USA Technologies, Inc. Reports Results for Fiscal 2011 First Quarter

MALVERN, PA. - November 10, 2010 - USA Technologies, Inc. (NASDAQ: USAT), a leader in the networking of wireless cashless transactions, today reported results for the quarter ended September 30, 2010.

Results for First Quarter

Total revenue for the quarter increased by 16% to $4.4 million, compared to $3.8 million in the first quarter of the prior year. Gross profit was $1.4 million, up 32% versus $1.0 million from last year's fiscal first quarter. Gross profit margin expanded to 30.5%, compared to 26.9% a year ago. Earnings before interest, taxes, depreciation and amortization (EBITDA) improved to a loss of $1.4 million for the quarter, our best quarterly EBITDA performance since listing on NASDAQ. The prior year first quarter EBITDA loss was $2.5 million.

During the first quarter the Company recorded significant growth across its operating performance metrics as compared to the first quarter of the prior year:

"Our first quarter of fiscal 2011 represents a great start to what we believe will be a transformational year for USA Technologies," said George Jensen, Chairman and CEO of USA Technologies. "With approximately 93,000 connections to our USALive® network as of today, and signed contracts for delivery before December 31, 2010 that will result in approximately 100,000 connections, and annualized cashless payment volume over $100 million, we will surpass two significant mileposts that we believe signify an important inflection point. We anticipate that the recurring nature of our license and transaction fee revenue and increasing customer base provide a solid foundation for future growth."

Jensen continued, "Having doubled our customer base to over 1,200 customers on our service in the past twelve months, we have achieved significant market penetration, which we believe has positioned us as the industry leader for wireless, unattended cashless payments."

Non-GAAP Financial Measures: EBITDA

This press release includes the following financial measure defined as a non-GAAP financial measure by the Securities and Exchange Commission: EBITDA. This supplemental financial measure is not required by GAAP, nor is the presentation of this financial information intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management recognizes that non-GAAP financial measures have limitations in that they do not reflect all of the items associated with USA Technologies Inc.'s (USAT) earnings results as determined in accordance with GAAP. However, for the reasons described below, we used this non-GAAP measure to evaluate the performance of USAT's business. See "Reconciliation of GAAP Net Earnings to Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)" table included in this press release for further information regarding these non-GAAP financial measures. In addition, EBITDA is presented because the Company has a publically stated goal of achieving positive EBITDA for the quarter ending December 31, 2010 and believes it is frequently used by securities analysts, investors and others in the evaluation of companies.

EBITDA is calculated by adding income taxes, interest expense, depreciation and amortization to net earnings, EBITDA is not defined under GAAP and should not be considered in isolation or as a substitute for net earnings and other consolidated earnings data prepared in accordance with GAAP or as a measure of USAT's profitability.

Reconciliation of GAAP Net Earnings to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

Q1 FY 11Q1 FY10
Net Loss$(1,886,614)$(2,926,199)
Interest Income(25,310)(14,938)
Interest Expense12,65220,416
Taxes--
Depreciation266,306153,532
Amortization258,600258,600
EBITDA$(1,374,366)$(2,508,589)

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 financial position, anticipated connections to our network, business strategy and the plans and objectives of the Company'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 the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company's management, as well as assumptions made by and information currently available to the Company'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, business, financial market and economic conditions, including but not limited to, the ability of the Company to retain key customers from whom a significant portion of its revenues is derived; the ability of the Company to compete with its competitors to obtain market share; the ability of the Company to obtain widespread commercial acceptance of it products; and whether the Company's existing or anticipated customers purchase ePort devices in the future at levels currently anticipated by the Company. 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, the Company 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.

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