2021 First Quarter Net Sales of $8.3
Million
FST Recurring Revenue up 96% on a
Year-Over-Year Basis
FST Paid Terminals Up 124% from March 31,
2020
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 operating results for the quarter ended March 31,
2021.
“We are seeing many green shoots and positive signs of recovery
as we carry our momentum over from that latter half of 2020 into
the first quarter of 2021, our third consecutive quarter of
sequential top line growth. Our Food Service Technology (“FST”)
market continues to see considerable progress as the pandemic
subsides, with overall FST revenues growing 100% year-over-year,
and FST recurring revenue posting a 96% year-over-year gain. The
growth we are seeing within FST is exciting, particularly our
expanding hardware footprint, which drives a sustainable base of
recurring FST revenue,” said Bart C. Shuldman, Chairman and CEO of
TransAct Technologies. “On that note, we continue to see tremendous
momentum in our new paid terminals, with 7,009 total paid terminals
in service at the end of Q1, up from 5,688 at the end of the fourth
quarter of 2020. We also saw our first software upgrade order in
the quarter, highlighting the growing cross-sell opportunities we
have as our terminal base expands. We could not be more thrilled
with the results of our BOHA! efforts so far and we are optimistic
that this growth will continue throughout 2021 and beyond.”
Shuldman continued, “Finally, our Casino and Gaming market has
begun to turn the corner in the domestic market as we see casino
reopening’s tick up and guests return in greater numbers. TransAct
is well-positioned to capitalize on the re-opening of the global
economy and especially the casino and restaurant market and we look
forward to supporting our new and existing clients in solving their
ongoing business challenges.”
First Quarter 2021 Financial Highlights
- Net Sales: Net sales for the first quarter of 2021 were
$8.3 million, down 19% compared to $10.2 million for the first
quarter of 2020.
- FST Recurring Revenue: FST recurring revenue for the
first quarter of 2021 was $1.2 million, up 96% compared to $0.6
million for the first quarter of 2020.
- Gross Profit: Gross profit for the first quarter of 2021
was $3.2 million, resulting in gross margin of 38.4%, compared to
gross profit of $4.9 million for the first quarter of 2020, which
resulted in a 48.0% gross margin.
- Operating loss: Operating loss for the first quarter of
2021 was $(2.7) million, compared to operating loss of $(1.3)
million for the first quarter of 2020.
- Net loss: Net loss for the first quarter of 2021 was
$(2.2) million, or $(0.25) net loss per share, based on 8.9 million
weighted average common shares outstanding. Net loss for the
comparable 2020 period was $(1.0) million, or $(0.13) net loss per
share, based on 7.5 million weighted average common shares
outstanding.
- EBITDA: EBITDA loss was $(2.5) million for the first
quarter of 2021, compared to an EBITDA loss of $(1.2) million for
the first quarter of 2020.
- Adjusted EBITDA (loss): Adjusted EBITDA loss was $(2.2)
million for the first quarter of 2021, compared to adjusted EBITDA
loss of $(1.0) million for the first quarter of 2020.
- Paid Terminals: Paid terminals in the market were 7,009
at March 31, 2021, compared to 3,130 at March 31, 2020, an increase
of 124%.
2021 First Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today, May 6,
2021, beginning at 4:30 p.m. ET to discuss the Company’s
preliminary first quarter 2021 results and other matters. Both the
call and the webcast are open to the general public. The conference
call number is 888-254-3590 and the conference ID number is 1827739
(domestic or international). Please call five 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.
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 non-recurring
items 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 software-driven technology and printing solutions for
high-growth markets including food service, casino and gaming, POS
automation, and oil and gas. The Company’s solutions are designed
from the ground up based on customer requirements and are sold
under the BOHA! ™, AccuDate™, EPICENTRAL®, Epic®, Ithaca® and
Printrex® brands. TransAct has sold over 3.5 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™, Ithaca® and
Printrex® are trademarks of TransAct Technologies Incorporated.
©2021 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,
2021. 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, 2021. 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, 2021, 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 in this press release include forward-looking
statements. Forward-looking statements generally can be identified
by the use of forward-looking terminology, such as "may", "will",
"expect", "intend", "estimate", "anticipate", "believe", or
"continue", or the negative thereof, or other similar words. All
forward-looking statements involve risks and uncertainties,
including, but not limited to, the adverse effects of the COVID-19
pandemic on our business, operations, financial condition, results
of operations and capital resources, including as a result of
supply chain disruptions, shutdowns and/or operational restrictions
imposed on our customers, an inability of our customers to make
payments on time or at all, diversion of management attention,
necessary modifications to our business practices and operations,
cost cutting measures we have made and may continue to make, 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; our ability to remediate the material
weakness over internal control over financial reporting; 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 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; the effect of the United Kingdom’s
withdrawal from the European Union; and other risk factors detailed
in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2020, 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.
The forward-looking statements speak only as of the date of this
release, and the Company assumes no duty to update them to reflect
new, changing or unanticipated events or circumstances, except as
required by applicable law.
- Financial tables follow –
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Preliminary and
Unaudited)
Three months ended March 31,
2021
2020
(In thousands, except per share
data)
Net sales
$
8,301
$
10,247
Cost of sales
5,112
5,329
Gross profit
3,189
4,918
Operating expenses:
Engineering, design and product
development
1,803
1,385
Selling and marketing
1,443
2,208
General and administrative
2,609
2,620
5,855
6,213
Operating loss
(2,666
)
(1,295
)
Interest and other income (expense):
Interest, net
(13
)
3
Other, net
(83
)
(165
)
(96
)
(162
)
Loss before income taxes
(2,762
)
(1,457
)
Income tax benefit
(556
)
(465
)
Net loss
$
(2,206
)
$
(992
)
Net loss per common share:
Basic
$
(0.25
)
$
(0.13
)
Diluted
$
(0.25
)
$
(0.13
)
Shares used in per share calculation:
Basic
8,948
7,507
Diluted
8,948
7,507
SUPPLEMENTAL INFORMATION –
SALES BY MARKET:
(Preliminary and
Unaudited)
Three months ended March 31,
2021
2020
(In thousands)
Food service technology
$
2,747
$
1,371
POS automation
1,164
1,558
Casino and gaming
2,865
4,931
Printrex
159
117
TransAct services group
1,366
2,270
Total net sales
$
8,301
$
10,247
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Preliminary and
Unaudited)
March 31,
December 31,
2021
2020
(in thousands)
Assets:
Current assets:
Cash and cash equivalents
$
8,728
$
10,359
Accounts receivable, net
4,712
3,377
Note receivable
-
100
Inventories
10,000
11,286
Prepaid income taxes
2,411
2,409
Other current assets
911
644
Total current assets
26,762
28,175
Fixed assets, net
1,852
1,950
Note receivable, net of current
portion
-
1,584
Right-of-use asset
3,429
3,618
Goodwill
2,621
2,621
Deferred tax assets
3,489
2,939
Intangible assets, net
532
583
Other assets
678
777
12,601
14,072
Total assets
$
39,363
$
42,247
Liabilities and Shareholders’
Equity:
Current liabilities:
Accounts payable
$
1,919
$
1,691
Accrued liabilities
2,498
3,665
Lease liability
813
837
Deferred revenue
569
504
Total current liabilities
5,799
6,697
Long-term debt
2,173
2,173
Deferred revenue, net of current
portion
202
111
Lease liability, net of current
portion
2,666
2,864
Other liabilities
160
166
5,201
5,314
Total liabilities
11,000
12,011
Shareholders’ equity:
Common stock
130
130
Additional paid-in capital
42,816
42,536
Retained earnings
17,512
19,718
Accumulated other comprehensive income
(loss), net of tax
15
(38
)
Treasury stock, at cost
(32,110
)
(32,110
)
Total shareholders’ equity
28,363
30,236
Total liabilities and shareholders’
equity
$
39,363
$
42,247
TRANSACT TECHNOLOGIES
INCORPORATED RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED
EBITDA NON-GAAP FINANCIAL MEASURES (Preliminary and
Unaudited)
Three Months Ended
March 31,
(in thousands)
2021
2020
Net loss
$
(2,206
)
$
(992
)
Interest expense (income), net
13
(3
)
Income tax benefit
(556
)
(465
)
Depreciation and amortization
240
238
EBITDA
(2,509
)
(1,222
)
Share-based compensation expense
264
187
Adjusted EBITDA
$
(2,245
)
$
(1,035
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005891/en/
Investors: Bart Shuldman Chairman and Chief Executive
Officer TransAct Technologies Incorporated 702-388-8180 Michael
Bowen ICR, Inc. Michael.Bowen@icrinc.com 203-682-8299 Marc P.
Griffin ICR, Inc. Marc.Griffin@icrinc.com 646-277-1290
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