USA Technologies Inc (USAT)

[Enterprising Investor]

USA Technologies Announces Fourth Quarter and Fiscal Year 2016 Results (9/13/16)

MALVERN, Pa.--(BUSINESS WIRE)--USA Technologies, Inc. (NASDAQ:USAT), a premier payment technology service provider of integrated cashless and mobile transactions in the self-service retail market, today reported results for its fourth quarter and fiscal year ended June 30, 2016.

Fourth Quarter Financial Highlights:

• Total quarterly revenue of $21.9 million, a year-over-year increase of 24%

• 429,000 connections to ePort service, including 6,000 new connections attributable to the VendScreen acquisition which closed on January 15, 2016, representing a year-over-year increase of 29%

• Record 11,050 customers compared to 9,600 as of a year ago, a year-over-year increase of 15%

• Quarterly record license and transaction fee revenue of $15.3 million, a year-over-year increase of 28%

• $1.3 million of cash provided by operating activities representing the sixth straight quarter of positive operating cash flow

• Ended the quarter with $19.3 million in cash and cash equivalents

• Quarterly GAAP net loss of $872 thousand, including the impact of a $432 thousand non-cash expense for the write-down of trademarks to net realizable value of zero and $258 thousand of non-recurring expenses related to the acquisition and integration of the VendScreen business

• Quarterly Non-GAAP net loss of $1.4 million

• Quarterly adjusted EBITDA of $0.6 million

Fourth Quarter Financial Highlights, Connections & Transaction Data:

Fiscal Year Financial Highlights:

• Record total revenue of $77.4 million, a year-over-year increase of 33%

• Record net connections of 96,000 for the year

• Net loss for the fiscal year of 2016 was $6.8 million compared to a net loss of $1.1 million for the fiscal year of 2015. The net loss for the fiscal year reflected a $5.7 million non-cash charge for the change in the fair value of warrant liabilities

• Non-GAAP net loss was $0.7 million for the 2016 fiscal year compared to non-GAAP net loss of $0.5 million for the 2015 fiscal year

“We ended the fiscal year with strong momentum as we continue to drive growth by the adoption of our cashless payment solutions,” said Stephen P. Herbert, USA Technologies’ chairman and chief executive officer. “Our customers are increasingly realizing the positive benefits of upgrading 100% of their locations with our ePort Connect service to enable consumers the cashless payment option. The addition of our ePort Interactive Service provides additional value with the ability to provide a more robust consumer experience and yields improved performance at the location. We’ve grown our business substantially and are poised for the next phase of growth as we work to improve profitability and scale our business.”

As described in our Form 10-K for the fiscal year, to be filed today, based on management’s assessment of the effectiveness of its internal control over financial reporting as of June 30, 2016, management identified control deficiencies, including three significant deficiencies, in the design or operating effectiveness of the Company’s internal control over financial reporting, which when aggregated, represent a material weakness in internal control. The Company is committed to remediating the control deficiencies that gave rise to the material weakness. These internal controls are being evaluated by management, and will be adjusted appropriately as soon as is practical. Due its increased market capitalization, this is the first fiscal year that the Company’s internal control over financial reporting has been subject to audit by its independent registered public accounting firm.

Fiscal 2017 Outlook

For full fiscal year 2017, management expects to add between 115,000 and 125,000 net new connections for the year, bringing total connections to our service to a range of 544,000 to 554,000 and expects total revenue to be between $95 million and $100 million. We also expect to have year-over-year increases of adjusted EBITDA and non-GAAP net income.

Webcast and Conference Call

Management will host a conference call and webcast the event beginning at 8:30 a.m. Eastern Time today, September 13, 2016.

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 # 75053191.

A live webcast of the conference call will be available at http://investor.usatech.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 September 13, 2016 until 11:30 a.m. Eastern Time on September 16, 2016 and may be accessed by calling [phone] (domestic dial-in) or [phone] (international dial-in) and reference conference ID # 75053191. 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 Mobile™ for customers on the go, ePort® Interactive, and QuickConnect, an API Web service for developers. USA Technologies has 78 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.

http://www.businesswire.com/news/home/20160913005845/en/USA-Technologies-Announces-Fourth-Quarter-Fiscal-Year