Exhibit 99.1
 
 
USA Technologies Announces Fourth Quarter & Full Year Fiscal 2014 Results

Record 25,000 Gross Connections Added in Q4, 39% Y/Y Increase

 266,000 Total Connections at Year End, 24% Y/Y Increase

MALVERN, Pa – September 23, 2014 -
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 fiscal year ended June 30, 2014.

Fourth Quarter Financial Highlights:

· License and transaction fee revenue of $9.5 million, a year-over-year increase of 15.8%.
· Adjusted EBITDA of $1.3 million, a year-over-year decrease of 22.1%.
· GAAP net loss at breakeven, or $0.00 per share.
· Non-GAAP net loss of $0.1 million compared to non-GAAP net income of $0.2 million for fourth quarter of fiscal 2013.

 
Period Ended June 30
 
Q4F14
Q4F13
%Change
F2014
F2013
%Change
Gross New Connections (thousands)
25
18
38.9%
76
54
40.8%
% From Existing Customer Base
83.5%
82.5%
-
68.3%
83.5%
-
Net New Connections
22
18
22.2%
52
50
4.0%
Total Connections
266
214
24.3%
266
214
24.3%
 
 
 
 
 
 
 
New Customers Added
650
525
23.8%
2250
1750
28.6%
Total Customers
7300
5050
44.6%
7300
5050
44.6%
 
 
 
 
 
 
 
Total Number of Transactions (millions)
47.0
36.5
28.8%
168.5
129.1
30.5%
Transaction Volume ($millions)
$82.9
$62.7
32.2%
$293.8
$219.0
34.2%

Management Commentary

"USA Technologies ended fiscal 2014 with 266,000 total connections. During the year we added 76,000 gross new connections, a record, eclipsing the 24,000 deactivations from one large customer, and increased our customer base by over 44% to 7,300 total customers,” said Stephen P. Herbert, USA Technologies Chairman and Chief Executive Officer. “Through aggressive marketing campaigns designed to accelerate adoption and further secure USA Technologies’ foothold in the vending, laundry, kiosk and taxi verticals and innovative sales and product offerings targeting small- and medium-sized businesses, we successfully drove meaningful increases in our installed base and our total customer count.

“Revenue growth for fiscal 2014, however, came in slightly below our guidance range of 20% to 23% in large part due to a delay in integration work related to our recent taxi partnerships. We are working diligently with our partners to wrap up this work and expect to complete the integration in the second quarter,” added Herbert.

Herbert concluded, “With record new connections in fiscal 2014, a robust pipeline, and a set of ongoing sales and product initiatives, we’re entering the new fiscal year with good momentum. In addition, in fiscal 2015 we expect to recognize approximately $5.5 million in incremental revenue as billing grace periods granted in fiscal 2014 begin to expire. With 70% of our installed base, or approximately 150,000 locations, NFC-enabled (near field communications), we are perfectly aligned with the latest developments in NFC/mobile payment such as ApplePay. These positives, we believe, collectively position USA Technologies for strong growth and strengthening of our leading market position as adoption for cashless payment in the self-serve retail market continues to accelerate.”

Fourth Quarter Operational Highlights:

· Crossed 250,000 connection mark in June 2014, halfway to our three year goal of 500,000 connections.

· Of the record 25,000 gross new connections, approximately 86% were from traditional ePort vending customers, and 14% were primarily from customers in adjacent vertical markets, such as kiosk, amusement and gaming and laundry. Of the new gross connections, 83.5% were sold to existing customers.

· Introduced ePort Online, expanding capabilities of USA Technologies’ Integrated Payment Services. ePort Online gives customers a convenient way to accept credit/debit payments for goods and services online, from any computer or mobile device, and to retain secure, encrypted customer account information for scheduled and subscription payment. In less than one month, signed up over 800 existing customers.

· Expanded mobile payment services by signing a strategic alliance with BYNDL Inc., a provider of mobile marketing, payment and support services for unattended retail. The BYNDL system accepts cashless payments from mobile devices, provides for the collection of data analytics and targets demand creation through loyalty programs, coupons and location-based offers.

· Awarded Frost & Sullivan 2014 North American Customer Value Leadership Award in Financial Services and Retail M2M Communications for demonstrated excellence in implementing strategies that proactively create value for its customers with a focus on improving the return on the investment that customers make in its services or products.
 
Fourth Quarter Financial Results

For the fourth quarter total revenue was $11.2 million, an increase of 15.7% compared to $9.7 million in the fourth quarter of fiscal 2013. This increase was driven by an increase in year over year connections to our network. License and transaction fees were $9.5 million compared to $8.2 million in the year ago quarter, a 15.8% increase. These fees, which are comprised of recurring monthly service fees as well as transaction processing fees, accounted for approximately 84% of total revenue. Equipment sales were $1.7 million compared to $1.5 million in last year’s fourth quarter, a 15.5% increase, reflecting the greater connection growth in the fourth quarter of fiscal 2014 compared to last year’s comparable period.

Gross profit was $3.7 million, even with the year ago quarter. The gross margin was 32.7% compared to 37.9% in the fourth quarter last year. Gross margin on license and transaction fees was 33.1% compared to 37.1% last year, reflecting the impact in the fourth quarter of 2014 of certain new JumpStart connections associated with grace periods as well as deactivations from one large customer. For the new connections associated with the grace periods, the company incurred costs without the associated monthly service fees.

Operating expenses were $4.2 million in the fourth quarter compared to $3.5 million in the year ago quarter. The increase primarily reflects one-time expense reductions in the fourth quarter of fiscal 2013, increased compensation costs from the addition of new employees as well as year-end sales commissions and bonus accruals resulting from the record number of gross new connections during the fourth quarter.

GAAP operating loss was approximately $0.60 million compared to GAAP operating income of $0.2 million. Adjusted EBITDA was $1.3 million, a year-over-year decrease of 22.1%, compared to $1.6 million for the fourth quarter of fiscal 2013. Taking into account an income tax benefit of approximately $0.50 million related to the reduction in our tax provision for fiscal year 2014, GAAP net loss was approximately $39,000, or $0.00 per share, compared to GAAP net income of $1.7 million, or $0.05 per share, for the fourth quarter of fiscal 2013.

On a non-GAAP basis, net loss was $0.1 million, or $0.00 per share, for the fourth quarter of fiscal 2014, compared to net income of $0.2 million, or $0.00 per share, in the same period last year.

Cash and cash equivalents were $9.1 million as of June 30, 2014.

Fiscal 2014 Financial Results

For the year ended June 30, 2014, revenue was $42.3 million compared to $35.9 million in fiscal 2013. License and transaction fee revenue totaled $35.6 million compared to $30.0 million, an 18.6% increase. Adjusted EBITDA was $6.5 million compared to $5.8 million last year. GAAP net income applicable to common shares was $26.9 million, or $0.78 per share, compared to $0.2 million, or $0.01 per share, for fiscal 2013. GAAP net income for fiscal 2014 included $26.7 million, or $0.75 per diluted share, related to the partial recognition of a deferred tax asset. Non-GAAP net income applicable to common shares was $0.1 million, or $0.00 per diluted share, compared to non-GAAP net income of $0.2 million, or $0.01 per diluted share, applicable to common shares for fiscal 2013.

Fiscal 2015 Outlook

For full year fiscal 2015 management expects total revenue in the range of $51.0 million to $53.0 million, for a growth rate of 20% to 26%. License and transaction fee revenue is expected to be in the range of $44.0 million to $47.0 million, for a growth rate of 24% to 31%. Net new connections are expected to be in the range of 66,000 to 76,000, for a growth rate of 27% to 46%.

Webcast and Conference Call

Management will host a conference call at 10:00am EDT on Tuesday, September 23, 2014. 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 # 93456751.

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 1:00pm EDT on September 23, 2014 until 11:59pm EDT September 26, 2014 and may be accessed by calling (855) 859-2056 (domestic dial-in) or (404) 537-3406 (international dial-in) and reference conference ID # 93456751. 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 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® G-series, ePort Mobile™ for customers on the go, and QuickConnect, an API Web service for developers. USA Technologies has been granted 87 patents and has agreements with Verizon, Visa, Elavon 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 ability of management to accurately predict or forecast future earnings or taxable income of USAT; 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 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; the ability of USAT to efficiently and securely integrate cashless payment with new machine technologies; 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 the proprietary rights of others; 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
   
Year ended
 
 
 
June 30,
   
June 30,
 
 
 
2014
   
2013
   
2014
   
2013
 
 
 
   
   
   
 
Revenues:
 
   
   
   
 
     License and transaction fees
 
$
9,460,303
   
$
8,172,243
   
$
35,638,121
   
$
30,044,429
 
     Equipment sales
   
1,747,157
     
1,512,599
     
6,706,843
     
5,895,815
 
Total revenues
   
11,207,460
     
9,684,842
     
42,344,964
     
35,940,244
 
 
                               
     Cost of services
   
6,327,432
     
5,139,129
     
23,018,001
     
18,219,945
 
     Cost of equipment
   
1,217,884
     
874,901
     
4,254,127
     
3,623,686
 
Gross profit
   
3,662,144
     
3,670,812
     
15,072,836
     
14,096,613
 
 
                               
Operating expenses:
                               
     Selling, general and administrative
   
4,067,804
     
3,150,535
     
14,036,016
     
12,068,566
 
     Depreciation and amortization
   
162,151
     
309,989
     
600,488
     
1,314,122
 
Total operating expenses
   
4,229,955
     
3,460,524
     
14,636,504
     
13,382,688
 
Operating income (loss)
   
(567,811
)
   
210,288
     
436,332
     
713,925
 
 
                               
Other income (expense):
                               
     Interest income
   
8,995
     
4,212
     
30,337
     
57,121
 
     Interest expense
   
(74,529
)
   
(47,804
)
   
(256,844
)
   
(157,205
)
     Change in fair value of warrant liabilities
   
53,125
     
1,517,384
     
65,429
     
267,928
 
Total other income (expense), net
   
(12,409
)
   
1,473,792
     
(161,078
)
   
167,844
 
 
                               
Income (loss) before provision for income taxes
   
(580,220
)
   
1,684,080
     
275,254
     
881,769
 
Benefit (provision) for income taxes
   
541,501
     
(6,912
)
   
27,255,398
     
(27,646
)
 
                               
Net income (loss)
   
(38,719
)
   
1,677,168
     
27,530,652
     
854,123
 
Cumulative preferred dividends
   
-
     
-
     
(664,452
)
   
(664,452
)
Net income (loss) applicable to common shares
 
$
(38,719
)
 
$
1,677,168
   
$
26,866,200
   
$
189,671
 
Net earnings (loss) per common share - basic
 
$
-
   
$
0.05
   
$
0.78
   
$
0.01
 
 
                               
Weighted average number of common shares outstanding
   
35,517,099
     
33,080,641
     
34,613,497
     
32,787,673
 
Net earnings (loss) per common share - diluted
 
$
-
   
$
0.05
   
$
0.78
   
$
0.01
 
Diluted weighted average number of common shares outstanding
   
35,517,099
     
34,115,444
     
34,613,497
     
33,613,346
 
 
 

 
 
USA Technologies, Inc.
Consolidated Balance Sheets
 
 
June 30,
   
June 30,
 
 
 
2014
   
2013
 
 
 
   
 
Assets
 
   
 
Current assets:
 
   
 
     Cash and cash equivalents
 
$
9,072,320
   
$
5,981,000
 
     Accounts receivable, less allowance for uncollectible accounts of $63,000 and
               
          $18,000, respectively
   
2,683,579
     
2,620,684
 
     Finance receivables
   
119,793
     
116,444
 
     Inventory
   
1,486,777
     
1,823,615
 
     Prepaid expenses and other current assets
   
363,367
     
184,336
 
     Deferred income taxes
   
907,691
     
-
 
Total current assets
   
14,633,527
     
10,726,079
 
 
               
Finance receivables, less current portion
   
352,794
     
408,674
 
Other assets
   
190,703
     
84,117
 
Property and equipment, net
   
21,138,580
     
17,240,065
 
Deferred income taxes
   
26,353,330
     
-
 
Intangibles, net
   
432,100
     
454,053
 
Goodwill
   
7,663,208
     
7,663,208
 
 
               
Total assets
 
$
70,764,242
   
$
36,576,196
 
 
               
Liabilities and shareholders' equity
               
Current liabilities:
               
     Accounts payable
 
$
7,753,911
   
$
7,301,247
 
     Accrued expenses
   
1,915,799
     
1,468,184
 
     Line of credit
   
5,000,000
     
3,000,000
 
     Current obligations under long-term debt
   
172,911
     
247,152
 
     Income taxes payable
   
21,021
     
-
 
     Deferred gain from sale-leaseback transactions
   
380,895
     
-
 
Total current liabilities
   
15,244,537
     
12,016,583
 
 
               
Long-term liabilities:
               
     Long-term debt, less current portion
   
249,865
     
122,754
 
     Accrued expenses, less current portion
   
186,174
     
366,785
 
     Deferred tax liabilities
   
-
     
40,245
 
     Warrant liabilities
   
585,209
     
650,638
 
     Deferred gain from sale-leaseback transactions, less current portion
   
761,790
     
-
 
Total long-term liabilities
   
1,783,038
     
1,180,422
 
 
               
Total liabilities
   
17,027,575
     
13,197,005
 
 
               
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
               
     of $16,690,456 and $16,026,004, respectively)
   
3,138,056
     
3,138,056
 
Common stock, no par value: Authorized shares- 640,000,000 Issued and outstanding
               
     shares- 35,514,685 and 33,284,232, respectively
   
224,210,197
     
221,383,373
 
Accumulated deficit
   
(173,611,586
)
   
(201,142,238
)
 
               
Total shareholders' equity
   
53,736,667
     
23,379,191
 
 
               
Total liabilities and shareholders' equity
 
$
70,764,242
   
$
36,576,196
 
 

 
USA Technologies, Inc.
Consolidated Statements of Cash Flows
 
 
 
Three months ended
   
Year ended
 
 
 
June 30,
 
June 30,
 
 
 
2014
   
2013
   
2014
   
2013
 
OPERATING ACTIVITIES:
 
   
   
   
 
Net income (loss)
   
(38,719
)
   
1,677,167
   
$
27,530,652
   
$
854,123
 
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 employee and director compensation
   
280,161
     
133,674
     
529,041
     
502,907
 
(Gain) Loss on disposal of property and equipment
   
(2,808
)
   
(1,928
)
   
4,245
     
(20,343
)
Non-cash interest and amortization of debt discount
   
-
     
26,933
     
2,095
     
53,867
 
Bad debt expense (recoveries), net
   
67,403
     
61,156
     
134,176
     
68,615
 
Depreciation
   
1,553,875
     
1,094,978
     
5,463,985
     
3,837,174
 
Amortization
   
-
     
185,600
     
21,953
     
742,400
 
Change in fair value of warrant liabilities
   
(53,125
)
   
(1,517,384
)
   
(65,429
)
   
(267,928
)
Deferred income taxes, net
   
(551,848
)
   
6,912
     
(27,301,266
)
   
27,646
 
Recognition of deferred gain from sale-leaseback transactions
   
(9,522
)
   
-
     
(9,522
)
   
-
 
Changes in operating assets and liabilities:
                               
Accounts receivable
   
(736,633
)
   
(310,847
)
   
(157,071
)
   
(247,358
)
Finance receivables
   
(39,938
)
   
(29,687
)
   
52,531
     
17,729
 
Inventory
   
31,689
     
31,356
     
370,104
     
716,470
 
Prepaid expenses and other current assets
   
(128,280
)
   
452,207
     
(190,783
)
   
503,937
 
Accounts payable
   
1,341,699
     
1,968,679
     
412,664
     
1,164,804
 
Accrued expenses
   
567,988
     
(122,612
)
   
267,004
     
(1,915,091
)
Income taxes payable
   
(14,500
)
   
-
     
21,021
     
-
 
 
                               
Net cash provided by operating activities
   
2,267,442
     
3,656,204
     
7,085,400
     
6,038,952
 
 
                               
INVESTING ACTIVITIES:
                               
Purchase of property and equipment
   
(50,760
)
   
(25,660
)
   
(111,121
)
   
(107,351
)
Purchase of property for rental program
   
(3,671,812
)
   
(2,771,880
)
   
(10,883,473
)
   
(9,092,394
)
Proceeds from sale of rental equipment under sale-leaseback transaction
   
2,995,095
     
-
     
2,995,095
     
-
 
Proceeds from sale of property and equipment
   
51,672
     
-
     
82,047
     
18,908
 
 
                               
Net cash used in investing activities
   
(675,805
)
   
(2,797,540
)
   
(7,917,452
)
   
(9,180,837
)
 
                               
FINANCING ACTIVITIES:
                               
Net proceeds from the issuance (retirement) of common stock and
                               
     exercise of common stock warrants
   
(13,913
)
   
323,652
     
2,272,936
     
311,177
 
Excess tax benefits from share-based compensation
   
24,847
     
-
     
24,847
     
-
 
Proceeds from line of credit
   
1,000,000
     
1,000,000
     
2,000,000
     
3,000,000
 
Repayment of long-term debt
   
(107,368
)
   
(149,853
)
   
(374,411
)
   
(614,937
)
 
                               
Net cash provided by (used in) financing activities
   
903,566
     
1,173,799
     
3,923,372
     
2,696,240
 
 
                               
Net increase (decrease) in cash and cash equivalents
   
2,495,203
     
2,032,463
     
3,091,320
     
(445,645
)
Cash and cash equivalents at beginning of year
   
6,577,117
     
3,948,537
     
5,981,000
     
6,426,645
 
Cash and cash equivalents at end of year
 
$
9,072,320
   
$
5,981,000
   
$
9,072,320
   
$
5,981,000
 
 
                               
Supplemental disclosures of cash flow information:
                               
Cash paid for interest
 
$
70,617
   
$
34,714
   
$
259,820
   
$
118,934
 
Depreciation expense allocated to cost of sales
 
$
1,386,803
   
$
970,590
   
$
4,880,529
   
$
3,265,452
 
Reclass of rental program property to inventory, net
 
$
6,463
   
$
16,414
   
$
33,266
   
$
28,337
 
Prepaid items financed with debt
 
$
(144,312
)
 
$
3,186
   
$
101,850
   
$
133,588
 
Prepaid interest from issuance of warrants for debt costs
 
$
-
   
$
-
   
$
-
   
$
55,962
 
Equipment and software acquired under capital lease
 
$
107,670
   
$
44,034
   
$
325,431
   
$
124,917
 
Equipment and software financed with long-term debt
 
$
-
   
$
-
   
$
-
   
$
-
 
Disposal of property and equipment
 
$
475,781
   
$
91,228
   
$
709,638
   
$
98,928
 
Disposal of property and equipment under sale-leaseback transactions
 
$
1,918,920
   
$
-
   
$
1,918,920
   
$
-
 
 
 
 

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 below.

The following non-GAAP financial measures are discussed herein: adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net earnings per common share - diluted. 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 below the reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Non-GAAP net income (loss) represents GAAP net income (loss) excluding costs relating to the proxy contest, benefit from reduction of the deferred tax asset valuation allowances, any adjustment for fair value of warrant liabilities, and any charges for impairment of intangible assets.

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.

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 and any impairment expense on intangible assets. We have excluded the non-operating items, benefit from reduction of the deferred tax asset valuation allowances and change in fair value of warrant liabilities, because they represent a non-cash charge that is not related to USAT’s operations. We have excluded the non-cash expenses, stock-based compensation and any impairment expense, 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.

Management believes that non-GAAP net income (loss) and non-GAAP net earnings (loss) per common share - diluted 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.
 
Non-GAAP Reconciliation
 
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 Loss Per Common Share - Basic and Diluted
 
 
 
 
Three Months Ended
   
Fiscal Year Ended
 
 
 
6/30/2014
   
6/30/2013
   
6/30/2014
   
6/30/2013
 
Net income (loss)
 
$
(38,719
)
 
$
1,677,168
   
$
27,530,652
   
$
854,123
 
Non-GAAP adjustments:
                               
Operating expenses
                               
  Selling, general and administrative:
                               
    Proxy related costs
   
-
     
-
     
-
     
328,000
 
Fair value of warrant adjustment
   
(53,125
)
   
(1,517,384
)
   
(65,429
)
   
(267,928
)
Benefit from reduction of valuation allowances
   
-
     
-
     
(26,713,897
)
   
-
 
Non-GAAP net income (loss)
 
$
(91,844
)
 
$
159,784
   
$
751,326
   
$
914,195
 
 
                               
Net income (loss)
 
$
(38,719
)
 
$
1,677,168
   
$
27,530,652
   
$
854,123
 
Non-GAAP net income (loss)
 
$
(91,844
)
 
$
159,784
   
$
751,326
   
$
914,195
 
 
                               
Cumulative preferred dividends
   
-
     
-
     
(664,452
)
   
(664,452
)
Net income (loss) applicable to common shares
 
$
(38,719
)
 
$
1,677,168
   
$
26,866,200
   
$
189,671
 
Non-GAAP net income (loss) applicable to common shares
 
$
(91,844
)
 
$
159,784
   
$
86,874
   
$
249,743
 
Weighted average number of common shares outstanding
   
35,517,099
     
33,080,641
     
34,613,497
     
32,787,673
 
Diluted weighted average number of common shares outstanding
   
35,517,099
     
34,115,444
     
34,613,497
     
33,613,346
 
Net earnings (loss) per common share - basic
 
$
-
   
$
0.05
   
$
0.78
   
$
0.01
 
Non-GAAP net earnings (loss) per common share - basic
 
$
-
   
$
-
   
$
-
   
$
0.01
 
 
                               
Net earnings (loss) per common share - diluted
 
$
-
   
$
0.05
   
$
0.78
   
$
0.01
 
Non-GAAP net earnings (loss) per common share - diluted
 
$
-
   
$
-
   
$
-
   
$
0.01
 
 
 
 
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)
 
 
 
Three Months Ended
   
Fiscal year ended
 
 
 
6/30/2014
   
6/30/2013
   
6/30/2014
   
6/30/2013
 
Net income (loss)
 
$
(38,719
)
 
$
1,677,168
   
$
27,530,652
   
$
854,123
 
Less interest income
   
(8,995
)
   
(4,212
)
   
(30,337
)
   
(57,121
)
Plus interest expenses
   
74,529
     
47,804
     
256,844
     
157,205
 
Plus income tax expense (benefit)
   
(541,501
)
   
6,912
     
(27,255,398
)
   
27,646
 
Plus depreciation expense
   
1,553,875
     
1,094,978
     
5,463,985
     
3,837,174
 
Plus amortization expense
   
-
     
185,600
     
21,953
     
742,400
 
Plus change in fair value of warrant liabilities
   
(53,125
)
   
(1,517,384
)
   
(65,429
)
   
(267,928
)
Plus stock-based compensation
   
280,161
     
133,674
     
529,041
     
502,907
 
Adjusted  EBITDA
 
$
1,266,225
   
$
1,624,540
   
$
6,451,311
   
$
5,796,406
 
 
Company Contact:
David DeMedio
Chief Financial Officer
USA Technologies
(800) 633-0340

Investor Contact:
Stephanie Prince/Jody Burfening
LHA
(212) 838-3777
sprince@lhai.com
 
 


The following information was filed by Usa Technologies Inc (USAT) on Friday, September 26, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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