USA Technologies Inc (USAT)

[Enterprising Investor]

USA Technologies Announces First Quarter Fiscal Year 2018 Results (11/08/17)

Announced Agreement to Acquire Cantaloupe Systems

MALVERN, Pa.--(BUSINESS WIRE)-- USA Technologies, Inc. (NASDAQ:USAT) ("USAT"), a premier payment technology service provider of integrated cashless and mobile transactions in the self-service retail market, today reported results for its first quarter ended September 30, 2017.

First Quarter Financial Highlights:

Revenue of $25.6 million, a year-over-year increase of 19% marking the 32nd consecutive quarter of growth

Net connections of 26,000, a year-over-year increase of 37%

Achieved record license and transaction fee revenue of $19.9 million, a year-over-year increase of 22%

Operating loss of $(0.6) million, compared to an operating loss of $(1.0) million in the prior year period

Adjusted operating income (operating income as adjusted for integration and acquisition costs) of $0.2 million, compared to a loss of $(0.8) million for the prior year period

Ended the quarter with $51.9 million in cash

Net loss of $(0.2) million, or $(0.01) per share, compared to a net loss of $(2.5) million, or $(0.07) per share for the prior year period

Adjusted EBITDA of $2.3 million, a year-over-year increase of 244%

"The first quarter was a strong start to our fiscal year, marked by continued momentum of cashless acceptance in our target market," said Stephen P. Herbert, USA Technologies' chairman and Chief Executive Officer. "During the quarter, we increased our penetration with our existing customers and reached the highest quarterly new customer additions in two years. We believe that our value proposition and addressable market will be further enhanced by our planned acquisition of Cantaloupe Systems, which we announced yesterday, November 7, 2017. Cantaloupe will bring complementary value added services that will enable USA Technologies to offer a comprehensive end-to-end enterprise platform to new customers and further penetrate our existing customer base."

"I am very pleased with our first quarter results," said Priyanka Singh, USA Technologies' Chief Financial Officer. "Consistent with our strategy, we grew revenue, while increasing our L&T margins and managing expenses, which led to improved profitability. We are excited about the opportunity to further enhance our financial model with the acquisition of Cantaloupe, which brings high margin recurring revenue and the potential for both cost and revenue synergies."

Fiscal Year 2018 Outlook

As a result of the announced agreement with Cantaloupe Systems, USAT is updating its outlook for fiscal 2018. The company now expects pro-forma combined revenue to be between $137 million to $142 million and adjusted EBITDA to be between $12.5 million to $13.5 million. Net of one-time transaction and integration expenses and any purchase accounting adjustments, USAT expects the transaction to be accretive in fiscal 2018.

USA Technologies has not reconciled the company's adjusted EBITDA outlook to GAAP net income (loss) due to the uncertainty and potential variability of the provision for (benefit from) income taxes, which is a reconciling item between adjusted EBITDA and GAAP net income (loss). Because this item cannot be reasonably predicted and could have a significant impact on the calculation of GAAP net income (loss), USA Technologies has not provided guidance for GAAP net income (loss) or a reconciliation of the company's adjusted EBITDA outlook to GAAP net income (loss). Accordingly, a GAAP net income (loss) outlook and a reconciliation of adjusted EBITDA outlook to GAAP net income (loss) is not available without unreasonable effort. For information regarding the reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see "Non-GAAP Financial Measures" and the reconciliation tables included in this press release under "Financial Schedules".

Webcast and Conference Call

USA Technologies will host a conference call and webcast the event beginning at 8:30 a.m. Eastern Time today, November 8, 2017.
To participate in the conference call, please dial [phone] approximately 10 minutes prior to the call. International callers should dial [phone]. Please reference conference ID # 4097308.
A live webcast of the conference call will be available at http://usat.client.shareholder.com/events.cfm. Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software. A telephone replay of the conference call will be available from 11:30 a.m. Eastern Time on November 8, 2017 until 11:30 a.m. Eastern Time on November 11, 2017 and may be accessed by calling [phone] (domestic dial-in) or [phone] (international dial-in) and reference conference ID # 4097308. An archived replay of the conference call will also be available in the investor relations section of the company's website.

About USA Technologies

USA Technologies, Inc. is a premier payment technology service provider of integrated cashless and mobile transactions in the self-service retail market. The company also provides a broad line of cashless acceptance technologies including its NFC-ready ePort® G-series, ePort® Connect, ePort® Interactive, QuickConnect, an API Web service for developers, and MORE., a customizable loyalty program. USA Technologies has 76 United States and foreign patents in force; and has agreements with Verizon, Visa, Chase Paymentech and customers such as Compass, AMI Entertainment and others. For more information, please visit the website at www.usatech.com.

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http://www.businesswire.com/news/home/20171108005513/en/USA-Technologies-Announces-Quarter-Fiscal-Year-2018