US Dataworks Announces Fiscal 2013 Third Quarter Results

           US Dataworks Announces Fiscal 2013 Third Quarter Results

PR Newswire

SUGAR LAND, Texas, Feb. 14, 2013

SUGAR LAND, Texas, Feb. 14, 2013 /PRNewswire/ -- US Dataworks, Inc. (OTC
Bulletin Board: UDWK), a leader in payment processing solutions, today
announced its financial results for its fiscal 2013 third quarter ended
December 31, 2012.

Revenue for the quarter ended December 31, 2012 was $1.8 million as compared
to $1.8 million for the quarter ended December 31, 2011.

Net loss for the quarter ended December 31, 2012 was $230,865, or $0.01 per
share, as compared to net income of $83,718, or $0.00 per diluted share, for
the quarter ended December 31, 2011. Included in the net loss for the quarter
ended December 31, 2012 is non-cash stock based compensation expense of
$286,791 as compared to non-cash stock based compensation expense of $7,313
for the quarter ended December 31, 2011.

Conference Call Information
US Dataworks' management has scheduled a conference call to review its fiscal
2013 third quarter results tomorrow February 15, 2013 at 12:00 p.m. Eastern
time, 11:00 a.m. Central time. To listen to the call, dial (480) 629-9771 at
least 10 minutes before the call begins and ask for US Dataworks' conference
call. A replay of the call will be available approximately two hours after
the live broadcast ends and will be accessible until February 22, 2013. To
access the replay, dial (303) 590-3030 using a pass code of 4599261#.

Investors, analysts and the general public will also have the opportunity to
listen to the conference call over the Internet by visiting
www.usdataworks.com. To listen to the live call on the web, please visit the
Company's web site at least fifteen minutes before the call begins to
register, download and install any necessary audio software. For those who
cannot listen to the live webcast, an archive will be available shortly after
the call.

About US Dataworks
US Dataworks offers cloud payment processing services with proven
enterprise-class payment, deposit, returns processing, and powerful payment
analytic tools. US Dataworks' solutions are trusted to process $7 billion in
payments each day for utilities, telecommunications providers, content
providers, financial institutions and government agencies. Additional
information about US Dataworks is available at www.usdataworks.com.

Certain statements made in this press release (other than the historical
information contained herein) constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995, as
amended, including, but not limited to, statements regarding our expectations
of our ability to meet our future goals and expectations. Any forward-looking
statements are subject to risks and uncertainties that may cause actual
results to differ materially, including, but not limited to, the failure of
our new solutions to perform as anticipated, our ability to provide long-term
customer value and agility, our ability to protect our intellectual property,
our position in the marketplace, our ability to develop and timely introduce
products that address market demand, the impact of alternative technological
advances and competitive products, market fluctuations, our ability to repay
or refinance our debt, our ability to realize the anticipated benefits from
our business initiatives, including our cloud-based solutions, and other risks
detailed from time to time in our SEC reports including our Annual Report on
Form 10-K for the fiscal year ended March 31, 2012. These forward-looking
statements speak only as of the date hereof. US Dataworks disclaims any
obligation to update these forward-looking statements.



Contacts: Randy Frapart, CFO
          US Dataworks, Inc.
          281-504-8026
          Ken Dennard, Managing Partner
          Dennard - Lascar Associates, LLC
          Ken@DennardLascar.com
          713-529-6600





US DATAWORKS, INC.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
                       FortheThreeMonthsEnded  FortheNineMonthsEnded
                       December 31,                 December 31,
                       2012           2011          2012          2011
Revenues:
Software
transactional and      $  616,144     $ 688,341     $ 1,899,838   $ 2,056,567
subscription revenues
Software licensing        8,587         29,483        18,161        127,953
revenues
Software maintenance      164,210       213,203       506,172       518,837
revenues
Professional services     984,100       856,323       2,261,272     2,266,838
revenues
Software resale           37,686        36,027        46,617        112,716
revenues
Total revenues           1,810,727     1,823,377     4,732,060     5,082,911
Cost of revenues         510,465       548,574       1,532,635     1,652,211
Gross profit             1,300,262     1,274,803     3,199,425     3,430,700
Operating expenses:
Research and              196,187       172,280       636,651       631,887
development
Sales and marketing       283,926       303,401       787,449       992,258
General and               877,020       542,002       2,031,007     1,738,340
administrative
Depreciation and          13,745        19,586        47,479        67,064
amortization
Total operating           1,370,878     1,037,269     3,502,586     3,429,549
expense
Income (loss) from       (70,616)      237,534       (303,161)     1,151
operations
Other expense:
Interest expense          (32,630)      (28,378)      (76,170)      (71,913)
Interest expense –        (142,077)     (125,438)     (432,565)     (374,566)
related party
Unrealized gain on
fair value of             14,458                      2,699
derivative
instruments
Total other expenses      (160,249)     (153,816)     (506,036)     (446,479)
Net income (loss)     $  (230,865)   $ 83,718      $ (809,197)   $ (445,328)
Basic earnings (loss)  $  (0.01)                      (0.02)      $ (0.01)
per share
Diluted earnings       $  (0.01)                      (0.02)      $ (0.01)
(loss) per share
Basic
weighted-average          33,583,606    33,425,606    33,550,662    33,397,300
shares outstanding
Diluted
weighted-average          33,583,606    33,430,151    33,550,662    33,397,300
shares outstanding





US DATAWORKS, INC.

UNAUDITED CONDENSED BALANCE SHEETS
ASSETS                                    December 31, 2012     March 31, 2012
                                          (Unaudited)
Current assets:
Cash and cash equivalents                 $   57,527            81,985
Accounts receivable, trade, net of
allowance for doubtful accounts at            698,638           437,662
December 31, 2012 and March 31, 2012 of
$10,500 and $0, respectively
Prepaid expenses and other current            173,208           200,636
assets
Total current assets                          929,373           720,283
Property and equipment, net                   152,060           184,387
Goodwill                                      4,020,698         4,020,698
Other assets                                  29,751            42,354
Total assets                              $   5,131,882       $ 4,967,722
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt, net
of unamortized discount at December 31,   $   346,095         $ 244,667
2012 and March 31, 2012 of $3,264 and
$0, respectively
Current portion of long term debt –
related party, net of unamortized             24,188            --
discount at December 31, 2012 and March
31, 2012 of $812 and $0, respectively
Accounts payable                              435,895           426,895
Accrued expenses                              324,436           138,033
Accrued interest – related parties            525,737           383,592
Deferred revenue                              483,185           424,191
Derivative instruments                        10,701            --
Total current liabilities                     2,150,237         1,617,378
Long term liabilities:
Notes payable, net of unamortized
discount at December 31, 2012 and March       103,231           109,078
31, 2012 of $3,371 and $2,557,
respectively
Notes payable – related parties, net of
unamortized discountat December 31,         2,960,383         2,849,556
2012 andMarch 31, 2012 of$156,862 and
$267,689, respectively
Total long term liabilities                   3,063,614         2,958,634
Total liabilities                             5,213,851         4,576,012
Commitments and contingencies
Stockholders' equity (deficit):
Convertible SeriesB preferred stock,
$0.0001 par value, 700,000 shares
authorized, 109,933 shares issued and
outstanding, $3.75 liquidation                11                11
preference, dividends of $489,878 and
$458,802 in arrears as of December 31,
2012 and March 31, 2012, respectively
Common stock, $0.0001 par value,
90,000,000 shares
authorized,33,583,606 and 33,485,835        3,358             3,348
shares issued and outstanding as of
December 31, 2012 and March 31, 2012,
respectively
Additional paid-in-capital                    66,928,668        66,593,160
Accumulated deficit                           (67,014,006)      (66,204,809)
Total stockholders' equity (deficit)          (81,969)          391,710
Total liabilities and stockholders'       $   5,131,882       $ 4,967,722
equity (deficit)







US DATAWORKS, INC.

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS



For the Nine Months Ended December 31,
                                                     2012           2011
Cash flows from operating activities:
Net loss from operating activities                 $ (809,197)    $ (445,328)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization of property and        47,479         67,064
equipment
Bad debt expense                                     15,581         --
Amortization of discount on notes payable            5,854          2,792
Amortization of discount on notes payable –          111,670        106,006
related parties
Amortization of deferred financing costs – related   12,603         17,513
parties
Stock based compensation                             337,330        27,199
Unrealized loss on fair value of derivative          (2,699)        --
instruments
Changes in operating assets and liabilities:
Accounts receivable                                  (276,557)      311,154
Prepaid expenses and other current assets            27,428         190,714
Accounts payable                                     9,000          (172,301)
Accrued expenses                                     186,403        135,095
Accrued interest – related parties                   142,145        238,664
Deferred revenue                                     58,994         (142,272)
Net cash (used in) provided by operating             (133,966)      336,300
activities
Cash flows from investing activities:
Purchase of property and equipment                   (15,152)       (23,015)
Net cash used in investing activities                (15,152)       (23,015)
Cash flows from financing activities:
Payments on note payable to bank                     --             (808,562)
Payments on secured line of credit                   (1,751,383)    ---
Proceeds from secured line of credit                 1,507,331      445,902
Payments on factoring facility                       (1,960,051)    --
Proceeds from factoring facility                     2,206,238      --
Proceeds from issuance of notes payables and         125,000        125,000
detachable stock warrants
Payments on equipment loan payable                   (2,475)        (2,476)
Net cash provided by (used in) financing             124,660        (240,136)
activities
Net decrease in cash and cash equivalents            (24,458)       73,149
Cash and cash equivalents, beginning of period       81,985         44,096
Cash and cash equivalents, end of period           $ 57,527       $ 117,245
Supplemental disclosures of cash flow information:
Interest paid                                      $ 243,447      $ 44,036
Income taxes paid                                    --             --
Supplemental disclosures of non-cash financing
activities:
In conjunction with the extension of certain
existing notes payable and the issuance of new
notes payable, the Company issued additional
common stock warrants and modified the existing
notes to add a common stock conversion feature. As
a result, the following balance sheet accounts
were affected as follows:
Increased derivative warrant instruments           $ 13,400       $ --
Increased note discount on notes payable             11,588         --
Decreased additional paid-in-capital                 (1,812)        --







US DATAWORKS, INC.



INCOME STATEMENT DATA

Non GAAP Reconciliations

For the three months and nine months ended December 31, 2012 and 2011
                         For the Three Months Ended  For the Nine Months Ended
                         December 31,                December 31,
                         2012           2011         2012          2011
Reconciliation of
Adjusted EBITDA (Note 1)
  Net income (loss)      $ (203,865)    $ 83,718     $ (809,197)   $ (445,328)
  Depreciation and       13,745         19,586       47,479        67,064
  amortization
  Stock based            286,791        7,313        337,330       27,199
  compensation expense
  Interest expense       174,707        153,816      508,735       446,479
  Unrealized gain on
  fair value of          (14,458)       -            (2,699)       -
  derivative instruments
  Adjusted EBITDA (See   $ 229,920      $ 264,433    $ 81,648      $ 95,414
  Note 1)
Reconciliation of EBITDA
margin
  Revenue                $ 1,810,727    $ 1,823,377  $ 4,732,060   $ 5,082,911
  Adjusted EBITDA        $ 229,920      $ 264,433    $ 81,648      $ 95,414
  Margin %               13%            15%          2%            2%



Note 1:
        Adjusted EBITDA is a non-GAAP measure we define as earnings before
        interest, taxes, depreciation and amortization, equity compensation
        expense and unrealized gain on fair value of derivative instruments.
        We use Adjusted EBITDA as a supplemental financial measure to assess
        (i) our operating and financial performance without regard to the
        structure of our financing or the historical cost basis in our assets
        and (ii) our ability to generate cash flow to cover our interest
        payments. Adjusted EBITDA has limitations as an analytical tool and
        should not be used as a substitute for financial measures presented in
        accordance with GAAP, including net income, operating income and cash
        flow from operating activities. Such limitations include the fact
        that Adjusted EBITDA does not reflect (i) cash requirements to service
        interest and principal payments on our debt, (ii) capital expenditure
        requirements or (iii) income tax payment requirements and income tax
        accruals. In addition, companies in our industry may define Adjusted
        EBITDA differently than we do, thereby limiting its usefulness as a
        comparative measure.



SOURCE US Dataworks, Inc.

Website: http://www.usdataworks.com
 
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