USAT Appoints Donald W. Layden, Jr. Executive Chairman, Posts Q1 Results

Posted On: 11/14/2019

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MALVERN, PA -- USA Technologies Inc.'s board of directors has appointed Donald W. Layden, Jr. as executive chairman of the board. The company also posted its first quarter fiscal year 2020 results for the period ended Sept. 30.

Last month, USA Technologies Inc. announced that chief executive Stephen Herbert had stepped down as its largest investor threatened to take over its board. USAT's board of directors named Donald W. Layden Jr., a board member, interim CEO, effectively immediately. Earlier this week, USAT issued a statement that Hudson Executive Capital's attempt to seize control of the company by calling a special board meeting is invalid under the company's bylaws.

Layden's appointment follows Albin F. Moschner's retirement as board chair and as a member of the board effective Nov. 8. In connection with this appointment, current board member William J. Schoch has been appointed as the lead independent director of the board.

First quarter revenue climbed 25.7% year over year to $42.1 million. USAT posted a net loss of $12.9 million, or 22¢ per share compared to net loss of $6.3 million, or 11¢ a share in the prior year period.

License and transaction fee revenue of $33.8 millio, increased 16.8% year-over-year. Equipment revenue of $8.3 million increased 82.7% year-over-year. Net new connections of 46,000 bring USAT's total connections to 1,215,000.

"We are pleased to report record quarterly revenue led by an expanding customer base and strong growth in connections," Layden said. "The entire management team is focused on strengthening the business by reducing the company's cost structure to improve profitability while enhancing our customer service and we are working diligently to regain our Nasdaq listing. We believe that the company remains well positioned to capitalize on the ongoing shift and increasing demand for electronic payment transactions in the unattended retail market."

For full fiscal year 2020, the company continues to expect revenue to be between $165 million to $175 million and expects to add 170,000 to 190,000 net new connections to its service.

USAT said its adjusted EBITDA was lower than expected in the first quarter of fiscal year 2020 primarily because professional service fees were higher than expected for costs related to the company's restatement audit. Despite the first quarter loss, the company said it "continues to believe that it will produce between $10 million and $11 million in adjusted EBITDA over the full 2020 fiscal year."