Cantaloupe, Inc. (CTLP) Earnings Call Transcript & Summary

Good morning. I am Alicia Nieva-Woodgate, VP of Public Relations and Investor Relations at Cantaloupe, Inc, formerly known as USA Technologies, Inc. Our meeting this morning is being chaired by Douglas Bergeron. Mr. Bergeron?

Good morning, ladies and gentlemen, and welcome to this Annual Meeting of Shareholders of Cantaloupe, Inc. I am Douglas Bergeron, the non-Executive Chair of the Board of the company. At this time, I am -- I call the meeting to order. Now before we proceed, I would like to introduce to you the other directors of the company who are present today; Lisa Baird, Doug Braunstein; Sean Feeney, the company's CEO; Jacob Lamm; Michael Passilla; Ellen Richey; Anne Smalling; and Shannon Warren. In addition, present today are representatives from our independent registered public accountants, BDO USA. Anthony Diianni and Joann Doyle from BDO will be available to answer questions. As the bylaws provide, I will act as Chairman of the meeting, Davina Furnish, the company's secretary, will act as secretary of the meeting. I will now ask Sean Feeney, the company's CEO, to present the business to be considered at the meeting.

Thank you, Doug. Before we begin, I would like to note that following the consideration of business at this meeting, we will have a question-and-answer period at which Doug and I will be available to answer questions. If you would like to ask a question, please click the message box on the Annual Meeting website. There is a 2-limit question per shareholder. The Board of Directors has appointed Davina Furnish to act as a judge of election. Many shareholders have already submitted their proxies. All proxies will be voted as you have marked them. If you have voted by proxy, you do not need to take any further action unless you want to change your vote. If you are a registered shareholder or a beneficial shareholder who registered in advance and sent in a legal proxy and you wish to vote electronically at the meeting, you may vote using the control number provided to you. The Board of Directors set the close of business on March 15, 2021 as the date of record for this meeting. A list of shareholders of record is available at this meeting for examination by any registered shareholder to do so, and may be accessed by following the instructions on the Annual Meeting website. I would also like to confirm the mailing of the notice of internet availability of proxy materials to our stockholders. The notice provided an internet website address that contains instructions on how shareholders can access our proxy statement and annual report and how to vote their shares. On or about March 30, 2021, Broadridge mailed the notice to all stockholders of record as of March 15, 2021. The affidavit of Broadridge relating to the mailing of our notice using the list of stockholders as of the record date is available for your inspection and may be accessed by following the instructions on the Annual Meeting website. I have been advised by the judge of election that as of the record date, there were 71,066,404 shares of common stock and 445,063 shares of Series A convertible preferred stock entitled to vote at the Annual Meeting, and that the holders of over 74% of the company's voting power as of the record date are represented at today's meeting. Each share of common stock is entitled to 1 vote. And each share of Series A preferred stock is entitled to 0.1988 of a vote for each share registered in their names. We have been informed by the judge of election that a majority of the company's shares is represented here today, and therefore, a quorum is present. The meeting is duly constituted, and the business of the meeting may proceed. The polls are now open for voting. The polls will continue to be open for the duration of this meeting. Each of the director candidates has been duly nominated and each of the other matters to be voted on at this meeting, as listed in the agenda, are considered to have already been moved and seconded and open to a shareholder vote. The business of the meeting consists of consideration of the following proposals. One, the election of 9 nominees to serve as directors until the 2022 Annual Meeting of Shareholders and until their respective successors have been duly elected and qualified. The company's nominees are: Lisa Baird, Douglas Bergeron, Douglas Braunstein, Sean Feeney, Jacob Lamm, Michael Passilla, Ellen Richey, Anne Smalling and Shannon Warren. Two, the ratification of the appointment of BDO USA as the independent registered public accounting firm of the company for fiscal year 2021. And three, the approval on an advisory basis of the compensation of the company's named executive officers. The votes represented by the proxies received prior to the meeting are being tabulated by the judge of election. Any registered shareholder who registered in advance with Broadridge, and any beneficial owner holding a legal proxy who registered in advance with Broadridge who wants to cast a ballot electronically, should at this time vote electronically via the portal on the virtual meeting website. If you have already voted by proxy in advance of the virtual meeting, there is no need to submit a vote now unless you want to change your prior vote instructions. Beneficial shareholders who own their shares through a bank, broker or other custodian, who did not register in advance with Broadridge will not be promoted -- permitted to vote during this virtual meeting. Thank you for all those that have voted. I would now like to provide a short recap of the accomplishments to date. This marks 1 year since I began to lead this incredible company, and this is my second annual shareholder meeting as CEO. While it has been a year with many challenges, the biggest being a worldwide pandemic, I believe we have made significant progress in our journey to build a better, stronger company for our customers, employees and stakeholders. For the first 9 months of our fiscal year 2021, we reported revenue of $117.9 million. 1.08 million active devices as of March 31, 2021, defined as devices that have communicated or transacted with the company in the last 12 months compared to 1.05 million compared to the same period last year, an increase of approximately 30,000 active devices, or 3%. 18,763 active customers as of March 31, 2021, defined as customers that have at least 1 device that has communicated with the company in the last 12 months compared to 16,808 as of March 31, 2020, an increase of approximately 12%. The gross margin of 33.3% compared to 27% in the same period last year. Operating loss of $8.2 million, a significant improvement compared to operating loss of $29.2 million in the same period last year. Adjusted EBITDA of positive $2.6 million compared to a negative $7.6 million in the same period last year. In terms of operational achievements over the last year, we relisted on the NASDAQ Stock Exchange. We rebuilt the executive team with strong talent, increased our stock price significantly during the last year, increasing the market cap to approximately $760 million on March 31, 2021. We raised $55 million of aggregate gross proceeds from institutional accredited investors through a private placement transaction. And finally, last month, we officially rebranded to Cantaloupe, Inc, as the name carries great brand equity in the industry and strong customer loyalty. I am thrilled about the progress we have made over the last year within such a tough environment. I am looking forward to the future of our company, especially as the economy, schools and businesses begin to reopen. I believe we have the right team in place, with significant tailwinds, which we expect will drive our business for years to come. Thank you. We are now available to answer questions that have been submitted. Alicia, please present our first question.

I do not have any questions at this time. We want to give it a minute. There are no questions.

Okay. So thank you for all those that attended the meeting today. Polls are now closed. Based on the preliminary tabulation of votes from the judge of elections, the company's 9 nominees have been elected as directors for terms expiring at the 2022 Annual Meeting of Stockholders. Two, the appointment of BDO USA as the company's independent registered public accountants for the fiscal year 2021 has been ratified. And three, the compensation of the company's named executive officers has been approved. We will publish the final results of the proposals considered at the Annual Meeting on our website, and we'll file them with the SEC. I will now turn the meeting over to Doug for adjournment.

Thank you for attending the Annual Meeting. We are excited about the progress the company has made, and we appreciate your continued support. This concludes the business of our Annual Meeting. And the Annual Meeting is now adjourned.