Sold Over 1,350 Terminals in the Quarter, With
Over 2,800 Sold in the Last Two Quarters
Added 12 New FST Customers in the Quarter
Casino Market Continues to Normalize after
Industry Inventory Build During Pandemic
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 third quarter ended September 30,
2024.
“We reported an excellent FST quarter, with another 1,355 BOHA!
Terminal sales. We believe this momentum is just the beginning,
with the effects of our re-organization and re-focusing of the
sales team and go-to-market process starting to yield positive
results,” said John Dillon, Chief Executive Officer of TransAct.
“We also added another 12 new FST accounts in the quarter,
representing approximately 2,400 potential Terminal 2 sales
opportunities. Our pipeline continues to hold strong under
continued scrubbing, and as we further refine our process, we
expect to further improve our go-to-market execution and generate
improving conversion rates in 2025.”
Third Quarter 2024 Financial Highlights
- Net Sales: Net sales for the third quarter of 2024 were
$10.9 million, down 6% sequentially and down 37% compared to $17.2
million for the third quarter of 2023, largely as a result of the
expected market dynamics and normalizing demand for our Casino and
Gaming printers.
- FST Recurring Revenue: FST recurring revenue for the
third quarter of 2024 was $2.9 million, which was up 4%
sequentially, but down 8% compared to $3.1 million for the third
quarter of 2023.
- Gross Profit: Gross profit for the third quarter of 2024
was $5.2 million, resulting in gross margin of 48.1%, compared to
gross profit of $8.9 million for the third quarter of 2023, which
delivered a 51.9% gross margin.
- Operating (loss) income: Operating loss for the third
quarter of 2024 was $(837) thousand, compared to an operating loss
of $(438) thousand for the second quarter of 2024 and operating
income of $1.2 million for the third quarter of 2023.
- Net (loss) income: Net loss for the third quarter of
2024 was $(551) thousand, or $(0.06) per diluted share, based on
10.0 million weighted average common shares outstanding, compared
sequentially to a net loss for the second quarter of 2024 of $(319)
thousand, or $(0.03) per diluted share. This compares to net income
for the third quarter of 2023 of $906 thousand, or $0.09 per
diluted share, based on 10.1 million weighted average common shares
outstanding.
- EBITDA: EBITDA was negative $(533) thousand for the
third quarter of 2024, compared to negative $(190) thousand for the
second quarter of 2024 and $1.5 million for the third quarter of
2023.
- Adjusted EBITDA: Adjusted EBITDA was negative $(204)
thousand for the third quarter of 2024, compared to $89 thousand in
the second quarter of 2024, and $1.7 million for the third quarter
of 2023.
Updated 2024 Financial Outlook
- Net Sales: The Company now expects full year 2024 net
sales of between $43 million and $45 million.
- Adjusted EBITDA: The Company continues to expect full
year 2024 adjusted EBITDA to be between negative $1 million and
negative $2 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.
Strategic Business Review
The Company continues to actively assess strategic alternatives
with the assistance of Roth Capital Partners, LLC, the Company’s
advisor while continuing to pursue its business growth and
development initiatives on a parallel track. The Company has
engaged with a number of outside parties since the previous update
in June and is in various stages of discussion with such outside
parties. The Company is committed to pursuing an optimal outcome
for all its stakeholders and maximizing shareholder value.
2024 Third Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today,
November 7, 2024, beginning at 4:30 p.m. ET to discuss the
Company’s preliminary third quarter 2024 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 13749888. 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 “Company” followed by
“Investor Relations,” then select “News & Events” 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 items that do not
reflect the Company’s ongoing operations and are excluded from the
calculation of such measures; (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. Adjusted net (loss) income and adjusted net
(loss) income per diluted share provide the Company with an
understanding of the results of the primary operations of the
business by excluding the effects of special items (for example,
the $1.5 million severance charge related to the resignation of the
Company’s former CEO in the first nine months of 2023) that do not
reflect the ordinary earnings of the Company’s operations. The
Company uses these measures to evaluate period-over-period
operating performance because the Company believes this provides a
more comparable measure of the Company’s continuing business, as
these measures adjust for the special items that are not reflective
of the normal results of the business. 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 (loss) income before net interest
income (expense), income taxes, depreciation, and amortization. A
reconciliation of EBITDA to net (loss) income, the most comparable
GAAP financial measure, can be found attached to this release.
Adjusted EBITDA is defined as net (loss) income before net
interest income (expense), income taxes, depreciation and
amortization and is adjusted for (1) share-based compensation
expense, (2) the $1.5 million severance charge related to the
resignation of the Company’s former CEO in the first nine months of
2023 and (3) any other items, when they occur, that we believe do
not reflect the ordinary earnings of the Company’s ongoing
business. The Company adjusts EBITDA for share-based compensation
because the Company considers share-based compensation expense to
be a non-cash expense similar to depreciation and amortization. A
reconciliation of adjusted EBITDA to net (loss) income, the most
comparable GAAP financial measure, can be found attached to this
release.
Adjusted net (loss) income is defined as net (loss) income
adjusted for the $1.5 million severance charge related to the
resignation of the Company’s former CEO in the first nine months of
2023. A reconciliation of adjusted net (loss) income to net (loss)
income, the most comparable GAAP financial measure, can be found
attached to this release.
Adjusted net (loss) income per diluted share is defined as
adjusted net (loss) income divided by diluted shares outstanding. A
reconciliation of adjusted net (loss) income per diluted share to
net (loss) income per diluted share, 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 3.9 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.
©2024 TRANSACT Technologies Incorporated. All rights reserved.
TransAct®, BOHA!™, AccuDate™, Epic Edge®, EPICENTRAL® and Ithaca®
are trademarks of TransAct Technologies Incorporated.
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 and nine months ended
September 30, 2024. 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
and nine months ended September 30, 2024. During the course of the
preparation of the Company’s condensed consolidated financial
statements and related notes as of and for the three and nine
months ended September 30, 2024, 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 within the meaning of the U.S. federal
securities laws, including the Private Securities Litigation Reform
Act of 1995. 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”, ”could”, ”expect”, ”intend”, ”estimate”,
“anticipate”, ”believe”, ”project”, ”plan”, ”predict”, ”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 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; inflationary pressures; the Russia/Ukraine and Middle
East conflicts; 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 third party component
parts or raw materials at reasonable prices; 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; any
system outages, interruptions or other disruptions to our software
applications, including as a result of unexpected errors or
mistakes in connection with over-the-air updates; our ability to
successfully grow our business in the food service technology
market; risks associated with the pursuit of strategic initiatives
and business growth; 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; our dependence on third parties for sales
outside the United States; marketplace acceptance of new products;
risks associated with foreign operations; 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; political and policy
uncertainties in connection with the U.S. presidential election;
our ability to protect intellectual property; exchange rate
fluctuations; the availability of needed financing on acceptable
terms or at all; volatility of, and decreases in, trading prices of
our common stock; and other risk factors identified and discussed
in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2023, and other reports filed with the Securities and
Exchange Commission. 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
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
(In thousands, except per share
data)
Net sales
$
10,867
$
17,190
$
33,153
$
59,366
Cost of sales
5,640
8,274
16,192
27,337
Gross profit
5,227
8,916
16,961
32,029
Operating expenses:
Engineering, design and product
development
1,640
2,509
5,405
7,283
Selling and marketing
1,880
2,397
6,160
7,838
General and administrative
2,544
2,819
7,972
10,680
6,064
7,725
19,537
25,801
Operating (loss) income
(837
)
1,191
(2,576
)
6,228
Interest and other income (expense):
Interest, net
42
(73
)
116
(207
)
Other, net
96
(43
)
43
(22
)
138
(116
)
159
(229
)
(Loss) income before income taxes
(699
)
1,075
(2,417
)
5,999
Income tax benefit (expense)
148
(169
)
511
(1,189
)
Net (loss) income
$
(551
)
$
906
$
(1,906
)
$
4,810
Net (loss) income per common share:
Basic
$
(0.06
)
$
0.09
$
(0.19
)
$
0.48
Diluted
$
(0.06
)
$
0.09
$
(0.19
)
$
0.48
Shares used in per share calculation:
Basic
10,006
9,958
9,992
9,948
Diluted
10,006
10,052
9,992
10,023
SUPPLEMENTAL INFORMATION –
SALES BY MARKET: (Preliminary and Unaudited)
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
(In thousands)
Food service technology
$
4,321
$
4,241
$
11,799
$
11,594
POS automation
1,148
1,644
2,950
5,345
Casino and gaming
4,534
9,019
15,589
37,002
TransAct Services Group
864
2,286
2,815
5,425
Total net sales
$
10,867
$
17,190
$
33,153
$
59,366
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Preliminary and
Unaudited)
September 30,
December 31,
2024
2023
(In thousands)
Assets:
Current assets:
Cash and cash equivalents
$
11,343
$
12,321
Accounts receivable, net
7,421
9,824
Inventories
16,851
17,759
Prepaid income taxes
713
322
Other current assets
1,079
773
Total current assets
37,407
40,999
Fixed assets, net
1,986
2,421
Right-of-use assets, net
1,380
1,602
Goodwill
2,621
2,621
Deferred tax assets
7,034
6,304
Intangible assets, net
-
88
Other assets
75
163
13,096
13,199
Total assets
$
50,503
$
54,198
Liabilities and Shareholders’
Equity:
Current liabilities:
Revolving loan payable
$
2,250
$
2,250
Accounts payable
3,210
4,431
Accrued liabilities
3,883
4,947
Lease liabilities
983
929
Deferred revenue
926
1,079
Total current liabilities
11,252
13,636
Deferred revenue, net of current
portion
240
209
Lease liabilities, net of current
portion
438
720
Other liabilities
219
219
897
1,148
Total liabilities
12,149
14,784
Shareholders’ equity:
Common stock
141
140
Additional paid-in capital
57,857
57,055
Retained earnings
12,472
14,378
Accumulated other comprehensive loss, net
of tax
(6
)
(49
)
Treasury stock, at cost
(32,110
)
(32,110
)
Total shareholders’ equity
38,354
39,414
Total liabilities and shareholders’
equity
$
50,503
$
54,198
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF GAAP
EARNINGS FINANCIAL MEASURES TO CORRESPONDING NON-GAAP
FINANCIAL MEASURES
(Preliminary and Unaudited,
thousands of dollars, except percentages and per share
amounts)
Three months ended September 30,
2024
Reported
Adjustments(1)
Adjusted Non-GAAP
Operating expenses
$
6,064
$
-
$
6,064
% of net sales
55.8
%
55.8
%
Operating loss
(837
)
-
(837
)
% of net sales
(7.7
)%
(7.7
)%
Interest and other income
138
-
138
Loss before income taxes
(699
)
-
(699
)
Income tax benefit
148
-
148
Net loss
(551
)
-
(551
)
Net loss per common share:
Basic
$
(0.06
)
$
-
$
(0.06
)
Diluted
$
(0.06
)
$
-
$
(0.06
)
(1) No adjustments.
Three months ended September 30,
2023
Reported
Adjustments(2)
Adjusted
Non-GAAP
Operating expenses
$
7,725
$
-
$
7,725
% of net sales
44.9
%
44.9
%
Operating income
1,191
-
1,191
% of net sales
6.9
%
6.9
%
Interest and other expense
(116
)
-
(116
)
Income before income taxes
1,075
-
1,075
Income tax (expense)
(169
)
-
(169
)
Net income
906
-
906
Net income per common share:
Basic
$
0.09
$
-
$
0.09
Diluted
$
0.09
$
-
$
0.09
(2) No adjustments.
TRANSACT TECHNOLOGIES
INCORPORATED RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO
CORRESPONDING NON-GAAP FINANCIAL MEASURES (Preliminary and
Unaudited, thousands of dollars, except percentages and per share
amounts)
Nine months ended September 30,
2024
Reported
Adjustments(3)
Adjusted Non-GAAP
Operating expenses
$
19,537
$
-
$
19,537
% of net sales
58.9
%
58.9
%
Operating loss
(2,576
)
-
(2,576
)
% of net sales
(7.8
)%
(7.8
)%
Interest and other income
159
-
159
Loss before income taxes
(2,417
)
-
(2,417
)
Income tax benefit
511
-
511
Net loss
(1,906
)
-
(1,906
)
Net loss per common share:
Basic
$
(0.19
)
$
-
$
(0.19
)
Diluted
$
(0.19
)
$
-
$
(0.19
)
(3) No adjustments.
Nine months ended September 30,
2023
Reported
Adjustments(4)
Adjusted Non-GAAP
Operating expenses
$
25,801
$
(1,461
)
$
24,340
% of net sales
43.5
%
41.0
%
Operating income
6,228
1,461
7,689
% of net sales
10.5
%
13.0
%
Interest and other expense
(229
)
-
(229
)
Income before income taxes
5,999
1,461
7,460
Income tax (expense)
(1,189
)
(70
)
(1,259
)
Net income
4,810
1,391
6,201
Net income per common share:
Basic
$
0.48
$
0.14
$
0.62
Diluted
$
0.48
$
0.14
$
0.62
(4) Adjustment includes a severance charge
of $1,461 incurred in April 2023 related to the resignation of the
Company’s former CEO.
TRANSACT TECHNOLOGIES
INCORPORATED RECONCILIATION OF NET (LOSS) INCOME TO EBITDA AND
ADJUSTED EBITDA NON-GAAP FINANCIAL MEASURES (Preliminary and
Unaudited)
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
(In thousands)
Net (loss) income
$
(551
)
$
906
$
(1,906
)
$
4,810
Interest (income) expense, net
(42
)
73
(116
)
207
Income tax (benefit) expense
(148
)
169
(511
)
1,189
Depreciation and amortization
208
381
844
1,103
EBITDA
(533
)
1,529
(1,689
)
7,309
Share-based compensation expense
329
213
873
611
Severance charge related to resignation of
the Company’s former CEO
-
-
-
1,461
Adjusted EBITDA
$
(204
)
$
1,742
$
(816
)
$
9,381
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107947672/en/
Investor Contact: Ryan Gardella ICR, Inc.
Ryan.Gardella@icrinc.com
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