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Achieved a record 12,700 total customers, a year-over-year increase of 15%

 

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Net loss was $(1.9) million, or $(0.06) per share, compared to a net loss of $(6.8) million, or $(0.21) per share for the fiscal year of 2016. The net loss for the fiscal year reflected a $1.5 million non-cash charge for the change in the fair value of warrant liabilities

 

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Non-GAAP net loss was $(0.2) million, or $(0.02) per share, compared to non-GAAP net loss of $(0.7) million, of $(0.04) per share for the prior year period

 

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Adjusted EBITDA of $7.1 million, a year-over-year increase of 18%

 

Fourth Quarter and Fiscal Year Financial Highlights, Connections & Transaction Data:

 

		As of and for the three months ended
		June 30,
(Connections and $'s in thousands, transactions in millions, eps is not rounded)		2017				2016				Change				% Change
Revenues:
License and transaction fees		$	18,679			$	15,263			$	3,416				22.4	%
Equipment sales			15,610				6,681				8,929				133.6	%
Total revenues		$	34,289			$	21,944			$	12,345				56.3	%
License and transaction fee margin			32.8	%			30.5	%			2.3	%
Equipment sales gross margin			8.9	%			17.0	%			-8.1	%
Overall Gross Margin			21.9	%			26.4	%			(4.5	%)
Operating income/(loss)		$	432			$	(1,578	)		$	2,010				127.4	%
Net income/(loss)		$	243			$	(872	)		$	1,115				127.9	%
Net loss per common shares - basic and diluted		$	0.01			$	(0.02	)		$	0.03				150.0	%
Net cash provided by (used in) operating activities		$	(2,476	)		$	1,273			$	(3,749	)			(294.5	%)
Net New Connections			64,000				28,000				36,000				128.6	%
Total Connections (at period end)			568,000				429,000				139,000				32.4	%
Total Number of Transactions (millions)			114.8				89.3				25.5				28.6	%
Transaction Volume (millions)		$	225.6			$	169.0			$	56.6				33.5	%
Adjusted EBITDA		$	2,781			$	626			$	2,155				344.2	%
Non-GAAP net income (loss)		$	203			$	(1,373	)		$	1,576				114.8	%
Basic weighted average number of common shares outstanding			40,331,993				37,325,681				3,006,312				8.1	%
Diluted weighted average number of common shares outstanding			40,772,482				37,325,681				3,446,801				9.2	%
Non-GAAP net earnings (loss) per common share - basic and diluted			0.01				(0.04	)			0.05				(125.0	%)

 

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“Our fiscal fourth quarter performance capped a strong year for USA Technologies. We achieved record revenue, and added the highest number of connections to our ePort service in the company’s history.  We are executing well in an accelerating market and have exceeded our long-term goals of attaining $100 million in annual revenue and 500,000 connections this fiscal year,” said Stephen P. Herbert, USA Technologies’ chairman and chief executive officer. “Moreover, we strengthened our balance sheet by completing a follow-on offering at the end of July, raising $43.1 million in gross proceeds, to extend our leadership in the unattended retail payments industry with the flexibility to continue our organic growth and pursue potential inorganic growth opportunities that are accretive and strategically complementary. We are excited about the opportunity ahead of us and believe that we can continue to deliver returns for shareholders through increased growth and profitability.”

 

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Discussion of Non-GAAP Financial Measures:

As used herein, Adjusted EBITDA represents net loss before interest income, interest expense, income taxes, depreciation, amortization, non-recurring fees and charges that were incurred in connection with the acquisition and integration of the VendScreen business, professional fees incurred in connection with the class action litigation incurred during the fiscal year, impairment charges related to our EnergyMiser asset trademarks, change in fair value of warrant liabilities, and stock-based compensation expense. We have excluded the non-operating item, change in fair value of warrant liabilities, because it represents a non-cash gain or charge that is not related to the Company’s operations. We have excluded the non-cash expense, stock-based compensation, as it does not reflect the cash-based operations of the Company. We have excluded the non-recurring costs and expenses incurred in connection with the VendScreen transaction in order to allow more accurate comparison of the financial results to historical operations. We have excluded the professional fees incurred in connection with the class action litigation as well as the trademark impairment charges because we believe that they represent a charge that is not related to the Company's operations. Adjusted EBITDA is a non-GAAP financial measure which is not required by or defined under GAAP. We use these non-GAAP financial measures for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision making. The presentation of this financial measure is not intended to be considered in isolation or as a substitute for the financial measures prepared and presented in accordance with GAAP, including the net income or net loss of the Company or net cash used in operating activities. Management recognizes that non-GAAP financial measures have limitations in that they do not reflect all of the items associated with the Company’s net income or net loss as determined in accordance with GAAP, and are not a substitute for or a measure of the Company’s profitability or net earnings. Adjusted EBITDA is presented because we believe it is useful to investors as a measure of comparative operating performance. Additionally, the Company utilizes Adjusted EBITDA as a metric in its executive officer and management incentive compensation plans.

 

USA Technologies Announces Fourth Quarter and Fiscal Year 2017 Financial Results

 

Forward-looking Statements:

 

 

USA Technologies Announces Fourth Quarter and Fiscal Year 2017 Financial Results

 

(A)	Statement of Operations for the 3 Months and Fiscal Years Ended June 30, 2017 and June 30, 2016

 

		For the three months ended June 30,
($ in thousands, except shares and per share data)		2017				% of Sales				2016				% of Sales				Change				% Change
Revenues:
License and transaction fees		$	18,679				54.5	%		$	15,263				69.6	%		$	3,416				22.4	%
Equipment sales			15,610				45.5	%			6,681				30.4	%			8,929				133.6	%
Total revenues			34,289				100.0	%			21,944				100.0	%			12,345				56.3	%
Costs of sales/revenues:
Cost of services			12,545				67.2	%			10,613				69.5	%			1,932				18.2	%
Cost of equipment			14,224				91.1	%			5,548				83.0	%			8,676				156.4	%
Total costs of sales/revenues			26,769				158.3	%			16,161				152.6	%			10,608				65.6	%
Gross profit			7,520				21.9	%			5,783				26.4	%			1,737				30.0	%
Operating expenses:
Selling, general and administrative			6,844				20.0	%			6,721				30.6	%			123				1.8	%
Depreciation and amortization			244				0.7	%			208				0.9	%			36				17.3	%
Impairment of intangible asset			—				0.0	%			432				2.0	%			(432	)			(100.0	%)
Total operating expenses			7,088				20.7	%			7,361				33.5	%			(273	)			(3.7	%)
Operating income (loss)			432				1.3	%			(1,578	)			(7.2	%)			2,010				(127.4	%)
Other income (expense):
Interest income			95				0.3	%			182				0.8	%			(87	)			(47.8	%)
Interest expense			(291	)			(0.8	%)			(197	)			(0.9	%)			(94	)			(47.7	%)
Change in fair value of warrant liabilities			—				0.0	%			18				0.1	%			(18	)			100.0	%
Total other expense, net			(196	)			(0.6	%)			3				0.0	%			(199	)			(6633.3	%)
Loss before (provision) benefit for income taxes			236				0.7	%			(1,575	)			(7.2	%)			1,811				115.0	%
Benefit (provision) for income taxes			7				0.0	%			703				3.2	%			(696	)			99.0	%
Net income (loss)			243				0.7	%			(872	)			(4.0	%)			1,115				127.9	%
Cumulative preferred dividends			—				0.0	%			—				0.0	%			—				0.0	%
Net income (loss) applicable to common shares		$	243				0.7	%		$	(872	)			(4.0	%)		$	1,115				127.9	%
Net income (loss) per common share - basic		$	0.01							$	(0.02	)						$	0.03				150.0	%
Net income (loss) per common share - diluted		$	0.01							$	(0.02	)						$	0.03				150.0	%
Basic weighted average number of common shares outstanding			40,331,993								37,325,681								3,006,312				8.1	%
Diluted weighted average number of common shares outstanding			40,772,482								37,325,681								3,446,801				9.2	%

 

USA Technologies Announces Fourth Quarter and Fiscal Year 2017 Financial Results

 

		For the year ended June 30,
($ in thousands, except shares and per share data)		2017				% of Sales				2016				% of Sales				Change				% Change
Revenues:
License and transaction fees		$	69,142				66.4	%		$	56,589				73.1	%		$	12,553				22.2	%
Equipment sales			34,951				33.6	%			20,819				26.9	%			14,132				67.9	%
Total revenues			104,093				100.0	%			77,408				100.0	%			26,685				34.5	%
Costs of sales/revenues:
Cost of services		$	47,053				68.1	%		$	38,089				67.3	%			8,964				23.5	%
Cost of equipment			30,394				87.0	%			17,334				83.3	%			13,060				75.3	%
Total costs of sales/revenues			77,447				74.4	%			55,423				71.6	%			22,024				39.7	%
Gross profit			26,646				25.6	%			21,985				28.4	%			4,661				21.2	%
Operating expenses:
Selling, general and administrative			25,493				24.5	%			22,373				28.9	%			3,120				13.9	%
Depreciation and amortization			1,018				1.0	%			647				0.8	%			371				57.3	%
Impairment of intangible asset			—				0.0	%			432				0.6	%			(432	)			(100.0	%)
Total operating expenses			26,511				25.5	%			23,452				30.3	%			3,059				13.0	%
Operating (loss) income			135				0.1	%			(1,467	)			(1.9	%)			1,602				(109.2	%)
Other income (expense):
Interest income			482				0.5	%			320				0.4	%			162				50.6	%
Interest expense			(892	)			(0.9	%)			(600	)			(0.8	%)			(292	)			(48.7	%)
Change in fair value of warrant liabilities			(1,490	)			(1.4	%)			(5,674	)			(7.3	%)			4,184				73.7	%
Total other expense, net			(1,900	)			(1.8	%)			(5,954	)			(7.7	%)			4,054				68.1	%
Loss before (provision) benefit for income taxes			(1,765	)			(1.7	%)			(7,421	)			(9.6	%)			5,656				76.2	%
(Provision) benefit for income taxes			(87	)			(0.1	%)			615				0.8	%			(702	)			114.1	%
Net loss			(1,852	)			(1.8	%)			(6,806	)			(8.8	%)			4,954				72.8	%
Cumulative preferred dividends			(668	)			(0.6	%)			(668	)			(0.9	%)			—				0.0	%
Net loss applicable to common shares			(2,520	)			(2.4	%)			(7,474	)			(9.7	%)		$	4,954				66.3	%
Net loss per common share - basic and diluted			(0.06	)							(0.21	)						$	0.15				71.4	%
Weighted average number of common shares outstanding - basic and diluted			39,860,335								36,309,047								3,551,288				9.8	%

 

USA Technologies Announces Fourth Quarter and Fiscal Year 2017 Financial Results

 

(B)	Five Quarter Select Key Performance Indicators

		As of and for the three months ended
		June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
Connections:
Gross New Connections			70,000				40,000				25,000				22,000				33,000
% from Existing Customer Base			93	%			88	%			80	%			86	%			83	%
Net New Connections			64,000				35,000				21,000				19,000				28,000
Total Connections			568,000				504,000				469,000				448,000				429,000
Customers:
New Customers Added			300				500				500				350				300
Total Customers			12,700				12,400				11,900				11,400				11,050
Volumes:
Total Number of Transactions (millions)			114.8				104.9				100.1				95.1				89.3
Transaction Volume (millions)		$	225.6			$	202.5			$	191.5			$	183.4			$	169.0
Financing Structure of Connections:
JumpStart			6.7	%			8.6	%			6.8	%			7.7	%			6.5	%
QuickStart & All Others *			93.3	%			91.4	%			93.2	%			92.3	%			93.5	%
Total			100.0	%			100.0	%			100.0	%			100.0	%			0.0	%

*Includes credit sales with standard trade receivable terms