Sold Approximately 1,500 Terminals in the
Quarter, Up 64% Sequentially
Recurring FST Revenue Increased 15%
Sequentially
Added Thirteen New FST Customers in the
Quarter
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 second quarter ended June 30, 2024.
“We are pleased with our results for the quarter, highlighted by
1,476 new terminals sold in the quarter, sequential FST recurring
revenue growth, and thirteen new logos added to our BOHA! platform
in the quarter,” said John Dillon, Chief Executive Officer of
TransAct. “Our continued focus on cost control is also yielding
results, with our latest measures expected to save approximately $2
million on an annualized basis, which we anticipate seeing the full
effect of beginning in the third quarter 2024. Our initiatives
aimed at streamlining the organization and increasing our sales
efficiency are producing positive changes at TransAct and we are
continuing to work diligently towards our goals.”
Second Quarter 2024 Financial Highlights
- Net Sales: Net sales for the second quarter of 2024 were
$11.6 million, up 9% sequentially, but down 42% compared to $19.9
million for the second 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
second quarter of 2024 was $2.8 million, which was up 15%
sequentially, and up 12% compared to $2.5 million for the second
quarter of 2023.
- Gross Profit: Gross profit for the second quarter of
2024 was $6.1 million, resulting in gross margin of 52.7%, compared
to gross profit of $10.9 million for the second quarter of 2023,
which delivered a 54.5% gross margin.
- Operating (loss) income: Operating loss for the second
quarter of 2024 was $(438) thousand, compared to an operating loss
of $(1.3) million for the first quarter of 2024 and operating
income of $1.2 million for the second quarter of 2023.
- Net (loss) income: Net loss for the second quarter of
2024 was $(319) thousand, or $(0.03) per diluted share, based on
10.0 million weighted average common shares outstanding. Net loss
for the first quarter of 2024 was $(1.0) million, or $(0.10) per
diluted share, and net income for the second quarter of 2023 was
$765 thousand, or $0.08 per diluted share, based on 10.0 million
weighted average common shares outstanding.
- Adjusted net (loss) income: Adjusted net loss for the
second quarter of 2024 was $(319) thousand, or $(0.03) per diluted
share. Adjusted net income for the comparable 2023 period was $2.2
million, or $0.22 per diluted share.
- EBITDA: EBITDA was negative $190 thousand for the second
quarter of 2024, compared to negative $966 thousand for the first
quarter of 2024 and $1.6 million for the second quarter of
2023.
- Adjusted EBITDA: Adjusted EBITDA was $89 thousand for
the second quarter of 2024, compared to negative $701 thousand in
the first quarter of 2024, and $3.2 million for the second quarter
of 2023.
Updated 2024 Financial Outlook
- Total Net Sales: The Company currently expects full year
2024 total net sales of between $45 million and $50 million.
- Total Adjusted EBITDA: The Company expects full year
2024 total adjusted EBITDA to be between negative $1 million and
negative $2 million, up from the previously anticipated range of
negative $2.5 million to negative $3.5 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.
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 Second Quarter Conference Call and Webcast TransAct
is hosting a conference call and webcast today, August 8, 2024,
beginning at 4:30 p.m. ET to discuss the Company’s preliminary
second 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 13747979.
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
second quarter 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, (2)
the $1.5 million severance charge related to the resignation of the
Company’s former CEO in the second quarter 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 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 second quarter 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 six months ended
June 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 six months ended June 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 six months
ended June 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; 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, 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; political and policy uncertainties with the
approach of 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
Six months ended
June 30,
June 30,
2024
2023
2024
2023
(In thousands, except per share
data)
Net sales
$11,599
$19,906
$22,286
$42,176
Cost of sales
5,489
9,048
10,552
19,063
Gross profit
6,110
10,858
11,734
23,113
Operating expenses:
Engineering, design and product
development
1,799
2,505
3,765
4,774
Selling and marketing
2,197
2,684
4,280
5,441
General and administrative
2,552
4,445
5,428
7,861
6,548
9,634
13,473
18,076
Operating (loss) income
(438)
1,224
(1,739)
5,037
Interest and other income (expense):
Interest, net
26
(68)
74
(134)
Other, net
7
-
(53)
21
33
(68)
21
(113)
(Loss) income before income taxes
(405)
1,156
(1,718)
4,924
Income tax benefit (expense)
86
(391)
363
(1,020)
Net (loss) income
$(319)
$765
$(1,355)
$3,904
Net (loss) income per common share:
Basic
$(0.03)
$0.08
$(0.14)
$0.39
Diluted
$(0.03)
$0.08
$(0.14)
$0.39
Shares used in per share calculation:
Basic
9,997
9,956
9,985
9,943
Diluted
9,997
10,017
9,985
10,016
SUPPLEMENTAL INFORMATION –
SALES BY MARKET:
(Preliminary and
Unaudited)
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
(In thousands)
Food service technology
$4,178
$3,895
$7,478
$7,353
POS automation
1,151
1,904
1,802
3,701
Casino and gaming
5,359
12,172
11,055
27,983
TransAct Services Group
911
1,935
1,951
3,139
Total net sales
$11,599
$19,906
$22,286
$42,176
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Preliminary and
Unaudited)
June 30,
December 31,
2024
2023
(In thousands)
Assets:
Current assets:
Cash and cash equivalents
$11,134
$12,321
Accounts receivable, net
6,738
9,824
Inventories
17,636
17,759
Prepaid income taxes
711
322
Other current assets
800
773
Total current assets
37,019
40,999
Fixed assets, net
2,132
2,421
Right-of-use assets
1,605
1,602
Goodwill
2,621
2,621
Deferred tax assets
6,875
6,304
Intangible assets, net
13
88
Other assets
99
163
13,345
13,199
Total assets
$50,364
$54,198
Liabilities and Shareholders’
Equity:
Current liabilities:
Revolving loan payable
$2,250
$2,250
Accounts payable
3,043
4,431
Accrued liabilities
3,651
4,947
Lease liabilities
942
929
Deferred revenue
836
1,079
Total current liabilities
10,722
13,636
Deferred revenue, net of current
portion
198
209
Lease liabilities, net of current
portion
701
720
Other liabilities
215
219
1,114
1,148
Total liabilities
11,836
14,784
Shareholders’ equity:
Common stock
140
140
Additional paid-in capital
57,528
57,055
Retained earnings
13,023
14,378
Accumulated other comprehensive loss, net
of tax
(53)
(49)
Treasury stock, at cost
(32,110)
(32,110)
Total shareholders’ equity
38,528
39,414
Total liabilities and shareholders’
equity
$50,364
$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
data)
Three months ended
June 30, 2024
Reported
Adjustments(1)
Adjusted
Non-GAAP
Operating expenses
$6,548
$-
$6,548
% of net sales
56.5
%
56.5
%
Operating loss
(438
)
-
(438
)
% of net sales
(3.8
)%
(3.8
)%
Interest and other income
33
-
33
Loss before income taxes
(405
)
-
(405
)
Income tax benefit
86
-
86
Net loss
(319
)
-
(319
)
Net loss per common share:
Basic
$(0.03
)
$-
$(0.03
)
Diluted
$(0.03
)
$-
$(0.03
)
(1) No adjustments.
Three months ended
June 30, 2023
Reported
Adjustments(2)
Adjusted
Non-GAAP
Operating expenses
$9,634
$(1,461
)
$8,173
% of net sales
48.4
%
41.1
%
Operating income
1,224
1,461
2,685
% of net sales
6.1
%
13.5
%
Interest and other expense
(68
)
-
(68
)
Income before income taxes
1,156
1,461
2,617
Income tax (expense)
(391
)
(70
)
(461
)
Net income
765
1,391
2,156
Net income per common share:
Basic
$0.08
$0.14
$0.22
Diluted
$0.08
$0.14
$0.22
(2) 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 GAAP
EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL
MEASURES
(Preliminary and Unaudited,
thousands of dollars, except percentages and per share
data)
Six months ended
June 30, 2024
Reported
Adjustments(3)
Adjusted
Non-GAAP
Operating expenses
$13,473
$-
$13,473
% of net sales
60.5
%
60.5
%
Operating loss
(1,739
)
-
(1,739
)
% of net sales
(7.8
)%
(7.8
)%
Interest and other income
21
-
21
Loss before income taxes
(1,718
)
-
(1,718
)
Income tax benefit
363
-
363
Net loss
(1,355
)
-
(1,355
)
Net loss per common share:
Basic
$(0.14
)
$-
$(0.14
)
Diluted
$(0.14
)
$-
$(0.14
)
(3) No adjustments.
Six months ended
June 30, 2023
Reported
Adjustments(4)
Adjusted
Non-GAAP
Operating expenses
$18,076
$(1,461
)
$16,615
% of net sales
42.9
%
39.4
%
Operating income
5,037
1,461
6,498
% of net sales
11.9
%
15.4
%
Interest and other expense
(113
)
-
(113
)
Income before income taxes
4,924
1,461
6,385
Income tax (expense)
(1,020
)
(70
)
(1,090
)
Net income
3,904
1,391
5,295
Net income per common share:
Basic
$0.39
$0.14
$0.53
Diluted
$0.39
$0.14
$0.53
(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
Six months ended
June 30,
June 30,
2024
2023
2024
2023
(In thousands)
Net (loss) income
$(319)
$765
$(1,355)
$3,904
Interest (income) expense, net
(26)
68
(74)
134
Income tax (benefit) expense
(86)
391
(363)
1,020
Depreciation and amortization
241
370
636
722
EBITDA
(190)
1,594
(1,156)
5,780
Share-based compensation expense
279
120
544
398
Severance charge related to resignation of
the Company’s’ former CEO
-
1,461
-
1,461
Adjusted EBITDA
$89
$3,175
$(612)
$7,639
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808882198/en/
Investor Contact: Ryan Gardella ICR, Inc.
Ryan.Gardella@icrinc.com
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