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Press Release: USA Technologies Reports Second -4-

· 02/04/2021 16:05
-- An increase of 544 Active Customers and 21,178 Active Devices during the quarter; -- 1,154,932 Active Devices compared to the same quarter last year of 1,089,406, an increase of 65,526 Net New Active Devices, or 6.01%; -- 18,304 Active Customers to our service compared to the same quarter last year of 16,489, an increase of 1,815 Net Change in Active Customers, or 11.01%.As of and for the three months ended ------------------------------------------------------------------------- December 31, September 30, June 30, March 31, December 31, 2020 2020 2020 2020 2019 ------------- ------------- ------------- ------------- ------------- Devices, new presentation: Active Devices 1,154,932 1,133,754 1,117,805 1,103,242 1,089,406 Net New Active Devices 21,178 15,949 14,563 13,836 25,744 Customers: Active Customers 18,304 17,760 17,249 16,808 16,489 Net Change in Active Customers 544 511 441 319 479 Volumes: Total Number of Transactions (millions) 211.8 201.9 167.7 237.3 243.4 Total Dollar Volume of Transactions (millions) 422.6 406.3 329.1 462.7 476.4 Financing structure of Devices: JumpStart 4.3% 3.0% 6.2% 1.4% 4.3% QuickStart & all others (a) 95.7% 97.0% 93.8% 98.6% 95.7% --------- --------- --------- --------- --------- Total 100.0% 100.0% 100.0% 100.0% 100.0% ========= ========= ========= ========= ========= a) Includes credit sales with standard trade receivable terms.(c) The revised amounts for the three and six months ended December 2019 are presented in the Condensed Consolidated Statements of Operations. (d) No changes noted for these amounts. The amounts for the three and six months ended December 2019 are presented in the Condensed Consolidated Statements of Operations. Reconciliation of Net Loss to Adjusted EBITDA Three months ended December 31, ----------------------------------------- ($ in thousands, including endnotes to table) 2020 2019 -------------------------- -------------------- ----------------- U.S. GAAP net loss $ (2,902) $ (8,378) Less: interest income (325) (283) Plus: interest expense 596 833 Plus: income tax provision 49 72 Plus: depreciation expense included in cost of sales for rentals 515 757 Plus: depreciation and amortization expense in operating expenses 1,052 1,080 ---------------- ---------------- EBITDA (1,015) (5,919) Plus: stock-based compensation (a) 1,640 1,742 Plus: investigation, proxy solicitation and restatement expenses (b) (c) -- 3,277 Plus: asset impairment charge (b) 333 -- ---------------- ---------------- Adjustments to EBITDA 1,973 5,019 ---------------- ---------------- Adjusted EBITDA (d) (e) $ 958 $ (900) ============ ============ (a) As an adjustment to EBITDA, we have excluded stock-based compensation, as it does not reflect our cash-based operations. (b) As an adjustment to EBITDA, we have excluded the professional fees incurred in connection with the non-recurring costs and expenses related to the 2019 Investigation, financial statement restatement activities, and proxy solicitation costs, and non-cash impairment charges related to long-lived assets because we believe that they represent charges that are not related to our operations. (c) The previously reported amounts for the three months ended December 31, 2019 were reclassified to include additional operating expenses that related to non-recurring professional services fees. The adjustment amount for the three months ended December 31, 2019 has been revised as disclosed in the basis of presentation and preparation section of Note 1 to the interim Condensed Consolidated Financial Statements. (d) As a result of the adjustment noted in (c), the Adjusted EBITDA for the year ended June 30, 2020 and three months ended June 30, 2020 as previously reported in the Company's June 30, 2020 Annual Report on Form 10-K should be revised from $(8,253) to $(9,735) and $(85) to $(2,118) respectively. Similarly, the Adjusted EBITDA for the three months ended September 30, 2019 as previously reported in the Company's September 30, 2020 Quarterly Report on Form 10-Q should be revised from $(4,856) to $(2,841). (e) As a result of the adjustment noted in (c) and the subsequent revision to the reclassification amounts as noted in Note 1 to the interim Condensed Consolidated Financial Statements., the Adjusted EBITDA for the three months ended December 31, 2019 as previously reported in the Company's December 31, 2019 Quarterly Report on Form 10-Q should have been revised from $(2,324) million to $(900) as presented in table above.

QUARTERLY FINANCIAL AND NON-FINANCIAL DATA

The following table shows certain financial and non-financial data that management believes give readers insight into certain trends and relationships about the Company's financial performance. We believe the metrics (Active Devices and Net New Active Devices, Active Customers and Net Change in Active Customers and Total Number of Transactions and Total Dollar Volume of Transactions) are useful in allowing management and readers to evaluate our strategy of driving growth in devices and transactions and the Financing Structure of Devices metric is useful in allowing management and readers to evaluate the growth of our QuickStart program and direct sales compared to the JumpStart program.

Active Devices and Net New Active Devices (new presentation)

Active Devices is defined as a device that has communicated with us or has had a transaction in the last 12 months. Included in the number of Active Devices are devices that communicate through other devices that communicate or transact with us. A self-service retail location that utilizes an ePort cashless payment device as well as Seed management services constitutes only one device.

Net New Active Devices during the quarter are defined as the net change in Active Devices from prior quarter.

Active Customers and Net Change in Active Customers

The Company defines Active Customers as all customers with at least one active device. Net Change in Active customers is defined by the net change in Active Customers from the prior period.

Total Number of Transactions and Total Dollar Volume of Transactions

Transactions are defined as electronic payment transactions that are processed by our technology-enabled solutions. Management uses Total Number and Dollar Volume of transactions to evaluate the effectiveness of our new customer strategy and ability to leverage existing customers and partners.

Financing Structure of Devices

The Financing Structure of Devices is determined by identifying the gross new devices during the quarter and determining which devices were due to devices financed by the JumpStart program compared to devices financed by the QuickStart program or purchased outright. We monitor this metric as we are able to increase cash collections from direct sales to customers or under QuickStart sales by utilizing lease companies which improves cash provided by operating activities.

Highlights of USAT's devices and customers for the quarter ended December 31, 2020 include:

Total Connections (historical presentation)

Historically, connections is a performance metric that has been used by the Company. Connections to the Company's service include those resulting from the sale or lease of our POS electronic payment devices, telemetry devices or certified payment software or the servicing of similar third-party installed POS terminals or telemetry devices. The Company records a connection upon shipment of an activated device or the activation of a non-device location on our platform to a customer under contract. If a customer provides sufficient notice to deactivate a device or non-device location, in accordance with the terms of the contract, we stop counting the existing connection as a connection after the applicable notice period. A previously installed telemeter or cashless payment system that is no longer being utilized by our customer is still considered and reported as an existing connection until the customer requests deactivation and the contractual notice period has expired.

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February 04, 2021 16:05 ET (21:05 GMT)