Global Payment Technologies Announces Fiscal 2008 Second-Quarter Results

  
    
  
  
    
      Global Payment Technologies, Inc. (Over the Counter Bulletin Board 
      Symbol: GPTX.OB) ("GPT"), a leading manufacturer and innovator of 
      currency acceptance systems used in the worldwide gaming, beverage, and 
      vending industries, today announced its fiscal 2008 second-quarter 
      results.
    
    
      
        
          Summary of Financial Highlights

          
            (Dollar amounts in 000s, except per share data)
          
        
      
      
        
          
             
          
        
        
          
            Three Months Ended 3/31
          
        
        
           
        
        
          
            Six Months Ended 3/31
          
        
      
      
        
           
        
        
          2008
        
        
           
        
        
           
        
        
          2007
        
        
           
        
        
           
        
        
          Change
        
        
           
        
        
          2008
        
        
           
        
        
           
        
        
          2007
        
        
           
        
        
           
        
        
          Change
        
      
      
        
          Net Sales
        
        
          $2,921
        
        
           
        
        
           
        
        
          $2,802
        
        
           
        
        
           
        
        
          4.2
        
        
          %
        
        
           
        
        
          $5,432
        
        
           
        
        
           
        
        
          $6,766
        
        
           
        
        
           
        
        
          (19.7
        
        
          %)
        
      
      
        
          Net (Loss)
        
        
          
            ($1,060
          
        
        
          )
        
        
           
        
        
          
            ($1,330
          
        
        
          )
        
        
           
        
        
          20.3
        
        
          %
        
        
           
        
        
          ($2,004
        
        
          )
        
        
           
        
        
          ($2,579
        
        
          )
        
        
           
        
        
          22.3
        
        
          %
        
      
      
        
          Net (Loss) Per Share
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
          Basic
        
        
          ($0.15
        
        
          )
        
        
        
        
          ($0.21
        
        
          )
        
        
        
        
          $0.06
        
        
        
        
        
        
          ($0.29
        
        
          )
        
        
        
        
          ($0.41
        
        
          )
        
        
        
        
          $0.12
        
        
        
      
      
        
          Diluted
        
        
          ($0.15
        
        
          )
        
        
           
        
        
          ($0.21
        
        
          )
        
        
           
        
        
          $0.06
        
        
           
        
        
           
        
        
          ($0.29
        
        
          )
        
        
           
        
        
          ($0.41
        
        
          )
        
        
           
        
        
          $0.12
        
        
           
        
      
    
    
      Andre Soussa, who was named Chairman of the Board and Chief Executive 
      Officer on February 5, 2008 stated, “I stepped 
      into the role of Chairman and CEO in February 2008 and immediately set 
      up several initiatives aimed at stabilizing the company in order to 
      eliminate the losses. The results in this quarter include losses that 
      are a legacy of prior activities in the company and approximately $200 
      thousand in expenses related to the recently completed Securities 
      Purchase Agreement. In the short time frame that I have had in this 
      quarter, excluding the expenses related to the financing, we were able 
      to minimize the net losses to the lowest level in 6 quarters. Our sales 
      for the second quarter ended March 31, 2008, exceeded quarterly sales 
      for the comparable period last year as well as this year’s 
      first quarter sales and the fourth quarter of last year. Cost reduction 
      measures as well as steps to maintain our material supply chain were 
      employed to reduce the losses during this quarter.
    
    
      Our faithful customers have supported us over this period and our 
      backlog of sales orders remains strong.
    
    
      In the past two months we have spent a considerable amount of time and 
      effort reviewing all facets of the business. There is great room for 
      improvement and we are currently defining the exact process required to 
      rebuild this company. We will communicate our vision in the very near 
      future via further press releases. We will be implementing an aggressive 
      game plan aimed at reinvigorating the company to a NEW GPT.”
    
    
      Net sales increased by 4.2%, or $119,000, to $2,921,000 in the three 
      months ended March 31, 2008 as compared with $2,802,000 in the 
      comparative prior-year period. This sales increase was due to increased 
      sales in the gaming market.
    
    
      Net sales decreased by 19.7%, or $1,334,000, to $5,432,000 in the six 
      months ended March 31, 2008 as compared with $6,766,000 in the 
      comparative prior-year period. This sales decrease was due to $843,000 
      decreased sales to the gaming market and $491,000 decreased sales to the 
      beverage and vending market.
    
    
      Gross profit decreased to $584,000, or 20% of net sales, in the three 
      months ended March 31, 2008 as compared with $627,000, or 22.4% of net 
      sales, in the comparative prior-year period. The most significant factor 
      affecting the Company's gross profit percentage is the unit sales levels 
      achieved and their relationship to manufacturing costs.
    
    
      Gross profit decreased to $1,101,000, or 20.3% of net sales, in the six 
      months ended March 31, 2008 as compared with $1,339,000, or 19.8% of net 
      sales, in the comparative prior-year period. The most significant factor 
      affecting the Company's gross profit percentage is the unit sales levels 
      achieved and their relationship to manufacturing costs.
    
    
      Operating expenses decreased to $1,582,000, or 54.2% of sales, in the 
      three months ended March 31, 2008 as compared with $1,939,000, or 69.2% 
      of sales, in the comparative prior-year period. This decrease of 
      $357,000 is primarily the result of lower payroll, travel, and 
      consulting expenses. The Company also reduced its operating expenses by 
      moving to a smaller facility, which is more appropriate to the size of 
      the business in July 2007. The Company charged $58,000 to operations 
      during the three months ended March 31, 2008 and March 31, 2007 
      representing the fair value of stock options granted to employees, 
      officers and directors.
    
    
      Operating expenses decreased to $3,035,000, or 55.9% of sales, in the 
      six months ended March 31, 2008 as compared with $3,889,000, or 57.5% of 
      sales, in the comparative prior-year period. This decrease of $854,000 
      is primarily the result of lower payroll, travel, and consulting 
      expenses. The Company also reduced its operating expenses by moving to a 
      smaller facility, which is more appropriate to the size of the business 
      in July 2007. The Company charged $77,000 to operations during the six 
      months ended March 31, 2008 as compared to $58,000 in the prior year 
      representing the fair value of stock options granted to employees, 
      officers and directors.
    
    
      Interest expense increased to $60,000 as compared to interest expense of 
      $16,000 in the comparable prior-year period. The increase was primarily 
      associated with the issuance to GPTA of a one-year secured term note in 
      the principal amount of $440,000 that bears interest at a rate equal to 
      the prime rate plus 3.0% and the amortization of the warrants issued in 
      connection with the convertible note of $400,000. The convertible note 
      matures in June 2009.
    
    
      Interest expense increased to $62,000 as compared to interest expense of 
      $25,000 in the comparable prior-year period. The increase was primarily 
      associated with the issuance to GPTA of a one-year secured term note in 
      the principal amount of $440,000 that bears interest at a rate equal to 
      the prime rate plus 3.0% and the amortization of the warrants issued in 
      connection with the convertible note of $400,000. The convertible note 
      matures in June 2009. .
    
    
      With respect to the provision for income taxes, the effective rate was 
      0.9% as compared with 0.1% in the prior-year period. The Company 
      provided a full valuation allowance against its deferred income tax 
      assets in the fourth quarter of fiscal 2003 and continues to provide a 
      full valuation allowance at March 31, 2008. The valuation allowance is 
      subject to adjustment based upon the Company’s 
      ongoing assessment of its future taxable income and may be wholly or 
      partially reversed in the future.
    
    
      With respect to the provision for income taxes, the effective rate was 
      0.9% as compared with 0.1% in the prior-year period. The Company 
      provided a full valuation allowance against its deferred income tax 
      assets in the fourth quarter of fiscal 2003 and continues to provide a 
      full valuation allowance at March 31, 2008. The valuation allowance is 
      subject to adjustment based upon the Company’s 
      ongoing assessment of its future taxable income and may be wholly or 
      partially reversed in the future.
    
    
      Net loss for the quarter ended March 31, 2008 was $1,060,000, or $0.15 
      per share, as compared with $1,330,000, or ($0.21) per share, in the 
      comparative prior-year period.
    
    
      Net loss for the six months ended March 31, 2008 was $2,004,000, or 
      $0.29 per share, as compared with $2,579,000, or $0.41 per share, in the 
      comparative prior-year period.
    
    
      Global Payment Technologies, Inc. is a United States-based designer, 
      manufacturer, and marketer of automated currency acceptance and 
      validation systems used to receive and authenticate currencies in a 
      variety of payment applications worldwide. GPT's proprietary and 
      patented technologies are among the most advanced in the industry. 
      Please visit the GPT web site for more information at http://www.gpt.com.
    
    
      Special Note Regarding Forward-Looking Statements: A number of 
      statements contained in this release are forward-looking statements 
      within the meaning of the Private Securities Litigation Reform Act of 
      1995 that involve risks and uncertainties that could cause actual 
      results to differ materially from those expressed or implied in the 
      applicable statements. These risks and uncertainties include, but are 
      not limited to: Statements regarding the Company’s 
      strategy, future sales, future expenses and future liquidity and capital 
      resources; dependence on a limited base of customers for a significant 
      portion of sales; GPT's dependence on the paper currency validator 
      market and its potential vulnerability to technological obsolescence; 
      the risks that its current and future products may contain errors or 
      defects that would be difficult and costly to detect and correct; 
      possible risks of product inventory obsolescence; regulatory approval; 
      potential manufacturing difficulties; potential shortages of key parts 
      and/or raw materials; potential difficulties in managing growth; 
      dependence on key personnel; the possible impact of competitive products 
      and pricing; and other risks described in more detail in GPT's 
      Securities and Exchange Commission filings.
    
    
      
        
          
            – SEE ATTACHED TABLES –
          
        
      
      
        
           
        
      
      
        
           
        
      
      
        
          GLOBAL PAYMENT TECHNOLOGIES, INC.
        
      
      
        
          CONDENSED CONSOLIDATED BALANCE SHEETS
        
      
      
        
          (000s)
        
      
      
        
           
        
      
      
        
        
        
           
        
        
          unaudited
        
        
           
        
        
        
      
      
        
        
        
        
        
          3/31/2008
        
        
        
        
          9/30/2007
        
      
      
        
          
            ASSETS
          
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          CURRENT ASSETS:
        
        
        
        
        
        
        
        
        
      
      
        
          CASH AND CASH EQUIVALENTS
        
        
        
        
          $
        
        
          859
        
        
        
        
        
        
          $
        
        
          879
        
        
        
      
      
        
          ACCOUNTS RECEIVABLE, NET
        
        
        
        
        
        
          1,035
        
        
        
        
        
        
        
        
          1,030
        
        
        
      
      
        
          INVENTORY, NET
        
        
        
        
        
        
          3,278
        
        
        
        
        
        
        
        
          3,768
        
        
        
      
      
        
          PREPAID EXPENSES AND OTHER CURRENT ASSETS
        
        
        
        
           
        
        
          39
        
        
           
        
        
        
        
           
        
        
          178
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL CURRENT ASSETS
        
        
        
        
        
        
          5,211
        
        
        
        
        
        
        
        
          5,855
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          PROPERTY AND EQUIPMENT, NET
        
        
        
        
        
        
          642
        
        
        
        
        
        
        
        
          822
        
        
        
      
      
        
          CAPITALIZED SOFTWARE COSTS, NET
        
        
        
        
        
        
          67
        
        
        
        
        
        
        
        
          89
        
        
        
      
      
        
          OTHER ASSETS
        
        
        
        
           
        
        
          81
        
        
           
        
        
        
        
           
        
        
          36
        
        
           
        
      
      
        
          TOTAL ASSETS
        
        
        
        
          $
        
        
          6,001
        
        
           
        
        
        
        
          $
        
        
          6,802
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            LIABILITIES AND SHAREHOLDERS' 
            EQUITY
          
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          CURRENT LIABILITIES:
        
        
        
        
        
        
        
        
        
      
      
        
          BORROWING UNDER DEBT FACILITY
        
        
        
        
          $
        
        
          -
        
        
        
        
        
        
          $
        
        
          353
        
        
        
      
      
        
          CURRENT PORTION OF LONG-TERM DEBT
        
        
        
        
        
        
          8
        
        
        
        
        
        
        
        
          40
        
        
        
      
      
        
          NOTE PAYABLE, RELATED PARTY
        
        
        
        
        
        
          440
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
          ACCOUNTS PAYABLE
        
        
        
        
        
        
          2,102
        
        
        
        
        
        
        
        
          2,003
        
        
        
      
      
        
          ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
        
        
        
        
           
        
        
          1,240
        
        
           
        
        
        
        
           
        
        
          936
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL CURRENT LIABILITIES
        
        
        
        
        
        
          3,790
        
        
        
        
        
        
        
        
          3,332
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          CONVERTIBLE NOTE, RELATED PARTY, NET
        
        
        
        
        
        
          44
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
        
        
        
        
           
        
        
        
        
           
        
      
      
        
          TOTAL LIABILITIES
        
        
        
        
           
        
        
          3,834
        
        
           
        
        
        
        
           
        
        
          3,332
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          SHAREHOLDERS' EQUITY:
        
        
        
        
        
        
        
        
        
      
      
        
          COMMON STOCK
        
        
        
        
        
        
          78
        
        
        
        
        
        
        
        
          68
        
        
        
      
      
        
          ADDITIONAL PAID-IN CAPITAL
        
        
        
        
        
        
          14,570
        
        
        
        
        
        
        
        
          13,912
        
        
        
      
      
        
          RETAINED (DEFICIT) EARNINGS
        
        
        
        
        
        
          (11,028
        
        
          )
        
        
        
        
        
        
          (9,024
        
        
          )
        
      
      
        
          ACCUMULATED OTHER COMPREHENSIVE INCOME
        
        
        
        
           
        
        
          46
        
        
           
        
        
        
        
           
        
        
          13
        
        
           
        
      
      
        
        
        
        
        
        
        
          3,666
        
        
        
        
        
        
        
        
          4,969
        
        
        
      
      
        
          LESS: TREASURY STOCK
        
        
        
        
           
        
        
          (1,499
        
        
          )
        
        
        
        
           
        
        
          (1,499
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL SHAREHOLDERS' EQUITY
        
        
        
        
           
        
        
          2,167
        
        
           
        
        
        
        
           
        
        
          3,470
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
        
        
        
        
          $
        
        
          6,001
        
        
           
        
        
        
        
          $
        
        
          6,802
        
        
           
        
      
    
    
      
        
          GLOBAL PAYMENT TECHNOLOGIES, INC.
        
      
      
        
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
        
      
      
        
          (IN OOOs EXCEPT SHARE AND PER SHARE DATA)
        
      
      
        
           
        
      
      
        
        
        
           
        
        
          
            (unaudited)
          
        
        
           
        
        
           
        
        
          
            (unaudited)
          
        
      
      
        
        
        
        
        
          THREE MONTHS ENDED
        
        
        
        
        
        
          SIX MONTHS ENDED
        
      
      
        
        
        
        
        
          MARCH 31,
        
        
        
        
        
        
          MARCH 31,
        
      
      
        
        
        
        
        
        
        
           
        
        
        
        
        
        
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          
            2008
          
        
        
        
        
          
            2007
          
        
        
        
        
        
        
          
            2008
          
        
        
        
        
          
            2007
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET SALES
        
        
        
        
          $
        
        
          2,921
        
        
        
        
        
        
          $
        
        
          2,802
        
        
        
        
        
        
        
        
          $
        
        
          5,432
        
        
        
        
        
        
          $
        
        
          6,766
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          GROSS PROFIT
        
        
        
        
        
        
          584
        
        
        
        
        
        
        
        
          627
        
        
        
        
        
        
        
        
        
        
          1,101
        
        
        
        
        
        
        
        
          1,339
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          OPERATING EXPENSES
        
        
        
        
        
        
          1,582
        
        
        
        
        
        
        
        
          1,939
        
        
        
        
        
        
        
        
        
        
          3,035
        
        
        
        
        
        
        
        
          3,889
        
        
        
      
      
        
        
        
        
        
           
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
        
           
        
      
      
        
          (LOSS) INCOME FROM OPERATIONS
        
        
        
        
           
        
        
          (998
        
        
          )
        
        
        
        
           
        
        
          (1,312
        
        
          )
        
        
        
        
        
        
           
        
        
          (1,934
        
        
          )
        
        
        
        
           
        
        
          (2,550
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          OTHER EXPENSE:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          INTEREST EXPENSE, NET
        
        
        
        
           
        
        
          (60
        
        
          )
        
        
        
        
           
        
        
          (16
        
        
          )
        
        
        
        
        
        
           
        
        
          (62
        
        
          )
        
        
        
        
           
        
        
          (25
        
        
          )
        
      
      
        
          TOTAL OTHER EXPENSE
        
        
        
        
           
        
        
          (60
        
        
          )
        
        
        
        
           
        
        
          (16
        
        
          )
        
        
        
        
        
        
           
        
        
          (62
        
        
          )
        
        
        
        
           
        
        
          (25
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LOSS BEFORE PROVISION FOR INCOME TAXES
        
        
        
        
        
        
          (1,058
        
        
          )
        
        
        
        
        
        
          (1,328
        
        
          )
        
        
        
        
        
        
        
        
          (1,996
        
        
          )
        
        
        
        
        
        
          (2,575
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          PROVISION FOR INCOME TAXES
        
        
        
        
           
        
        
          2
        
        
           
        
        
        
        
           
        
        
          2
        
        
           
        
        
        
        
        
        
           
        
        
          8
        
        
           
        
        
        
        
           
        
        
          4
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET LOSS
        
        
        
        
          $
        
        
          (1,060
        
        
          )
        
        
        
        
          $
        
        
          (1,330
        
        
          )
        
        
        
        
        
        
          $
        
        
          (2,004
        
        
          )
        
        
        
        
          $
        
        
          (2,579
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          PER SHARE INFORMATION:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          BASIC
        
        
        
        
          $
        
        
          (0.15
        
        
          )
        
        
        
        
          $
        
        
          (0.21
        
        
          )
        
        
        
        
        
        
          $
        
        
          (0.29
        
        
          )
        
        
        
        
          $
        
        
          (0.41
        
        
          )
        
      
      
        
          DILUTED (1)
        
        
        
        
          $
        
        
          (0.15
        
        
          )
        
        
        
        
          $
        
        
          (0.21
        
        
          )
        
        
        
        
        
        
          $
        
        
          (0.29
        
        
          )
        
        
        
        
          $
        
        
          (0.41
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            COMMON SHARES USED IN COMPUTING PER SHARE AMOUNTS:
          
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          BASIC
        
        
        
        
           
        
        
          6,981,526
        
        
           
        
        
        
        
           
        
        
          6,218,201
        
        
           
        
        
        
        
        
        
           
        
        
          6,876,283
        
        
           
        
        
        
        
           
        
        
          6,218,201
        
        
           
        
      
      
        
          DILUTED (1)
        
        
        
        
           
        
        
          6,981,526
        
        
           
        
        
        
        
           
        
        
          6,218,201
        
        
           
        
        
        
        
        
        
           
        
        
          6,876,283
        
        
           
        
        
        
        
           
        
        
          6,218,201
        
        
           
        
      
      
        
           
        
      
      
        
           
        
      
      
        
          
            (1) FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 AND THE 
            SIX MONTHS ENDED MARCH 31, 2008 AND 2007, THE WEIGHTED AVERAGE 
            SHARES OUTSTANDING USED IN THE CALCULATION OF NET LOSS PER COMMON 
            SHARE DID NOT INCLUDE POTENTIAL DILUTIVE SHARES OUTSTANDING 
            BECAUSE THEY WERE ANTI-DILUTIVE.