GPTX Global Payment Technologies Inc (CE)

Global Payment Technologies, Inc. (Over the Counter Bulletin Board Symbol: GPTX.OB) (๏ฟฝGPT๏ฟฝ), a leading manufacturer and developer of currency acceptance systems used in the worldwide gaming, beverage and vending industries, discusses its fiscal 2008 First Quarter results. GLOBAL PAYMENT TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN OOOs EXCEPT SHARE AND PER SHARE DATA) ๏ฟฝ ๏ฟฝ (unaudited) THREE MONTHS ENDED DECEMBER 31, ๏ฟฝ 2007 ๏ฟฝ 2006 ๏ฟฝ NET SALES $ 2,511 $ 3,964 ๏ฟฝ GROSS PROFIT 517 712 ๏ฟฝ OPERATING EXPENSES 1,453 1,950 ๏ฟฝ ๏ฟฝ ๏ฟฝ LOSS FROM OPERATIONS ๏ฟฝ (936 ) ๏ฟฝ ๏ฟฝ (1,238 ) ๏ฟฝ NET LOSS ๏ฟฝ (944 ) ๏ฟฝ ๏ฟฝ (1,249 ) ๏ฟฝ PER SHARE INFORMATION: BASIC ๏ฟฝ ($0.15 ) ๏ฟฝ ๏ฟฝ ($0.20 ) DILUTED ๏ฟฝ ($0.15 ) ๏ฟฝ ๏ฟฝ ($0.20 ) William McMahon, GPT President and CFO stated, ๏ฟฝThe first quarter for Fiscal 2008 signaled significant change for the Company. We settled into our new, smaller manufacturing facility and continued to reduce costs. We paid the borrowings under our credit facility with Laurus Master Fund in full on the maturity date of November 15, 2007 and we continued our efforts to find additional capital. Subsequent to the end of the quarter we entered into a Securities Purchase Agreement with Global Payment Technologies Australia PTY Ltd. (๏ฟฝGPTA๏ฟฝ) and Exfair Pty Ltd (๏ฟฝExfair๏ฟฝ), companies controlled by Andre Soussa. GPTA is our largest customer. We consummated the transaction with two closings, the first of which took place on January 15, 2008 where we issued a $440,000 one-year secured term note to GPTA and the second of which took place on February 5, 2008 where we issued a Convertible Note in the amount of $400,000 to Exfair (Please refer to our Form 10-Q for the period ended December 31, 2007 for more details). Concurrently with the second closing, Andre Soussa was named Chairman of the Board and Chief Executive Officer and all current directors except Richard Gerzof resigned and new directors were appointed.๏ฟฝ Mr. McMahon continued, ๏ฟฝWhile our sales were negatively impacted by financial constraints and a shortage of raw materials to complete our customers๏ฟฝ requirements, the demand for GPT๏ฟฝs products during the quarter was strong and remains strong. We have a lot of work ahead of us and we look forward to working with Andre and our new directors.๏ฟฝ Net sales decreased by 36.6%, or $1,453,000, to $2,511,000 in the three months ended December 31, 2007 as compared with $3,964,000 in the comparative prior-year period. This sales decrease was due to $1,228,000 decreased sales in our gaming market and $225,000 decreased sales in our beverage and vending market. Last year๏ฟฝs sales included special incentives to customers in order to reduce inventory levels in our Aurora product. Gross profit decreased to $517,000, or 20.6% of net sales, in the three months ended December 31, 2007 as compared with $712,000, or 18% of net sales, in the comparative prior-year period. A favorable sales mix provided slightly better margins in our validator and parts sales. Operating expenses decreased to $1,453,000, or 58.0% of sales, in the three months ended December 31, 2007 as compared with $1,950,000, or 49.2% of sales, in the comparative prior-year period. This decrease of $497,000 is primarily the result of lower payroll, travel, and consulting expenses. In July 2007, we also reduced our operating expenses by moving to a smaller facility, which is more appropriate to the size of our business. We charged $19,000 to operations during the three months ended December 31, 2007 as compared to $58,000 in the prior year representing the fair value of stock options granted to employees, officers and directors. Net loss for the quarter ended December 31, 2007 was ($944,000), or ($0.15) per share, as compared with ($1,249,000), or ($0.20) 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. Please visit the GPT web site for more information at http://www.gptx.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๏ฟฝs 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๏ฟฝs 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๏ฟฝs Securities and Exchange Commission filings.