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 first quarter ended September 30, 2016.
First Quarter Financial Highlights:
- Total quarterly revenue of $21.6
million, a year-over-year increase of 30%
- 448,000 connections to ePort service,
representing a year-over-year increase of 28%
- Added 350 customers to achieve record
11,400 total customers compared to 10,275 as of a year ago, a
year-over-year increase of 11%
- Quarterly record license and
transaction fee revenue of $16.4 million, a year-over-year
increase of 27%
- Ended the quarter with $18.2 million in
cash
- Quarterly GAAP net loss of $2.5
million, primarily attributable to the $1.5 million increase in the
fair value of the warrant liabilities, as well the $1.7 million
dollar increase in professional services included in SG&A
related to SOX 404 compliance, internal audit, and audit of our
financial statements driven primarily by our status as a first time
accelerated filer which required an audit of our annual SOX 404
assessment
- Quarterly Non-GAAP net loss of $1.0
million
- Quarterly Adjusted EBITDA of $0.7
million
First Quarter Financial Highlights, Connections &
Transaction Data:
As of and for the threemonths
endedSeptember 30,
(Connections and $'s in thousands,
transactions in millions, eps is not rounded)
2016 2015 Change
% Change Revenues: License and transaction
fees $ 16,365 $ 12,925 $ 3,440 27 % Equipment Sales 5,223
3,675 1,548 42 % Total revenues
$ 21,588 $ 16,600 $ 4,988 30 % License
and transaction fee margin 31.3 % 32.6 % -1.3 % -4 %
Equipment sales gross margin 20.0 % 22.5 % -2.5 % -11 %
Overall Gross Margin 28.6 % 30.4 % -1.8 % -6 % Operating
income/(loss) $ (950 ) $ 112 $ (1,062 ) -948 % Net
income/(loss) $ (2,464 ) $ 360 $ (2,824 ) -784 % Net income
(loss) per common shares - basic $ (0.07 ) $ - $ (0.07 ) -700 %
Net income (loss) per common shares - diluted $ (0.07 ) $
(0.01 ) $ (0.06 ) 600 % Net New Connections 19 16 3 19 %
Total Connections (at period end) 448 349 99 28 %
Total Number of Transactions (millions) 95 69 26 38 %
Transaction Volume (millions) $ 183 $ 127 $ 56 44 % Adjusted
EBITDA $ 663 $ 1,751 $ (1,088 ) -62 % Non-GAAP net income
(loss) $ (955 ) $ 61 $ (1,016 ) -1666 %
“USA Technologies continued its strong connection and revenue
growth and is executing in the market to drive cashless and mobile
payments to self-service retail locations,” said Stephen P.
Herbert, USA Technologies’ chairman and chief executive
officer. “As we move further into our fiscal year, we expect to see
both continued top line growth and expanding
profitability as we drive wider adoption of our ePort Connect
service to vending, kiosks, and other unattended retail locations.
Our customers continue to see compelling economics which underpins
their decisions to upgrade 100% of their locations to our
technology. Further, as the market advances we expect our
ePort Interactive Service, which enables a more robust consumer
experience and yields improved performance at the location,
to expand market share.”
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, November 9, 2016.
To participate in the conference call, please dial (866)
393-1608 approximately 10 minutes prior to the call.
International callers should dial (224) 357-2194. Please reference
conference ID # 8492228.
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 November 9, 2016 until 11:30 a.m.
Eastern Time on November 12, 2016 and may be accessed by calling
(855) 859-2056 (domestic dial-in) or (404) 537-3406 (international
dial-in) and reference conference ID # 8492228. 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.
Forward-looking Statements:
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: All statements other than statements of
historical fact included in this release, including without
limitation the business strategy and the plans and objectives of
USAT's management for future operations, are forward-looking
statements. When used in this release, words such as "anticipate",
"believe", "estimate", "expect", "intend", and similar expressions,
as they relate to USAT or its management, identify forward looking
statements. Such forward-looking statements are based on the
beliefs of USAT's management, as well as assumptions made by and
information currently available to USAT's management. Actual
results could differ materially from those contemplated by the
forward-looking statements as a result of certain factors,
including but not limited to, the ability of management to
accurately predict or forecast future financial results, including
earnings or taxable income of USAT, or increased revenues at a
customer location; the incurrence by USAT of any unanticipated or
unusual non-operational expenses which would require us to divert
our cash resources from achieving our business plan; the ability of
USAT to retain key customers from whom a significant portion of its
revenues is derived; the ability of USAT to compete with its
competitors to obtain market share; whether USAT's customers
continue to utilize USAT's transaction processing and related
services, as our customer agreements are generally cancelable by
the customer on thirty to sixty days' notice; the ability of USAT
to raise funds in the future through the sales of securities or
debt financings in order to sustain its operations if an unexpected
or unusual non-operational event would occur; the ability of USAT
to use available data to predict future market conditions, consumer
behavior and any level of cashless usage; the ability to prevent a
security breach of our systems or services or third party services
or systems utilized by us; whether any patents issued to USAT will
provide USAT with any competitive advantages or adequate protection
for its products, or would be challenged, invalidated or
circumvented by others; the ability of USAT to operate without
infringing or violating the intellectual property rights of others;
whether USAT would be able to sell sufficient ePort hardware to
third party leasing companies as part of the QuickStart program in
order to improve cash flows from operations; whether USAT’s
remediation efforts in connection with the control deficiencies
that resulted in a material weakness in USAT’s internal controls
over financial reporting as of June 30, 2016 would be effective;
whether USAT experiences additional material weaknesses in its
internal controls over financial reporting in future periods, and
USAT is not able to accurately or timely report its financial
condition or results of operations; and whether USAT's existing or
anticipated customers purchase, rent or utilize ePort devices or
our other products or services in the future at levels currently
anticipated by USAT. Readers are cautioned not to place undue
reliance on these forward-looking statements. Any forward-looking
statement made by us in this release speaks only as of the date of
this release. Unless required by law, USAT does not undertake to
release publicly any revisions to these forward-looking statements
to reflect future events or circumstances or to reflect the
occurrence of unanticipated events.
Financial Schedules:
A. Statements of Operations for the 3 Months Ended September 30,
2016 and 2015
B. Five Quarter Select Key Performance Indicators
C. Comparative Balance Sheets as of September 30, 2016 and June
30, 2016
D. Five Quarter Statements of Operations and Adjusted EBITDA
E. Five Quarter Selling, General, & Administrative
Expenses
F. Five Quarter Condensed Balance Sheets
G. Five Quarter Statements of Cash Flows
H. Five Quarter Reconciliation of Net Income/(Loss) to Non-GAAP
Net Income (Loss) and Net Earnings/(Loss) Per Common Share – Basic
and Diluted to Non-GAAP Net Earnings/(Loss) Per Common Share –
Basic and Diluted
(A) Statement of Operations for the 3
Months Ended September 30, 2016 and 2015
For the three months ended September 30, ($ in
thousands, except shares and per share data)
2016
% ofSales
2015
% ofSales
Change % Change Revenues: License and
transaction fees $ 16,365 75.8 % $ 12,925 77.9 % $ 3,440 27 %
Equipment sales 5,223 24.2 % 3,675 22.1
% 1,548 42 % Total revenues 21,588 100.0 % 16,600 100.0 % 4,988 30
% Costs of sales/revenues: Cost of services 11,243 68.7 %
8,705 67.4 % 2,538 29 % Cost of equipment 4,178 80.0
% 2,848 77.5 % 1,330 47 % Total costs of
sales/revenues 15,421 71.4 % 11,553
69.6 % 3,868 33 % Gross profit 6,167 28.6 % 5,047 30.4 %
1,120 22 % Operating expenses: Selling, general and
administrative 6,909 32.0 % 4,796 28.9 % 2,113 44 % Depreciation
and amortization 208 1.0 % 139 0.8 % 69
50 % Total operating expenses 7,117 33.0 % 4,935 29.7 % 2,182 44 %
Operating income (loss) (950 ) -4.4 % 112 0.7 % (1,062 )
-948 % Other income (expense): Interest income 73 0.3 % 51
0.3 % 22 43 % Interest expense (212 ) -1.0 % (119 ) -0.7 % (93 ) 78
% Change in fair value of warrant liabilities (1,490 ) -6.9
% 343 2.1 % (1,833 ) -534 % Total other income
(expense), net (1,629 ) -7.5 % 275 1.7 % (1,904 ) -692 %
Income (loss) before provision for income taxes (2,579 ) -11.9 %
387 2.3 % (2,966 ) -766 % Benefit (provision) for income taxes
115 0.5 % (27 ) -0.2 % 142 -526 % Net
income (loss) (2,464 ) -11.4 % 360 2.2 % (2,824 ) -784 % Cumulative
preferred dividends (334 ) -1.5 % (334 ) -2.0 % - 0 %
Net income (loss) applicable to common shares $ (2,798 ) -13.0 % $
26 0.2 % $ (2,824 ) -10862 % Net earnings (loss) per
common share - basic $ (0.07 ) $ - $ (0.07 ) -700 % Net
earnings (loss) per common share - diluted $ (0.07 ) $ (0.01 ) $
(0.06 ) 600 % Basic weighted average number of common shares
outstanding 38,488,005 35,848,395 2,639,610 7 % Diluted weighted
average number of common shares outstanding 38,488,005 36,487,879
2,000,126 5 %
(B) Five Quarter Select Key Performance
Indicators
As of and for the three months ended September
30, June 30, March
31, December 31, September 30, 2016
2016 2016
2015 2015 Connections: Gross New
Connections 22,000 33,000 34,000 23,000 20,000 % from Existing
Customer Base 86 % 83 % 91 % 89 % 86 % Net New Connections 19,000
28,000 32,000 20,000 16,000 Total Connections 448,000 429,000
401,000 369,000 349,000
Customers: New Customers
Added 350 300 125 350 675 Total Customers 11,400 11,050 10,750
10,625 10,275
Volumes: Total Number of Transactions
(millions) 95 89 82 76 69 Transaction Volume (millions) $ 183 $ 169
$ 151 $ 138 $ 126
Financing Structure of Connections:
JumpStart 7.7 % 6.5 % 7.4 % 10.1 % 13.8 % QuickStart & All
Others * 92.3 % 93.5 %
92.6 % 89.9 % 86.2
% Total 100.0 % 100.0 %
100.0 % 100.0 %
100.0 % *Includes credit sales with standard trade
receivable terms
(C) Comparative Balance Sheets
September 30, 2016 to June 30, 2016
($
in thousands)
September 30, June 30, 2016
2016 Change % Change Assets Current assets:
Cash $ 18,198 $ 19,272 $ (1,074 ) -6 % Accounts receivable, less
allowance 5,840 4,899 941 19 % Finance receivables 3,349 3,588 (239
) -7 % Inventory, net 4,264 2,031 2,233 110 % Prepaid expenses and
other current assets 1,439 987 452 46 % Deferred income taxes
2,271 2,271 - 0 % Total
current assets 35,361 33,048 2,313 7 % Finance receivables,
less current portion 3,962 3,718 244 7 % Other assets 163 348 (185
) -53 % Property and equipment, net 9,570 9,765 (195 ) -2 %
Deferred income taxes 25,568 25,453 115 0 % Intangibles, net 754
798 (44 ) -6 % Goodwill 11,703 11,703
- 0 % Total assets $ 87,081 $ 84,833 $
2,248 3 % Liabilities and shareholders' equity
Current liabilities: Accounts payable $ 8,693 $ 12,354 $ (3,661 )
-30 % Accrued expenses 3,912 3,458 454 13 % Line of credit, net
7,258 7,119 139 2 % Current obligations under long-term debt 834
629 205 33 % Income taxes payable 8 18 (10 ) -56 % Warrant
liabilities - 3,739 (3,739 ) 100 % Deferred gain from
sale-leaseback transactions 685 860
(175 ) -20 % Total current liabilities 21,390 28,177 (6,787
) -24 % Long-term liabilities Long-term debt, less current portion
1,517 1,576 (59 ) -4 % Accrued expenses, less current portion 11 15
(4 ) -27 % Deferred gain from sale-leaseback transactions, less
current portion - 40 (40 ) -100
% Total long-term liabilities 1,528 1,631
(103 ) -6 % Total liabilities 22,918
29,808 (6,890 ) -23 % Shareholders'
equity: Preferred stock, no par value 3,138 3,138 - 0 % Common
stock, no par value 244,996 233,394 11,602 5 % Accumulated deficit
(183,971 ) (181,507 ) (2,464 ) 1 % Total
shareholders' equity 64,163 55,025
9,138 17 % Total liabilities and shareholders' equity
$ 87,081 $ 84,833 $ 2,248 3 % Net
working capital $ 13,971 $ 4,871 $ 9,100 187 %
(D) Five Quarter Statement of
Operations and Adjusted EBITDA
($ in thousands)
For the three months ended
September 30,
June 30,
March 31,
December 31,
September 30,
2016
% of Sales
2016
% of Sales
2016
% of Sales
2015
% of Sales
2015
% of Sales
Revenues: License and transaction fees $ 16,365 75.8 % $ 15,263
69.6 % $ 14,727 72.3 % $ 13,674 73.9 % $ 12,925 77.9 % Equipment
Sales 5,223 24.2 % 6,681 30.4 %
5,634 27.7 % 4,829 26.1 % 3,675
22.1 % Total revenue 21,588 100.0 % 21,944 100.0 % 20,361 100.0 %
18,503 100.0 % 16,600 100.0 % Costs of sales/revenues:
License and transaction fees 11,243 68.7 % 10,614 69.5 % 9,703 65.9
% 9,067 66.3 % 8,705 67.4 % Equipment sales 4,178
80.0 % 5,547 83.0 % 4,986 88.5 %
3,953 81.9 % 2,848 77.5 % Total costs of
sales/revenues 15,421 71.4 % 16,161 73.6 % 14,689 72.1 % 13,020
70.4 % 11,553 69.6 % Gross Profit: License and transaction
fees 5,122 31.3 % 4,649 30.5 % 5,024 34.1 % 4,607 33.7 % 4,220 32.6
% Equipment sales 1,045 20.0 % 1,134
17.0 % 648 11.5 % 876 18.1 % 827
22.5 % Total gross profit 6,167 28.6 % 5,783 26.4 % 5,672
27.9 % 5,483 29.6 % 5,047 30.4 % Operating expenses:
Selling, general and administrative 6,909 32.0 % 6,721 30.6 % 6,094
29.9 % 4,762 25.7 % 4,796 28.9 % Depreciation 208 1.0 % 208 0.9 %
173 0.8 % 127 0.7 % 139 0.8 % Impairment of intangible asset
- 0.0 % 432 2.0 % - 0.0 %
- 0.0 % - 0.0 % Total operating expenses 7,117
33.0 % 7,361 33.5 % 6,267 30.8 % 4,889 26.4 % 4,935 29.7 %
Operating income (loss) (950 )
-4.4 % (1,578 ) -7.2 % (595 ) -2.9 % 594
3.2 % 112 0.7 % Other income (expense):
Interest income 73 0.3 % 182 0.8 % 67 0.3 % 20 0.1 % 51 0.3 % Other
income - 0.0 % - 0.0 % - 0.0 % - 0.0 % - 0.0 % Interest expense
(212 ) -1.0 % (197 ) -0.9 % (180 ) -0.9 % (104 ) -0.6 % (119 ) -0.7
% Change in fair value of warrant liabilities (1,490 ) -6.9
% 18 0.1 % (4,805 ) -23.6 % (1,230 )
-6.6 % 343 2.1 % Total other income (expense), net
(1,629 ) -7.5 % 3 0.0 % (4,918 ) -24.2 % (1,314 ) -7.1 % 275 1.7 %
Loss before provision for income taxes (2,579 ) -11.9 %
(1,575 ) -7.2 % (5,513 ) -27.1 % (720 ) -3.9 % 387 2.3 % Benefit
(provision) for income taxes 115 0.5 % 703 3.2 % 93 0.5 % (154 )
-0.8 % (27 ) -0.2 % Net income
(loss) (2,464 ) -11.4 % (872 ) -4.0 % (5,420 )
-26.6 % (874 ) -4.7 % 360 2.2 % Less
interest income (73 ) -0.3 % (182 ) -0.8 % (67 ) -0.3 % (20 ) -0.1
% (51 ) -0.3 % Plus interest expenses 212 1.0 % 197 0.9 % 180 0.9 %
104 0.6 % 119 0.7 % Plus income tax expense (115 ) -0.5 % (703 )
-3.2 % (93 ) -0.5 % 154 0.8 % 27 0.2 % Plus depreciation expense
1,257 5.8 % 1,272 5.8 % 1,190 5.8 % 1,323 7.2 % 1,350 8.1 % Plus
amortization expense 44 0.2 % 44 0.2 % 44 0.2 % - 0.0 % - 0.0 %
Plus (less) change in fair value of warrant liabilities 1,490 6.9 %
(18 ) -0.1 % 4,805 23.6 % 1,230 6.6 % (343 ) -2.1 % Plus
stock-based compensation 211 1.0 % 198 0.9 % 142 0.7 % 237 1.3 %
272 1.6 % Plus intangible asset impairment - 0.0 % 432 2.0 % - 0.0
% - 0.0 % - 0.0 % Plus VendScreen non-recurring charges 101 0.5 %
258 1.2 % 461 2.3 % 106 0.6 % - 0.0 % Plus litigation related
professional fees - 0.0 % - 0.0 %
105 0.5 % - 0.0 % - 0.0 %
Adjusted EBITDA $ 663 3.1 % $ 626 2.9 % $ 1,347
6.6 % $ 2,260 12.2 % $ 1,734 10.4 % See
discussion of Non-GAAP financial measures later in this document
(E) Five Quarter Selling, General,
& Administrative Expenses
Three months ended ($ in thousands)
September
30, % of June 30,
% of March 31, % of December 31, %
of September 30, % of 2016 SG&A
2016 SG&A 2016 SG&A 2015
SG&A 2015 SG&A Salaries and
benefit costs $ 3,129 45.3 % $ 3,050 45.4 % $ 2,760 45.4 % $ 2,786
58.6 % $ 2,685 56.0 % Marketing related expenses 329 4.8 % 635 9.4
% 362 5.9 % 335 7.0 % 333 6.9 % Professional services 2,520 36.5 %
1,533 22.8 % 1,152 18.9 % 839 17.6 % 782 16.3 % Bad debt expense 97
1.4 % 470 7.0 % 505 8.3 % 239 5.0 % 236 4.9 % Premises, equipment
and insurance costs 499 7.2 % 555 8.3 % 460 7.5 % 347 7.3 % 399 8.3
% Research and development expenses 124 1.8 % 123 1.8 % 131 2.1 %
37 0.8 % 191 4.0 % VendScreen non-recurring charges 101 1.5 % 258
3.8 % 461 7.6 % 106 2.2 % 17 0.4 % Litigation related professional
fees 33 0.5 % 51 0.8 % 105 1.7 % - 0.0 % - 0.0 % Other expenses
77 1.1 % 46
0.7 % 158
2.6 % 73 1.5 %
153 3.2 % Total SG&A
expenses $ 6,909 100 % $ 6,721
100 % $ 6,094
100 % $ 4,762 100 %
$ 4,796 100 % Total
Revenue $ 21,588 $ 21,944 $ 20,361 $ 18,503 $ 16,600 SG&A
expenses as a percentage of revenue 32.0 % 30.6 % 29.9 % 25.7 %
28.9 %
(F) Five Quarter Condensed Balance
Sheets
($ in thousands)
September 30, June 30,
March 31, December 31, September 30,
2016 2016 2016 2015 2015
Assets Current assets: Cash $ 18,198 $ 19,272 $ 14,901 $ 14,809 $
11,592 Accounts receivable, less allowance 5,840 4,899 8,345 6,976
6,448 Finance receivables 3,349 3,588 1,677 1,503 946 Inventory,
net 4,264 2,031 2,341 2,849 3,718 Other current assets 3,710
3,258 2,336 2,160 1,883 Total
current assets 35,361 33,048 29,600 28,297 24,587 Finance
receivables, less current portion 3,962 3,718 3,042 2,435 3,525
Other assets 163 348 337 326 342 Property and equipment, net 9,570
9,765 10,584 10,856 11,890 Deferred income taxes 25,568 25,453
25,701 25,607 25,761 Goodwill and intangibles 12,457
12,501 12,976 8,095 8,095 Total assets
$ 87,081 $ 84,833 $ 82,240 $ 75,616 $ 74,200
Liabilities and shareholders' equity Current liabilities: Accounts
payable and accrued expenses $ 12,605 $ 15,812 $ 15,368 $ 9,992 $
11,615 Line of credit, net 7,258 7,119 6,980 7,000 4,000 Warrant
Liabilities - 3,739 5,964 - - Other current liabilities
1,527 1,507 1,485 1,384 1,497
Total current liabilities 21,390 28,177 29,797 18,376 17,112
Long-term liabilities Total
long-term liabilities 1,528 1,631 2,016
3,945 3,116 Total liabilities 22,918
29,808 31,813 22,321 20,228
Shareholders' equity: Total shareholders' equity 64,163
55,025 50,427 53,295 53,972
Total liabilities and shareholders' equity $ 87,081 $ 84,833 $
82,240 $ 75,616 $ 74,200 Total current assets $
35,361 $ 33,048 $ 29,600 $ 28,297 $ 24,587 Total current
liabilities 21,390 28,177 29,797
18,376 17,112 Net working capital $ 13,971 $ 4,871 $ (197 )
$ 9,921 $ 7,475
(G) Five Quarter Statements of Cash
Flows
Three months ended
($ in thousands)
September 30, June 30, March 31, December 31, September 30, 2016
2016 2016 2015
2015 OPERATING ACTIVITIES: Net (loss) income $ (2,464 ) $
(872 ) $ (5,420 ) $ (874 ) $ 360
Adjustments to reconcile net (loss) income
to net cash provided by (used in) operating activities:
Charges incurred in connection with the
vesting and issuance of common stock for employee and director
compensation
211 198 142 237 272 Gain on disposal of property and equipment -
(110 ) (15 ) (41 ) (1 ) Non-cash interest and amortization of debt
discount 105 13 - - - Bad debt expense 97 470 506 238 236
Depreciation 1,257 1,272 1,190 1,323 1,350 Amortization of
intangible assets 44 43 44 - - Impairment of intangible asset - 432
- - - Change in fair value of warrant liabilities 1,490 (18 ) 4,805
1,230 (343 ) Deferred income taxes, net (115 ) (748 ) (93 ) 154 27
Recognition of deferred gain from sale-leaseback transactions (215
) (215 ) (215 ) (215 ) (215 ) Changes in operating assets and
liabilities: Accounts receivable (1,038 ) 2,977 (1,872 ) (767 ) 38
Finance receivables (5 ) (2,587 ) (154 ) 533 (583 ) Inventory
(2,223 ) (82 ) 250 649 219 Prepaid expenses and other assets (224 )
(397 ) (160 ) (254 ) 48 Accounts payable (3,661 ) 329 4,154 (1,623
) (1,044 ) Accrued expenses 486 115 1,166 (13 ) (2 ) Income taxes
payable (10 ) 453
- (70 ) -
Net change in operating assets and liabilities (6,675
) 808 3,384
(1,545 ) (1,324 ) Net
cash provided (used) by operating activities (6,265 ) 1,273 4,328
507 362 INVESTING ACTIVITIES: Purchase and additions of
intangible assets, property and equipment (168 ) (207 ) (164 ) (118
) (49 ) Purchase of property for rental program (642 ) - - - -
Proceeds from sale of property and equipment - 265 19 101 4 Cash
paid for assets acquired from VendScreen -
- (5,625 )
- - Net cash provided by
(used in) investing activities (810 ) 58 (5,770 ) (17 ) (45 )
FINANCING ACTIVITIES: Cash used for the retirement of common
stock (31 ) (173 ) - (40 ) - Proceeds from exercise of common stock
warrants 6,193 3,237 1,652 - 29 Proceeds (payments) from line of
credit - 138 33 3,000 - Repayment of long-term debt (161 )
(162 ) (151 )
(233 ) (128 ) Net cash provided
by (used in) financing activities 6,001
3,040 1,534
2,727 (99 ) Net increase
(decrease) in cash (1,074 ) 4,371 92 3,217 218 Cash at beginning of
period 19,272 14,901
14,809 11,592
11,374 Cash at end of period $
18,198 $ 19,272 $ 14,901
$ 14,809 $ 11,592
Supplemental disclosures of cash flow information: Interest
paid in cash $ 87 $ 147 $
191 $ 107 $ 106
Depreciation expense allocated to cost of services $ 1,072
$ 1,139 $ 1,051
$ 1,186 $ 1,199 Reclass of
rental program property to inventory, net $ (11 ) $
415 $ 347 $ 777
$ (279 ) Prepaid items financed with debt $ 54
$ - $ - $ -
$ 103 Warrant issuance for debt
discount $ - $ - $ 52
$ - $ - Debt
financing cost financed with debt $ - $ -
$ 79 $ -
$ - Equipment and software acquired under capital
lease $ 254 $ - $ 409
$ - $ 35 Disposal
of property and equipment $ - $ 555
$ 189 $ 238
$ 99
(H) Five Quarter Reconciliation of Net
Income/(Loss) to Non-GAAP Net Income (Loss) and Net Earnings/(Loss)
Per Common Share – Basic and Diluted to Non-GAAP Net
Earnings/(Loss) Per Common Share – Basic and Diluted
Three months ended ($ in thousands) September 30,
June 30, March 31, December 31, September 30,
2016 2016 2015 2015
2015 Net income (loss) $ (2,464 ) $ (872 ) $
(5,420 ) $ (874 ) $ 360 Non-GAAP adjustments: Non-cash portion of
income tax provision (115 ) (792 ) (38 ) 224 27 Change in fair
value of warrant adjustment 1,490 (18 ) 4,805 1,230 (343 )
VendScreen non-recurring charges 101 258 461 106 - Litigation
related professional fees 33 51
105 -
- Non-GAAP net income (loss) $
(955 ) $ (1,373 ) $ (87 )
$ 686 $ 44 Net income (loss) $
(2,464 ) $ (872 ) $ (5,420 ) $ (874 ) $ 360 Cumulative preferred
dividends (334 ) -
(334 ) -
(334 ) Net income (loss) applicable to common shares $ (2,798 )
$ (872 ) $ (5,754 ) $
(874 ) $ 26 Non-GAAP net income (loss)
$ (955 ) $ (1,373 ) $ (87 ) $ 686 $ 44 Cumulative preferred
dividends (334 ) -
(334 ) -
(334 ) Non-GAAP net income (loss) applicable to common shares $
(1,289 ) $ (1,373 ) $ (421 )
$ 686 $ (290 ) Net earnings
(loss) per common share - basic $ (0.07 ) $ (0.02 )
$ (0.16 ) $ (0.02 ) $ -
Non-GAAP net earnings (loss) per common share - basic
$ (0.03 ) $ (0.04 ) $ (0.01 )
$ 0.02 $ (0.01 ) Basic weighted average
number of common shares outstanding 38,488,005 37,325,681
36,161,626 35,909,933 35,848,395 Net earnings (loss) per
common share - diluted $ (0.07 ) $ (0.02 )
$ (0.16 ) $ (0.02 ) $ (0.01 )
Non-GAAP net earnings (loss) per common share - diluted $ (0.03 )
$ (0.04 ) $ (0.01 ) $
0.02 $ (0.01 ) Diluted weighted average number
of common shares outstanding 38,488,005 37,325,681 36,161,626
35,909,933 36,487,879 See discussion of Non-GAAP financial measures
later in this document
Discussion of Non-GAAP Financial Measures:
This press release contains certain non-GAAP financial measures.
Generally, a non-GAAP financial measure is a numerical measure of a
company's performance, financial position or cash flows that either
excludes or includes amounts that are not normally excluded or
included in the most directly comparable measure calculated and
presented in accordance with GAAP. Reconciliations between non-GAAP
and GAAP measures are set forth above in Financial Schedules (D)
and (H).
The following non-GAAP financial measures are discussed herein:
adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net
earnings (loss) per common share – basic and diluted. The
presentation of these additional financial measures is not intended
to be considered in isolation from, or superior to, or as a
substitute for the financial measures prepared and presented in
accordance with GAAP (Generally Accepted Accounting Principles),
including the net income or net loss of USAT or net cash
provided/used by operating activities. Management recognizes that
non-GAAP financial measures have limitations in that they do not
reflect all of the items associated with USAT's net income or net
loss as determined in accordance with GAAP. These non-GAAP
financial measures are not required by or defined under GAAP and
may be materially different from the non-GAAP financial measures
used by other companies. USAT has provided above in Financial
Schedules (D) and (H) the reconciliations of the non-GAAP financial
measures to the most directly comparable GAAP financial
measures.
As used herein, non-GAAP net income (loss) represents GAAP net
income (loss) excluding costs or benefits relating to any
adjustment for fair value of warrant liabilities and non-cash
portions of the Company’s income tax benefit (provision),
non-recurring fees and charges that were incurred in connection
with the acquisition and integration of the VendScreen business,
and professional fees incurred in connection with the class action
litigation and the SLC investigation. Non-GAAP net earnings (loss)
per common share - diluted is calculated by dividing non-GAAP net
income (loss) applicable to common shares by the number of diluted
weighted average shares outstanding. Management believes that
non-GAAP net income (loss) is an important measure of USAT’s
business. Non-GAAP net income (loss) is a non-GAAP financial
measure which is not required by or defined under GAAP (Generally
Accepted Accounting Principles). 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. Management believes that non-GAAP
net income (loss) and non-GAAP net earnings (loss) per share are
important measures of the Company's business. Management uses the
aforementioned non-GAAP measures to monitor and evaluate ongoing
operating results and trends and to gain an understanding of our
comparative operating performance. We believe that this non-GAAP
financial measure serves as a useful metric for our management and
investors because they enable a better understanding of the
long-term performance of our core business and facilitate
comparisons of our operating results over multiple periods, and
when taken together with the corresponding GAAP (United States’
Generally Accepted Accounting Principles) financial measures and
our reconciliations, enhance investors’ overall understanding of
our current and future financial performance. Additionally, the
Company utilizes non-GAAP net income (loss) as a metric in its
executive officer and management incentive compensation plans.
As used herein, Adjusted EBITDA represents net income (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 third quarter
of the prior fiscal year, impairment charges related to our
EnergyMiser asset trademarks, and 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 (Generally
Accepted Accounting Principles). 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 provided/used by 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.
F-USAT
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version on businesswire.com: http://www.businesswire.com/news/home/20161109005272/en/
Investor Contact:The Blueshirt GroupMike Bishop, +1
415-217-4968mike@blueshirtgroup.com
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