2023 First Quarter Net Sales of $22.3 Million,
up 130% on a Year-Over-Year Basis
Casino and Gaming Sales of $15.8 Million, up
232% on a Year-Over-Year Basis
FST Sales of $3.5 Million, up 62% on a
Year-Over-Year Basis
TransAct Technologies Incorporated (Nasdaq: TACT) (“TransAct” or
the “Company”), a global leader in software-driven technology and
printing solutions for high-growth markets, today reported
preliminary results for the first quarter ended March 31, 2023. The
Company also announced that John M. Dillon, who was appointed as
Chief Executive Officer on April 4, 2023, will continue in the role
indefinitely and is no longer serving in an interim capacity.
“We are pleased with our results this quarter, and after a
little over a month as Chief Executive Officer of TransAct, I
believe there is strong potential for the entire company. Our first
quarter results demonstrated the strength of TransAct’s market
presence in casino and gaming, and some green shoots of momentum in
our FST business,” said John Dillon, Chief Executive Officer of
TransAct. “I am equally impressed by the caliber of professionals
here at TransAct who I am working with and getting to know better
every day, many of whom have been contributing to the success of
TransAct for years now. I am looking forward to all we can achieve
together and firmly believe that we can set the company up for
consistent, long-term sustainable growth.”
First Quarter 2023 Financial Highlights
- Net Sales: Net sales for the first quarter of 2023 were
$22.3 million, up 130% compared to $9.7 million for the first
quarter of 2022.
- FST Recurring Revenue: FST recurring revenue for the
first quarter of 2023 was $2.3 million, up 49% compared to $1.6
million for the first quarter of 2022.
- Gross Profit: Gross profit for the first quarter of 2023
was $12.3 million, resulting in gross margin of 55.0%, compared to
gross profit of $2.6 million for the first quarter of 2022, which
resulted in a 26.4% gross margin.
- Operating income (loss): Operating income for the first
quarter of 2023 was $3.8 million, compared to operating loss of
$(5.6) million for the first quarter of 2022.
- Net income (loss): Net income for the first quarter of
2023 was $3.1 million, or $0.31 net income per diluted share, based
on 10.0 million weighted average common shares outstanding. Net
loss for the comparable 2022 period was $(4.4) million, or $(0.44)
net loss per diluted share, based on 9.9 million weighted average
common shares outstanding.
- EBITDA: EBITDA was $4.2 million for the first quarter of
2023, compared to EBITDA loss of $(5.4) million for the first
quarter of 2022.
- Adjusted EBITDA: Adjusted EBITDA was $4.5 million for
the first quarter of 2023, compared to adjusted EBITDA loss of
$(5.1) million for the first quarter of 2022.
2023 Financial Outlook
- Total Net Sales: The Company currently expects total net
sales of between $71.5-73.5 million.
- Total Adjusted EBITDA: The Company currently expects
total adjusted EBITDA of between $6.5 -$7.5 million.
Our outlook for non-GAAP adjusted EBITDA is presented only on a
non-GAAP basis because not all of the information necessary for a
quantitative reconciliation of this forward-looking non-GAAP
financial measure to the most directly comparable GAAP financial
measure is available without unreasonable effort, primarily due to
uncertainties relating to the occurrence or amount of these
adjustments that may arise in the future. If one or more of the
currently unavailable items is applicable, some items could be
material, individually or in the aggregate, to GAAP reported
results.
2023 First Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today, May 9,
2023, beginning at 4:30 p.m. ET to discuss the Company’s
preliminary first quarter 2023 results and other matters. Both the
call and the webcast are open to the general public. The conference
call number is 877-704-4453 and the conference ID number is
13737812 (domestic or international). Please call ten minutes prior
to the presentation to ensure that you are connected.
Interested parties may also access the conference call live on
the Internet at www.transact-tech.com (select “Investor Relations”
followed by “Events & Presentations”). Approximately two hours
after the call has concluded, an archived version of the webcast
will be available for replay at the same location.
Change in Accounting Principle
Effective April 1, 2022, TransAct changed its method of
inventory valuation from standard costing which approximates
first-in first-out “FIFO” to the average costing methodology. The
Company believes this method is preferable because it reflects a
better measurement estimate of inventory cost as the Company does
not perform intensive manufacturing of its finished products which
are therefore better measured under average cost. Comparative
financial statements of prior periods have been adjusted to apply
the new method retrospectively and are labeled “As Adjusted” in the
Condensed Consolidated Statements of Operations attached to this
release.
Non-GAAP Financial Measures
TransAct is providing certain non-GAAP financial measures
because the Company believes that these measures are helpful to
investors and others in assessing the ongoing nature of what the
Company’s management views as TransAct’s core operations. EBITDA
and adjusted EBITDA provide the Company with an understanding of
one aspect of earnings before the impact of investing and financing
charges and income taxes. The Company believes that these non-GAAP
financial measures provide relevant and useful information to an
investor evaluating the Company’s operating performance because
these measures are: (i) widely used by investors to measure a
company’s operating performance without regard to items that do not
reflect the Company’s ongoing operations and are excluded from the
calculation of such measure; (ii) used as financial measurements by
lenders and other parties to evaluate creditworthiness; and (iii)
used by the Company’s management for various purposes including
strategic planning and forecasting and assessing financial
performance. The presentation of this non-GAAP information is not
considered superior to or a substitute for, and should be read in
conjunction with, the financial information prepared in accordance
with GAAP.
EBITDA is defined as net income (loss) before net interest
expense, income taxes, depreciation, and amortization. A
reconciliation of EBITDA to net income (loss), the most comparable
GAAP financial measure, can be found attached to this release.
Adjusted EBITDA is defined as net income (loss) before net
interest expense, income taxes, depreciation and amortization and
is adjusted for share-based compensation. The Company adjusts
EBITDA for share-based compensation because the Company considers
share-based compensation to be a non-cash expense similar to
depreciation and amortization. A reconciliation of adjusted EBITDA
to net income (loss), the most comparable GAAP financial measure,
can be found attached to this release.
About TransAct Technologies Incorporated
TransAct Technologies Incorporated is a global leader in
developing and selling software-driven technology and printing
solutions for high-growth markets including food service, casino
and gaming, and POS automation. The Company’s solutions are
designed from the ground up based on customer requirements and are
sold under the BOHA!™, AccuDate™, EPICENTRAL®, Epic® and Ithaca®
brands. TransAct has sold over 3.7 million printers, terminals and
other hardware devices around the world and is committed to
providing world-class service, spare parts, and accessories to
support its installed product base. Through the TransAct Services
Group, the Company also provides customers with a complete range of
supplies and consumable items both online at
http://www.transactsupplies.com and through its direct sales team.
TransAct is headquartered in Hamden, CT. For more information,
please visit http://www.transact-tech.com or call (203)
859-6800.
TransAct®, BOHA!™, AccuDate™, Epic, EPICENTRAL™ and Ithaca® are
trademarks of TransAct Technologies Incorporated. ©2023 TRANSACT
Technologies Incorporated. All rights reserved.
Cautionary Statement Regarding Preliminary Financial
Information
The Company has prepared the preliminary financial information
set forth below on a materially consistent basis with its
historical financial information and in good faith based upon its
internal reporting as of and for the three months ended March 31,
2023. This financial information is preliminary and is thus
inherently uncertain and subject to change as the Company finalizes
its financial results and related review for the three months ended
March 31, 2023. During the course of the preparation of the
Company’s consolidated financial statements and related notes as of
and for the three months ended March 31, 2023, the Company may
identify items that could cause its final reported results to be
materially different from the preliminary financial information set
forth above. As a result, there can be no assurance that the
Company’s final results for this period will not differ from the
preliminary financial information.
This preliminary financial information should not be viewed as a
substitute for full financial statements prepared in accordance
with GAAP. In addition, this preliminary financial information is
not necessarily indicative of the results to be achieved for any
future period.
Forward-Looking Statements
Certain statements included in this press release may be
forward-looking statements. Forward-looking statements are any
statements other than statements of historical fact.
Forward-looking statements represent current views about possible
future events and are often identified by the use of
forward-looking terminology, such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "project”, "plan”,
"design" or "continue", or the negative thereof, or other similar
words. Forward-looking statements are subject to certain risks,
uncertainties and assumptions. In the event that one or more of
such risks or uncertainties materialize, or one or more underlying
assumptions prove incorrect, actual results may differ materially
from those expressed or implied by the forward-looking statements.
Important factors and uncertainties that could cause actual results
to differ materially from those expressed or implied by the
forward-looking statements include, but are not limited to, the
following: the adverse effects of current economic conditions,
whether due to the COVID-19 pandemic or otherwise, on our business,
operations, financial condition, results of operations and capital
resources, difficulties or delays in manufacturing or delivery of
inventory or other supply chain disruptions, inflation and the
Russia/Ukraine conflict, an inability of our customers to make
payments on time or at all, diversion of management attention, a
possible future reduction in the value of goodwill or other
intangible assets, inadequate manufacturing capacity or a shortfall
or excess of inventory as a result of difficulty in predicting
manufacturing requirements due to volatile economic conditions,
price increases or decreased availability of component parts or raw
materials, exchange rate fluctuations, volatility of and decreases
in trading prices of our common stock and the availability of
needed financing on acceptable terms or at all; our ability to
successfully develop new products that garner customer acceptance
and generate sales, both domestically and internationally, in the
face of substantial competition; our reliance on an unrelated third
party to develop, maintain and host certain web-based food service
application software and develop and maintain selected components
of our downloadable software applications pursuant to a
non-exclusive license agreement, and the risk that interruptions in
our relationship with that third party could materially impair our
ability to provide services to our food service technology
customers on a timely basis or at all and could require substantial
expenditures to find or develop alternative software products; our
ability to successfully transition our business into the food
service technology market; risks associated with potential future
acquisitions; general economic conditions; our dependence on
contract manufacturers for the assembly of a large portion of our
products in Asia; our dependence on significant suppliers; our
ability to recruit and retain quality employees as the Company
grows; our dependence on third parties for sales outside the United
States; our dependence on technology licenses from third parties;
marketplace acceptance of new products; risks associated with
foreign operations; the availability of third-party components at
reasonable prices; price wars, supply chain disruptions or other
significant pricing pressures affecting the Company’s products in
the United States or abroad; increased product costs or reduced
customer demand for our products due to changes in U.S. policy that
may result in trade wars or tariffs; our ability to protect
intellectual property; and other risk factors detailed in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2022, and other reports filed with the Securities and Exchange
Commission. Actual results may differ materially from those
discussed in, or implied by, the forward-looking statements. We
caution readers not to place undue reliance on forward-looking
statements, which speak only as of the date of this release. We
undertake no obligation to publicly or otherwise revise any
forward-looking statements, whether as a result of new information,
future events or other factors, except where we are expressly
required to do so by applicable law.
- Financial tables follow –
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Preliminary and
Unaudited)
Three months ended March 31,
2023
2022 As Adjusted
(In thousands, except per share
data)
Net sales
$22,270
$9,702
Cost of sales
10,015
7,136
Gross profit
12,255
2,566
Operating expenses:
Engineering, design and product
development
2,269
2,283
Selling and marketing
2,757
2,683
General and administrative
3,416
3,204
8,442
8,170
Operating income (loss)
3,813
(5,604)
Interest and other income (expense):
Interest, net
(66)
(64)
Other, net
21
(35)
(45)
(99)
Income (loss) before income taxes
3,768
(5,703)
Income tax expense (benefit)
629
(1,355)
Net income (loss)
$3,139
$(4,348)
Net income (loss) per common share:
Basic
$0.32
$(0.44)
Diluted
$0.31
$(0.44)
Shares used in per share calculation:
Basic
9,930
9,886
Diluted
10,043
9,886
SUPPLEMENTAL INFORMATION –
SALES BY MARKET:
(Preliminary and
Unaudited)
Three months ended March 31,
2023
2022
(In thousands)
Food service technology
$3,458
$2,130
POS automation
1,797
1,300
Casino and gaming
15,811
4,762
TransAct Services Group
1,204
1,510
Total net sales
$22,270
$9,702
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Preliminary and
Unaudited)
March 31,
December 31,
2023
2022
Assets:
(In thousands)
Current assets:
Cash and cash equivalents
$6,644
$7,946
Accounts receivable, net
17,022
13,927
Employee retention credit receivable
-
1,500
Inventories
12,296
12,028
Other current assets
1,004
724
Total current assets
36,966
36,125
Fixed assets, net
2,882
2,781
Right-of-use asset
2,274
2,488
Goodwill
2,621
2,621
Deferred tax assets
6,828
7,327
Intangible assets, net
204
242
Other assets
225
248
15,034
15,707
Total assets
$52,000
$51,832
Liabilities and Shareholders’
Equity:
Current liabilities:
Current portion of revolving loan
payable
$2,250
$2,250
Accounts payable
$4,574
7,395
Accrued liabilities
4,061
4,077
Lease liability
891
875
Deferred revenue
1,205
1,329
Total current liabilities
12,981
15,926
Deferred revenue, net of current
portion
148
143
Lease liability, net of current
portion
1,449
1,683
Other liabilities
226
218
1,823
2,044
Total liabilities
14,804
17,970
Shareholders’ equity:
Common stock
140
139
Additional paid-in capital
56,474
56,282
Retained earnings
12,769
9,630
Accumulated other comprehensive loss, net
of tax
(77)
(79)
Treasury stock, at cost
(32,110)
(32,110)
Total shareholders’ equity
37,196
33,862
Total liabilities and shareholders’
equity
$52,000
$51,832
TRANSACT TECHNOLOGIES
INCORPORATED RECONCILIATION OF NET INCOME (LOSS) TO
EBITDA AND ADJUSTED EBITDA NON-GAAP FINANCIAL
MEASURES (Preliminary and Unaudited)
Three Months Ended
March 31,
2023
2022 As Adjusted
(In thousands)
Net income (loss)
$3,139
$(4,348)
Interest expense, net
66
64
Income tax provision (benefit)
629
(1,355)
Depreciation and amortization
352
228
EBITDA
4,186
(5,411)
Share-based compensation expense
278
296
Adjusted EBITDA
$4,464
$(5,115)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509006111/en/
Investor Contact: Ryan Gardella ICR, Inc.
Ryan.Gardella@icrinc.com
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