Attached files
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| 8-K - FORM 8-K - US DATAWORKS INC | v328456_8k.htm |
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NEWS RELEASE |
| Contacts: | Randy Frapart, CFO | |
| US Dataworks, Inc. | ||
| 281-504-8026 | ||
| Ken Dennard, Managing Partner | ||
| DRG&L | ||
| ksdennard@drg-l.com | ||
| 713-529-6600 |
US DATAWORKS ANNOUNCES FISCAL 2013 SECOND QUARTER RESULTS
SUGAR LAND, TX – NOVEMBER 14, 2012 – US Dataworks, Inc. (OTC Bulletin Board: UDWK), a leader in payment processing solutions, today announced its financial results for its fiscal 2013 second quarter ended September 30, 2012.
Revenue for the second quarter of fiscal 2013 was $1.7 million compared to revenue of $1.7 million for the second quarter of fiscal 2012. Net loss for the second quarter of fiscal 2013 was $47,000, or $0.00 loss per share, compared to a net loss of $257,000, or $0.01 loss per share, for the second quarter of fiscal 2012.
Conference Call Information
US Dataworks’ management has scheduled a conference call to review its fiscal 2013 second quarter results on Thursday, November 15, 2012 at 11:00 a.m. Eastern time, 10:00 a.m. Central time. To listen to the call, dial (480) 629-9771 at least 10 minutes before the call begins and ask for US Dataworks’ conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until November 22, 2012. To access the replay, dial (303) 590-3030 using a pass code of 4575648#.
Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting www.usdataworks.com. To listen to the live call on the web, please visit the Company’s web site at least fifteen minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call.
Additional information about Clearingworks as well as US Dataworks can be found on the company’s website at www.clearingworks.com.
About US Dataworks
US Dataworks offers cloud computing on-demand payment processing services with proven enterprise-class payment, deposit, returns processing and powerful payment analytic tools. US Dataworks is a trusted payments provider to financial institutions, telecommunications providers, content providers, corporate billers and government agencies.
US DATAWORKS, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| For the Three Months Ended September 30, | For the Six Months Ended September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues: | ||||||||||||||||
| Software transactional and subscription | $ | 633,794 | $ | 684,908 | $ | 1,283,693 | $ | 1,368,226 | ||||||||
| Software licensing | 7,143 | 7,268 | 9,575 | 98,470 | ||||||||||||
| Software maintenance | 175,043 | 163,637 | 341,962 | 305,634 | ||||||||||||
| Professional services | 884,747 | 826,497 | 1,277,172 | 1,410,515 | ||||||||||||
| Software resale | 8,932 | 4,301 | 8,932 | 76,689 | ||||||||||||
| Total revenues | 1,709,659 | 1,686,611 | 2,921,334 | 3,259,534 | ||||||||||||
| Cost of revenues | 534,692 | 542,733 | 1,022,171 | 1,103,638 | ||||||||||||
| Gross profit | 1,174,967 | 1,143,878 | 1,899,163 | 2,155,896 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 208,849 | 206,366 | 440,463 | 459,607 | ||||||||||||
| Sales and marketing | 224,598 | 385,405 | 503,523 | 688,856 | ||||||||||||
| General and administrative | 595,055 | 638,129 | 1,153,987 | 1,196,338 | ||||||||||||
| Depreciation and amortization | 15,106 | 22,849 | 33,735 | 47,478 | ||||||||||||
| Total operating expenses | 1,043,608 | 1,252,749 | 2,131,708 | 2,392,279 | ||||||||||||
| Net income (loss) from operations | 131,359 | (108,871 | ) | (232,545 | ) | (236,383 | ) | |||||||||
| Other expense: | ||||||||||||||||
| Interest expense | (22,119 | ) | (23,011 | ) | (43,540 | ) | (43,535 | ) | ||||||||
| Interest expense – related parties | (141,115 | ) | (124,970 | ) | (290,488 | ) | (249,127 | ) | ||||||||
| Unrealized loss on fair value of derivative instruments | (11,760 | ) | — | (11,760 | ) | — | ||||||||||
| Total other expense | (174,994 | ) | (147,981 | ) | (345,788 | ) | (292,662 | ) | ||||||||
| Net income (loss) | $ | (43,635 | ) | $ | (256,852 | ) | $ | (578,333 | ) | $ | (529,045 | ) | ||||
| Basic earnings (loss) per share | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | ||||
| Diluted earnings (loss) per share | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | ||||
| Basic weighted-average shares outstanding | 33,551,398 | 33,401,485 | 33,534,183 | 33,382,931 | ||||||||||||
| Diluted weighted-average shares outstanding | 33,551,398 | 33,401,485 | 33,534,183 | 33,382,931 | ||||||||||||
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US DATAWORKS, INC.
UNAUDITED CONDENSED BALANCE SHEETS
| September 30, 2012 | March 31, 2012 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 71,966 | $ | 81,985 | ||||
| Accounts receivable, trade, net of allowance for doubtful accounts at September 30, 2012 and March 31, 2012 of $10,500 and $0, respectively | 914,637 | 437,662 | ||||||
| Prepaid expenses and other current assets | 223,451 | 200,636 | ||||||
| Total current assets | 1,210,054 | 720,283 | ||||||
| Property and equipment, net | 161,765 | 184,387 | ||||||
| Goodwill | 4,020,698 | 4,020,698 | ||||||
| Other assets | 32,111 | 42,354 | ||||||
| Total assets | $ | 5,424,628 | $ | 4,967,722 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long term debt, net of unamortized discount at September 30, 2012 and March 31, 2012 of $4,610 and $0, respectively | $ | 718,207 | $ | 244,667 | ||||
| Current portion of long term debt – related party, net of unamortized discount at September 30, 2012 and March 31, 2012 of $1,152 and $0, respectively | 23,848 | — | ||||||
| Accounts payable | 538,867 | 426,895 | ||||||
| Accrued expenses | 303,067 | 138,033 | ||||||
| Accrued interest – related parties | 490,508 | 383,592 | ||||||
| Deferred revenue | 436,824 | 424,191 | ||||||
| Derivative instruments | 25,160 | — | ||||||
| Total current liabilities | 2,536,481 | 1,617,378 | ||||||
| Long term liabilities: | ||||||||
| Notes payable, net of unamortized discount at September 30, 2012 and March 31, 2012 of $3,810 and $2,557, respectively | 103,617 Q | 109,078 | ||||||
| Notes payable – related parties, net of unamortized discount at September 30, 2012 and March 31, 2012 of $194,819 and $267,689, respectively | 2,922,426 | 2,849,556 | ||||||
| Total long term liabilities | 3,026,043 | 2,958,634 | ||||||
| Total liabilities | 5,562,524 | 4,576,012 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Convertible Series B preferred stock, $0.0001 par value, 700,000 shares authorized, 109,933 shares issued and outstanding, $3.75 liquidation preference, dividends of $479,481 and $458,802 in arrears as of September 30, 2012 and March 31, 2012, respectively | 11 | 11 | ||||||
| Common stock, $0.0001 par value, 90,000,000 shares authorized, 33,551,773 and 33,485,835 shares issued and outstanding as of September 30, 2012 and March 31, 2012, respectively | 3,355 | 3,348 | ||||||
| Additional paid-in-capital | 66,641,880 | 66,593,160 | ||||||
| Accumulated deficit | (66,783,142 | ) | (66,204,809 | ) | ||||
| Total stockholders’ equity (deficit) | (137,896 | ) | 391,710 | |||||
| Total liabilities and stockholders’ equity | $ | 5,424,628 | $ | 4,967,722 | ||||
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US DATAWORKS, INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Six Months Ended September 30,
| 2012 | 2011 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss from operating activities | $ | (578,333 | ) | $ | (529,045 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization of property and equipment | 33,735 | 47,478 | ||||||
| Bad debt expense | 15,581 | — | ||||||
| Amortization of discount on notes payable | 3,618 | — | ||||||
| Amortization of discount on notes payable – related parties | 73,823 | 70,075 | ||||||
| Amortization of deferred financing costs – related parties | 10,243 | 7,269 | ||||||
| Stock based compensation | 50,539 | 19,886 | ||||||
| Unrealized loss on fair value of derivative instruments | 11,760 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (492,556 | ) | 183,010 | |||||
| Prepaid expenses and other current assets | (22,815 | ) | 161,940 | |||||
| Accounts payable | 111,972 | 50,231 | ||||||
| Accrued expenses | 165,034 | 194,460 | ||||||
| Accrued interest – related parties | 106,916 | 149,153 | ||||||
| Deferred revenue | 12,633 | (223,875 | ) | |||||
| Net cash (used in) provided by operating activities | (497,850 | ) | 130,582 | |||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (11,113 | ) | (20,758 | ) | ||||
| Net cash used in investing activities | (11,113 | ) | (20,758 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on note payable to bank | — | (174,294 | ) | |||||
| Payments on secured line of credit | (1,751,383 | ) | (312,690 | ) | ||||
| Proceeds from secured line of credit | 1,507,331 | 209,714 | ||||||
| Payments on factoring facility | (475,214 | ) | — | |||||
| Proceeds from factoring facility | 1,094,860 | — | ||||||
| Proceeds from issuance of notes payables and detachable stock warrants | 125,000 | 125,000 | ||||||
| Payments on equipment loan payable | (1,650 | ) | (1,650 | ) | ||||
| Net cash provided by (used in) financing activities | 498,944 | (153,920 | ) | |||||
| Net decrease in cash and cash equivalents | (10,019 | ) | (44,096 | ) | ||||
| Cash and cash equivalents, beginning of period | 81,985 | 44,096 | ||||||
| Cash and cash equivalents, end of period | $ | 71,966 | $ | — | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Interest paid | $ | 151,138 | $ | 28,110 | ||||
| Income taxes paid | — | — | ||||||
| Supplemental disclosures of non-cash financing activities: | ||||||||
| In conjunction with the extension of certain existing notes payable and the issuance of new notes payable, the Company issued additional common stock warrants and modified the existing notes to add a common stock conversion feature. As a result, the following balance sheet accounts were affected as follows: | ||||||||
| Increased derivative warrant instruments | $ | 13,400 | $ | — | ||||
| Increased note discount on notes payable | 11,588 | — | ||||||
| Decreased additional paid-in-capital | (1,812 | ) | — | |||||
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US DATAWORKS, INC.
INCOME STATEMENT DATA
UNAUDITED Non GAAP Reconciliations
| For the Three Months ended September 30, | For the Six Months ended September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Reconciliation of adjusted EBITDA (See Note 1) | ||||||||||||||||
| Net income (loss) | $ | (43,635 | ) | $ | (256,852 | ) | $ | (578,333 | ) | $ | (529,045 | ) | ||||
| Depreciation and amortization | 15,106 | 22,849 | 33,735 | 47,478 | ||||||||||||
| Stock based compensation expense | 49,012 | 8,349 | 50,539 | 19,886 | ||||||||||||
| Interest | 163,234 | 147,981 | 334,028 | 292,662 | ||||||||||||
| Adjusted EBITDA (See Note 1) | $ | 183,717 | $ | (77,673 | ) | $ | (160,031 | ) | $ | (169,019 | ) | |||||
| Reconciliation of EBITDA margin | ||||||||||||||||
| Revenue | $ | 1,709,659 | $ | 1,686,611 | $ | 2,921,334 | $ | 3,259,534 | ||||||||
| Adjusted EBITDA | $ | 183,717 | $ | (77,673 | ) | $ | (160,031 | ) | $ | (169,019 | ) | |||||
| Margin % | 11 | % | -5 | % | -5 | % | -5 | % | ||||||||
Note 1:
Adjusted EBITDA is a non-GAAP measure we define as earnings before interest, taxes, depreciation and amortization, and equity compensation expense. We use Adjusted EBITDA as a supplemental financial measure to assess (i) our operating and financial performance without regard to the structure of our financing or the historical cost basis in our assets and (ii) our ability to generate cash flow to cover our interest payments. Adjusted EBITDA has limitations as an analytical tool and should not be used as a substitute for financial measures presented in accordance with GAAP, including net income, operating income and cash flow from operating activities. Such limitations include the fact that Adjusted EBITDA does not reflect (i) cash requirements to service interest and principal payments on our debt, (ii) capital expenditure requirements or (iii) income tax payment requirements and income tax accruals. In addition, companies in our industry may define Adjusted EBITDA differently than we do, thereby limiting its usefulness as a comparative measure.
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