USA Technologies Inc (USAT)

[Enterprising Investor]

USA Technologies Announces Fourth Quarter and Fiscal Year 2017 Results (8/22/17)

Added Record 64,000 Connections in Q4:17, up 129% Year-Over-Year

MALVERN, Penn.--(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 fourth quarter and fiscal year ended June 30, 2017.

Fourth Quarter Financial Highlights:

• Achieved record quarterly revenue of $34.3 million, a year-over-year increase of 56% marking the 31st consecutive quarter of growth

• Record net connections of 64,000, a year-over-year increase of 129%

• Quarterly record license and transaction fee revenue of $18.7 million, a year-over-year increase of 22%

• Operating income of $432,000, compared to an operating loss of $1.6 million in the prior year period

• Ended the quarter with $12.7 million in cash, which excludes $11.0 million of short-term finance receivables

• Quarterly GAAP net income of $0.2 million, or $0.01 per share, compared to a net loss of $(872,000), or $(0.02) per share for the prior year period

• Quarterly Non-GAAP net income of $0.2 million, or $0.01 per share, compared to Non-GAAP net loss of $(1.4) million, or $(0.04) per share for the prior year period

• Quarterly Adjusted EBITDA of $2.8 million, a year-over-year increase of 344%

Fiscal Year Financial Highlights:

• Record total revenue of $104.1 million, a year-over-year increase of 35%

• Record 568,000 net connections to ePort service as of June 30, 2017, representing a year-over-year increase of 32%

• Record net connections of 139,000, a year-over-year increase of 45%

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

• 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

• 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

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

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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.”

Fiscal Year 2018 Outlook

For the full fiscal year 2018, USA Technologies expects to add between 170,000 and 175,000 net new connections for the year, bringing total connections to a range of 738,000 to 743,000. The company expects total revenue to be between $122 million and $127 million and adjusted EBITDA to grow 35% to 50% to a range of $9.6 million to $10.6 million.

We have not reconciled our 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), we have not provided guidance for GAAP net income (loss) or a reconciliation of our 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, August 22, 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 # 67222406.

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 August 22, 2017 until 11:30 a.m. Eastern Time on August 25, 2017 and may be accessed by calling [phone] (domestic dial-in) or [phone] (international dial-in) and reference conference ID # 67222406. 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 73 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/20170822005597/en/USA-Technologies-Announces-Fourth-Quarter-Fiscal-Year