USA Technologies, Inc (USAT) swung to a net profit for the quarter ended Dec. 31, 2016. The company has made a net profit of $0.23 million, or $ 0.01 a share in the quarter, against a net loss of $0.87 million, or $0.02 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $0.24 million, or $0.01 a share compared with $0.69 million or $0.02 a share, a year ago. Revenue during the quarter grew 17.58 percent to $21.76 million from $18.50 million in the previous year period. Gross margin for the quarter contracted 52 basis points over the previous year period to 29.11 percent. Total expenses were 98.92 percent of quarterly revenues, up from 96.79 percent for the same period last year. That has resulted in a contraction of 213 basis points in operating margin to 1.08 percent.
Operating income for the quarter was $0.23 million, compared with $0.59 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $1.74 million compared with $2.26 million in the prior year period. At the same time, adjusted EBITDA margin contracted 423 basis points in the quarter to 7.99 percent from 12.21 percent in the last year period.
“With a focus on driving growth through penetration into our existing customer base and by acquiring new customers, we are seeing more adoption of our ePort connect devices and subsequent traction in cashless payment options,” said Stephen P. Herbert, USA Technologies’ chairman and chief executive officer. “USA Technologies is at the forefront of the industry with our payment solutions, and with our customer loyalty programs and interactive point-of-sale devices we are adding increasing value to each connection sold. Our ePort Interactive platform creates new possibilities at the point of sale and we believe increases cashless payment acceptance.”
USA Technologies, Inc expects revenue to be in the range of $95 million to $100 million for financial year 2017.
Working capital increases sharply
USA Technologies, Inc has recorded an increase in the working capital over the last year. It stood at $14.77 million as at Dec. 31, 2016, up 48.89 percent or $4.85 million from $9.92 million on Dec. 31, 2015. Current ratio was at 1.73 as on Dec. 31, 2016, up from 1.54 on Dec. 31, 2015.
Cash conversion cycle (CCC) has increased to 8 days for the quarter from 1 days for the last year period. Days sales outstanding went down to 33 days for the quarter compared with 39 days for the same period last year.
Days inventory outstanding has decreased to 14 days for the quarter compared with 23 days for the previous year period. At the same time, days payable outstanding went down to 55 days for the quarter from 61 for the same period last year.
Debt moves up marginally
USA Technologies, Inc has witnessed an increase in total debt over the last one year. It stood at $9.24 million as on Dec. 31, 2016, up 1.43 percent or $0.13 million from $9.11 million on Dec. 31, 2015. Total debt was 10.69 percent of total assets as on Dec. 31, 2016, compared with 12.05 percent on Dec. 31, 2015. Debt to equity ratio was at 0.14 as on Dec. 31, 2016, down from 0.17 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 1.16 for the quarter from 5.71 for the same period last year.
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