Exhibit 99.1
 
 
USA Technologies Announces Fourth Quarter and Fiscal Year 2015 Results
 
MALVERN, Pa. Sept. 10, 2015 – USA Technologies, Inc. (NASDAQ:USAT) ("USAT"), a leader of wireless, cashless payment and M2M/IoT solutions for small-ticket, self-serve retailing industries, today reported results for the fourth quarter and fiscal year ended June 30, 2015.
 
Fourth Quarter Financial Highlights:
 
· Record net connections of 31,000 for a total on the service of 333,000
 
· Record total revenue of $17.6 million, a year-over-year increase of 57%
 
· Record license and transaction fee revenue of $11.9 million, a year-over-year increase of 26%
 
· Free cashflow  of $2.7 million*
 
*(defined as cash flow from operations less cash used for the purchase of property for the JumpStart rental program.)
 
Fourth Quarter Financial Results:
 
     
Three months ended
June 30,
                                                
 
   
2015
   
2014
   
$ Change
   
% Change
 
($ in thousands except-per share data)
               
                 
Revenues:
               
License and transaction fees
 
$
11,938
   
$
9,460
   
$
2,478
     
26
%
Equipment sales
   
5,708
     
1,747
     
3,961
     
227
%
Total revenues
 
$
17,646
   
$
11,208
   
$
6,439
     
57
%
                                 
Operating income (loss)
 
$
94
   
$
(568
)
 
$
662
     
116
%
Adjusted EBITDA
 
$
1,701
   
$
1,266
   
$
435
     
34
%
Net income (loss)
 
$
69
   
$
(39
)
 
$
108
     
277
%
Non-GAAP net income (loss)
 
$
59
   
$
(619
)
 
$
677
     
109
%
Net earnings (loss) per common share - diluted
 
$
(0.01
)
 
$
-
   
$
(0.01
)
   
-100
%
Non-GAAP net earnings (loss) per common share - diluted
 
$
-
   
$
(0.02
)
 
$
0.02
     
100
%
 

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
“Our leadership position in mobile and NFC payments, combined with our extensive experience with the self-service retail market, is fueling our growth and propels us toward achieving our long-term goals," said Stephen P. Herbert, USA Technologies’ chairman and chief executive officer.  “With Google’s launch of Android Pay, and our collaboration with them, it is another validation of the broader market acceptance of the mobile payments technology we have championed for more than 10 years.  With a record number of gross connections this quarter coupled with an increase in equipment sales, we ended the quarter with a year-over-year revenue increase of 57%. We continue to strengthen our balance sheet with the success of the QuickStart program which has increased our cash position significantly and are focused on expanding our presence with our current customers and developing a growing list of new customers.”
 
Fourth Quarter Connection and Transaction Data:
 
   
Three months ended
30-Jun
   
             
 
   
2015
   
2014
   
% Change
 
Gross New Connections ('000s)
   
34
     
25
     
36
%
% from Existing Customer Base
   
89
%
   
84
%
   
5
%
Net New Connections ('000s)
   
31
     
22
     
41
%
Total Connections ('000s)
   
333
     
266
     
25
%
                         
New Customers Added
   
675
     
650
     
4
%
Total Customers
   
9,600
     
7,300
     
32
%
                         
Total Number of Transactions (millions)
   
62
     
47
     
32
%
Total Volume ($ millions)
 
$
112.8
   
$
82.9
     
36
%
 
Fiscal 2015 Financial Highlights:
 
· Record net connections of 67,000 for the year
 
· Record total revenue of $58.1 million,  a year-over-year increase of 37%
 
· Year end cash position of $11.4 million
 
2

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
Fiscal 2015 Financial Results:
 
     
Year ended
June 30,
     
                
     
             
 
 
   
2015
   
2014
   
$ Change
   
% Change
 
($ in thousands except-per share data)
 
   
   
   
 
   
   
   
   
 
Revenues:
 
   
   
   
 
License and transaction fees
 
$
43,633
   
$
35,638
   
$
7,995
     
22
%
Equipment sales
   
14,444
     
6,707
     
7,737
     
115
%
Total revenues
 
$
58,077
   
$
42,345
   
$
15,732
     
37
%
                                 
Operating income
 
$
210
   
$
436
   
$
(226
)
   
-52
%
Adjusted EBITDA
 
$
6,709
   
$
6,451
   
$
258
     
4
%
Net income (loss)
 
$
(819
)
 
$
27,531
   
$
(28,350
)
   
-103
%
Non-GAAP net income (loss)
 
$
(20
)
 
$
189
   
$
(209
)
   
-111
%
Net earnings (loss) per common share - diluted
 
$
(0.04
)
 
$
0.78
   
$
(0.82
)
   
-105
%
Non-GAAP loss per common share - diluted
 
$
(0.02
)
 
$
(0.01
)
 
$
(0.01
)
   
-100
%

 
Fiscal 2016 Outlook
 
For full year fiscal 2016, management expects to add more than 75,000 net new connections , bringing total connections on the service to over 400,000 and expects total revenue to be between $69 million and $71 million.  Additionally, QuickStart will remain a popular program for customers, and management expects it to drive positive free cash flows in 2016.
 
Webcast and Conference Call
 
Management will host a conference call today, September 10, 2015 at 5:00 pm EST.  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 # 25774520.
 
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 10:00 p.m. Eastern Time on September 10, 2015 until 11:59 p.m. Eastern Time on September 13, 2015 and may be accessed by calling (855) 859-2056 (domestic dial-in) or (404) 537-3406 (international dial-in) and reference conference ID # 25774520.  An archived replay of the conference call will also be available in the investor relations section of the company's website.
 
3

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
About USA Technologies
 
USA Technologies is a leader of wireless, cashless payment and M2M telemetry 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 ePortG-series, ePort MobileTM 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, Chase Paymentech and customers such as Compass, AMI Entertainment and others. Visit the website at www.usatech.com.
 
4

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
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 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 the proprietary 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 significantly increase cash flows from 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.
 
5

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
USA Technologies, Inc.
Consolidated Statement of Operations
 
    
Three months ended
June 30,
     
Year ended
June 30,
 
 
   
2015
   
2014
   
2015
   
2014
 
                 
Revenues:
               
License and transaction fees
 
$
11,937,898
   
$
9,460,303
   
$
43,633,462
   
$
35,638,121
 
Equipment sales
   
5,708,297
     
1,747,157
     
14,444,012
     
6,706,843
 
Total revenues
   
17,646,195
     
11,207,460
     
58,077,474
     
42,344,964
 
                                 
Cost of services
   
7,863,105
     
6,327,432
     
29,429,385
     
23,018,001
 
Cost of equipment
   
4,975,089
     
1,217,884
     
11,825,455
     
4,254,127
 
Gross profit
   
4,808,001
     
3,662,144
     
16,822,634
     
15,072,836
 
                                 
Operating expenses:
                               
Selling, general and administrative
   
4,558,816
     
4,067,804
     
16,001,255
     
14,036,016
 
Depreciation and amortization
   
155,697
     
162,151
     
611,682
     
600,488
 
Total operating expenses
   
4,714,513
     
4,229,955
     
16,612,937
     
14,636,504
 
Operating income (loss)
   
93,488
     
(567,811
)
   
209,697
     
436,332
 
                                 
Other income (expense):
                               
Interest income
   
42,204
     
8,995
     
82,695
     
30,337
 
Other income
   
52,178
     
-
     
52,178
     
-
 
Interest expense
   
(92,078
)
   
(74,529
)
   
(301,767
)
   
(256,844
)
Change in fair value of warrant liabilities
   
262,643
     
53,125
     
(393,144
)
   
65,429
 
Total other income (expense), net
   
264,947
     
(12,409
)
   
(560,038
)
   
(161,078
)
                                 
Income (loss) before provision for income taxes
   
358,435
     
(580,220
)
   
(350,341
)
   
275,254
 
Benefit (provision) for income taxes
   
(289,436
)
   
541,501
     
(469,141
)
   
27,255,398
 
                                 
Net income (loss)
   
68,999
     
(38,719
)
   
(819,482
)
   
27,530,652
 
Cumulative preferred dividends
   
-
     
-
     
(664,452
)
   
(664,452
)
Net income (loss) applicable to common shares
 
$
68,999
   
$
(38,719
)
 
$
(1,483,934
)
 
$
26,866,200
 
Net earnings (loss) per common share - basic
 
$
-
   
$
-
   
$
(0.04
)
 
$
0.78
 
Basic weighted average number of common shares outstanding
   
35,716,603
     
35,517,099
     
35,663,386
     
34,613,497
 
Net earnings (loss) per common share - diluted
 
$
(0.01
)
 
$
-
   
$
(0.04
)
 
$
0.78
 
Diluted weighted average number of common shares outstanding
   
36,310,919
     
35,517,099
     
35,663,386
     
34,613,497
 
 
6

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
USA Technologies, Inc.
Consolidated Balance Sheets
 
   
June 30,
 
   
2015
   
2014
 
         
Assets
       
Current assets:
       
Cash and cash equivalents
 
$
11,373,973
   
$
9,072,320
 
Accounts receivable, less allowance for uncollectible accounts of $494,000 and $63,000, respectively
   
4,671,544
     
2,683,579
 
Finance receivables
   
941,150
     
119,793
 
Inventory
   
4,216,396
     
1,486,777
 
Prepaid expenses and other current assets
   
574,479
     
363,367
 
Deferred income taxes
   
1,257,796
     
907,691
 
Total current assets
   
23,035,338
     
14,633,527
 
                 
Finance receivables, less current portion
   
3,697,513
     
352,794
 
Other assets
   
350,041
     
190,703
 
Property and equipment, net
   
12,868,808
     
21,138,580
 
Deferred income taxes
   
25,608,187
     
26,353,330
 
Intangibles, net
   
432,100
     
432,100
 
Goodwill
   
7,663,208
     
7,663,208
 
                 
Total assets
 
$
73,655,195
   
$
70,764,242
 
                 
Liabilities and shareholders’ equity
               
Current liabilities:
               
Accounts payable
 
$
8,792,672
   
$
7,753,911
 
Accrued expenses
   
2,107,530
     
1,915,799
 
Line of credit
   
4,000,000
     
5,000,000
 
Current obligations under long-term debt
   
477,522
     
172,911
 
Income taxes payable
   
54,086
     
21,021
 
Deferred gain from sale-leaseback transactions
   
860,391
     
380,895
 
Total current liabilities
   
16,292,201
     
15,244,537
 
                 
Long-term liabilities:
               
Long-term debt, less current portion
   
1,854,424
     
249,865
 
Accrued expenses, less current portion
   
49,160
     
186,174
 
Warrant liabilities
   
978,353
     
585,209
 
Deferred gain from sale-leaseback transactions, less current portion
   
900,348
     
761,790
 
Total long-term liabilities
   
3,782,285
     
1,783,038
 
Total liabilities
   
20,074,486
     
17,027,575
 
                 
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 $17,354,908 and $16,690,456, respectively)
   
3,138,056
     
3,138,056
 
Common stock, no par value: Authorized shares- 640,000,000 Issued and outstanding shares- 35,747,242 and 35,514,685, respectively
   
224,873,721
     
224,210,197
 
Accumulated deficit
   
(174,431,068
)
   
(173,611,586
)
Total shareholders’ equity
   
53,580,709
     
53,736,667
 
Total liabilities and shareholders’ equity
 
$
73,655,195
   
$
70,764,242
 
 
7

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
USA Technologies, Inc.
Consolidated Statements of Cash Flows
 
   
Three months ended June 30
   
Year ended June 30
 
   
2015
   
2014
   
2015
   
2014
 
OPERATING ACTIVITIES:
               
Net income (loss)
 
$
68,999
   
$
(38,719
)
 
$
(819,482
)
 
$
27,530,652
 
Adjustments to reconcile net income (loss) 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
   
174,598
     
280,161
     
715,762
     
529,041
 
(Gain) loss on disposal of property and equipment
   
(3,926
)
   
(2,808
)
   
(17,357
)
   
4,245
 
Non-cash interest and amortization of debt discount
   
-
     
-
     
-
     
2,095
 
Bad debt expense
   
47,184
     
67,403
     
649,528
     
134,176
 
Depreciation
   
1,380,983
     
1,553,875
     
5,731,356
     
5,463,985
 
Amortization
   
-
     
-
     
-
     
21,953
 
Change in fair value of warrant liabilities
   
(262,643
)
   
(53,125
)
   
393,144
     
(65,429
)
Deferred income taxes, net
   
211,086
     
(587,369
)
   
395,038
     
(27,301,266
)
Gain on sale of finance receivables
   
(52,178
)
   
-
     
(52,178
)
   
-
 
Recognition of deferred gain from sale-leaseback transactions
   
(215,097
)
   
(9,522
)
   
(833,619
)
   
(9,522
)
Changes in operating assets and liabilities:
                               
Accounts receivable
   
(1,260,064
)
   
(736,633
)
   
(2,517,493
)
   
(157,071
)
Finance receivables
   
(331,606
)
   
(39,938
)
   
(4,113,898
)
   
52,531
 
Inventory
   
(638,693
)
   
31,689
     
(1,930,857
)
   
370,104
 
Prepaid expenses and other current assets
   
(96,924
)
   
(128,280
)
   
(304,229
)
   
(190,783
)
Accounts payable
   
3,528,851
     
1,341,699
     
918,761
     
412,664
 
Accrued expenses
   
93,273
     
567,988
     
54,717
     
267,004
 
Income taxes payable
   
37,312
     
21,021
     
33,065
     
21,021
 
                                 
Net cash provided by (used in) operating activities
   
2,681,155
     
2,267,442
     
(1,697,742
)
   
7,085,400
 
                                 
INVESTING ACTIVITIES:
                               
Purchase of property and equipment
   
(6,080
)
   
(50,760
)
   
(60,309
)
   
(111,121
)
Purchase of property for rental program
   
-
     
(3,671,812
)
   
(1,641,993
)
   
(10,883,473
)
Proceeds from sale of rental equipment under sale-leaseback transaction
   
-
     
2,995,095
     
4,993,879
     
2,995,095
 
Proceeds from sale of property and equipment
   
7,676
     
51,672
     
61,914
     
82,047
 
                                 
Net cash provided by (used in) investing activities
   
1,596
     
(675,805
)
   
3,353,491
     
(7,917,452
)
                                 
FINANCING ACTIVITIES:
                               
Net proceeds from the issuance (retirement) of common stock and exercise of common stock warrants
   
-
     
(13,913
)
   
(61,987
)
   
2,272,936
 
Excess tax benefits from share-based compensation
   
9,749
     
24,847
     
9,749
     
24,847
 
Proceeds from (repayment of) line of credit
   
-
     
1,000,000
     
(1,000,000
)
   
2,000,000
 
Proceeds from long-term debt
   
304,007
     
-
     
2,056,724
     
-
 
Repayment of long-term debt
   
(97,240
)
   
(107,368
)
   
(358,582
)
   
(374,411
)
                                 
Net cash provided by financing activities
   
216,516
     
903,566
     
645,904
     
3,923,372
 
                                 
Net increase in cash and cash equivalents
   
2,899,267
     
2,495,203
     
2,301,653
     
3,091,320
 
Cash and cash equivalents at beginning of period
   
8,474,706
     
6,577,117
     
9,072,320
     
5,981,000
 
Cash and cash equivalents at end of period
 
$
11,373,973
   
$
9,072,320
   
$
11,373,973
   
$
9,072,320
 
                                 
Supplemental disclosures of cash flow information:
                               
Cash paid for interest
 
$
99,474
   
$
70,617
   
$
301,767
   
$
259,820
 
Depreciation expense allocated to cost of services
 
$
1,252,485
   
$
1,386,803
   
$
5,119,674
   
$
4,880,529
 
Reclass of rental program property to inventory, net
 
$
(718,816
)
 
$
6,463
   
$
674,280
   
$
33,266
 
Prepaid items financed with debt
 
$
-
   
$
-
   
$
103,125
   
$
101,850
 
Equipment and software acquired under capital lease
 
$
-
   
$
107,670
   
$
107,903
   
$
325,431
 
Disposal of property and equipment
 
$
447,338
   
$
475,781
   
$
842,204
   
$
709,638
 
Disposal of property and equipment under sale-leaseback transactions
 
$
-
   
$
1,918,920
   
$
3,873,275
   
$
1,918,920
 
 
8

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results

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 (loss) per common share – basic and 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.
 
As used herein, non-GAAP net income 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-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.  We have excluded the non-operating change in fair value of warrant liabilities, because it represents a non-cash gain or (charge) that is not related to USAT's operations. We have excluded the non-cash expense stock-based compensation as it does 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.
 

 
9

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
Non GAAP Reconciliation
Reconciliation of Net Income (Loss) to Non-GAAP Net Income (loss) and Earnings (loss) Per Common Share to Non-GAAP Earnings (loss) Per Common Share
 
   
Three months ended
June 30,
2015
   
Three months ended
March 31,
2015
   
Three months ended
December 31,
2014
   
Three months ended
September 30,
2014
   
Three months ended
June 30,
2014
 
                     
Net income (loss)
 
$
68,999
   
$
(566,610
)
 
$
(260,915
)
 
$
(60,956
)
 
$
(38,719
)
Non-GAAP adjustments:
                                       
Non-cash portion of income tax provision/benefit
   
252,124
     
121,046
     
402,358
     
(369,452
)
   
(527,001
)
Fair value of warrant adjustment
   
(262,643
)
   
1,101,241
     
(135,402
)
   
(310,052
)
   
(53,125
)
Non-GAAP net income (loss)
 
$
58,480
   
$
655,677
   
$
6,041
   
$
(740,460
)
 
$
(618,845
)
                                         
Net income (loss)
 
$
68,999
   
$
(566,610
)
 
$
(260,915
)
 
$
(60,956
)
 
$
(38,719
)
Cumulative preferred dividends
   
-
     
(332,226
)
   
-
     
(332,226
)
   
-
 
Net income (loss) applicable to common shares
 
$
68,999
   
$
(898,836
)
 
$
(260,915
)
 
$
(393,182
)
 
$
(38,719
)
                                         
Non-GAAP net income (loss)
 
$
58,480
   
$
655,677
   
$
6,041
   
$
(740,460
)
 
$
(618,845
)
Cumulative preferred dividends
   
-
     
(332,226
)
   
-
     
(332,226
)
   
-
 
Non-GAAP net income (loss) applicable to common shares
 
$
58,480
   
$
323,451
   
$
6,041
   
$
(1,072,686
)
 
$
(618,845
)
                                         
Net earnings (loss) per common share - basic
 
$
-
   
$
(0.03
)
 
$
(0.01
)
 
$
(0.01
)
 
$
-
 
Non-GAAP net earnings (loss) per common share - basic
 
$
-
   
$
0.01
   
$
-
   
$
(0.03
)
 
$
(0.02
)
                                         
Basic weighted average number of common shares outstanding
   
35,716,603
     
35,687,650
     
35,657,519
     
35,586,455
     
35,517,099
 
                                         
Net loss per common share - diluted
 
$
(0.01
)
 
$
(0.03
)
 
$
(0.01
)
 
$
(0.01
)
 
$
-
 
Non-GAAP net earnings (loss) per common share - diluted
 
$
-
   
$
0.01
   
$
-
   
$
(0.03
)
 
$
(0.02
)
                                         
Diluted weighted average number of common shares outstanding
   
36,310,919
     
35,687,650
     
35,657,519
     
35,586,455
     
35,517,099
 
 
10

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) and Income (Loss) Per Common Share to Non-GAAP Loss Per Common Share
 
   
Year ended June 30,
 
   
2015
   
2014
 
Net income (loss)
 
$
(819,482
)
 
$
27,530,652
 
Non-GAAP adjustments:
               
Non-cash portion of income tax provision/benefit
   
406,076
     
(27,276,419
)
Fair value of warrant adjustment
   
393,144
     
(65,429
)
Non-GAAP net income (loss)
 
$
(20,262
)
 
$
188,804
 
                 
Net income (loss)
 
$
(819,482
)
 
$
27,530,652
 
Cumulative preferred dividends
   
(664,452
)
   
(664,452
)
Net income (loss) applicable to common shares
 
$
(1,483,934
)
 
$
26,866,200
 
                 
Non-GAAP net income (loss)
 
$
(20,262
)
 
$
188,804
 
Cumulative preferred dividends
   
(664,452
)
   
(664,452
)
Non-GAAP net loss applicable to common shares
 
$
(684,714
)
 
$
(475,648
)
                 
Net earnings (loss) per common share - basic and diluted
 
$
(0.04
)
 
$
0.78
 
Non-GAAP net loss per common share - basic and diluted
 
$
(0.02
)
 
$
(0.01
)
                 
Weighted average number of common shares outstanding - basic and diluted
   
35,663,386
     
34,613,497
 
 
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (Adjusted EBITDA)
 
     
Three months ended
June 30,
2015
       
Three months ended
March 31,
2015
       
Three months ended
December 31,
2014
       
Three months ended
September 30,
2014
       
Three months ended
June 30,
2014
 
 
 
                     
Net income (loss)
 
$
68,999
   
$
(566,610
)
 
$
(260,915
)
 
$
(60,956
)
 
$
(38,719
)
                                         
Less interest income
   
(42,204
)
   
(26,394
)
   
(4,015
)
   
(10,082
)
   
(8,995
)
                                         
Plus interest expense
   
92,078
     
85,349
     
49,429
     
74,911
     
74,529
 
                                         
Plus income tax expense (benefit)
   
289,436
     
137,820
     
402,358
     
(360,473
)
   
(541,501
)
                                         
Plus depreciation expense
   
1,380,983
     
1,433,251
     
1,443,710
     
1,473,412
     
1,553,875
 
                                         
Plus change in fair value of warrant liabilities
   
(262,643
)
   
1,101,241
     
(135,402
)
   
(310,052
)
   
(53,125
)
                                         
Plus stock-based compensation
   
174,598
     
216,469
     
185,891
     
138,804
     
280,161
 
                                         
Adjusted EBITDA
 
$
1,701,247
   
$
2,381,126
   
$
1,681,056
   
$
945,564
   
$
1,266,225
 
 
11

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (Adjusted EBITDA)
 
   
Year ended June 30,
 
   
2015
   
2014
 
Net income (loss)
 
$
(819,482
)
 
$
27,530,652
 
                 
Less interest income
   
(82,695
)
   
(30,337
)
                 
Plus interest expense
   
301,767
     
256,844
 
                 
Plus income tax expense (benefit)
   
469,141
     
(27,255,398
)
                 
Plus depreciation expense
   
5,731,356
     
5,463,985
 
                 
Plus amortization expense
   
-
     
21,953
 
                 
Plus change in fair value of warrant liabilities
   
393,144
     
(65,429
)
                 
Plus stock-based compensation
   
715,762
     
529,041
 
                                     
Adjusted EBITDA
 
$
6,708,993
   
$
6,451,311
 
 
12

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
Supplemental Tables:
 
USA Technologies, Inc.
Consolidated Statement of Operations

   
Three months ended
June 30,
2015
   
Three months ended
March 31,
2015
   
Three months ended
December 31,
2014
   
Three months ended
September 30,
2014
   
Three months ended
June 30,
2014
 
                     
Revenues:
                   
License and transaction fees
 
$
11,937,898
   
$
11,059,846
   
$
10,479,496
   
$
10,156,222
   
$
9,460,303
 
Equipment sales
   
5,708,297
     
4,297,894
     
2,341,441
     
2,096,380
     
1,747,157
 
Total revenues
   
17,646,195
     
15,357,740
     
12,820,937
     
12,252,602
     
11,207,460
 
                                         
Cost of services
   
7,863,105
     
7,157,333
     
7,157,840
     
7,251,107
     
6,327,432
 
Cost of equipment
   
4,975,089
     
3,054,268
     
1,929,841
     
1,866,257
     
1,217,884
 
Gross profit
   
4,808,001
     
5,146,139
     
3,733,256
     
3,135,238
     
3,662,144
 
                                         
Operating expenses:
                                       
Selling, general and administrative
   
4,558,816
     
4,279,888
     
3,530,064
     
3,632,487
     
4,067,804
 
Depreciation and amortization
   
155,697
     
134,845
     
151,737
     
169,403
     
162,151
 
Total operating expenses
   
4,714,513
     
4,414,733
     
3,681,801
     
3,801,890
     
4,229,955
 
Operating income (loss)
   
93,488
     
731,406
     
51,455
     
(666,652
)
   
(567,811
)
                                         
Other income (expense):
                                       
Interest income
   
42,204
     
26,394
     
4,015
     
10,082
     
8,995
 
Other income
   
52,178
     
-
     
-
     
-
     
-
 
Interest expense
   
(92,078
)
   
(85,349
)
   
(49,429
)
   
(74,911
)
   
(74,529
)
Change in fair value of warrant liabilities
   
262,643
     
(1,101,241
)
   
135,402
     
310,052
     
53,125
 
Total other income (expense), net
   
264,947
     
(1,160,196
)
   
89,988
     
245,223
     
(12,409
)
                                         
Income (loss) before provision for income taxes
   
358,435
     
(428,790
)
   
141,443
     
(421,429
)
   
(580,220
)
Benefit (provision) for income taxes
   
(289,436
)
   
(137,820
)
   
(402,358
)
   
360,473
     
541,501
 
                                         
Net income (loss)
   
68,999
     
(566,610
)
   
(260,915
)
   
(60,956
)
   
(38,719
)
Cumulative preferred dividends
   
-
     
(332,226
)
   
-
     
(332,226
)
   
-
 
Net income (loss) applicable to common shares
 
$
68,999
   
$
(898,836
)
 
$
(260,915
)
 
$
(393,182
)
 
$
(38,719
)
Net earnings (loss) per common share - basic
 
$
-
   
$
(0.03
)
 
$
(0.01
)
 
$
(0.01
)
 
$
-
 
Basic weighted average number of common shares outstanding
   
35,716,603
     
35,687,650
     
35,657,519
     
35,586,455
     
35,517,099
 
Net earnings (loss) per common share - diluted
 
$
(0.01
)
 
$
(0.03
)
 
$
(0.01
)
 
$
(0.01
)
 
$
-
 
Diluted weighted average number of common shares outstanding
   
36,310,919
     
35,687,650
     
35,657,519
     
35,586,455
     
35,517,099
 
 
13

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
USA Technologies, Inc.
Consolidated Balance Sheets
 
    
June 30,
2015
     
March 31,
2015
      
December 31,
2014
     
September 30,
2014
     
June 30,
2014
 
 
                     
Assets
                   
Current assets:
                   
Cash
 
$
11,373,973
   
$
8,474,706
   
$
6,734,077
   
$
10,916,078
   
$
9,072,320
 
Accounts receivable, less allowance for uncollectible accounts
   
4,671,544
     
3,403,489
     
2,758,475
     
2,444,748
     
2,683,579
 
Finance receivables
   
941,150
     
749,631
     
362,898
     
279,216
     
119,793
 
Inventory
   
4,216,396
     
4,241,057
     
3,448,374
     
2,629,361
     
1,486,777
 
Prepaid expenses and other current assets
   
574,479
     
414,046
     
586,144
     
376,823
     
363,367
 
Deferred income taxes
   
1,257,796
     
907,691
     
907,691
     
907,691
     
907,691
 
Total current assets
   
23,035,338
     
18,190,620
     
14,797,659
     
17,553,917
     
14,633,527
 
                                         
Finance receivables, less current portion
   
3,697,513
     
3,505,248
     
1,643,363
     
948,833
     
352,794
 
Prepaid expenses and other assets
   
350,041
     
423,255
     
410,838
     
382,563
     
190,703
 
Property and equipment, net
   
12,868,808
     
13,574,402
     
16,450,712
     
17,780,294
     
21,138,580
 
Deferred income taxes
   
25,608,187
     
26,169,378
     
26,290,424
     
26,713,803
     
26,353,330
 
Intangibles, net
   
432,100
     
432,100
     
432,100
     
432,100
     
432,100
 
Goodwill
   
7,663,208
     
7,663,208
     
7,663,208
     
7,663,208
     
7,663,208
 
                                         
Total assets
 
$
73,655,195
   
$
69,958,211
   
$
67,688,304
   
$
71,474,718
   
$
70,764,242
 
                                         
Liabilities and shareholders’ equity
                                       
Current liabilities:
                                       
Accounts payable
 
$
8,792,672
   
$
5,208,646
   
$
5,385,822
   
$
7,632,643
   
$
7,753,911
 
Accrued expenses
   
2,107,530
     
1,994,746
     
1,726,614
     
1,779,037
     
1,915,799
 
Line of credit
   
4,000,000
     
4,000,000
     
4,000,000
     
5,000,000
     
5,000,000
 
Current obligations under long-term debt
   
477,522
     
416,695
     
203,621
     
207,383
     
172,911
 
Income taxes payable
   
54,086
     
16,774
     
-
     
-
     
21,021
 
Deferred gain from sale-leaseback transactions
   
860,391
     
860,390
     
860,390
     
860,390
     
380,895
 
Total current liabilities
   
16,292,201
     
12,497,251
     
12,176,447
     
15,479,453
     
15,244,537
 
                                         
Long-term liabilities:
                                       
Long-term debt, less current portion
   
1,854,424
     
1,708,484
     
261,716
     
222,907
     
249,865
 
Accrued expenses, less current portion
   
49,160
     
68,671
     
102,338
     
137,045
     
186,174
 
Warrant liabilities
   
978,353
     
1,240,996
     
139,755
     
275,157
     
585,209
 
Deferred gain from sale-leaseback transactions, less current portion
   
900,348
     
1,115,446
     
1,330,544
     
1,545,641
     
761,790
 
Total long-term liabilities
   
3,782,285
     
4,133,597
     
1,834,353
     
2,180,750
     
1,783,038
 
                                         
Total liabilities
   
20,074,486
     
16,630,848
     
14,010,800
     
17,660,203
     
17,027,575
 
                                         
Commitments and contingencies
                                       
                                         
Shareholders’ equity:
                                       
Total shareholders’ equity
   
53,580,709
     
53,327,363
     
53,677,504
     
53,814,515
     
53,736,667
 
                                         
Total liabilities and shareholders’ equity
 
$
73,655,195
   
$
69,958,211
   
$
67,688,304
   
$
71,474,718
   
$
70,764,242
 
 
14

USA Technologies Announces Fourth Quarter & Fiscal Year 2015 Financial Results
 
USA Technologies, Inc.
Consolidated Statements of Cash Flows
 
       
Three months ended
June 30,
2015
       
Three months ended
March 31,
2015
       
Three months ended
December 31,
2014
       
Three months ended
September 30,
2014
       
Three months ended
June 30,
2014
 
 
 
                     
                     
OPERATING ACTIVITIES:
                   
Net income (loss)
 
$
68,999
   
$
(566,610
)
 
$
(260,915
)
 
$
(60,956
)
   
(38,719
)
Adjustments to reconcile net income (loss) 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
   
174,598
     
216,469
     
185,891
     
138,804
     
280,161
 
(Gain) loss on disposal of property and equipment
   
(3,926
)
   
(6,353
)
   
(3,794
)
   
(3,284
)
   
(2,808
)
Non-cash interest and amortization of debt discount
   
-
     
-
     
-
     
-
     
-
 
Bad debt expense (recoveries), net
   
47,184
     
302,632
     
140,996
     
158,716
     
67,403
 
Depreciation
   
1,380,983
     
1,433,251
     
1,443,710
     
1,473,412
     
1,553,875
 
Amortization
   
-
     
-
     
-
     
-
     
-
 
Change in fair value of warrant liabilities
   
(262,643
)
   
1,101,241
     
(135,402
)
   
(310,052
)
   
(53,125
)
Deferred income taxes, net
   
211,086
     
121,046
     
423,379
     
(360,473
)
   
(551,848
)
Gain on sale of finance receivables
   
(52,178
)
   
-
     
-
     
-
     
-
 
Recognition of deferred gain from sale-leaseback transactions
   
(215,097
)
   
(215,098
)
   
(215,097
)
   
(188,327
)
   
(9,522
)
Changes in operating assets and liabilities:
                                       
Accounts receivable
   
(1,260,064
)
   
(974,176
)
   
(363,368
)
   
80,115
     
(736,633
)
Finance receivables
   
(331,606
)
   
(2,248,618
)
   
(778,212
)
   
(755,462
)
   
(39,938
)
Inventory
   
(638,693
)
   
650,784
     
(804,629
)
   
(1,138,319
)
   
31,689
 
Prepaid expenses and other current assets
   
(96,924
)
   
150,159
     
(246,709
)
   
(110,755
)
   
(128,280
)
Accounts payable
   
3,528,851
     
(150,646
)
   
(2,338,176
)
   
(121,268
)
   
1,341,699
 
Accrued expenses
   
93,273
     
234,465
     
(87,130
)
   
(185,891
)
   
567,988
 
Income taxes payable
   
37,312
     
16,774
     
-
     
(21,021
)
   
(14,500
)
                                         
Net cash provided by (used in) operating activities
   
2,681,155
     
65,320
     
(3,039,456
)
   
(1,404,761
)
   
2,267,442
 
                                         
INVESTING ACTIVITIES:
                                       
Purchase of property and equipment
   
(6,080
)
   
(3,860
)
   
(18,879
)
   
(31,490
)
   
(50,760
)
Purchase of property for rental program
   
-
     
-
     
-
     
(1,641,993
)
   
(3,671,812
)
Proceeds from sale of rental equipment under sale-leaseback transaction
   
-
     
-
     
-
     
4,993,879
     
2,995,095
 
Proceeds from sale of property and equipment
   
7,676
     
19,327
     
11,177
     
23,734
     
51,672
 
                                         
Net cash provided by (used in) investing activities
   
1,596
     
15,467
     
(7,702
)
   
3,344,130
     
(675,805
)
                                         
FINANCING ACTIVITIES:
                                       
Net proceeds from the issuance (retirement) of common stock and
                                       
exercise of common stock warrants
   
-
     
-
     
(61,987
)
   
-
     
(13,913
)
Excess tax benefits from share-based compensation
   
9,749
     
-
     
-
     
-
     
24,847
 
Proceeds from (repayment of) line of credit
   
-
     
-
     
(1,000,000
)
   
-
     
1,000,000
 
Proceeds from long-term debt
   
304,007
     
1,752,717
     
-
     
-
     
-
 
Repayment of long-term debt
   
(97,240
)
   
(92,875
)
   
(72,856
)
   
(95,611
)
   
(107,368
)
                                         
Net cash provided by (used in) financing activities
   
216,516
     
1,659,842
     
(1,134,843
)
   
(95,611
)
   
903,566
 
                                         
Net increase (decrease) in cash
   
2,899,267
     
1,740,629
     
(4,182,001
)
   
1,843,758
     
2,495,203
 
Cash at beginning of period
   
8,474,706
     
6,734,077
     
10,916,078
     
9,072,320
     
6,577,117
 
Cash at end of period
 
$
11,373,973
   
$
8,474,706
   
$
6,734,077
   
$
10,916,078
   
$
9,072,320
 
                                         
Supplemental disclosures of cash flow information:
                                       
Cash paid for interest
 
$
99,474
   
$
67,102
   
$
55,992
   
$
79,199
   
$
70,617
 
Depreciation expense allocated to cost of services
 
$
1,252,485
   
$
1,288,884
   
$
1,282,860
   
$
1,295,445
   
$
1,386,803
 
Reclass of rental program property to inventory, net