TransAct Technologies Reports Preliminary Second Quarter 2023 Financial Results
2023 Second Quarter Net Sales of
Casino and Gaming Sales of
FST Sales of
“Our team continues to capitalize on opportunities in our core markets as they present themselves, and while the competitive environment in casino and gaming has started to normalize as predicted, we believe that we will see a sustainable, net market share gain in the long run,” said John Dillon, Chief Executive Officer of TransAct. “We have also been hard at work with our now restructured food service technology (“FST”) sales team, and are beginning to actively market and demonstrate our new BOHA! Terminal 2 to existing and potential customers. While these are multi-stage sales opportunities with lengthy cycle times, we are encouraged by our early results and pre-orders, and believe a solid foundation has been laid for future growth.”
Second Quarter 2023 Financial Highlights
-
Net Sales: Net sales for the second quarter of 2023 were
$19.9 million 58% compared to$12.6 million -
FST Recurring Revenue: FST recurring revenue for the second quarter of 2023 was
$2.5 million 14% compared to$2.2 million -
Gross Profit: Gross profit for the second quarter of 2023 was
$10.9 million 54.5% , compared to gross profit of$5.4 million 43.0% gross margin. -
Operating income (loss): Operating income for the second quarter of 2023 was
$1.2 million $(3.0) million -
Net income (loss): Net income for the second quarter of 2023 was
$765 thousand $0.08 $(2.4) million $(0.24) -
Adjusted net income (loss): Adjusted net income for the second quarter of 2023 was
$2.2 million $0.22 $(2.4) million $(0.24) -
EBITDA: EBITDA was
$1.6 million $(2.8) million -
Adjusted EBITDA: Adjusted EBITDA was
$3.2 million $(2.5) million
2023 Financial Outlook
-
Total Net Sales: The Company currently expects total net sales of between
$71.5 -73.5 million -
Total Adjusted EBITDA: The Company currently expects total adjusted EBITDA of between
$8.0 $8.5 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.
2023 Second Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today, August 9, 2023, beginning at 4:30 p.m. ET to discuss the Company’s preliminary second quarter 2023 results and other matters. Both the call and the webcast are open to the general public. The conference call number is 888-886-7786 and the conference ID number is 45546995 (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.
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
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 (1) share-based compensation and (2) the
Adjusted net income (loss) is defined as net income (loss) adjusted for the
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 3.7 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
©2023 TRANSACT Technologies Incorporated. All rights reserved. TransAct®, BOHA!™, AccuDate, Epic Edge®, EPICENTRAL®, Ithaca® areTrademarks 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, 2023. 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, 2023. 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, 2023, 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. 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", "expect", "intend", "estimate", "anticipate", "believe", "project”, "plan”, "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, whether due to the COVID-19 pandemic or otherwise, 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
- Financial tables follow-
TRANSACT TECHNOLOGIES INCORPORATED |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(Preliminary and Unaudited) |
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Three months ended |
|
Six months ended |
||||
|
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June 30, |
|
June 30, |
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
(In thousands, except per share data) |
||||||
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
Cost of sales |
|
9,048 |
|
7,189 |
|
19,063 |
|
14,325 |
Gross profit |
|
10,858 |
|
5,434 |
|
23,113 |
|
8,000 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Engineering, design and product development |
|
2,505 |
|
2,172 |
|
4,774 |
|
4,455 |
Selling and marketing |
|
2,684 |
|
3,293 |
|
5,441 |
|
5,976 |
General and administrative |
|
4,445 |
|
2,923 |
|
7,861 |
|
6,127 |
|
|
9,634 |
|
8,388 |
|
18,076 |
|
16,558 |
Operating income (loss) |
|
1,224 |
|
(2,954) |
|
5,037 |
|
(8,558) |
|
|
|
|
|
|
|
|
|
Interest and other income (expense): |
|
|
|
|
|
|
|
|
Interest, net |
|
(68) |
|
(28) |
|
(134) |
|
(92) |
Other, net |
|
- |
|
(264) |
|
21 |
|
(299) |
|
|
(68) |
|
(292) |
|
(113) |
|
(391) |
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
1,156 |
|
(3,246) |
|
4,924 |
|
(8,949) |
Income tax (expense) benefit |
|
(391) |
|
870 |
|
(1,020) |
|
2,225 |
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation: |
|
|
|
|
|
|
|
|
Basic |
|
9,956 |
|
9,910 |
|
9,943 |
|
9,898 |
Diluted |
|
10,017 |
|
9,910 |
|
10,016 |
|
9,898 |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION – SALES BY MARKET: |
||||||||
(Preliminary and Unaudited) |
||||||||
|
Three months ended |
|
Six months ended |
|||||
|
June 30, |
|
June 30, |
|||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
(In thousands) |
|||||||
|
|
|
|
|
|
|||
Food service technology |
|
|
|
|
|
|||
POS automation |
1,904 |
1,172 |
|
3,701 |
2,472 |
|||
Casino and gaming |
12,172 |
6,525 |
|
27,983 |
11,287 |
|||
TransAct Services Group |
1,935 |
1,494 |
|
3,139 |
3,004 |
|||
Total net sales |
|
|
|
|
|
|||
TRANSACT TECHNOLOGIES INCORPORATED |
||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
(Preliminary and Unaudited) |
||||
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
|
(In thousands) |
||
Assets: |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
|
|
|
Accounts receivable, net |
|
14,441 |
|
13,927 |
Employee retention credit receivable |
|
- |
|
1,500 |
Inventories |
|
15,408 |
|
12,028 |
Other current assets |
|
707 |
|
724 |
Total current assets |
|
41,312 |
|
36,125 |
|
|
|
|
|
Fixed assets, net |
|
2,838 |
|
2,781 |
Right-of-use asset, net |
|
2,053 |
|
2,488 |
Goodwill |
|
2,621 |
|
2,621 |
Deferred tax assets |
|
6,565 |
|
7,327 |
Intangible assets, net |
|
165 |
|
242 |
Other assets |
|
333 |
|
248 |
|
|
14,575 |
|
15,707 |
Total assets |
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity: |
|
|
|
|
Current liabilities: |
|
|
|
|
Current portion of revolving loan payable |
|
|
|
|
Accounts payable |
|
6,321 |
|
7,395 |
Accrued liabilities |
|
5,511 |
|
4,077 |
Lease liability |
|
904 |
|
875 |
Deferred revenue |
|
1,222 |
|
1,329 |
Total current liabilities |
|
16,208 |
|
15,926 |
|
|
|
|
|
Deferred revenue, net of current portion |
|
152 |
|
143 |
Lease liability, net of current portion |
|
1,210 |
|
1,683 |
Other liabilities |
|
227 |
|
218 |
|
|
1,589 |
|
2,044 |
Total liabilities |
|
17,797 |
|
17,970 |
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
Common stock |
|
140 |
|
139 |
Additional paid-in capital |
|
56,594 |
|
56,282 |
Retained earnings |
|
13,534 |
|
9,630 |
Accumulated other comprehensive loss, net of tax |
|
(68) |
|
(79) |
Treasury stock, at cost |
|
(32,110) |
|
(32,110) |
Total shareholders’ equity |
|
38,090 |
|
33,862 |
Total liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
|
TRANSACT TECHNOLOGIES INCORPORATED |
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING NON-GAAP FINANCIAL MEASURES |
(Preliminary and Unaudited, in thousands of dollars, except percentages and per share data) |
|
|
Three months ended June 30, 2023 |
||||
|
|
Reported |
|
Adjustments(1) |
|
Adjusted
|
Operating expenses |
|
|
|
|
|
|
% of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
1,224 |
|
1,461 |
|
2,685 |
% of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
| (1) |
Adjustment includes a severance charge of |
|
|
Three months ended
|
||||
|
|
Reported |
|
Adjustments(2) |
|
Adjusted
|
Operating expenses |
|
|
|
$- |
|
|
% of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(2,954) |
|
- |
|
(2,954) |
% of net sales |
|
(23.4)% |
|
|
|
(23.4)% |
|
|
|
|
|
|
|
Interest and other expense |
|
(292) |
|
- |
|
(292) |
Loss before income taxes |
|
(3,246) |
|
- |
|
(3,246) |
Income tax benefit |
|
870 |
|
- |
|
870 |
Net loss |
|
(2,376) |
|
- |
|
(2,376) |
Net loss per common share: |
|
|
|
|
|
|
Basic |
|
|
|
$- |
|
|
Diluted |
|
|
|
$- |
|
|
| (2) | No adjustments. |
TRANSACT TECHNOLOGIES INCORPORATED |
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING |
NON-GAAP FINANCIAL MEASURES |
(Preliminary and Unaudited, in thousands of dollars, except percentages and per share data) |
|
|
Six months ended
|
||||
|
|
Reported |
|
Adjustments(3) |
|
Adjusted Non-GAAP |
Operating expenses |
|
|
|
|
|
|
% of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
5,037 |
|
1,461 |
|
6,498 |
% of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
| (3) |
Adjustment includes a severance charge of |
|
|
Six months ended
|
||||
|
|
Reported |
|
Adjustments(4) |
|
Adjusted
|
Operating expenses |
|
|
|
$- |
|
|
% of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(8,558) |
|
- |
|
(8,558) |
% of net sales |
|
(38.3)% |
|
|
|
(38.3)% |
|
|
|
|
|
|
|
Interest and other expense |
|
(391) |
|
- |
|
(391) |
Loss before income taxes |
|
(8,949) |
|
- |
|
(8,949) |
Income tax benefit |
|
2,225 |
|
- |
|
2,225 |
Net loss |
|
(6,724) |
|
- |
|
(6,724) |
Net loss per common share: |
|
|
|
|
|
|
Basic |
|
|
|
$- |
|
|
Diluted |
|
|
|
$- |
|
|
(4) |
No adjustments. |
TRANSACT TECHNOLOGIES INCORPORATED |
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA NON-GAAP FINANCIAL MEASURES |
(Preliminary and Unaudited) |
|
|
Three months ended |
|
Six months ended |
||||
|
|
June 30, |
|
June 30, |
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
(In thousands) |
||||||
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
68 |
|
28 |
|
134 |
|
92 |
Income tax expense (benefit) |
|
391 |
|
(870) |
|
1,020 |
|
(2,225) |
Depreciation and amortization |
|
370 |
|
397 |
|
722 |
|
625 |
|
|
|
|
|
|
|
|
|
EBITDA |
|
1,594 |
|
(2,821) |
|
5,780 |
|
(8,232) |
|
|
|
|
|
|
|
|
|
Share-based compensation expense |
|
120 |
|
285 |
|
398 |
|
581 |
Severance charge related to resignation of the Company’s former CEO |
|
1,461 |
|
- |
|
1,461 |
|
- |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809679218/en/
Investor Contact:
Ryan Gardella
ICR, Inc.
Ryan.Gardella@icrinc.com
Source: TransAct Technologies Incorporated
