TransAct Technologies Announces Update to Strategic Business Review

Rhea-AI Summary

TransAct Technologies (NASDAQ: TACT) has provided an update on its strategic business review, conducted with the help of Roth Capital Partners. The company is exploring various strategic alternatives, including potential sales or new growth strategies. An independent committee has been formed to evaluate these options. CEO John Dillon highlighted the stable growth prospects of the company's casino business and the expansion of its FST business, despite losing the 7-Eleven label business. Notably, a large global QSR client has procured over 1,000 units of their new BOHA! Terminal 2 this year. The company remains committed to both external strategic initiatives and internal operational improvements.

Positive

• The casino business remains a market leader with global growth prospects.
• Formation of an independent committee to evaluate strategic, operational, and financial alternatives.
• Preliminary discussions with potential strategic partners.
• Significant growth opportunities in the FST business, despite the loss of 7-Eleven's label business.
• Successful procurement of over 1,000 units of the new BOHA! Terminal 2 by a large global QSR client.
• Continued focus on internal initiatives to refine operational execution.

Negative

• Loss of 7-Eleven's label business in the FST segment.

Insights

Financial Analyst

TransAct Technologies' update on their strategic business review could have notable implications for investors. Engaging Roth Capital Partners signals that the company is serious about exploring strategic alternatives, which typically means they are considering significant changes such as mergers, acquisitions, or asset sales. These moves can directly impact shareholder value.

The formation of an independent committee to explore these options adds a layer of credibility and thoroughness to the process. Such committees are often used to ensure that any potential deals are in the best interest of shareholders. However, there's no certainty on what precise action will be taken, which introduces some level of uncertainty for investors. It may mean a major business overhaul or simply better-organized operations.

From a financial standpoint, the continued growth in the casino business, despite industry inventory normalization, is a positive indicator. The future prospects in this segment appear stable. On the other hand, the FST business has seen setbacks with the loss of major clients like 7-Eleven. However, the addition of new clients and the rollout of new products like the BOHA! Terminal 2 could mitigate these losses and provide new growth avenues.

In summary, investors should be aware of potential short-term volatility due to the strategic review process. Long-term, the outcomes could be favorable if the company successfully implements beneficial strategic changes or secures new growth opportunities.

Market Research Analyst

TransAct Technologies' announcement highlights a strategic pivot that is worth noting. The company's involvement with Roth Capital Partners suggests they are examining their position in the market and considering ways to optimize or restructure. This can be a signal to investors that the company is looking to unlock value, possibly through partnerships or divestitures, which can have significant market implications.

The reference to growth in the casino business is crucial. Casino technology is a specialized and competitive market where leadership can translate into sustained revenue streams. The normalization of industry inventories points to a stabilization phase, which could mean fewer supply chain disruptions and more predictable cash flows moving forward.

However, the loss of a significant client in the FST business does raise concerns about revenue impacts. Yet, the acquisition of new clients and successful deployment of the BOHA! Terminal 2 suggests that TransAct is actively mitigating this risk, which could stabilize this segment over time.

Investors should watch for further updates on strategic alternatives as these could fundamentally alter the company’s market position and financial health.

The Company is Actively Assessing Strategic Alternatives with Assistance from Roth Capital Partners, LLC

Committee Formed to Support Review of Strategic Alternatives

HAMDEN, Conn.--(BUSINESS WIRE)-- TransAct Technologies Incorporated (Nasdaq: TACT) (“TransAct” or the “Company”), a global leader in software-driven technology and printing solutions for high-growth markets, today announced an update to its previously announced strategic business review.

The Company is actively assessing strategic alternatives with the assistance of Roth Capital Partners, LLC (“Roth Capital”), the Company’s advisor. The Company has engaged in preliminary discussions with potential strategic partners. Additionally, the Board of Directors has formed an independent committee to consider the full range of strategic, operational, and financial alternatives in order to maximize stockholder value, which may include a potential sale of part of or the entire business of the Company and the development and implementation of new strategies designed to grow the Company’s business.

“TransAct’s casino business remains a market leader with growth prospects existing globally. As inventories in the industry normalize, we fully expect the business to continue to produce stable and growing returns,” said John Dillon, Chief Executive Officer of TransAct. “The FST business, despite the loss of 7-Eleven’s label business, is growing. We have added a number of new customers with significant growth opportunities and, in addition, a large global QSR client has successfully procured more than 1,000 units of our new BOHA! Terminal 2 since the beginning of this year.”

“While we focus externally on strategic initiatives, we will continue to prioritize internal initiatives that improve and refine operational execution within each functional area of the business,” continued Mr. Dillon.

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.

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, inflation and the Russia/Ukraine and Middle East conflicts, an inability of our customers to make payments on time or at all, diversion of management attention, 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 grow our business in the food service technology market; risks associated with the pursuit of strategic initiatives and business growth; 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; our 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, 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; our ability to protect intellectual property; 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240603565987/en/

Investor:

Ryan Gardella

ICR, Inc.

Ryan.Gardella@icrinc.com

Source: TransAct Technologies Incorporated

FAQ

What strategic alternatives is TransAct Technologies (TACT) considering?

TransAct Technologies is evaluating a range of strategic, operational, and financial alternatives, which may include the potential sale of part or all of the company and the development of new growth strategies.

Who is assisting TransAct Technologies in their strategic business review?

Roth Capital Partners, is assisting TransAct Technologies in their strategic business review.

What are the growth prospects for TransAct Technologies' casino business?

The casino business remains a market leader with stable and growing returns expected as industry inventories normalize.

How has the FST business of TransAct Technologies (TACT) been performing?

Despite losing 7-Eleven's label business, the FST segment is growing, with new customers and significant growth opportunities. A large global QSR client procured over 1,000 units of the new BOHA! Terminal 2 this year.

What internal initiatives is TransAct Technologies focusing on?

TransAct Technologies is prioritizing internal initiatives that improve and refine operational execution within each functional area of the business.