
|
)
|
$
|
74,557
|
|||
Cumulative preferred dividends
|
(332,226
|
)
|
(332,226
|
)
|
||||
Net loss applicable to common shares
|
$
|
(393,182
|
)
|
$
|
(38,572
|
)
|
||
Non-GAAP net loss applicable to common shares
|
$
|
(703,234
|
)
|
$
|
(257,669
|
)
|
||
Net loss per common share (basic and diluted)
|
$
|
(0.01
|
)
|
$
|
-
|
|||
Non-GAAP net loss per common share (basic and diluted)
|
$
|
(0.02
|
)
|
$
|
(0.01
|
)
|
||
Weighted average number of common shares outstanding (basic and diluted)
|
35,586,455
|
33,324,295
|
Three months ended September 30,
|
||||||||
2014
|
2013
|
|||||||
Net income (loss)
|
$
|
(60,956
|
)
|
$
|
293,654
|
|||
Less interest income
|
(10,082
|
)
|
(13,526
|
)
|
||||
Plus interest expense
|
74,911
|
60,976
|
||||||
Plus income tax expense (benefit)
|
(360,473
|
)
|
6,911
|
|||||
Plus depreciation expense
|
1,473,412
|
1,218,071
|
||||||
Plus amortization expense
|
-
|
21,953
|
||||||
Plus change in fair value of warrant liabilities
|
(310,052
|
)
|
(219,097
|
)
|
||||
Plus stock-based compensation
|
138,804
|
84,392
|
||||||
Adjusted EBITDA
|
$
|
945,564
|
$
|
1,453,334
|