Slide 1: USA Technologies Annual Meeting of Shareholders
USA Technologies Annual Meeting of Shareholders June 21, 2013
Slide 2: Safe Harbor Statement
Safe Harbor Statement All statements other than statements of historical fact included in this presentation are forward-looking statements. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, b
Slide 3: Market Opportunity is Vast
Market Opportunity is Vast Translates to millions of potential connections for cashless payment services and market is largely untapped $119 billion in transaction dollars in traditionally cash-only addressable market Sources: US Department of Transportation, 2008; IHL Kiosk Study, 2010 (2011 projec
Slide 4: Delivering On Shareholder Commitments
Delivering On Shareholder Commitments Path to sustainable profitability High standards of governance Improved visibility, transparency Increased customer value We are making progress on every front and building momentum across multiple channels Increased Shareholder Value *
Slide 5: Delivering On Shareholder Commitments
Delivering On Shareholder Commitments 1. Path to sustainable profitability Increased 2. Increased customer value Shareholder 3. High standards of governance 4. Improved visibility, transparency
Slide 6: Two Primary Growth Platforms
Existing Base Two Primary Growth Platforms: * Growth in Connections Growth in the Value of Every USAT Connection Customers of ePort Connect Connections to ePort Connect Expanded Reach Adjacent Markets Existing Base Accelerate Adoption Continue to grow and diversify customer base Enhance cashless val
Slide 7: Growing And Diversifying Customer Base
Growing And Diversifying Customer Base (1) Company estimate Customer base represents millions of potential connections as adoption rate accelerates Mar 2010 Mar2013 ePort Connect Customers 3 year CAGR of 68% 4,525 customers 2-3M manage potential connections(1) *
Slide 8: Cashless is Delivering Returns
Over the span of 12 months after deploying cashless, average monthly sales, both cash & credit ($), increased 28%; and number of transactions increased 23%. + 79% Cashless is Delivering Returns * + 17% Average Monthly Sales +28% USAT studied 10,000 terminals as a subset of its broader study of 62,0
Slide 9: USAT is Helping its Customers Cash In on Cashless
USAT is Helping its Customers “Cash In” on Cashless * “We believe cashless has contributed to a 20%-30% sales uplift since we first began to deploy cashless payment less than a year ago, with both credit and cash sales up.” “Our existing cashless deployments with USAT have been impactful. Our custom
Slide 10: New ePort G9 and G10 to Bring More Value, Greater Functionality
ePort G10 Value offering for purchase or JumpStart ePort G9 Upgraded to ARM 9 processor Wireless EMV for Interact debit in Canada Added Serial and Pulse interfaces Enhanced MDB diagnostics “High Drive”TM DEX with diagnostics Enhanced consumer engagement and EMV capabilities EMV contactless L1 Contac
Slide 11: Connections Continue To Grow
Connections Continue To Grow * Our strategy is designed to accelerate adoption, increase revenues and create competitive advantage Mar 2010 Mar 2013 39% 3-year CAGR 196,000 connections to ePort Connect service
Slide 12: Leverage Partners To Expand Distribution and Sales Coverage
Verizon Wireless M2M sales team New distribution relationship with Betson New internal sales resources Sales and Distribution Leverage Partners To Expand Distribution and Sales Coverage Building Momentum *
Slide 13: Amusement and Gaming
Amusement and Gaming * Betson’s 12 distribution centers throughout U.S. will support distribution of USAT’s ePort and ePort Connect service Cashless is believed to be in its early stages of transition USAT established several hundred new connections as of March 31, 2013 USAT’s new distribution agree
Slide 14: Continued Expansion Across Adjacent Channels
Adjacent Channels Continued Expansion Across Adjacent Channels Building Momentum New partnership with Setomatic Systems Growing network of ePort SDK and QuickConnect developers *
Slide 15: Laundry
Laundry * Commencing in 4Q FY2013, USAT to be exclusive service provider through its ePort Connect service Initial connections are anticipated to be several thousand as Setomatic’s existing cashless base converts to USAT’s ePort Connect service platform Setomatic and USAT to target market using Seto
Slide 16: Our Expanding Base of Non-Vending Customers
Our Expanding Base of Non-Vending Customers * Setomatic * AMI Entertainment * Eaton Corporation * Starbucks * Ice House * Apple Industries * Philabundance * Non-traditional Vending Amusement & Gaming Office Coffee Car Wash Laundry ePort Connect Service Base as of March 31, 2013 Kiosk
Slide 17: Expanded Services to Increase the Value of Every Connection
Expanded Services Expanded Services to Increase the Value of Every Connection New consumer engagement services New, unprecedented nationwide loyalty program announced with Isis Building Momentum *
Slide 18: ePort Connect Drives Over 80% of Revenues
ePort Connect Drives Over 80% of Revenues * Wireless Connectivity Online Sales Reporting Settlement Data Security Over the Air updates & Remote Data Management Machine Health Alerts Card Processing Services Consumer Services A PCI compliant, end-to-end, suite of cashless payment and telemetry servic
Slide 19: Consumer Engagement Services – A Paradigm Shift
Consumer Engagement Services – A Paradigm Shift * New ePort Connect consumer engagement services will enable cash-based, small ticket business owners to connect with the consumer in ways never possible until cashless. Consumers see the “value” in their spending Brand loyalty Spend more Rewarded more
Slide 20: USA Technologies Prepaid and Loyalty Program
Launch process underway Higher transaction $’s on load/ reload provides transaction processing cost saving opportunities to both USAT and vend operator Features include: Provide consumers with both a mag-stripe card & contactless mobile sticker Secure online web portal to monitor rewards, view promo
Slide 21: Mobile Marketing
Mobile Marketing * Integrates with USAT’s prepaid program Delivers a customized coupon to a smart phone in real time based on location and item Enables USAT customers to develop meaningful one-to-one relationships with end-customers A mobile app developed from the Verizon Wireless/USAT strategic mar
Slide 22: Leveraging Contactless/NFC Touch Points with Isis
Isis™, the mobile commerce joint venture created by AT&T Mobility, T-Mobile USA and Verizon Wireless, plans to leverage USAT’s 103,000 contactless/NFC enabled connections Successful participation in Isis’ soft launch in Salt Lake City and Austin USAT rolling out nationwide loyalty promotion with Isi
Slide 23: Momentum Across All Channels
Momentum Across All Channels Building Momentum Path to sustainable profitability and market leadership Existing Base Sales & Distribution Adjacent Channels Expanded Services 24
Slide 24: Financial Highlights
Financial Highlights 25 Celebrating USAT’s profitability milestone NASDAQ, 2Q Fiscal 2013
Slide 25: Condensed Financials
Condensed Financials 26 Quarter Ended Quarter Ended (#039;s in thousands) 3/31/12 3/31/13 Growth ePort Connect service base 148,000 196,000 32% Total revenues $ 7,527 $ 8,981 19% License & trans. fees “recurring revenues” $ 5,985 $ 7,563 26% Gross profit $ 2,795 $ 3,681 32% Operating income (loss) $ (6
Slide 26: Summary
Summary 27 Positioned to capture benefits of market shift to cashless Growing recurring revenue and customer & connection base Growth strategies building scale and sustainable profitability New verticals and expanded service opportunities
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation 28 Non-GAAP Net Income (Loss) Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) and Net Earnings (Loss) Per Common Share - Diluted to Non-GAAP Net Earnings (Loss) Per Common Share - Diluted Non-GAAP net income (loss) represents GAAP net income (loss) excluding
Slide 28: Steve Herbert Chairman and CEO sherbert@usatech.com David DeMedio CFO ddemedio@usatech.com www.usatech.com 800.633.03…
Steve Herbert Chairman and CEO sherbert@usatech.com David DeMedio CFO ddemedio@usatech.com www.usatech.com NASDAQ: USAT 800.633.0340 Veronica Rosa VP Investor Relations vrosa@usatech.com
Slide 29: Steve Herbert
Steve Herbert Chairman and CEO sherbert@usatech.com www.usatech.com NASDAQ: USAT 800.633.0340 David DeMedio CFO ddemedio@usatech.com Veronica Rosa VP Investor Relations vrosa@usatech.com