USA Technologies, Inc. reported results for the second fiscal quarter ended Dec. 31, 2013. Revenues of $10.6 million in the second quarter of fiscal 2014 grew by 19 percent from the same period a year ago, led by growth in equipment sales of 28 percent and growth in license and transaction fees of 17 percent.
Revenue from license and transaction fees, which represented 82 percent of revenues in the second quarter, is driven by net connections to USAT's ePort Connect service through monthly service fees, including any rental program fees and transaction processing fees.
Gross profit of $3.8 million increased by 6 percent in the second quarter, from $3.6 million for the same period in the prior year. Gross profit margin was 36.2 percent, down from 40.5 percent for the same period in the prior year, due primarily to deactivations in the quarter.
Operating expenses of $3.3 million in the second quarter grew slightly, from $3.0 million for the same period in fiscal 2013, largely due to additional investments in sales and marketing for fiscal 2014. Operating margin — both generally accepted accounting principles (GAAP) and non-GAAP — was 4.8 percent for the second quarter, compared to 6.4 percent for the same period a year ago.
GAAP and non-GAAP net income were both positive for the second quarter of fiscal 2014, with non-GAAP net income reaching the second highest level for USAT to date.
GAAP net income was $409,191 for the second quarter of fiscal 2014, compared to $153,758 for the same period in the prior year. Diluted net earnings per common share were $.01 for the second quarter of fiscal 2014 compared to $.00 for the same period in fiscal 2013.
Non-GAAP net income for the second quarter of fiscal 2014 was $447,087 compared to $557,393 for the same period in the prior year. Non-GAAP diluted net earnings per common share was $.01 for the second quarter of fiscal 2013 compared to $.02 for the same period in fiscal 2013. Non-GAAP net income and non-GAAP diluted net earnings per common share removes the impact of the fair value of warrant adjustment of $0.04 million and $0.4 million for second quarter fiscal 2014 and 2013, respectively.
Cash and cash equivalents stood at approximately $6.7 million as of Dec. 31, 2013, up from approximately $5.0 million as of Dec. 31, 2012. Full report.
