US Dataworks, Inc. Announces Fiscal Second Quarter Financial Results

- Company Reports a 48.7% Increase in Revenues and Operating Profit - 


HOUSTON, Nov. 14  /PRNewswire-FirstCall/ -- US Dataworks, Inc. (AMEX:UDW), a leading developer of payment processing solutions, announced today financial results for its fiscal 2009 second quarter and six months results ended September 30, 2008.

Revenues for the second quarter ended September 30, 2008 were $2,030,737 compared with revenues of $1,366,084 for the same period a year ago.  The company reported a gain from operations for the second quarter of $162,702 compared to a loss from operations of $831,446 for the second quarter ended September 30, 2007.  Net loss for the second quarter was $1,841,695 or $0.06 per share, compared to a net loss of $845,758 or $0.03 per share, for the corresponding period in the prior year.

Revenues for the six months ended September 30, 2008 were $4,099,786 compared with the revenues of $2,595,156 for the same period a year ago.  Gain from operations for the six months ended was $269,850 compared to an operating loss of $1,668,516 for the six months ended September 30, 2007.  Net loss for the six months ended was $1,951,176 or $0.06 per share, compared to a net loss of $1,715,019 or $0.05 per share, for the corresponding period in the prior year.

Contributing to the net loss in the three and six months periods were the promissory notes that were paid in full during the quarter on August 13, 2008, resulting in an accounting treatment consistent with FASB No. 133 guidelines. At the time the notes were paid off the derivatives no longer have value associated with the notes, and the discount on note payable must be immediately expensed. At the time the notes were paid in August 2008, $1,747,791 remained on the discount on note payable. This amount was charged to interest expense in the quarter ended September 30, 2008 and accounts for the bulk of the decrease in other income for the three and six months ended September 30, 2008 as compared to the same time period last year.

Charles E. Ramey, Chairman and CEO of US Dataworks said, "We are very encouraged about our continued growth, especially in transactional revenues of 34% in the quarter. This increase was principally due to an increase in the number of customers subject to transactional pricing combined with an increase in transactions processed by our current customers."

Mr. Ramey added, "We were pleased to report our second consecutive quarter of operating profits, which we believe indicates success in our recent restructuring. We believe that we have properly right sized the Company to incur additional growth. Overall, while we have a lot to do, we have accomplished a lot over the last quarter, including the early repayment of the convertible promissory notes, acceptance of our compliance plan by NYSE Alternext US (formerly the American Stock Exchange), adding a major U.S. Federal Government Entity to use our ClearingWorks 3.0, and the launch of a new, patent-pending solution to capture payments remotely and send the images and data directly to a centralized processing system. This last accomplishment will eliminate the need for our clients to rely on a PC to drive the remote capture device. This will minimize our clients' costs as well as help improve their employee productivity. We are excited about this new solution and believe it will assist the company in continuing our growth."

A conference call is scheduled for today, at 11:00 AM EST.  Interested parties may participate in the call by dialing [phone]; international callers dial [phone] about 5-10 minutes prior to 11:00 AM EST. The conference call will also be available on replay starting at 1:00 p.m. EST on November 14, 2008, and ending on November 21, 2008. For the replay, please dial [phone] (replay pin # 5008). The access number for the replay for international callers is [phone] (replay pin # 5008).

About US Dataworks, Inc.

US Dataworks is a developer of payment processing solutions, focused on the Financial Services market, Federal, State and local governments, billers and retailers. Software developed by US Dataworks is designed to enable organizations to transition from traditional paper-based payment and billing processes to electronic solutions that automate end-to-end processes for accepting and clearing checks.  Additional information about US Dataworks is available at http://www.usdataworks.com/.

Except for the historical information contained herein, the matters set forth in this press release, including, but not limited to statements regarding our expectation of continued growth, the benefits of our recent restructuring, the anticipated features and benefits of our new distribution payment capture solution, our vision for payment processing and our new solutions' ability to provide a higher return on investment for our clients. 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 solution to perform as anticipated, our ability to provide long-term customer value and agility, our ability to protect our intellectual property, the Company's position in the marketplace, its ability to develop and timely introduce products that address market demand, the impact of alternative technological advances and competitive products, market fluctuations and other risks detailed from time to time in the SEC reports of US Dataworks, including its annual report on Form 10-KSB for the period ended March 31, 2008 and its quarterly report on Form 10-Q/A for the period ended June 30, 2008. These forward-looking statements speak only as of the date hereof. US Dataworks disclaims any obligation to update these forward-looking statements.

                            US DATAWORKS, INC.
                     QUARTERLY INCOME STATEMENT DATA
                               (UNAUDITED)


                               Three months ended        Six months ended
                                  September 30,           September 30,
                                2008        2007        2008        2007
  Revenues
       Software licensing
        revenues                     -      36,922      30,000     106,922
       Software transactional
        revenues               522,755     389,880   1,060,504     779,389
       Software maintenance
        revenues               219,608     233,796     448,482     425,009
       Software service
        revenues             1,288,374     705,486   2,560,800   1,283,836
       ATM Equipment
        revenues                     -           -           -           -
                             2,030,737   1,366,084   4,099,786   2,595,156
       Discounts on Sales            -           -           -           -
       Net Revenue           2,030,737   1,366,084   4,099,786   2,595,156

  Cost of sales                505,766     509,123   1,043,260     895,082
       Gross profit          1,524,971     856,961   3,056,526   1,700,074

  Operating Expenses
       General and
        administrative       1,314,087   1,642,644   2,690,443   3,283,777
       Depreciation and
        amortization            48,182      45,763      96,233      84,813
       Goodwill Impairment           -           -           -           -

                             1,362,269   1,688,407   2,786,676   3,368,590

  Gain/(Loss) from
   operations                  162,702    (831,446)    269,850  (1,668,516)

  Other income (expense)
       Financing costs        (299,692)    (25,976)   (329,692)    (25,976)
       Interest expense     (2,219,703)     (6,402) (2,493,419)    (12,803)
       Interest expense -
        related parties        (67,922)    (10,938)    (78,829)    (21,875)
       Loss on disposition
        of assets                    -     (44,231)          -     (44,231)
       Gain/Loss on
        Derivatives            580,201      73,235     621,281      58,382
       Other income
        (expense)                2,719           -      59,633           -

                            (2,004,397)    (14,312) (2,221,026)    (46,503)

  Net Income (Loss)         (1,841,695)   (845,758) (1,951,176) (1,715,019)

  Basic and diluted loss
   per share                     (0.06)      (0.03)     $(0.06)      (0.05)

  Basic and diluted
   weighted - average
   (adjusted for reverse stock
   split 1:5) shares
   outstanding              32,349,012  31,549,103  32,243,947  31,425,462



                            US DATAWORKS, INC.
                     Quarterly Balance Sheet Analysis
                 For the quarter ended September 30, 2008
                                 (UNAUDITED)


                      ASSETS                                   September 30,
                                                                    2008
  Current assets
      Cash and cash equivalents                                     322,978
      Accounts receivable, trade                                  1,068,258
      Prepaid expenses and other
       current assets                                               194,055

            Total current assets                                  1,585,291

  Property and equipment, net                                       390,342
  Goodwill, net                                                   4,020,698
  Other assets
      Deposits                                                       32,111
      Deferred Financing Costs                                      378,578
            Total Other Assets                                      410,689

            Total assets                                          6,407,020

      LIABILITIES AND SHAREHOLDERS EQUITY
  Current liabilities
      Notes payable - current                                        35,279
      Note Payable - related party                                4,203,500
      Deferred revenue - current                                    315,324
      Accounts payable                                              657,157
      Accrued expenses                                              179,408
      Accrued Interest - Related Party                               55,044

            Total current liabilities                             5,445,712

  Long term Note Payable                                             35,279

            Total liabilities                                     5,480,991

  Shareholders' equity
      Convertible series B preferred
       stock, 0001 par                                                   55
      Common Stock. 0001 par                                          3,236
      Additional paid in capital                                 64,933,785
      Unissued Common Stock                                          31,367
      Accumulated deficit                                       (64,042,414)

                      Total shareholders' equity                    926,029
            Total liabilities and shareholders' equity            6,407,020



   CONTACTS:
   Charles Ramey, CEO        Donald C. Weinberger
   US Dataworks, Inc.        Wolfe Axelrod Weinberger Assoc. LLC
   Tel. [phone]       Tel. [phone] Fax [phone]


DATASOURCE: US Dataworks, Inc.



CONTACT:  Charles Ramey, CEO of US Dataworks, Inc., [phone]; or

Donald C. Weinberger of Wolfe Axelrod Weinberger Assoc. LLC, [phone],

fax, [phone]



Web site:  http://www.usdataworks.com/ 

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