USA Technologies, Inc. reported results for the fourth quarter and full fiscal year ended June 30, 2012. Revenues for the fourth quarter of Fiscal 2012 were $7.9 million, an increase of 15 percent from the same period a year ago. Revenue growth was fueled by a 27 percent growth in license and transaction fees; this growth was slightly offset by a decline in equipment sales of approximately $340,000 due to reduced sales of EnergyMiser®-branded products in the quarter.
Growing ePort Connect Service Base Drives Recurring Revenues
Revenue from license and transaction fees, which is fueled primarily by monthly ePort Connect service fees, JumpStart fees and transaction processing fees, grew to $6.4 million, or by 27 percent in Fiscal 2012 fourth quarter from $5.0 million for the same quarter a year ago. Highlights in this area for the fourth quarter of Fiscal 2012 included:
- 16,000 additional net connections to USAT’s ePort Connect service in the quarter — an increase of approximately 129 percent from the same period a year ago;
- $47 million in small-ticket, credit/debit transactions dollars handled in the quarter, up 27 percent from the fourth quarter of the prior year;
- Approximately 450 new ePort Connect customers in the quarter, the strongest quarter of new customer wins for all of Fiscal 2012.
In addition, gross margin on these recurring revenues, which represented 81 percent of total revenue for the quarter, crossed the 40 percent mark in the quarter — to 40.2 percent — from 33.5 percent from the fourth quarter of the prior year.
Stephen P. Herbert, chairman and CEO of USA Technologies, commented in a prepared statement: “Our Fiscal 2012 results reflect the commitment we made to shareholders in January of this year to sharply accelerate our path toward profitability. With every new connection and customer win we are building a reliable stream of recurring revenues and strengthening our pipeline for future growth. While approximately $3.2 million in expenses related to the proxy contest and CEO separation clearly impacted our results this fiscal year, they did not stop the fundamental progress we are making in growing revenues and expanding our footprint of connections and the value of those connections for our customers in the small ticket, unattended retail market.”
Fiscal 2012 highlights, compared to the prior year, included:
- 27 percent increase in total revenues to $29.0 million;
- 42 percent increase in license and transaction fee revenues (“recurring revenues”) to $23.4 million, representing 81 percent of total revenues for the 2012 year;
- 38 percent increase in connections to its ePort Connect® service, from 119,000 at the end of Fiscal 2011 to 164,000 as of June 30, 2012; as well as a 43 percent increase in the dollar value of transactions processed through its ePort Connect service during the fiscal year; and,
- 69 percent increase in new customers to USAT’s ePort Connect service during the year, for 3,300 customers as of June 30, 2012.
In addition, Fiscal 2012 net loss, which includes a charge of $2.2 million in selling, general and administrative expenses related to the proxy contest that took place in the fourth quarter ended June 30, 2012 and approximately $975,000 related to the CEO separation, narrowed to ($5.2) million, compared to ($6.5) million for Fiscal 2011.
Outlook
“Our plans for Fiscal 2013 include a steadfast focus on optimizing the scalability and versatility of our ePort Connect service platform to expand our growth potential and generate cash. In Fiscal 2013, we are targeting double-digit revenue growth and connection growth of over 30 percent, as we strive to grow our ePort Connect service base to 225,000 connections by the end of Fiscal 2013,” concluded Herbert.
