Good day ladies and gentlemen, and welcome to the USA Technologies’ Second Quarter Fiscal 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call maybe recorded. I’d now like to turn the conference over to Lauren Sloane with Investor Relations. You may begin.

Thank you and good morning everyone. This is Lauren Sloane and welcome to the USA Technologies’ second quarter 2016 earnings conference call. With me on the call this morning is Steve Herbert, Chairman and Chief Executive Officer and Lee Maxwell, Interim Chief Financial Officer of USA Technologies. Before we begin today’s call, I’d like to remind you that all statements included in this call other than the statements of historical fact 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 the risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included with our filings with the SEC and in the press release issued earlier this morning. 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 any forward-looking statements rather 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 among things evaluating USA Technologies operating results. These non-GAAP financial measures are supplemental to and not a substitute for GAAP financial measures such as net income or loss or net cash used in operating activity. Details of these items and a reconciliation of these non-GAAP financial measures to GAAP financial measures can be found in our press release issued earlier this morning and on the Investor Relations page of our Web site at www.usatech.com. I’d now like to turn the call over to Steve. Steve, go ahead.

Thank you, Lauren and good morning everyone. Thank you for joining us to discuss our second quarter results. We continued our strong growth in the quarter, improving our financial fundamentals on nearly every metric. USA Technologies is a high growth company with a compelling revenue model composed of a high proportion of recurring revenue. In the quarter, we continue to execute well, driving an inflection point in the market towards our payment solutions. Obviously, many significant demands have transpired since our last call and I’d like to provide more context to them plus review the record breaking quarter. A quick summary of the financials revealed excellent performance. Net connection adds up 20,000, our customer account now numbers 10,625, revenue of $18.5 million, a record high for USAT of which more than $13 million was in the recurring revenue line of license and transaction. Cash provided by operating activities increased 117% from a year-ago, a result of the continued progress of our QuickStart program. Further, we held our expenses and delivered improving profitability. Adjusted EBITDA was approximately $2.3 million, growing 36% from a year-ago. The self service retail market continues to move towards cashless payment evident by our growing success here at USAT by the exciting trends we’re seeing within our customer base and in the overall cashless payments market. The USAT ePort Connect service process 76 million for more than $138 million in the quarter, 54% increase from Q2 of last year. We are now on a run rate to surpass $550 million in annual transaction volume. What these numbers tell me is twofold. One, our strategy to move the self service market towards fastest payment is working. And two, we’re executing well on the strategy. To expand on that, our strategy is to add more customers, drive more connections…

Thank you, Steve, and good morning, everyone. Before we begin, I’d like to take the opportunity to introduce myself and express my excitement to be filling the CFO role at USA Technologies. It’s great to be back at the Company, and working along side Steve and a fantastic team. Now let’s take a look at the numbers for the quarter. I will start by reviewing our second quarter fiscal 2016 reports -- results before I review our outlook for the full-year 2016. To echo what Steve said, we added 24,000 gross connections in the second quarter compared to 14,000 gross connections in Q2 of last year. Net connections for the second quarter totaled 20,000 compared to 12,000 net connections in the second quarter of last year, representing a 67% increase. We added 350 new customers in Q2 and invest a total of 10,625, compared to Q2 last year we had a 26% increase in customers, which we believe is indicative of a broadened adoption and acceptance of cashless payments in the industries we serve. It’s also worth highlighting both the growth in transactions and transaction volume with others. We ended this quarter with 76 million transactions, which represents 138 million in transaction volume increases of 49% in the transactions and 55% in dollars compared to last year’s second fiscal quarter. Growth was driven by a year-over-year increase in total connections to our ePort Connect service, which increased to 369,000 connections, representing a 28% increase from the 288,000 at the end of the same quarter last year. 89% of the gross new connections came from existing customers. Total revenue for the second quarter was a record $18.5 million, an increase of 44% compared to the $12.8 million recorded in the second quarter fiscal year 2015. License and transaction fees were $13.7…

Thank you very much, Lee and thanks to everyone for joining us this morning. In closing, in the second quarter we continued the momentum we built in the first quarter. And as a result, we’re off to a great start for the fiscal year. For 2016, we reiterate our goal to achieve more than 400,000 connections and for the end of fiscal 2017, we reiterate the goal to achieve 500,000 connections and $100 million revenue run rate. We believe we’re seeing an inflection point in the business and USAT is aggressively positioning itself to remain a clear leader for cashless payments in the self service retail market. With that, let me open the call for questions. We’d like to open-up the call for questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of George Sutton of Craig-Hallum. Your line is now open.

Thank you, guys. Superb results. And Lee welcome to the call.

Thanks, George.

I wanted to make sure I understood the seasonality, obviously these first two quarters represented 50% of your goal for the year in prior -- in the prior two years from a net add perspective, its only been 20%, 32% respectively. So can you give us a sense in terms of what you’re seeing seasonally and how that might influence the next couple of quarters?

George, good morning. It’s Steve. Thanks for the question. The -- regarding the seasonality curve, just to repeat, we’ve seen in our last two quarters of the fiscal year historically greater activity. In the first two of this year, we’ve gotten off to a much faster start which we really attribute to what we believe is an inflection point in the industry right now. We don’t know if the seasonality that we’ve experienced over the last number of years will continue into the back half of the fiscal year. I can offer some color just based upon the fact that that a good amount of the activity in our business right now is coming from the vending industry, because it has the most traction in terms of implementing what we’re trying to do. The seasonality curve in that business is something that hasn’t changed for decades. And what I mean by that is that essentially as these companies get new budgets and they head into the warmer time of the year, you typically see more activity out of that. So, I’d expect that certainly we’re not going to see just based upon that, which personally I’ve seen in the vending industry for a number of decades, I’m dating myself, but the fact is that that seasonality alone could continue to drive a stronger second half to us. So I hope I’m answering your question and providing a little additional color.

I think you’re. And relative to the VendScreen contribution, as we think about how you roll this out to your existing and new customers over time, how does this change your pitch from a big picture perspective relative to how you were going to market before?

Well, that’s a great question and thanks for asking it. It changes our pitch in a couple of different ways. First of all, we can -- we have an opportunity from a pure device perspective for our customers to buy a little bit farther out on the technology curve. They can buy a screen, so that’s good and it has benefits for them, but most importantly what it does is, it changes the way that we talk about a connection. We are able to -- remember, I talk in the prepared remarks about couponing and the ability to promote certain things at point of sale to further promote a loyalty program such as MORE. Essentially, what it does is from a service perspective, when we’re offering to the customer the ePort Connect service, we’ve essentially bolted on a module from the -- from a service perspective to say you have these additional capabilities that you can bring to point of sale in your market now. So that one word to use an analogy, in any network business what happens is a connection occurs and one starts to move more value to that pipe and that’s what we’ve said, we’d do all along and that’s what we told our customers the same thing. So they’re seeing an opportunity to extract more value through that connection.

Okay. Last question for me, interesting point Lee made relatively to competition from the third-party lessors could increase your sales margins over time. Can you give us a little bit more of a sense of that competition?

Well, as you can imagine, when a program like this takes off the way QuickStart has, there are lots of companies in this particular space, equipment leasing, and I think we’ve gotten -- right now we’ve two primary partners. We’ve gotten the attention of quite a few others and they continue to [indiscernible] for our business. Our current partners are great. They’re doing terrific job. However, we believe as the program continues to open-up and volumes increase that it will drive some price competition and the cost of capital will go down and we will be able to make a bit of a spread on that. So we’re looking forward to that opportunity.

Got you. Okay, perfect. Thanks guys.

Thank you. Our next question comes from the line of Mike Latimore of Northland Capital. Your line is now open.

Hi, great. Thanks. Very good quarter there.

Thanks, Mike.

Just the -- you have some Premium Services today. Do you have a sense of how many of your customers or connections are using kind of the [indiscernible] versus like loyalty and [indiscernible]?

Mike, it’s -- the question is, I think you asked about two services. One is the -- a Premium Services and the other would be loyalty. Were you referring to the MORE loyalty program?

Yes.

Yes, the -- I’d say that it’s just fairly small percentage at this point. In terms of the number of customers who are actually leveraging more where the rubber meets the road as they say. But I also think it’s very safe to say that many of them have it on their roadmap. So they’re busy building out their infrastructure, if you will, getting their machines on the network, on the service, and they clearly have plans to leverage the MORE program. So while the numbers now might be small, its definitely on the radar screen of our customers and candidly it’s a significant selling point and a competitive point of difference that we’ve over others.

Got you. And then, the license and transaction gross margin, I guess, what are you thinking about that kind of next couple of quarters are?

Well, the -- what we’ve said on past call is that what everyone needs to think is somewhere in the mid 30s. And as you look back, if you went back and look at the last five or six quarters, you can see a steady progression towards that mid 30s number. At some point it might pop above that, but I’d in a long winded sort of way, I’d say still [ph] mid 30s right now.

Okay.

I think that’s a very safe -- safe way, one is working on a model at a very safe place to bid.

And finally just last question, the -- are you seeing higher volumes coming out of MasterCard, sort of [indiscernible]?

I think -- well, first of all, regarding MasterCard for quite sometime due to Durban, we actually didn’t accept MasterCard debit and I guess it was about a year-ago that we started accepting MasterCard debit again. And we did see a bump in MasterCard volume obviously driven by MasterCard debit. So it’s been a bit of a bump there. Its -- in terms of share, their share is relatively small. I believe its single-digit. So it’s not something that move the market, if you will.

Okay. Thanks a lot. Good luck.

Thank you. And our next question ….

I’m sorry.

Our next question comes from the line of Bill Sutherland of Emerging Growth Equities. Your line is now open.

Thanks. Good morning, Steve, and Lee. Just a couple of questions. I noticed license and transaction fee as a percent of connection or you know -- I’m sorry, per connection has moved from like a low single-digit decline, I guess, several years, last several years to a slight increase -- even better increase in the December quarter. So I just wonder if you could maybe provide color on the dynamic there and maybe the trend.

Yes. Bill, the -- I’m sorry, if you could repeat that?

Oh, sure. So the license and transaction fee per connection, it’s in declining low single-digit until this year and now its beginning to go positive. Its -- it was up 2%, 2.5% in the quarter on an average connection. So, just curious if you guys have thoughts on that, because it does -- it has a nice impact on the growth rate obviously kind of leverage or connection growth.

Bill, the -- I think there are a number of things affecting that number. One would be from the perspective of license and transaction fees curve. Per connection, just to repeat, some of the connections that we’re adding to our service are micro markets, which have a much higher average ticket and a much higher transaction volume. So that’s a connection that has a completely different dynamic from a regular connection. That one thing that I believe is affecting this. I also -- if you look at what’s happening with transactions in general, transaction volume is still right -- can’t remember the increase; it’s in the prepared remarks somewhere, its up 40% -- 50%. So that is driving the number as well. Those are two things that I think will drive that number. In addition to that, as we continue to offer new services to our customers, it might be things like loyalty or whatever it is, we have the opportunity to charge more per connection. That’s something else that I think will affect the number as well.

Makes sense. And …

And just for a little more color, a little more background, the -- in general our average ticket across the whole business, when I mention the fact that our transaction volume is going up, well, you might look at that thing, well that’s because your connections are going up. But there is another driver of that and across our whole business; average ticket is going up for our customers. So that two is driving the numbers. So as you can see there are many factors, but its all good.

Yes. Yes. And last, Steve, I’m -- I think we’re all kind of scratching our head looking at this great momentum thinking about the second half and then trying to square that with your continued revenue guidance range that you haven’t changed. I mean, it just implies if we were to actually think about it like inside that range, major deceleration in the back half, you’re not implying that, I assume by keeping that range?

Well, we’re certainly not implying at declaration if that’s what you mean. We are just -- we are simply not prepared at this point to raise the numbers, to raise our guidance. That’s something that could happen, but the fact -- if you look at the raw numbers we’re at 30 -- even if you remain flat, let’s say everything I said about the seasonality curve, asked by George Sutton’s question, that’s everything I said about seasonality curve is wrong and we remain flat through the end of the year, that the strong start to the first half was an aberration. We’re at 35%, and it remained flat through the end of the year that $70 million.

Exactly. That’s my point.

But I certainly don’t want to give anyone the idea that we’re expecting any sort of deceleration. But what I would say again is that, we’re not prepared at this point in time to raise guidance for the fiscal year, if that’s what you’re asking.

That was what I was asking, and I guess, we’ll have to take that as the answer. Thanks, Steve.

It’s just not something we’re prepared to do at this time.

Okay.

But I would say -- I do have to say, I am very encouraged by the strong start that we had to the first half. This for the last number of years, it is -- it’s without a doubt the strongest start we’ve had for the first half, so, its very encouraging not only to me but to the whole team.

Great. Thanks again.

You got it.

Thank you. And our next question comes from the line of Josh Elving of Feltl and Company. Your line is now opening.

Hi. Good morning, guys.

Good morning, Josh.

Couple of questions, I think it’s a fair question about the revenue guidance. Maybe just to beat a dead horse a little bit more; could you characterize it as best of the revenue guidance you put out at the beginning of the year? Yes, you beat expectations by a fair amount in the first two quarters. You’re just adding in, layering in a little bit of conservatism over the balance of the year by not changing it?

I wouldn’t say that we’re being conservative. I’m going to repeat what I said; we’re not prepared to move the number at this point. And I’ll also repeat again, very, very encouraged by the strong start to the first half. But I wouldn’t call it being conservative. I would just say we’re -- we’re just not prepared to do it at this point. That doesn’t mean we won't.

Okay. Fair enough. On the license gross margin you talked a little bit about how that was a little bit lower than some of the folks expectations, little lower than my expectation as well as the first quarter now the second quarter. Heading into 2016, I was -- we were thinking a little bit more along the lines of 35%, and maybe even drifting a little bit higher. I understand first quarter you had some spending of premium services which -- and a couple of other onetime items that kind of impacted their gross margin a little bit. I kind of got the sense it was going to be closer to 35%. Is that -- first of all, is there any seasonality in that gross margin. We’ve seen it fluctuate a fair amount over the past several quarters, it has been a little bit lower in the first half, it was a little higher in the second half of last year, first of all. And second of all, is it just something we’re going to just have to just be able to work with a little bit wiggle from quarter-to-quarter? Is 35% a good -- and is 35% a good number in the back half?

The answer to that, I want to answer the easy one first, yes. Mid-30s, 35% if you’re modeling this thing out, that we -- and you look back, if you look back five or six quarters, you can see that we’ve been on a steady march to that mid-30s range. Even though things may have popped up and down a bit, we’re -- if you draw the line we’re headed straight there. So, if you’re looking at the back half and one would have plugged that in, I think it would be a safe assumption. The good news is that over -- some people might not call five or six quarters the long haul, but I’ll just call it the long haul for now. The trend is very much headed in the right direction.

Okay. And I guess, is it fair to say you control that direction, because I know that this license gross margin, even the business has changed a little bit, but I had been closer to 40% going back a couple of years ago. And I know that there was a lot of incentive’s that drove that number lower. Just trying to get a sense longer term, do you anticipate it kind of bouncing out here in the mid-30s like you’ve kind alluded to over the balance of this year?

Yes, I do. I’ll just say it again. I think that’s where we’re headed for the moment. That’s a number that we’re comfortable putting our finger on our range -- we’re comfortable putting our finger on. To answer your question, we do have some control over that number. Of course as it relates to the pricing of our services and processing and so forth, so we do have some control over that. The numbers from the past, if you look back -- if you look back at the margins in this regard, it’s been a very long time since we’ve been in the 40s. So that doesn’t mean we can't get there some day. Because one of the things we haven’t talked about here is it relates to license and transaction fee is operating leverage. Now as you move across 500,000 connections and 600,000, 750,000, we have leverage in our model that will also help to drive margins as well. So, there is -- so some of the upside frankly is just built-in.

Okay, great. And then as far as, I thought the gross dollar volumes generated was extremely strong and that has a little bit to do with your GDP per transaction, but also transactions were extremely strong. Is there any seasonality to GDP per transaction or expectation around transactions per machine?

Well, that’s a great question, but first of all transaction volume right now as it increases is being driven by a number of factors. Obviously the number of connections to the service is driving overall transaction volume. But what we also have, and we haven’t talked about it during this call, is an increasing percentage of all of our customer’s transactions for all 369,000 connections continue -- it’s just been moving up into the right for years. And I believe we’re somewhere in the 40% range, now where all of our customers -- 40% of all of our customers transactions across the board are cashless. So you have more connections driving more transactions. You have an increasing percentage of the overall base moving to cashless transactions versus cash in some locations, like in military it can approach a 100% of all of the transactions, in universities, as you can imagine its somewhere over 60%. So those two things alone will drive additional transaction volume. And then finally, as we add other types of connections like kiosk [ph] with a much higher ticket, micro-markets with a much higher ticket. Those are things in self service that as opposed to an average ticket of say $1.75, $1.80 in the vending market we have other customers that have a $9 or $10 average ticket. And as we get more of those customers, that will drive the transaction volume as well.

Great. The last question …

I might add that, as that volume goes up, remember what I said about leveraging the model. As our transaction volume goes up and our average ticket goes up, our cost to process goes down. And that’s just one example of a place that we have -- I referred to leveraging the model, we have leverage there. That’s just purely pricing leverage.

Great. Last question, I know you probably have more opportunities in the United States than you can, I guess handle. Obviously the vending space is large globally. Do you have any interest in expanding globally?

We do. We certainly do as a company. Our feeling here, and then this is something that we’ve said all along is, let’s make -- excuse the expression. Let’s make a box in the United States first and get the company on sound financial footing. And then when it comes to international, we have some wonderful global partners and the list is long, right. There are companies like Compass and Apple and Visa and MasterCard and Starbucks, and the list just goes on and on. Our feeling is that, what we’ll do and what you’re very likely to see us do is go to international markets with those customers and/or partners in TOW [ph]. So we’re not following the field of dreams model right build it and they will come. We’ll have our customer and our partner in TOW [ph] and we’ll know that, that it’s a solid debt if you will.

Great. Thank you so much.

Sure. Thank you.

Thank you. And our next question comes from the line of Gary Prestopino of Barrington Research. Your line is now open.

Steve and Lee. Couple of questions here, and not to get specific on modeling, but the back half of the year particularly half of this quarter and Q4, what can we anticipate in terms of a drag from VendScreen on your adjusted EBITDA, I mean, is it to the point where we would see some sequential decline in your adjusted EBITDA margin due to VendScreen?

Gary, thanks for the question and good morning by the way. It’s Steve.

Yes.

What I would say about the VendScreen transaction in general is that, we went into that transaction -- pre-transaction with a very clear plan to -- happened to efficiencies quickly. And the moment it was done, we began to implement that plan which happened with those efficiencies. The companies are really very similar. They are mirror images of one another. So we will do that, and are doing that, and sooner rather than later I think what we’ve said at a couple of quarters out, sooner rather than later you’ll see this, we want to put this in an accretive -- yes, put it in an accretive position. So, that’s something that we’re squarely focused on right now, and it did come with some revenue as well. So we don’t anticipate a significant negative drag. There will be some onetime cost as there always are associated with absorbing this type of thing and working through the efficiency, but we’ll quickly put those behind us and be on our way. I think any effect in this regard will be far outraged by the benefit of what will happen in the marketplace over the next couple of quarters.

Okay. Well to the extent that you do have onetime costs associated with this, hopefully you’ll be able to segregate those out as you report Q3 and Q4, so we can get a true read on the company’s profitability?

We can take that to the bank. That will definitely happen. It will be very, very clear.

Okay. Couple of other questions here; you mentioned something about advertising for VendScreen which kind of struck me as being very interesting. Had they been doing any advertising prior to you acquiring them? And if you are tending to do advertising, I’m sure you are. Is that a separate revenue stream, how is [technical difficulty] the transaction revenue?

Let’s start with the end of that question. The fact is that it is an additional revenue stream for both us and our customers, and I’ll give you a couple of examples. First of all, across all of our business, across all of our self-serve retail, and 8 or 10 different verticals that was [indiscernible] like vending and laundry and kiosk et cetera. We have payment partners who want their payment method to be what used to be called Top-Of-Wallet. Now we have people like buying for the consumers’ attention in terms of what they might use to pay. Now they have multiple choices when they walk out. It could be a Visa, Credit or Debit card; it could be a MasterCard, and an American Express, Apple Pay, Android Pay. So there’s an intense competition as the payment industry goes through what is this tectonic change. We’re purely certain that our payment partners are going to want to promote in that regard. So yes, it’s a revenue stream and not only is it a revenue stream for us, but it’s a revenue stream for our customers. Essentially what would happen is it the revenue share in the case that we’re moving content in that regard, another example might be a CPG company. Let’s say that to use a vending example, let’s say that Mars chocolates, once you promote certain brands that they have in any of our customer’s locations, well they then would obviously pay if you will for airtime. So we think that’s a significant opportunity and the nutritional angle is a good one as well. As the FDA continues to lay down new standards and what we call immediate consumption where consumers are in the supermarket its easy, you pick it up, its got a label on it, you read it, when in places where there is immediate consumption of food as we all know the cohort information isn’t always available. That capability is already built and test and out there.

But, I guess the question I had is, had the company been doing this prior or is this something new that you can leverage from the acquisition with the advertising?

I’m not quite sure that in any significant manner the Company [indiscernible] I think they may have been doing some testing and things like that. But it’s not something that was -- it was not something that was widely commercialized.

Okay. And then, it’s early in the acquisition. But just a read on what your current customer base is if you’re getting positive feedback, level of interest from your current customer base et cetera in this new product?

Yes, the feedback when the transaction was announced, the feedback was swift and it was very positive from our customer base. That’s what I was told from our marketing and sales folks who are in touch with our top customers. They -- our customers are smart. They know now that they’re putting their machines on a network and of course they’re smart because we’ve been educating them for years, but they’re smart on their own too. They know that, this is another way for them to leverage that investment of putting their machines on a network. So its -- so not only have they been encouraging in their words, they’ve been encouraging with -- and it was still very early. There’s already been some buying from our customer base which obviously was outside the VendScreen customer base. So we’re very encouraged. It’s important to note, I know that we announced this when we announced the acquisition of VendScreen. The VendScreen devices, the interactive devices are already operating on our service. They’ve been certified on our service and they’re operating on our service all day every day. So what that means, surprising I was asked the question about integration. Well how long is it going to take you to integrate this in order to get any value added, but well the fact of the matter is that, that portion of it is already done, it’s finished. We were already working together as partners when we decided to combine the company.

Okay. That’s good news. And just a couple of quick questions, I promise I’ll get off. Interchange as a percentage of license and transaction revenue; what does that stand at this quarter versus last quarter? I assumed your average ticket is going up, that’s going up too?

Interchange as a portion of -- can you repeat that?

License and transaction revenue, because isn’t that booked as -- in the L&T space on, in revenue and cost of goods sold, so its just basically a flow through?

Well, it’s essentially a flow through, but as a percentage my -- I don’t have the numbers right in front of me Gary, but …

Okay, that’s fine. I can get it later.

We can always follow-up with you. But my inclination on that is that, as a percentage of L&T it would go down as we get further leverage as I mentioned a few minutes ago on increasing average ticket.

Okay. And then just a last question. Is there anything that you guys can do to force conversion of these warrants so we can get rid of this line item fair value of warrant change every other quarter?

Well, the answer to that is, yes. We can always -- we can always take a shot at incenting these warrant holders in some way who holds -- they hold warrants that, I believe its $2.61, it’s about 4 million in change warrants I believe.

Right.

So we could -- however Gary, the warrants expire in September. So that’s not far -- that’s not far away.

Okay. Yes.

So we think we could either incent them or we could top it out for another say quarter or two. But I can -- I know exactly what you mean. I feel your pain, when you see that adjustment and its effect on net income, it’s a little bit disappointing. But the good news there for those who haven’t done the math is there’s a $11 million in cash out there, and these warrants are very much in the money at this point and of course that’s good news for our company.

Yes, I’m sorry. I completely forgot that they expire in September. Then last question, I promise, what's the pro forma long-term debt now post the VendScreen acquisition, what did you borrow, about $5.6 million for that?

Well, actually I think we only borrowed $3 million.

$3 million. Okay.

We used $3 million online, and we used $2.65 million ballpark in cash.

Okay.

We could have -- candidly, we could have made it all cash, but we felt like we have the credit facility, lets be a little bit more conservative and utilize that credit facility. We felt like it was a reasonable course of action.

Okay.

Thanks, Gary.

Thank you. And this time we do not have time for additional questions. I’ll now turn the call back over to management for closing comments.

I would like to thank everyone for taking the time for our call today. As I mentioned before, we’re very enthusiastic about the first half of our fiscal year. We have a great plan in terms of continuing to drive the business for the second half and of course we’re also enthusiastic about the addition of the VendScreen assets, and also the team and actually the geographic capabilities that we get as part of that which are going to be helpful in terms of driving growth and supporting customers. So again, I thank everyone for your time today and your interest in our company, and I look forward to reporting back to you after next quarter.