2022 Third Quarter Net Sales of $17.9 Million,
up 68% on a Year-Over-Year Basis
FST Recurring Revenue of $2.6 Million, up 27%
on a Year-Over-Year Basis
FST Paid Terminals Up 36% from September 30,
2021
Reports Positive Net Income
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 September 30,
2022.
“Our quarterly results broke not only a number of Company sales
records, but also mark the end of our best nine months in sales
since 2018. This would not be possible without the incredible work
of our engineering, operations and sales teams who have worked
tirelessly to get a near record number of casino and POS printers
manufactured, sold and delivered in the face of supply shortages,
and I cannot thank the TransAct team enough for their efforts,”
said Bart C. Shuldman, Chief Executive Officer of TransAct. Mr.
Shuldman continued, “This quarter saw continued momentum in our
Food Service Technology (“FST”) business with new records set for
total FST revenue at $3.7 million, and total recurring FST revenue
of nearly $2.6 million, including label sales. Furthermore, with
the new additions to our sales force settling in, we have a solid
pipeline of opportunities with a number of customer evaluations in
progress with world-class organizations.”
“In addition, I am thrilled with the Casino and Gaming market
where historic demand continues to outstrip our supply. Every
printer we can make is being shipped out which helped us see a
double-digit gain in our domestic sales and yet another triple
digit gain in our international markets in the third quarter of
2022 compared to the third quarter of 2021. I could not be more
pleased with the whole team as TransAct looks to capitalize on
these trends going into 2023.”
Third Quarter 2022 Financial Highlights
- Net Sales: Net sales for the third quarter of 2022 were
$17.9 million, up 68% compared to $10.6 million for the third
quarter of 2021.
- FST Recurring Revenue: FST recurring revenue for the
third quarter of 2022 was $2.6 million, up 27% compared to $2.0
million for the third quarter of 2021.
- Gross Profit: Gross profit for the third quarter of 2022
was $8.2 million, resulting in gross margin of 45.9%, compared to
gross profit of $4.3 million for the third quarter of 2021, which
resulted in a 40.5% gross margin.
- Operating income (loss): Operating income for the third
quarter of 2022 was $0.4 million, compared to operating loss of
$(1.6) million for the third quarter of 2021.
- Net income: Net income for the third quarter of 2022 was
$0.5 million, or $0.05 net income per diluted share, based on 9.9
million weighted average common shares outstanding. Net income for
the comparable 2021 period was $0.9 million, or $0.09 net income
per diluted share, based on 9.8 million weighted average common
shares outstanding.
- Adjusted net income (loss): Adjusted net income for the
third quarter of 2022 was $0.5 million, or $0.05 adjusted net
income per diluted share compared to adjusted net loss for the
third quarter of 2021 of $(1.3) million, or $(0.14) adjusted net
loss per diluted share.
- EBITDA: EBITDA was $0.9 million for the third quarter of
2022, compared to EBITDA of $0.7 million for the third quarter of
2021.
- Adjusted EBITDA: Adjusted EBITDA was $1.2 million for
the third quarter of 2022, compared to adjusted EBITDA loss of
$(1.2) million for the third quarter of 2021.
- Paid Terminals: Paid terminals in the market were 11,929
on September 30, 2022, compared to 8,749 on September 30, 2021, an
increase of 36%.
2022 Third Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today,
November 10, 2022, beginning at 4:30 p.m. ET to discuss the
Company’s preliminary third quarter 2022 results and other matters.
Both the call and the webcast are open to the general public. The
conference call number is 888-394-8218 and the conference ID number
is 6552635 (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 estimate of inventory cost as the Company does not perform
intensive manufacturing of its finished products which are
therefore better measured under average cost. In addition, the
Company’s business is projected to include an increasing sales
volume of software going forward, which better aligns with average
costing. 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 and Condensed Consolidated Balance Sheets 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. Adjusted net income (loss) and adjusted net income
(loss) 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
forgiveness of the Company’s $2.2 million loan under the Paycheck
Protection Program (the “PPP Loan”) administered by the Small
Business Administration ( the “SBA”) pursuant to the Coronavirus
Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”))
that do not reflect the ordinary earnings of the Company’s
operations. 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. These measures may be useful to an
investor in evaluating the underlying operating performance of the
Company’s 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 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 and the impact of the
forgiveness of the PPP Loan by the SBA pursuant to the CARES Act.
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.
Adjusted net income (loss) is defined as net income (loss)
adjusted for the impact of the forgiveness of the PPP Loan by the
SBA pursuant to the CARES Act. A reconciliation of adjusted net
income (loss) to net income (loss), the most comparable GAAP
financial measure, can be found attached to this release.
Adjusted net income (loss) per diluted share is defined as
adjusted net income (loss) divided by diluted shares outstanding. A
reconciliation of adjusted net income (loss) per diluted share to
net income (loss) 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 3.6 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. ©2022 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 and nine months ended
September 30, 2022. 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, 2022. 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, 2022, 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", "project”,
"plan”, "design" 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 current economic conditions, whether due to the COVID-19
pandemic or otherwise on our business, operations, financial
condition, results of operations and capital resources, including
difficulties or delays in manufacturing or delivery of inventory or
other 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; 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; the ongoing war between Russia
and Ukraine and the global response to this war; risks associated
with the Company’s ongoing implementation of a new ERP system; and
other risk factors detailed in the Company’s Annual Report on Form
10-K for the year ended December 31, 2021, 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
Nine months ended
September 30,
September 30,
2022
2021
2022
2021
As Adjusted
As Adjusted
As Adjusted
(In thousands, except per share
data)
Net sales
$17,856
$10,637
$40,181
$28,263
Cost of sales
9,663
6,332
23,988
17,187
Gross profit
8,193
4,305
16,193
11,076
Operating expenses:
Engineering, design and product
development
1,985
1,876
6,440
5,483
Selling and marketing
2,748
1,899
8,724
5,109
General and administrative
3,073
2,146
9,200
7,264
7,806
5,921
24,364
17,856
Operating income (loss)
387
(1,616)
(8,171)
(6,780)
Interest and other income (expense):
Interest, net
(53)
(29)
(145)
(71)
Other, net
132
(69)
(167)
(169)
Gain on forgiveness of long-term debt
-
2,173
-
2,173
79
2,075
(312)
1,933
Income (loss) before income taxes
466
459
(8,483)
(4,847)
Income tax benefit
62
442
2,287
1,629
Net income (loss)
$528
$901
$(6,196)
$(3,218)
Net income (loss) per common share:
Basic
$0.05
$0.10
$(0.63)
$(0.35)
Diluted
$0.05
$0.09
$(0.63)
$(0.35)
Shares used in per share calculation:
Basic
9,911
9,408
9,902
9,112
Diluted
9,911
9,846
9,902
9,112
SUPPLEMENTAL INFORMATION –
SALES BY MARKET:
(Preliminary and
Unaudited)
Three months ended
Nine months ended
September 30,
September 30,
2022
2021
2022
2021
(In thousands)
Food service technology
$3,748
$3,282
$9,310
$9,103
POS automation
5,228
1,188
7,700
3,608
Casino and gaming
7,743
4,036
19,030
10,368
Printrex
-
160
-
431
TransAct Services Group
1,137
1,971
4,141
4,753
Total net sales
$17,856
$10,637
$40,181
$28,263
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Preliminary and
Unaudited)
As Adjusted
September 30,
December 31,
2022
2021
(In thousands)
Assets:
Current assets:
Cash and cash equivalents
$6,364
$19,457
Accounts receivable, net
13,639
7,593
Employee retention credit receivable
1,500
1,500
Inventories
11,115
7,711
Prepaid income taxes
188
137
Other current assets
984
738
Total current assets
33,790
37,136
Fixed assets, net
2,737
2,684
Right-of-use asset
2,693
2,553
Goodwill
2,621
2,621
Deferred tax assets
7,520
5,143
Intangible assets, net
281
397
Other assets
297
400
16,149
13,798
Total assets
$49,939
$50,934
Liabilities and Shareholders’
Equity:
Current liabilities:
Current portion of revolving loan
payable
$2,250
$-
Accounts payable
6,156
4,308
Accrued liabilities
3,998
3,894
Lease liability
827
789
Deferred revenue
1,158
805
Total current liabilities
14,389
9,796
Deferred revenue, net of current
portion
164
186
Lease liability, net of current
portion
1,909
1,781
Other liabilities
195
187
2,268
2,154
Total liabilities
16,657
11,950
Shareholders’ equity:
Common stock
139
139
Additional paid-in capital
55,995
55,246
Retained earnings
9,370
15,566
Accumulated other comprehensive (loss)
income, net of tax
(112)
143
Treasury stock, at cost
(32,110)
(32,110)
Total shareholders’ equity
33,282
38,984
Total liabilities and shareholders’
equity
$49,939
$50,934
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, 2022
Reported
Adjustments(1)
Adjusted
Non-GAAP
Operating expenses
$7,806
$-
$7,806
% of net sales
43.7
%
43.7
%
Operating income
387
-
387
% of net sales
2.2
%
2.2
%
Interest and other income
79
-
79
Income before income taxes
466
-
466
Income tax benefit
62
-
62
Net income
528
-
528
Net income per common share:
Basic
$0.05
$-
$0.05
Diluted
$0.05
$-
$0.05
(1) No adjustments.
Three months ended
September 30, 2021
Reported
Adjustments(2)
Adjusted
Non-GAAP
Operating expenses
$5,921
$-
$5,921
% of net sales
55.7
%
55.7
%
Operating loss
(1,616
)
-
(1,616
)
% of net sales
(15.2
)%
(15.2
)%
Interest and other income (expense)
2,075
(2,173
)
(98
)
Income (loss) before income taxes
459
(2,173
)
(1,714
)
Income tax benefit
442
-
442
Net income (loss)
901
(2,173
)
(1,272
)
Net income (loss) per common share:
Basic
$0.10
$(0.23
)
$(0.14
)
Diluted
$0.09
$(0.22
)
$(0.13
)
(2) Adjustment includes $2,173 gain on
forgiveness of the PPP Loan that occurred in July 2021.
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, 2022
Reported
Adjustments(3)
Adjusted
Non-GAAP
Operating expenses
$24,364
$-
$24,364
% of net sales
60.6
%
60.6
%
Operating loss
(8,171
)
-
(8,171
)
% of net sales
(20.3
)%
(20.3
)%
Interest and other income (expense)
(312
)
-
(312
)
Loss before income taxes
(8,483
)
-
(8,483
)
Income tax benefit
2,287
-
2,287
Net loss
(6,196
)
-
(6,196
)
Net loss per common share:
Basic
$(0.63
)
$-
$(0.63
)
Diluted
$(0.63
)
$-
$(0.63
)
(3) No adjustments.
Nine months ended
September 30, 2021
Reported
Adjustments(4)
Adjusted
Non-GAAP
Operating expenses
$17,856
$-
$17,856
% of net sales
63.2
%
63.2
%
Operating loss
(6,780
)
-
(6,780
)
% of net sales
(24.0
)%
(24.0
)%
Interest and other income (expense)
1,933
(2,173
)
(240
)
Loss before income taxes
(4,847
)
(2,173
)
(7,020
)
Income tax benefit
1,629
-
1,629
Net loss
(3,218
)
(2,173
)
(5,391
)
Net loss per common share:
Basic
$(0.35
)
$(0.24
)
$(0.59
)
Diluted
$(0.35
)
$(0.24
)
$(0.59
)
(4) Adjustment includes $2,173 gain on
forgiveness of the PPP Loan that occurred in July 2021.
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF NET INCOME
(LOSS) TO EBITDA AND ADJUSTED EBITDA
NON-GAAP FINANCIAL
MEASURES
(Preliminary and
Unaudited)
Three months ended
Nine months ended
September 30,
September 30,
2022
2021
2022
2021
As Adjusted
As Adjusted
As Adjusted
(In thousands)
Net income (loss)
$528
$901
$(6,196
)
$(3,218
)
Interest expense, net
53
29
145
71
Income tax (benefit)
(62
)
(442
)
(2,287
)
(1,629
)
Depreciation and amortization
359
235
984
721
EBITDA
878
723
(7,354
)
(4,055
)
Share-based compensation expense
287
257
868
952
Gain on forgiveness of PPP Loan
-
(2,173
)
-
(2,173
)
Adjusted EBITDA
$1,165
$(1,193
)
$(6,486
)
$(5,276
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221110005715/en/
Investor Contact: Bart Shuldman Chief Executive Officer
TransAct Technologies Incorporated
Ryan Gardella ICR, Inc. Ryan.Gardella@icrinc.com
TransAct Technologies (NASDAQ:TACT)
Historical Stock Chart
From Apr 2024 to May 2024
TransAct Technologies (NASDAQ:TACT)
Historical Stock Chart
From May 2023 to May 2024