USA Technologies Announces Fourth Quarter and Fiscal Year 2013 Results

  USA Technologies Announces Fourth Quarter and Fiscal Year 2013 Results

 Fiscal 2013 Service Revenues Up 29%; Total Revenues Up 24% (year over year)

         Connections to ePort Connect Service Up 30% (year over year)

        Substantial Improvements in Profitability and Cash Generation

Business Wire

MALVERN, Pa. -- September 27, 2013

USA Technologies, Inc. (NASDAQ:USAT) (“USAT”), a leader of wireless, cashless
payment and M2M telemetry solutions for small-ticket, self-serve retailing
industries, today reported results for the fourth quarter and full fiscal year
ended June 30, 2013.

Fiscal 2013 financial highlights, compared to the prior year, included:

  *29% increase in license and transaction fee revenues to $30.0 million,
    representing 84% of total revenues for the 2013 fiscal year;
  *24% increase in total revenues to $35.9 million;
  *Adjusted EBITDA of $5.8 million up from an Adjusted EBITDA loss of ($2.8)
    million;
  *GAAP net income of $0.9 million from a GAAP net loss of ($5.2) million;
    and,
  *Non-GAAP net income of $0.9 million, up from a non-GAAP net loss of ($3.8)
    million (fiscal 2013 excludes $0.3 million of Other income for change in
    fair value of warrants and $0.3 million in proxy expenses and fiscal 2012
    excludes $1.8 million Other income for change in fair value of warrants
    and $3.2 million in proxy and separation expenses).

Total connections to USAT’s cashless payment and M2M telemetry service, ePort
Connect®, grew by 30% during fiscal 2013, with 18,000 net connections achieved
in the fourth quarter. In addition, USAT’s customer base expanded to 5,050
customers as of June 30, 2013, a 53% increase from the prior fiscal year, with
525 new customers in the fourth quarter.

After accrual for preferred dividends, net earnings per common share, diluted,
for fiscal 2013 was $0.01 compared to a net loss per common share of ($0.18)
for Fiscal 2012. On a non-GAAP basis, net income per common share, diluted,
was $0.01 for fiscal 2013, improving from a net loss per common share of
($0.14) for fiscal 2012.

Cash generated from operations was $6.0 million for fiscal 2013 compared to
$0.08 million for fiscal 2012, an increase due primarily to substantial
improvements in operating performance over the course of fiscal 2013 when
compared to 2012. Cash and cash equivalents stood at approximately $6.0
million as of June 30, 2013.

Stephen P. Herbert, USA Technologies’ chairman and chief executive officer,
commented, “During fiscal 2013, we achieved tremendous improvements in
profitability, while making great strides in developing new services and
marketing partnerships that extend USAT’s capabilities across multiple
channels of the small-ticket, unattended market. We continued to lead cashless
payment adoption in the sizable vending market with the industry’s largest
menu of cashless payment services, including our MORE loyalty program and the
upcoming Isis Mobile Wallet “fifth vend free” promotion—relatively new
value-added services that we believe are only beginning to shape how a
cashless payment platform can be optimized in our market segment.

“In addition, we took important steps toward leveraging USAT’s ePort Connect
service platform in several other, equally opportunistic markets such as
laundry, transportation and amusement in fiscal 2013. For example, during the
fourth quarter, we kicked off our new relationship with Setomatic Systems, a
leading provider of cashless payment acceptance devices in the commercial and
multi-unit housing laundry markets, with the transfer of over 5,000 of their
existing cashless connections to our ePort Connect service. We also coupled
the appeal of our ePort Connect service with a unique solution for the taxi
and for-hire vehicle industry, called ePortGO™, and we continue to experience
a growing demand for our integration capabilities as self-service applications
become more ubiquitous,” said Herbert.

Fourth Quarter Results

Fourth quarter financial highlights, compared to the prior year, included:

  *23% increase in total revenues to $9.7 million;
  *28% increase in license and transaction fee revenues to $8.2 million,
    representing 84% of total revenues for the quarter;
  *Adjusted EBITDA of $1.6 million, up from an Adjusted EBITDA loss of ($1.4)
    million;
  *GAAP net income of $1.7 million from a GAAP net loss of ($2.8) million;
    and,
  *Non-GAAP net income of $0.2 million, up from a non-GAAP net loss of ($0.4)
    million (fiscal 2013 excludes $1.5 million of Other income for the change
    in fair value of warrants and fiscal 2012 excludes $0.2 million of Other
    expense for the change in fair value of warrants and $2.2 million in proxy
    expenses).

Revenues for the fourth quarter of fiscal 2013 were $9.7 million, an increase
of 23% from the same period a year ago. Revenue growth was attributable to a
28% increase in license and transaction fees to $8.2 million. Revenue from
license and transaction fees, which grew to represent 84% of revenues for the
fourth quarter of fiscal 2013 compared to 81% for the fourth quarter of the
prior year, is driven by connections to USAT’s ePort Connect service through
monthly service fees, JumpStart fees and transaction processing fees.

Equipment sales of $1.5 million were essentially flat compared to the fourth
quarter of fiscal 2012 as growth in direct sales of ePort cashless payment
devices was offset by a decline in sales of Miser-branded energy products.

Gross profit was $3.7 million in the fourth quarter, a 15% improvement from
$3.2 million for the same period in the prior year.

Operating margin (both GAAP and non-GAAP) expanded to approximately 2% from
(33%) and (5%) on a GAAP and non-GAAP basis, respectively, for the same period
in the prior year, due largely to stronger revenues and resulting gross profit
dollar contribution.

GAAP net income was $1.7 million for the fourth quarter of fiscal 2013, which
included a $1.5 million other income adjustment for the change in fair value
of warrant liability related to the 3.9 million of warrants expiring in
September 2016. The fair value of warrant liability adjustment is based, in
part, on changes in USAT’s stock price and other market factors that occur
during the quarter. As a result, this non-cash adjustment can fluctuate
substantially from quarter to quarter. For the same period in the prior year,
GAAP net loss was ($2.8) million, which included a $0.2 million charge for
warrant liability adjustment.

Non-GAAP net income removes the impact of the fair value of warrant
adjustment, in addition to other non-operational adjustments noted for the
quarter (see Non-GAAP Reconciliation tables). For the fourth quarter, non-GAAP
net income was $0.2 million compared to a non-GAAP net loss of ($0.4) million
for the fourth quarter of fiscal 2012.

GAAP and non-GAAP net income (loss) applicable to common shares were the same
as GAAP and non-GAAP net income (loss). GAAP net earnings per common share,
diluted, for the fourth quarter was $0.05 compared to a GAAP net loss per
common share of ($0.09) for the prior year. Non-GAAP net earnings per common
share, diluted, for the fourth quarter of fiscal 2013 was $0.00, up from a
non-GAAP net loss per common share of ($0.01) for the fourth quarter of the
prior year.

Outlook

“To date, growth in customers and connections to our ePort Connect service
have delivered substantial improvements in our performance and our
strengthened service model is delivering visible returns in terms of cash
generation,” said Herbert. “In fiscal 2014, our priorities include delivering
25%-30% license and transaction fee revenue growth, 20-25% total revenue
growth and over 50% growth in non-GAAP profitability, even as we absorb
deactivations to our service from a customer in the first quarter of the
fiscal year.

“New customers, a stronger presence in complementary market segments, expanded
services and promising work underway that makes our ePort Connect service
easily accessible to kiosk and other developers, gives us confidence that
fiscal 2014 should be another exciting year of financial progress and value
creation for USAT in the quickly evolving, small-ticket market for cashless
payment,” concluded Herbert.

For more information on fiscal 2013 results and fiscal 2014 expectations,
including the impact of the deactivations noted above on its fiscal 2014
results, please access the webcast and conference call in addition to USAT’s
Form 10K, which will be filed on Monday, September 30.

Webcast and Conference Call

USA Technologies will conduct a conference call and webcast at 10:00 a.m.
Eastern Time on September 27, 2013. USA Technologies invites all interested
parties to listen to the live webcast of the conference call, accessible on
the Investor Relations section of USA Technologies’ website. The webcast will
be archived on the website within two hours of the live call. It will remain
available for approximately 90 days. Interested parties unable to access the
webcast may also participate by calling (866) 393-1608 or, if an international
caller, (224) 357-2194. A replay of the call, available until midnight on
September 30, 2013, can be accessed by calling (855) 859-2056; Conference
ID#41109554, (toll free).

About USA Technologies:

USA Technologies is a leader of wireless, cashless payment and M2M telemetry
solutions for small-ticket, self-serve retailing industries. ePort Connect® is
the company’s flagship service platform, a PCI-compliant, end-to-end suite of
cashless payment and telemetry services specially tailored to fit the needs of
small ticket, self-service retailing industries. USA Technologies also
provides a broad line of cashless acceptance technologies including its
NFC-ready ePort® G8, ePort Mobile™ for customers on the go, and QuickConnect™,
an API Web service for developers. USA Technologies has been granted 86
patents and has agreements with Verizon, Visa, Elavon, Isis and customers such
as Compass, Crane, AMI Entertainment and others. 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 incurrence by us 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 obtain widespread
commercial acceptance of it products; the ability of USAT to raise funds in
the future through the sales of securities 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 of USAT to efficiently
and securely integrate cashless payment with new machine technologies; 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.


USA Technologies, Inc.
Consolidated Statements of Operations


                Three months ended               For the year ended
                 June 30,                          June 30,
                 2013            2012             2013            2012
                                                                    
Revenues:
License and
transaction      $ 8,172,243      $ 6,382,575      $ 30,044,429     $ 23,370,754
fees
Equipment         1,512,599      1,520,271      5,895,815      5,646,489  
sales
Total revenues     9,684,842        7,902,846        35,940,244       29,017,243
                                                                    
Cost of            5,139,129        3,818,276        18,219,945       15,312,966
services
Cost of           874,901        906,231        3,623,686      3,743,226  
equipment
Gross profit       3,670,812        3,178,339        14,096,613       9,961,051
                                                                    
Operating
expenses:
Selling,
general and        3,150,535        5,420,955        12,068,566       15,460,668
administrative
Depreciation
and               309,989        361,275        1,314,122      1,500,775  
amortization
Total
operating         3,460,524      5,782,230      13,382,688     16,961,443 
expenses
Operating          210,288          (2,603,891 )     713,925          (7,000,392 )
income (loss)
                                                                    
Other income
(expense):
Interest           4,212            26,877           57,121           72,059
income
Interest           (47,804    )     (13,237    )     (157,205   )     (83,993    )
expense
Change in fair
value of          1,517,384      (169,755   )    267,928        1,813,687  
warrant
liabilities
Total other
income            1,473,792      (156,115   )    167,844        1,801,753  
(expense), net
                                                                    
Income (loss)
before             1,684,080        (2,760,006 )     881,769          (5,198,639 )
provision for
income taxes
Provision for     (6,912     )    (12,599    )    (27,646    )    (12,599    )
income taxes
Net income         1,677,168        (2,772,605 )     854,123          (5,211,238 )
(loss)
Cumulative
preferred         -              -              (664,452   )    (664,452   )
dividends
Net income
(loss)           $ 1,677,168     $ (2,772,605 )   $ 189,671       $ (5,875,690 )
applicable to
common shares
Net earnings
(loss) per       $ 0.05          $ (0.09      )   $ 0.01          $ (0.18      )
common share -
basic
                                                                    
Weighted
average number
of common          33,080,641       32,496,327       32,787,673       32,423,987
shares
outstanding
                                                                    
Net earnings
(loss)
applicable to    $ 0.05          $ (0.09      )   $ 0.01          $ (0.18      )
common shares
- diluted
Diluted
weighted
average number     34,115,444       32,496,327       33,613,346       32,423,987
of common
shares
outstanding



USA Technologies, Inc.
Consolidated Balance Sheets

                                          June 30,          June 30,
                                           2013               2012
                                                              
Assets
Current assets:
Cash and cash equivalents                  $ 5,981,000        $ 6,426,645
Accounts receivable, less allowance for
uncollectible accounts of $18,000 and        2,620,684          2,441,941
$25,000, respectively
Finance receivables                          116,444            206,649
Inventory                                    1,823,615          2,511,748
Prepaid expenses and other current          184,336          555,823      
assets
Total current assets                         10,726,079         12,142,806
                                                              
Finance receivables, less current            408,674            336,198
portion
Property and equipment, net                  17,240,065         11,800,108
Intangibles, net                             454,053            1,196,453
Goodwill                                     7,663,208          7,663,208
Other assets                                84,117           80,884       
Total assets                               $ 36,576,196      $ 33,219,657   
                                                              
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable                           $ 7,301,247        $ 6,136,443
Accrued expenses                             1,468,184          3,342,456
Line of credit                               3,000,000          -
Current obligations under long-term debt    247,152          466,056      
Total current liabilities                    12,016,583         9,944,955
                                                              
Long-term liabilities:
Long-term debt, less current portion         122,754            262,274
Accrued expenses, less current portion       366,785            426,241
Deferred tax liabilities                     40,245             12,599
Warrant liabilities, non-current            650,638          918,566      
Total long-term liabilities                 1,180,422        1,619,680    
Total liabilities                           13,197,005       11,564,635   
                                                              
Commitments and contingencies

Shareholders’ equity:
Preferred stock, no par value:
Authorized shares- 1,800,000 Series A
convertible preferred- Authorized
shares- 900,000
Issued and outstanding shares-
442,968 (liquidation preference              3,138,056          3,138,056
of $16,026,004 and $15,361,552,
respectively)
Common stock, no par value: Authorized
shares- 640,000,000 Issued and
outstanding
shares- 33,284,232 and 32,510,069,        221,383,373        220,513,327
respectively
Accumulated deficit                         (201,142,238 )    (201,996,361 )
Total shareholders’ equity                  23,379,191       21,655,022   
Total liabilities and shareholders’        $ 36,576,196      $ 33,219,657   
equity



USA Technologies, Inc.
Consolidated Statements of Cash Flows


               Three months ended               For the year ended
                June 30,                          June 30,
                 2013          2012           2013          2012       
OPERATING
ACTIVITIES:
Net income      $ 1,677,168      $ (2,772,605 )   $ 854,123        $ (5,211,238 )
(loss)
Adjustments
to reconcile
net income
(loss) to net
cash provided
by              
operating
activities:
Charges
incurred in
connection
with the
vesting and
issuance
of common
stock for         133,674          271,303          502,907          782,100
employee and
director
compensation
Charges
incurred in
connection
with the          -                -                -                -
Long-term
Equity
Incentive
Plan
(Gain) Loss
on disposal       (1,928     )     132,509          (20,343    )     134,350
of property
and equipment
Non-cash
interest and
amortization      26,933           -                53,867           -
of debt
discount
Bad debt
expense           61,156           (2,914     )     68,615           (48,270    )
(recoveries),
net
Depreciation      1,094,978        695,609          3,837,174        2,443,054
Amortization      185,600          222,100          742,400          997,900
Change in
fair value of     (1,517,384 )     169,755          (267,928   )     (1,813,687 )
warrant
liabilities
Provision for
deferred tax      6,912            12,599           27,646           12,599
liability
Changes in
operating
assets and
liabilities:
Accounts          (310,846   )     (307,182   )     (247,358   )     (758,952   )
receivable
Finance           (29,687    )     16,755           17,729           (61,460    )
receivables
Inventory         31,356           721,572          716,470          158,584
Prepaid
expenses and      452,207          722,159          503,937          431,276
other current
assets
Accounts          1,968,677        1,528,861        1,164,804        498,082
payable
Accrued          (122,612   )    1,459,430      (1,915,091 )    2,513,898  
expenses
                                                                   
Net cash
provided by       3,656,204        2,869,951        6,038,952        78,236
operating
activities
                                                                   
INVESTING
ACTIVITIES:
Purchase of
property and      (25,660    )     (74,041    )     (107,351   )     (478,144   )
equipment
Purchase of
property for      (2,771,880 )     (2,472,158 )     (9,092,394 )     (5,754,670 )
rental
program
Proceeds from
sale of          -              -              18,908         -          
property and
equipment
                                                                   
Net cash used
in investing      (2,797,540 )     (2,546,199 )     (9,180,837 )     (6,232,814 )
activities
                                                                   
FINANCING
ACTIVITIES:
Net proceeds
from the
issuance
(retirement)
of common
stock and
exercise
of common         323,652          (39,340    )     311,177          (41,371    )
stock
warrants
Proceeds from
line of           1,000,000        -                3,000,000        -
credit, net
of repayments
Repayment of
long-term        (149,853   )    (51,802    )    (614,937   )    (368,917   )
debt
                                                                   
Net cash
provided by
(used in)        1,173,799      (91,142    )    2,696,240      (410,288   )
financing
activities
                                                                   
Net increase
(decrease) in     2,032,463        232,610          (445,645   )     (6,564,866 )
cash and cash
equivalents
Cash and cash
equivalents      3,948,537      6,194,035      6,426,645      12,991,511 
at beginning
of period
Cash and cash
equivalents     $ 5,981,000     $ 6,426,645     $ 5,981,000     $ 6,426,645  
at end of
year
                                                                   
Supplemental
disclosures
of cash flow
information:
Cash paid for   $ 34,714        $ 10,472        $ 118,934       $ 38,891     
interest
Depreciation
expense         $ 970,590       $ 556,434       $ 3,265,452     $ 1,940,179  
allocated to
cost of sales
Prepaid
interest from
issuance of     $ -             $ -             $ 55,962        $ -          
warrants for
debt costs
Reclass of
rental
program         $ 16,414        $ -             $ 28,337        $ -          
property to
inventory
Prepaid items
financed with   $ 3,186         $ 66,844        $ 133,588       $ 95,263     
debt
Equipment and
software
acquired        $ 44,034        $ -             $ 124,917       $ 495,955    
under capital
lease
Equipment and
software
financed with   $ -             $ 212,097       $ -             $ 252,968    
long-term
debt
Disposal of
property and    $ 91,228        $ 597,455       $ 98,928        $ 652,093    
equipment


Discussion of Non-GAAP Financial Measures

This press release includes the following measures defined as non-GAAP
financial measures by the Securities and Exchange Commission: adjusted EBITDA,
non-GAAP net income (loss), non-GAAP operating margin and non-GAAP diluted
earnings (loss) per common share. The presentation of these additional
financial measures are 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 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
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 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 any adjustment for fair value of warrant liabilities and proxy
contest and separation expenses. As used herein, non-GAAP diluted earnings
(loss) per common share is calculated by dividing non-GAAP net income (loss)
applicable to common shares by the diluted weighted average number of shares
outstanding.

Management believes that non-GAAP net income (loss) and non-GAAP diluted
earnings (loss) per common share are important measures of USAT’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 these non-GAAP financial
measures serve as useful metrics 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 financial
measures and our reconciliations, enhance investors’ overall understanding of
our current and future financial performance.

As used herein, Adjusted EBITDA represents net income (loss) before interest
income, interest expense, income taxes, depreciation, amortization, 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 charge that is not related to
USAT’s operations. We have excluded the non-cash expenses and stock-based
compensation as they do not reflect the cash-based operations of USAT.
Adjusted EBITDA is presented because we believe it is useful to investors as a
measure of comparative operating performance and liquidity, and because it is
less susceptible to variances in actual performance resulting from
depreciation and amortization and non-cash charges for changes in fair value
of warrant liabilities and stock-based compensation expense.

As used herein, operating margin represents operating income or loss divided
by revenues and non-GAAP operating margin represents operating income or loss
excluding any adjustments for proxy contest and separation expenses divided by
revenues.


Non GAAP Reconciliation
Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) and Net
Earnings (Loss) Per Common Share - Diluted to Non-GAAP Net Earnings (Loss) Per
Common Share - Diluted
                 Three Months Ended               Fiscal Year Ended
                  6/30/2013       6/30/2012       6/30/2013       6/30/2012
Net income        $ 1,677,168     $ (2,772,605 )  $ 854,123       $ (5,211,238 )
(loss)
Non-GAAP
adjustments:
Operating
expenses
Selling,
general and
administrative:
Proxy related       -                2,229,000        328,000          2,229,000
costs
CEO separation      -                -                -                975,000
Fair value of
warrant            (1,517,384 )   169,755       (267,928   )   (1,813,687 )
adjustment
Non-GAAP net      $ 159,784      $ (373,850   )  $ 914,195      $ (3,820,925 )
income (loss)
                                                                                    
Net income        $ 1,677,168      $ (2,772,605 )   $ 854,123        $ (5,211,238 )
(loss)
Non-GAAP net      $ 159,784        $ (373,850   )   $ 914,195        $ (3,820,925 )
income (loss)
                                                                                    
Cumulative
preferred          -             -             (664,452   )   (664,452   )
dividends
Net income
(loss)            $ 1,677,168    $ (2,772,605 )  $ 189,671      $ (5,875,690 )
applicable to
common shares
Non-GAAP net
income (loss)     $ 159,784      $ (373,850   )  $ 249,743      $ (4,485,377 )
applicable to
common shares

Weighted
average number
of common          33,080,641    32,496,327    32,787,673    32,423,987 
shares
outstanding
Diluted
weighted
average number     34,115,444    32,496,327    33,613,346    32,423,987 
of common
shares
outstanding
Net earnings
(loss) per        $ 0.05         $ (0.09      )  $ 0.01         $ (0.18      )
common share -
diluted
Non-GAAP net
earnings (loss)   $ 0.00         $ (0.01      )  $ 0.01         $ (0.14      )
per common
share - diluted


                                                                                  
Non GAAP Reconciliation
Reconciliation of Operating Margin to Non-GAAP Operating Margin
                                                                                  
                Three Months Ended              Fiscal Year Ended
                 6/30/2013      6/30/2012       6/30/2013       6/30/2012
Operating        $ 210,288      $ (2,603,891 )  $ 713,925       $ (7,000,392 )
income (loss)
                                                                                  
Non-GAAP
adjustments:
Operating
expenses
Selling,
general and
administrative
Proxy related      -               2,229,000        328,000          2,229,000
costs
CEO Seperation    -            -             -             975,000    
Operating
income (loss),   $ 210,288       $ (374,891   )   $ 1,041,925      $ (3,796,392 )
Non-GAAP
                                                                                  
Revenues         $ 9,684,842     $ 7,902,846      $ 35,940,244     $ 29,017,243
                                                                                  
Operating         2.2       %   -32.9      %   2.0        %   -24.1      %
Margin
Operating
Margin,           2.2       %   -4.7       %   2.9        %   -13.1      %
Non-GAAP



Reconciliation of GAAP Net Earnings to Adjusted Earnings
Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)
                                                                                
              Three months ended               Fiscal year ended
               6/30/2013       6/30/2012       6/30/2013      6/30/2012
Net income     $ 1,677,168     $ (2,772,605 )   $ 854,123      $ (5,211,238 )
(loss)
Less
interest         (4,212     )     (26,877    )     (57,121   )     (72,059    )
income
Plus
interest         47,804           13,237           157,205         83,993
expenses
Plus income      6,911            12,599           27,646          12,599
tax expense
Plus
depreciation     1,094,978        695,609          3,837,174       2,443,054
expense
Plus
amortization     185,600          222,100          742,400         997,900
expense
Less change
in fair
value of         (1,517,384 )     169,755          (267,928  )     (1,813,687 )
warrant
liabilities
Plus
stock-based     133,674       271,303       502,907      782,100    
compensation
Adjusted       $ 1,624,539    $ (1,414,879 )  $ 5,796,406   $ (2,777,338 )
EBITDA


                                    F-USAT

Contact:

USA Technologies
Veronica Rosa,484-359-2138
VP Corp. Comm. & Investor Relations
vrosa@usatech.com
 
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