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US Dataworks Announces Fiscal 2013 Second Quarter Results

SUGAR LAND, Texas, Nov. 14, 2012 /PRNewswire/ -- 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 $44,000, 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.

 

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, 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

 

 

US DATAWORKS, INC.

UNAUDITED CONDENSED BALANCE SHEETS







ASSETS


September 30, 2012



March 31, 2012



(Unaudited)




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



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








 

 

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)



--


 

 

 

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.











 

SOURCE US Dataworks, Inc.

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