TransAct Technologies Reports Preliminary First Quarter 2020 Financial Results

2020 First Quarter Net Sales of $10.2 Million
Food Service Technology Revenues up 13% on a Year-Over-Year Basis
Revolving Credit Facility and PPP Loan Provide Operational Liquidity

Hamden, CT – May 7, 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, 2020.

“While the economic headwinds and disruptions in the quarter had an undeniable effect on our results, we are pleased with the upward trajectory of our Food Service Technology revenues prior to the industry disruptions that have occurred as a result of the COVID-19 crisis. We continue to be excited by the momentum of our BOHA! solution and the long-term opportunities it provides us,” said Bart C. Shuldman, Chairman and CEO of TransAct. “Unfortunately, COVID-19 is still causing massive disruptions across the world with widespread closures, and we expect this to continue to negatively impact our casino and gaming business as well as most restaurant and food service locations for the foreseeable future. While it is difficult to predict the magnitude of the impact that the spread of the virus and the associated stay at home orders will have on our customers and our business, we are confident in the steps we have taken to help us manage through these turbulent times.”


First Quarter 2020 Financial Highlights
Net Sales: Net Sales for the first quarter of 2020 were $10.2 million, down 11% compared to $11.6 million for the first quarter of 2019.
Gross Profit: Gross profit for the first quarter of 2020 was $4.9 million, resulting in gross margin of 48.0%, compared to gross profit of $6.1 million in the first quarter of 2019, which resulted in a 52.7% gross margin.
Operating income (loss): Operating loss for the first quarter of 2020 was $1.3 million, compared to operating income of $0.8 million in the first quarter of 2019.
Net income (loss): Net loss for the first quarter of 2020 was $1.0 million, or $0.13 net loss per share, based on 7.5 million diluted weighted average common shares outstanding. Net income for the comparable 2019 period was $0.7 million, or $0.10 net income per share, based on 7.6 million diluted weighted average common shares outstanding.
EBITDA: EBITDA was negative $1.2 million for the first quarter of 2020, compared to positive EBITDA of $1.1 million in the first quarter of 2019.
Adjusted EBITDA: Adjusted EBITDA was negative $1.0 million for the first quarter of 2020, compared to positive adjusted EBITDA of $1.3 million in the first quarter of 2019.
Liquidity: On March 16, 2020, the Company announced a new revolving credit facility of up to $10 million, subject to availability determined by a “borrowing base” calculation based on specified percentages of the Company’s eligible accounts receivable and inventory, of which $0.8 million was drawn as of March 31, 2020 and $0.1 million was drawn as of April 30, 2020, to provide adequate funding for business operations. In addition, on May 5, 2020, the Company announced it had received a $2.2 million loan under the Paycheck Protection Program to meet its payroll obligations and support ongoing operations.


2020 First Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today, May 7, 2020, beginning at 4:30 p.m. ET to discuss the Company’s preliminary first quarter 2020 results and other matters. Both the call and the webcast are open to the general public. The conference call number is 856-344-9221 and the conference ID number is 3986248 (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, assessing financial performance and paying incentive compensation. 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 before net interest expense, income taxes, depreciation and amortization. A reconciliation of EBITDA to net income, the most comparable GAAP financial measure, can be found attached to this release.

Adjusted EBITDA is defined as net income 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, 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 3.4 million printers and terminals 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. ©2019 TRANSACT Technologies Incorporated. All rights reserved.

Cautionary Statement Regarding Preliminary Financial Information
The Company has prepared the preliminary financial information set forth above 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 21, 2020.  This financial information is preliminary and is thus inherently uncertain and subject to change as the Company finalizes its financial results and related reviews for the three months ended March 31, 2020.  During the course of the preparation of the Company’s condensed consolidated financial statements and related notes as of and for the three months ended March 31, 2020, 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 interim 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.  The Company currently expects to file its Quarterly Report on Form 10-Q for the three months ended March 31, 2020 during the week of May 18, 2020.





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, 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 ability to successfully transition our business towards the food service technology market;  our ability to remediate the material weaknesses over internal control over financial reporting; risks associated with potential future acquisitions; our dependence on a significant customer; general economic conditions; risks, uncertainties and other factors related to the COVID-19 pandemic, including the extent and duration of the pandemic and governmental responses thereto, disruptions in operations of manufacturers that we rely on for the manufacturing and assembly of our printers and terminals as well as travel restrictions and a reduction in consumer spending impacting the Company’s supply, sales and delivery of its products, sales prices of the Company’s common stock, access to capital, and availability of funds under the Company’s credit facility; our dependence on contract manufacturers for the assembly of a large portion of our products in Asia; our dependence on significant suppliers;  dependence on third parties for sales outside the United States; 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 effectof 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.

# # #

Investor Contact:
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









- Financial tables follow –


TRANSACT TECHNOLOGIES INCORPORATED
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Preliminary and Unaudited)
 
       
(In thousands, except per share amounts)
 
Three months ended
March 31,
 
   
2020
   
2019
 
Net sales
 
$
10,247
   
$
11,550
 
Cost of sales
   
5,329
     
5,464
 
Gross profit
   
4,918
     
6,086
 
                 
Operating expenses:
               
Engineering, design and product development
   
1,385
     
1,165
 
Selling and marketing
   
2,208
     
1,854
 
General and administrative
   
2,620
     
2,290
 
     
6,213
     
5,309
 
Operating income (loss)
   
(1,295
)
   
777
 
                 
Interest and other income (expense):
               
Interest, net
   
3
     
(6
)
Other, net
   
(165
)
   
90
 
     
(162
)
   
84
 
                 
Income (loss) before income taxes
   
(1,457
)
   
861
 
Income tax provision (benefit)
   
(465
)
   
115
 
Net income (loss)
 
$
(992
)
 
$
746
 
                 
Net income (loss) per common share:
               
Basic
 
$
(0.13
)
 
$
0.10
 
Diluted
 
$
(0.13
)
 
$
0.10
 
                 
Shares used in per share calculation:
               
Basic
   
7,507
     
7,461
 
Diluted
   
7,507
     
7,619
 

SUPPLEMENTAL INFORMATION – SALES BY SALES UNIT:
(Preliminary and Unaudited)
 
 
 (In thousands)
 
Three months ended
March 31,
 
   
2020
   
2019
 
Food service technology
 
$
1,371
   
$
1,213
 
POS automation and banking
   
1,558
     
1,277
 
Casino and gaming
   
4,931
     
5,483
 
Lottery
   
-
     
697
 
Printrex
   
117
     
342
 
TransAct services group
   
2,270
     
2,538
 
Total net sales
 
$
10,247
   
$
11,550
 

TRANSACT TECHNOLOGIES INCORPORATED
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Preliminary and Unaudited)
 
   
March 31,
   
December 31,
 
(In thousands)
 
2020
   
2019
 
Assets:
           
Current assets:
           
Cash and cash equivalents
 
$
615
   
$
4,203
 
Accounts receivable, net
   
6,261
     
6,418
 
Note receivable
   
100
     
1,017
 
Inventories, net
   
12,586
     
12,099
 
Other current assets
   
1,424
     
1,178
 
Total current assets
   
20,986
     
24,915
 
                 
Fixed assets, net
   
2,414
     
2,244
 
Note receivable, net of current portion
   
1,530
     
-
 
Right-of-use asset
   
4,159
     
2,855
 
Goodwill
   
2,621
     
2,621
 
Deferred tax assets
   
3,086
     
2,565
 
Intangible assets, net
   
754
     
817
 
Other assets
   
237
     
44
 
     
14,801
     
11,146
 
Total assets
 
$
35,787
   
$
36,061
 
                 
Liabilities and Shareholders’ Equity:
               
Current liabilities:
               
Accounts payable
 
$
1,737
   
$
2,960
 
Accrued liabilities
   
2,419
     
3,041
 
Lease liability
   
880
     
945
 
Deferred revenue
   
643
     
700
 
Revolving bank loan payable
   
794
     
-
 
Total current liabilities
   
6,473
     
7,646
 
                 
Deferred revenue, net of current portion
   
183
     
219
 
Lease liability, net of current portion
   
3,456
     
2,104
 
Other liabilities
   
170
     
166
 
     
3,809
     
2,489
 
Total liabilities
   
10,282
     
10,135
 
                 
Shareholders’ equity:
               
Common stock
   
116
     
115
 
Additional paid-in capital
   
33,103
     
32,604
 
Retained earnings
   
24,356
     
25,348
 
Accumulated other comprehensive income (loss), net of tax
   
40
     
(31
)
Treasury stock, at cost
   
(32,110
)
   
(32,110
)
Total shareholders’ equity
   
25,505
     
25,926
 
Total liabilities and shareholders’ equity
 
$
35,787
   
$
36,061
 
                 



TRANSACT TECHNOLOGIES INCORPORATED
 
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
NON-GAAP FINANCIAL MEASURES
 
 (Preliminary and Unaudited)  
 
   
Three Months Ended
 
(In thousands)
 
March 31,
 
   
2020
   
2019
 
Net income (loss)
 
$
(992
)
 
$
746
 
                 
Interest expense (income), net
   
(3
)
   
6
 
Income tax provision (benefit)
   
(465
)
   
115
 
Depreciation and amortization
   
238
     
252
 
                 
EBITDA
   
(1,222
)
   
1,119
 
                 
Share-based compensation expense
   
187
     
173
 
                 
Adjusted EBITDA
 
$
(1,035
)
 
$
1,292
 
                 






The following information was filed by Transact Technologies Inc (TACT) on Thursday, May 7, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one quarter to another to evaluate Transact Technologies Inc's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Transact Technologies Inc.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account