US Dataworks, Inc. Announces Fiscal Second Quarter Financial Results

HOUSTON, Nov. 16  /PRNewswire-FirstCall/ -- US Dataworks, Inc. (AMEX:UDW), a leading developer of payment processing solutions, announced today financial results for its fiscal 2010 second quarter and six months results ended September 30, 2009.

Revenues for the second quarter ended September 30, 2009 were $2,087,189 compared with revenues of $2,030,737 for the same period a year ago.  The company reported a gain from operations for the second quarter of $129,813 compared to $162,703 for the second quarter ended September 30, 2008.  Net loss for the second quarter was $154,750 or $0.00 per share, compared to a net loss of $1,841,695 or $0.06 per share, for the corresponding period in the prior year.

Revenues for the six months ended September 30, 2009 were $4,095,650 compared with revenues of $4,099,786 for the same period a year ago.  Gain from operations for the six months ended September 30, 2009 was $371,379 compared to $269,850 for the six months ended September 30, 2008.  Net loss for the six months ended September 30, 2009 was $178,663 or $0.01 per share, compared to a net loss of $1,951,176 or $0.06 per share, for the corresponding period in the prior year.

Charles E. Ramey, Chairman and CEO of US Dataworks said, "The second quarter financial results signals how our Company is performing during these difficult economic times. Revenues increased slightly, by 3%, due to our professional services contract with a United States government entity, which enabled us to report positive cash flow on a non-GAAP basis (adjusted EBITDA). It is relationships like this one that has enabled us to build a solid foundation and remain fiscally sound. The challenges that we see in the near term are coming directly from the slowdown in the economy, which has taken a slight toll on our transactional revenues. While we await the expected economic recovery, our Company is currently well-positioned to convert our sales pipeline into revenue when these potential customers are ready to transition to electronic solutions from traditional means."

A conference call is scheduled for today, at 11:00 AM ET.  Interested parties may participate in the call by dialing [phone]; international callers dial [phone], 5-10 minutes prior to 11:00 AM ET.  The conference call will also be available on replay starting at 2:00 p.m. ET on November 16, 2009, and ending on November 23, 2009.  For the replay, please dial [phone] (replay account # 269, replay conference #337135).  The access number for the replay for international callers is [phone] (replay account # 269, replay conference #337135).

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 payments.  Additional information about US Dataworks is available at http://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 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, 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 avoid being delisted from the NYSE Alternext US (formerly the American Stock Exchange), our ability to repay, refinance or extend the maturity date of our debt, and other risks detailed from time to time in the SEC reports of US Dataworks, including its annual report on Form 10-K for the year ended March 31, 2009 and its quarterly report on Form 10-Q for the quarter ended September 30, 2009.  These forward-looking statements speak only as of the date hereof. US Dataworks disclaims any obligation to update these forward-looking statements.

  - Tables to Follow -



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

                                Three Months Ended      Six Months Ended
                                   September 30,          September 30,
                                 2009       2008        2009        2008
  Revenues
     Software licensing revenues      -          -           -      30,000
     Software transactional
      revenues, net             518,725    522,755   1,039,968   1,060,504
     Software maintenance
      revenues                  208,488    219,608     420,859     448,482
     Software service
      revenues                1,359,976  1,288,374   2,634,823   2,560,800
     ATM Equipment revenues           -          -           -           -
                              2,087,189  2,030,737   4,095,650   4,099,786
     Discounts on Sales                          -                       -
     Net Revenue              2,087,189  2,030,737   4,095,650   4,099,786

  Cost of sales                 670,318    651,401   1,346,689   1,397,580
     Gross profit             1,416,871  1,379,336   2,748,961   2,702,206

  Operating Expenses
     Research and development   217,254    256,152     430,191     517,643
     Sales and marketing        237,290    116,859     499,590     311,556
     General and
      administrative            793,496    795,441   1,365,137   1,506,924
     Depreciation and
      amortization               39,018     48,182      82,664      96,233
     Goodwill Impairment              -          -           -           -
                              1,287,058  1,216,634   2,377,582   2,432,356

  Gain from operations          129,813    162,703     371,379     269,850

  Other income (expense)
     Financing costs            (94,979)  (299,692)   (118,248)   (329,692)
     Interest expense           (55,518)(2,219,703)   (165,119) (2,493,419)
     Interest expense -
      related parties          (134,066)   (67,922)   (266,675)    (78,829)
     Gain/Loss on Derivatives         -    580,201           -     621,281
     Other income (expense)           -      2,719           -      59,633
                               (284,563)(2,004,397)   (550,042) (2,221,026)

  (Loss) before provision for
   income taxes                (154,750)(1,841,695)   (178,663) (1,951,176)

  Provision for income taxes
  Net (Loss)                   (154,750)(1,841,695)   (178,663) (1,951,176)

  Basic and diluted gain/
   (loss) per share               (0.00)     (0.06)     $(0.01)      (0.06)

  Basic and diluted weighted
   average (adjusted for
   reverse stock split 1:5)
   shares outstanding        32,849,330 32,349,012  32,815,014  32,243,927



                            US DATAWORKS, INC.
                       Quarterly Balance Sheet Data
                   For the quarter ended September 30, 2009
                               (UNAUDITED)

                         ASSETS                                  September
                                                                   2009
  Current assets
     Cash and cash equivalents                                    151,827
     Accounts receivable, trade                                   971,391
     Prepaid expenses and other current assets                    377,494

        Total current assets                                    1,500,712

  Property and equipment, net                                     223,119
  Goodwill, net                                                 4,020,698
  Other assets                                                     32,111

        Total assets                                            5,776,640

           LIABILITIES AND SHAREHOLDERS EQUITY
  Current liabilities
     Accounts payable                                             183,376
     Accrued expenses                                             181,794
     Accrued Interest - related Parties                            23,656
     Deferred revenue, current                                    285,721
     Note payable, current                                         35,279
     Note Payable - Related Party- CRJN,
      net unamortized discount of $277,094                      3,815,301

        Total current liabilities                               4,525,127

        Total liabilities                                       4,525,127

  Shareholders' equity
     Convertible series B preferred stock, 0001 par                    11
     Common Stock. 0001 par                                         3,285
     Additional paid in capital                                65,502,419
     Unissued Common Stock                                              9
     Accumulated deficit                                      (64,254,211)

        Total shareholders' equity                              1,251,513
        Total liabilities and shareholders' equity              5,776,640


                               US DATAWORKS, INC.
                             INCOME STATEMENT DATA
                            Non GAAP Reconciliations
                For the quarters ended September 30, 2009 and 2008

                                               2009              2008
  Reconciliation of Adjusted
   EBITDA (See Note 1)
     Net Income                             $(154,750)      $(1,841,694)
     Depreciation and Amortization
      (incl. loss on disposal of assets)       39,018            48,182
     Stock Based compensation expense          77,176            68,966
     Other (income) expense                   284,563         2,004,397
     Adjusted EBITDA (See Note 1)             246,007           279,851

  Reconciliation of EBITDA margin
     Revenue                               $2,087,189        $2,030,737
     Adjusted EBITDA                          246,007           279,851
     Margin %                                     12%               14%

  Notes:


(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.

  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], for US Dataworks, Inc.



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

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