Good day and welcome to USA Technologies Second Quarter Fiscal 2013 Earnings Conference Call. Today’s conference call is being recorded. At this time, I would like to turn the call over to Veronica Rosa, Vice President of Investor Relations. Please go ahead.

Good morning and welcome to USA Technologies second quarter conference call. Before beginning today’s call, I would like to remind our listeners that all statements other than statements of historical fact included in this call 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, business, financial market and economic conditions. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and the Form 10-Q report for the quarter ended September 30, 2012. USA Technologies’ financial results for the quarter and six months ended December 31, 2012 will be reported in our Form 10-Q that we intend to file with the Securities and Exchange Commission by its due date. Listeners are cautioned not to place undue reliance on any such forward-looking statements which reflect management’s view only as of the date they are made. USA Technologies undertakes no obligation to update our forward-looking statements whether as a result of new information, future events or otherwise. This call will also include a discussion of certain non-GAAP financial measures that we believe are useful for understanding our ongoing operations. These non-GAAP financial measures are supplemental to and not a substitute for GAAP financial measures such as net income or loss. Details of these items and a reconciliation of non-GAAP financial measures to GAAP financial measures can be found in our press release issued this morning and on the Investor Relations page of our website www.usatech.com. On our call this morning are Stephen Herbert, Chairman and Chief Executive Officer; and Dave DeMedio, Chief Financial Officer. Steve will begin our discussion this morning with an overview of the quarter as it relates to our longer-term strategy and objective. And then Dave will go through the financial highlights for the second quarter in more detail. Steve will then wrap up the call with some closing comments before opening the call for questions. At this point, I’d like to introduce Steve Herbert, Chairman and CEO of USA Technologies. Please go ahead, Steve.

Thank you, Ronnie, and good morning, everyone. We’re delighted to be conducting our second quarter earnings call from the NASDAQ MarketSite in Times Square this morning. Later today, we’ll bring the NASDAQ Closing Bell and celebration of the turnaround and reshaping of our company in the last year, culminating with a major milestone event for USAT that was reported to that profitability. USAT pioneered wireless, cashless, and telemetry for the self serve retail market. So achieving this, the kind of scale that we’re celebrating today at a time when many exciting things are beginning to happen in this space is thrilling for the company and its shareholders. The following financial highlights for the second quarter of fiscal 2013, represents the combination of the successful execution of the plan we set forth in a letter to our shareholders just over a year ago. We achieved non-GAAP net income of $557,000 and GAAP net income of $154,000 for the second quarter. In the second quarter a year ago, those numbers were a non-GAAP net loss of approximately $1 million and a GAAP net loss of $1.8 million. Revenues for the second quarter came in at $8.9 million, up 29% from the second quarter a year ago with license and transaction fees specifically, our recurring revenues from our ePort Connect service delivering 83% of our total revenue mix this quarter. Gross profit in our second fiscal quarter grew by 86% year-over-year and adjusted EBITDA grew to $1.8 million in the second quarter, a $2.7 million swing from the second quarter a year ago, a measure that reflects the steady improvements to revenue, cost and expense leverage over the past four quarters. Our turnaround plan was concise and focused with four primary objectives; getting the company to profitability, broadening and strengthening corporate governance, enhancing…

Thank you, Steve. We are very pleased to crossover into profitability this quarter by reporting both non-GAAP net income of $557,000 as well as GAAP net income of $154,000. Our stated target was non-GAAP profitability which removes non-operational adjustments like the fair value of warrant adjustments. But the financial results are strong enough for us to achieve GAAP profitability for the second consecutive quarter. In comparison, for the same period a year ago, non-GAAP net loss was $997,000 and GAAP net loss was $1.8 million. Net income for common shares for the quarter was $0.0 per share and on a non-GAAP basis, net income for common share was $0.02, compared to minus $0.03 for 2Q a year ago. There were no preferred dividends declared this quarter as that occurs in our first and third fiscal quarters. For the near-term, we will continue to use a non-GAAP measure to remove significant non-operational adjustments to our P&L as we think this allows for a better view of our progress and our potential. As a reminder, these non-GAAP reconciliations can be found in the Investor Relation section of our website, www.usatech.com with the other second quarter information. As Steve mentioned, reaching profitability was driven by a number of factors including service programs and customer acquisition investments we have made to drive adoption throughout the small ticket unattended market. A 43% three-year compounded annual growth rate in connections and a corresponding 74% compounded annual growth rate in customers has driven our March to profitability. As part of our turnaround plan, we accelerated our path toward profitability via improvements in gross margins including negotiating new and/or renegotiating existing supplier contracts that leveraged our growing scale, as well as to operating expense controls to obtain greater operating leverage as we continue to grow. With 83% of…

Thank you, David. It’s great to be here today to celebrate this great milestone for USAT. We’ve made great strides in the business over the last year and more importantly, plan a powerful siege relative to our future. Thank you all again for joining us here today and for being a part of the USAT story. Check us out on NASDAQ.com, Bloomberg, Fox or at CNBC as we ring the closing bell at NASDAQ this afternoon. At this point, we’re happy to take any questions. Operator, can you please open the call and provide instructions for our Q&A session? Thank you.

Thank you. (Operator Instructions) And our first question comes from Mike Latimore of Northland Capital. Please proceed. Michael Latimore – Northland Capital Markets: I guess first on connections, you’re down to 22,000 in the first half of the year. So that’s, I guess maybe 38,000 you need to kind of get you to the second half of the year goals. I guess what do you see as sort of different in the second half of the year that would drive that growth? And maybe talk a little bit about seasonality here?

Sure. Mike, thank you very much. It’s Steve Herbert. I appreciate your question. One of the things that is a trend in our business in the second half is typically that we have a strong second half. As an example, in the June 30 quarter of last fiscal year, we had 16,000 connections. So we do expect to have a strong second half. In addition, I think, both Dave and I alluded to a pipeline that we feel confident about that will help to fuel connections as we move forward through the second half of the fiscal year. Did you have a follow-up? Michael Latimore – Northland Capital Markets: Yeah, I know your connections are usually pretty diverse. But do you expect one or two customers to represent, I don’t know, 10% or 20% over the connections in the second half?

I don’t think we do, Mike. The customer base is becoming more diverse by the day. With 4,100 customers on the service, we have a significant amount of connections coming from existing customers, which will be a major focus for us. And many of those are in the vending industry as David mentioned, however, we’re getting some impressive traction in some of these other markets as well. Some of the markets that we mentioned earlier such as kiosk, laundry et cetera. So I personally don’t see as to bring it back full circle, I don’t see at this point a major concentration. Michael Latimore – Northland Capital Markets: Okay. And then I wasn’t completely clear on your JumpStart comments. Can you comment or refresh us on what’s the original goal of JumpStart as a percent of connections or you think it might be for the year now?

Mike, this is David DeMedio. Our original goal at the beginning of the year was to have JumpStart be about 55% to 60% of all connections, as a percent of all connections. And it’s been trending higher than that in the first fiscal half of the year. The most recent quarter, 2Q quarter was around 88% of connection. In terms of overall, when we end the year, I think we’ll probably end the year slightly higher than the 55% to 60% of all connections. But nonetheless, we’re expecting connections from other places in the second half to come away from JumpStart. Michael Latimore – Northland Capital Markets: And just last, you’ve historically reported transaction volume and number of transactions in the quarter. Do you have any of that data?

Well, we get $51 million of transactions handled. And the number of transactions, the average ticket for transaction was around $1.65. I think that translates to around $29 million transactions. Michael Latimore – Northland Capital Markets: Okay, great. Last question, just the SG&A came down, I think about $500,000 sequentially. I know you touched on it from a high level. But can you talk a little bit about, was that mostly employee costs or were those outsourced consultants or you have a pretty big change sequentially. What were the main factors there, employee versus the outsource cost versus our marketing?

Well, Mike, this is Dave again. If you remember in Q1 of our fiscal year, we had several hundred thousand dollars related, that carried over into that quarter, related to proxy. That went away in this quarter, Q2, we didn’t have anything related to that issue in the summer. So that was one of the reasons for the decrease. And then there are other reasons for the decrease really relate to year end type of accrual counting, payroll tax, PTO, those types of things. We lend it itself to reduce expenses in this quarter compared to Q1, great. Michael Latimore – Northland Capital: Yeah. Thanks a lot.

The next question comes from Charles Bellows of White Pine Capital. Please proceed. Charles Bellows – White Pine Capital: Plans and what do you see the fallout being?

Charles Bellows – White Pine Capital: What do you see from the Crane acquisition of MEI and how does that affect your strategies?

Thank you for the question, it’s Steve Herbert here. We actually – we do business with both companies. We being primarily a service business with 83% of our revenues coming from our service, and the two of those companies, those being hardware companies, Crane even before they purchased MEI had a payment systems division called Forenza and they make vending machines as well. So they’re very much a hardware company and MEI too is a device company. And we actually have many devices from both of those companies on our service. So the combination of the two businesses, we see as in part, a validation of the marketplace in terms of where it’s headed. And in addition to that, perhaps after their integration we’ll be doing business with one company instead of two. Charles Bellows – White Pine Capital: Okay. So you do not see a negative fallout from this?

Well, not at this point, not from what we can see. We don’t see it as an existential threat. As I mentioned, we’re in business with both companies. We have healthy relationships. So that’s definitely not the way we view it. Charles Bellows – White Pine Capital: Okay. Great, thanks.

(Operator Instructions) The next question comes from Hamed Khorsand of BWS Financial. Please proceed. Hamed Khorsand – BWS Financial: Good morning. Just, really one question here. Your customer count has increased year-over-year by 66%. But if I look at total unit growth, that’s only up 37% year-over-year. And so what’s the catalyst, especially when you gave earlier comments that you’ve only really penetrated less than 200,000 of the 2 million installed base. So could you comment on that please?

Well, in the early days of course, one targets the larger players. And we had a couple of very large hits, good hits in the marketplace, as we got started. Examples include things like our work with seven of the top nine Coca-Cola bottlers, in addition to that, our work with compass, which is a relationship that still continues to build and we’re many years into it. They’re the largest – their canteen division is the largest independent vending operating company in the United States if not the world. So and also I would mention, our work with MasterCard, VISA, and Discover drove through our company about $10 million in funding to place terminals in the marketplace with our customers. So with a limited number of large customers in the early days, you have those big hits. Now, we’re making our way through the markets and some of our customers are smaller. So you’re going to see – I think you’re going to see an evolution of that type. Hamed Khorsand – BWS Financial: Okay. But going back – the second part of my question was, you are less than 10% penetrated, right, up to what you’re saying your customers could install, the wireless – the credit card readers. So what’s going to be the catalyst to get these guys to adopt your services?

Well, that’s a different question and a great question. We are moving some very impressive data. We mentioned our knowledge base, but we have data from somewhere in the neighborhood of 75,000 locations that we watch very closely. And one of the things that will motivate our customers to drive penetration, further penetration into their business will be showing then good data, showing them good results, increases in net operating profit, increases in average ticket et cetera. Those are the types of things that will help our customers move further into their businesses. And that is a major priority for our team. Hamed Khorsand – BWS Financial: Okay. Thank you. Stephen P. Herbert – Chairman and Chief Executive Officer: Sure.

I’m showing no further questions in the queue. Ladies and gentlemen, thank you for participating in today’s conference. This does concludes the program and you may all disconnect. Everyone have a good day.