Attached files
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| 8-K - FORM 8-K - US DATAWORKS INC | v335252_8k.htm |
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NEWS RELEASE |
| Contacts: | Randy Frapart, CFO | |
| US Dataworks, Inc. | ||
| 281-504-8026 | ||
FOR IMMEDIATE RELEASE |
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| Ken Dennard, Managing Partner | ||
| Dennard - Lascar Associates, LLC | ||
| Ken@DennardLascar.com | ||
| 713-529-6600 |
US DATAWORKS ANNOUNCES FISCAL 2013 THIRD QUARTER RESULTS
SUGAR LAND, TX – February 14, 2013 – US Dataworks, Inc. (OTC Bulletin Board: UDWK), a leader in payment processing solutions, today announced its financial results for its fiscal 2013 third quarter ended December 31, 2012.
Revenue for the quarter ended December 31, 2012 was $1.8 million as compared to $1.8 million for the quarter ended December 31, 2011.
Net loss for the quarter ended December 31, 2012 was $230,865, or $0.01 per share, as compared to net income of $83,718, or $0.00 per diluted share, for the quarter ended December 31, 2011. Included in the net loss for the quarter ended December 31, 2012 is non-cash stock based compensation expense of $286,791 as compared to non-cash stock based compensation expense of $7,313 for the quarter ended December 31, 2011.
Conference Call Information
US Dataworks’ management has scheduled a conference call to review its fiscal 2013 third quarter results tomorrow February 15, 2013 at 12:00 p.m. Eastern time, 11:00 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 February 22, 2013. To access the replay, dial (303) 590-3030 using a pass code of 4599261#.
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.
About US Dataworks
US Dataworks offers cloud payment processing services with proven enterprise-class payment, deposit, returns processing, and powerful payment analytic tools. US Dataworks' solutions are trusted to process $7 billion in payments each day for utilities, telecommunications providers, content providers, financial institutions and government agencies. Additional information about US Dataworks is available at www.usdataworks.com.
Certain statements made in this press release (other than the historical information contained herein) constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, but not limited to, statements regarding our expectations of our ability to meet our future goals and expectations. Any forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, but not limited to, the failure of our new solutions to perform as anticipated, our ability to provide long-term customer value and agility, our ability to protect our intellectual property, our position in the marketplace, our ability to develop and timely introduce products that address market demand, the impact of alternative technological advances and competitive products, market fluctuations, our ability to repay or refinance our debt, our ability to realize the anticipated benefits from our business initiatives, including our cloud-based solutions, and other risks detailed from time to time in our SEC reports including our Annual Report on Form 10-K for the fiscal year ended March 31, 2012. These forward-looking statements speak only as of the date hereof. US Dataworks disclaims any obligation to update these forward-looking statements.
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US DATAWORKS, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| For the Three Months Ended December 31, | For the Nine Months Ended December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues: | ||||||||||||||||
| Software transactional and subscription revenues | $ | 616,144 | $ | 688,341 | $ | 1,899,838 | $ | 2,056,567 | ||||||||
| Software licensing revenues | 8,587 | 29,483 | 18,161 | 127,953 | ||||||||||||
| Software maintenance revenues | 164,210 | 213,203 | 506,172 | 518,837 | ||||||||||||
| Professional services revenues | 984,100 | 856,323 | 2,261,272 | 2,266,838 | ||||||||||||
| Software resale revenues | 37,686 | 36,027 | 46,617 | 112,716 | ||||||||||||
| Total revenues | 1,810,727 | 1,823,377 | 4,732,060 | 5,082,911 | ||||||||||||
| Cost of revenues | 510,465 | 548,574 | 1,532,635 | 1,652,211 | ||||||||||||
| Gross profit | 1,300,262 | 1,274,803 | 3,199,425 | 3,430,700 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 196,187 | 172,280 | 636,651 | 631,887 | ||||||||||||
| Sales and marketing | 283,926 | 303,401 | 787,449 | 992,258 | ||||||||||||
| General and administrative | 877,020 | 542,002 | 2,031,007 | 1,738,340 | ||||||||||||
| Depreciation and amortization | 13,745 | 19,586 | 47,479 | 67,064 | ||||||||||||
| Total operating expense | 1,370,878 | 1,037,269 | 3,502,586 | 3,429,549 | ||||||||||||
| Income (loss) from operations | (70,616 | ) | 237,534 | (303,161 | ) | 1,151 | ||||||||||
| Other expense: | ||||||||||||||||
| Interest expense | (32,630 | ) | (28,378 | ) | (76,170 | ) | (71,913 | ) | ||||||||
| Interest expense – related party | (142,077 | ) | (125,438 | ) | (432,565 | ) | (374,566 | ) | ||||||||
| Unrealized gain on fair value of derivative instruments | 14,458 | 2,699 | ||||||||||||||
| Total other expenses | (160,249 | ) | (153,816 | ) | (506,036 | ) | (446,479 | ) | ||||||||
| Net income (loss) | $ | (230,865 | ) | $ | 83,718 | $ | (809,197 | ) | $ | (445,328 | ) | |||||
| Basic earnings (loss) per share | $ | (0.01 | ) | (0.02 | ) | $ | (0.01 | ) | ||||||||
| Diluted earnings (loss) per share | $ | (0.01 | ) | (0.02 | ) | $ | (0.01 | ) | ||||||||
| Basic weighted-average shares outstanding | 33,583,606 | 33,425,606 | 33,550,662 | 33,397,300 | ||||||||||||
| Diluted weighted-average shares outstanding | 33,583,606 | 33,430,151 | 33,550,662 | 33,397,300 | ||||||||||||
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US DATAWORKS, INC.
UNAUDITED CONDENSED BALANCE SHEETS
| ASSETS | December 31, 2012 | March 31, 2012 | ||||||
| (Unaudited) | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 57,527 | $ | 81,985 | ||||
| Accounts receivable, trade, net of allowance for doubtful accounts at December 31, 2012 and March 31, 2012 of $10,500 and $0, respectively | 698,638 | 437,662 | ||||||
| Prepaid expenses and other current assets | 173,208 | 200,636 | ||||||
| Total current assets | 929,373 | 720,283 | ||||||
| Property and equipment, net | 152,060 | 184,387 | ||||||
| Goodwill | 4,020,698 | 4,020,698 | ||||||
| Other assets | 29,751 | 42,354 | ||||||
| Total assets | $ | 5,131,882 | $ | 4,967,722 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long term debt, net of unamortized discount at December 31, 2012 and March 31, 2012 of $3,264 and $0, respectively | $ | 346,095 | $ | 244,667 | ||||
| Current portion of long term debt – related party, net of unamortized discount at December 31, 2012 and March 31, 2012 of $812 and $0, respectively | 24,188 | -- | ||||||
| Accounts payable | 435,895 | 426,895 | ||||||
| Accrued expenses | 324,436 | 138,033 | ||||||
| Accrued interest – related parties | 525,737 | 383,592 | ||||||
| Deferred revenue | 483,185 | 424,191 | ||||||
| Derivative instruments | 10,701 | -- | ||||||
| Total current liabilities | 2,150,237 | 1,617,378 | ||||||
| Long term liabilities: | ||||||||
| Notes payable, net of unamortized discount at December 31, 2012 and March 31, 2012 of $3,371 and $2,557, respectively | 103,231 | 109,078 | ||||||
| Notes payable – related parties, net of unamortized discount at December 31, 2012 and March 31, 2012 of $156,862 and $267,689, respectively | 2,960,383 | 2,849,556 | ||||||
| Total long term liabilities | 3,063,614 | 2,958,634 | ||||||
| Total liabilities | 5,213,851 | 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 $489,878 and $458,802 in arrears as of December 31, 2012 and March 31, 2012, respectively | 11 | 11 | ||||||
| Common stock, $0.0001 par value, 90,000,000 shares authorized, 33,583,606 and 33,485,835 shares issued and outstanding as of December 31, 2012 and March 31, 2012, respectively | 3,358 | 3,348 | ||||||
| Additional paid-in-capital | 66,928,668 | 66,593,160 | ||||||
| Accumulated deficit | (67,014,006 | (66,204,809 | ) | |||||
| Total stockholders’ equity (deficit) | (81,969 | 391,710 | ||||||
| Total liabilities and stockholders’ equity (deficit) | $ | 5,131,882 | $ | 4,967,722 | ||||
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US DATAWORKS, INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Nine Months Ended December 31,
| 2012 | 2011 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss from operating activities | $ | (809,197 | ) | $ | (445,328 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization of property and equipment | 47,479 | 67,064 | ||||||
| Bad debt expense | 15,581 | -- | ||||||
| Amortization of discount on notes payable | 5,854 | 2,792 | ||||||
| Amortization of discount on notes payable – related parties | 111,670 | 106,006 | ||||||
| Amortization of deferred financing costs – related parties | 12,603 | 17,513 | ||||||
| Stock based compensation | 337,330 | 27,199 | ||||||
| Unrealized loss on fair value of derivative instruments | (2,699 | ) | -- | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (276,557 | ) | 311,154 | |||||
| Prepaid expenses and other current assets | 27,428 | 190,714 | ||||||
| Accounts payable | 9,000 | (172,301 | ) | |||||
| Accrued expenses | 186,403 | 135,095 | ||||||
| Accrued interest – related parties | 142,145 | 238,664 | ||||||
| Deferred revenue | 58,994 | (142,272 | ) | |||||
| Net cash (used in) provided by operating activities | (133,966 | ) | 336,300 | |||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (15,152 | ) | (23,015 | ) | ||||
| Net cash used in investing activities | (15,152 | ) | (23,015 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on note payable to bank | -- | (808,562 | ) | |||||
| Payments on secured line of credit | (1,751,383 | ) | --- | |||||
| Proceeds from secured line of credit | 1,507,331 | 445,902 | ||||||
| Payments on factoring facility | (1,960,051 | ) | -- | |||||
| Proceeds from factoring facility | 2,206,238 | -- | ||||||
| Proceeds from issuance of notes payables and detachable stock warrants | 125,000 | 125,000 | ||||||
| Payments on equipment loan payable | (2,475 | ) | (2,476 | ) | ||||
| Net cash provided by (used in) financing activities | 124,660 | (240,136 | ) | |||||
| Net decrease in cash and cash equivalents | (24,458 | ) | 73,149 | |||||
| Cash and cash equivalents, beginning of period | 81,985 | 44,096 | ||||||
| Cash and cash equivalents, end of period | $ | 57,527 | $ | 117,245 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Interest paid | $ | 243,447 | $ | 44,036 | ||||
| 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
Non GAAP Reconciliations
For the three months and nine months ended December 31, 2012 and 2011
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Reconciliation of Adjusted EBITDA (Note 1) | ||||||||||||||||
| Net income (loss) | $ | (203,865 | ) | $ | 83,718 | $ | (809,197 | ) | $ | (445,328 | ) | |||||
| Depreciation and amortization | 13,745 | 19,586 | 47,479 | 67,064 | ||||||||||||
| Stock based compensation expense | 286,791 | 7,313 | 337,330 | 27,199 | ||||||||||||
| Interest expense | 174,707 | 153,816 | 508,735 | 446,479 | ||||||||||||
| Unrealized gain on fair value of derivative instruments | (14,458 | ) | - | (2,699 | ) | - | ||||||||||
| Adjusted EBITDA (See Note 1) | $ | 229,920 | $ | 264,433 | $ | 81,648 | $ | 95,414 | ||||||||
| Reconciliation of EBITDA margin | ||||||||||||||||
| Revenue | $ | 1,810,727 | $ | 1,823,377 | $ | 4,732,060 | $ | 5,082,911 | ||||||||
| Adjusted EBITDA | $ | 229,920 | $ | 264,433 | $ | 81,648 | $ | 95,414 | ||||||||
| Margin % | 13 | % | 15 | % | 2 | % | 2 | % | ||||||||
Note 1:
Adjusted EBITDA is a non-GAAP measure we define as earnings before interest, taxes, depreciation and amortization, equity compensation expense and unrealized gain on fair value of derivative instruments. 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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