USA Technologies, Inc. Reports First Quarter Fiscal 2010 Financial Results

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-- Increased Revenue, Gross Profits and Reduced SG & A --
MALVERN, Pa.--(Business Wire)--
USA Technologies (NASDAQ:USAT), a leading provider of technology-enabled
solutions that facilitate payment transactions within the wireless unattended
Point of Sale ("POS") market, reported financial results for its first fiscal
quarter ended September 30, 2009.

Highlights for the First Quarter Ended September 30, 2009

* Increased the installed base by 36%, with 57,000 devices connected to its
USALive network as compared to approximately 42,000 devices as of the year
before;
* Increased the number of transactions processed during the quarter by 57% to
7.4 million, compared with 4.7 million transactions processed during the prior
year`s quarter;
* Increased the dollar volume of transactions processed to $14.6 million,
compared with $11.6 million in the year-ago quarter, an increase of 26%;
* $3.8 million quarterly revenue represents highest level in five quarters;
* Improved gross margin percentage on equipment sales to 32% from 30% in the
quarter a year ago;
* Reduced SG & A for the quarter by 20% compared with last year`s first quarter;

* Quick Start Program made up approximately 52% of ePort equipment revenues for
the quarter;
* During the month of October 2009, the number of cashless transactions
processed by the Company exceeded an average of 100,000 transactions per day

Mr. George Jensen, Chairman and Chief Executive Officer of USA Technologies
said, "We believe that the strong increases in our metrics this quarter reflect
the demonstrable returns our products offer our customers, the strategic
initiatives that we implemented over the past year, and the growing trends
towards cashless transactions. With our focus on expanding our customer base by
creating lower-cost products and helping to finance customer purchases through
our new Quick Start Program, we achieved improvements in revenue and gross
profit on equipment sales."

"We have diversified our customer base, adding approximately 75 new ePort
customers since June 30, 2009, for a total of approximately 600. While some of
these customers represent large and well-known national organizations, the
small- to mid-size customer has become an important part of our customer base.
Not only have new customers driven our growth, but sales from existing customers
have also contributed to our growth, with one-third of them buying additional
units this quarter. We believe that trends such as these would help fuel our
revenue growth," Mr. Jensen added.

"In addition to the operational improvements," Mr. Jensen said, "we are honored
to have added two esteemed executives to our Board of Directors, and we look
forward to the contributions that both Steven Barnhart and Jack Price will add
to our Company. With extensive backgrounds in technology, consumer products and
strategic leadership, we expect to benefit from their expertise as we expand our
business and evaluate new opportunities in our rapidly expanding market.
Further, our recently awarded 71st patent that covers a wireless system for
communicating cashless vending transaction data and vending machine audit data
to remote locations, adds confirmation to our industry leadership in developing
cashless technologies."

Mr. Jensen concluded, "Over the past year our strategy included developing new,
cost-efficient products that would meet the needs of our customers and help to
spur revenue growth. We also placed emphasis on reducing our costs. These
strategic initiatives have helped to improve our financial results. Our efforts,
however, are not stopping there. We are currently reviewing and attempting to
renegotiate some of our key vendor relationships, with the goal of reducing
certain costs. We expect that these steps, if successful, would improve our
revenue base as well as positively contributing towards improved margins."

To illustrate the progress the Company has achieved in certain key metrics,
management is providing the following table which highlights sequential
quarterly information.

Key Metrics Achieved by USA Technologies:

9/30/09 6/30/09 3/30/09 12/31/08 9/30/08
Number of devices connected to the network 57,000 52,000 48,000 43,000 42,000
Number of transactions (millions) 7.4 6.7 5.8 5.1 4.7
$ Value of transactions (millions) $14.6 $13.5 $11.4 $10.6 $11.6

About USA Technologies:

USA Technologies is a leader in the networking of wireless non-cash
transactions, associated financial/network services and energy management. USA
Technologies provides networked credit card and other non-cash systems in the
vending, commercial laundry, hospitality and digital imaging industries. The
Company has agreements with AT&T, Visa, MasterCard, First Data, Compass and
others. For further information on USA Technologies, please visit
www.usatech.com.

Statement under the Private Securities Litigation Reform Act:

With the exception of the historical information contained in this release, the
matters described herein contain forward-looking statements that involve risk
and uncertainties that may individually or mutually impact the matters herein
described, including but not limited to, product acceptance, the ability to
continually obtained increased orders of its products, the ability to meet
installation goals, economic, competitive, governmental impacts, whether pending
patents will be granted or defendable, validity of intellectual property and
patents, the ability to license patents, the ability to commercialize
developmental products, as well as technological and/or other factors.

(FINANCIAL TABLES FOLLOW)

USA Technologies, Inc.
Consolidated Statements of Operations
(Unaudited)

Three months ended
September 30,
2009 2008
Revenues:
Equipment sales $ 1,937,407 $ 2,038,915
License and transaction fees 1,890,229 1,355,964
Total revenues 3,827,636 3,394,879

Cost of equipment 1,309,356 1,433,844
Cost of services 1,488,157 1,057,626
Cost of sales 2,797,513 2,491,470
Gross profit 1,030,123 903,409

Operating expenses:
Selling, general and administrative 3,565,778 4,439,533
Depreciation and amortization 385,066 418,779
Total operating expenses 3,950,844 4,858,312
Operating loss (2,920,721 ) (3,954,903 )

Other income (expense):
Interest income 14,938 127,966
Interest expense (20,416 ) (26,958 )
Total other income (expense) (5,478 ) 101,008
Net loss (2,926,199 ) (3,853,895 )
Cumulative preferred dividends (382,703 ) (390,294 )
Loss applicable to common shares $ (3,308,902 ) $ (4,244,189 )

Loss per common share (basic and diluted) $ (0.17 ) $ (0.28 )

Weighted average number of common shares outstanding (basic and diluted) 9,819,926 15,169,216

USA Technologies, Inc.
Consolidated Balance Sheets

September 30, June 30,
2009 2009
Assets (Unaudited)
Current assets:
Cash and cash equivalents $ 16,690,469 $ 6,748,262
Accounts receivable, less allowance for uncollectible accounts of $59,000 and $42,000, respectively 1,541,307 1,468,052
Finance receivables 664,723 212,928
Inventory, net 1,699,519 1,671,226
Prepaid expenses and other current assets 949,139 1,078,026
Total current assets 21,545,157 11,178,494

Finance receivables, less current portion 253,471 121,624
Property and equipment, net 1,969,729 2,081,909
Intangibles, net 4,586,453 4,845,053
Goodwill 7,663,208 7,663,208
Other assets 105,869 90,090
Total assets $ 36,123,887 $ 25,980,378

Liabilities and shareholders` equity
Current liabilities:
Accounts payable $ 3,506,088 $ 3,794,691
Accrued expenses 1,814,929 1,393,356
Current obligations under long-term debt 445,235 494,850
Total current liabilities 5,766,252 5,682,897

Long-term debt, less current portion 283,318 325,209
Total liabilities 6,049,570 6,008,106

Commitments and contingencies (Note 7)

Shareholders` equity:
Preferred stock, no par value:
Authorized shares- 1,800,000
Series A convertible preferred- Authorized shares 900,000;
Issued and outstanding shares- 505,241 and 510,270, respectively (liquidation preference of $15,677,957 and $15,451,307, respectively) 3,578,948 3,614,554
Common stock, no par value:
Authorized shares- 640,000,000;
Issued and outstanding shares- 22,711,908 and 15,423,022, respectively 208,025,209 194,948,693
Accumulated deficit (181,529,840 ) (178,590,975 )
Total shareholders` equity 30,074,317 19,972,272
Total liabilities and shareholders` equity $ 36,123,887 $ 25,980,378

USA Technologies Contact:
George Jensen, Chairman & CEO, 800-633-0340
Stephen P. Herbert, President & COO, 800-633-0340
sherbert@usatech.com
or
Investor Relations Contact:
Porter, LeVay & Rose
Marlon Nurse, Vice President
212-564-4700

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