USA Tech (USAT) Sees Q4 Revs Just Ahead of Views; New Connections Up 114%


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June 25, 2012 7:02 AM EDT Send to a Friend
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Price: $1.81 -4.23%

EPS Growth %: +100.0%

Financial Fact:
License and transaction fees: 7.56M

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USA Technologies, Inc. (Nasdaq: USAT) announced the following preliminary results for the fourth quarter ending June 30, 2012.

Revenues:
  • Total revenues for the fourth quarter are expected to be approximately $8.0 million—a USAT record—versus $6.9 million for the same period in the prior year.

    The Street sees revs of $7.90 million.

    Recurring Revenues:
    • License and transaction fees are expected to be approximately $6.4 million for the fourth quarter, representing an increase of approximately 27% from the fourth quarter of fiscal 2011.

    • Recurring revenues are expected to represent approximately 80% of total anticipated revenues for the fourth quarter, compared to 73% for the same period last year.

    • Recurring revenues are license and transaction fees earned through USAT’s ePort Connect® service. License and transaction fees continue to increase as a result of USAT’s successful initiatives aimed to grow new connections and new customers for its turnkey telemetry, machine-to-machine ("M2M") and cashless payment services designed for the small-ticket, unattended retail market. With minimal customer churn to date, and by focusing on a high-margin service model, these monthly revenues provide a foundation for profitability and long-term value creation.
    Connections and Customers
    • New connections, which contribute to future recurring revenues, are expected to be approximately 15,000 for the June quarter, representing a 114% increase over the same period a year ago.

    • USAT’s total ePort Connect service base now stands at approximately 163,000, a 37% increase from one year ago. The growth in connections is primarily attributable to USAT’s JumpStart program, expansion into vertical markets such as kiosk, and continued demand for cashless payment solutions to meet consumer’s demand for non-cash options.

    • The list of new ePort Connect customers is also expected to lengthen in the quarter—by 400 new customers. This would bring total customers to approximately 3,225 at June 30, 2012, a 67% increase from one year ago.
    “We believe that these preliminary revenue, connection and customer results for the fourth quarter and fiscal year ending June 30, 2012 indicate that our plan is working and generating positive results,” said Stephen P. Herbert, Chairman and CEO of USA Technologies. “We are adding to our customer base, growing our business with new and existing customers, and focusing on a high margin service model that is providing the foundation to move us quickly toward profitability.”

    As stated earlier in the month, given the greater scale and visibility provided by USAT’s growing recurring revenue base and scalable service platform, the Company also expects Adjusted EBITDA for the fourth quarter ending June 30, 2012 to be greater than the March 31, 2012 quarter, excluding proxy contest costs. However, given the costs associated with the proxy contest, the Company expects net loss for the June 30, 2012 quarter to be greater than the March 31, 2012 quarter.

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