TransAct Technologies Reports Preliminary Third Quarter 2024 Financial Results
Sold Over 1,350 Terminals in the Quarter, With Over 2,800 Sold in the Last Two Quarters
Added 12 New FST Customers in the Quarter
Casino Market Continues to Normalize after Industry Inventory Build During Pandemic
“We reported an excellent FST quarter, with another 1,355 BOHA! Terminal sales. We believe this momentum is just the beginning, with the effects of our re-organization and re-focusing of the sales team and go-to-market process starting to yield positive results,” said John Dillon, Chief Executive Officer of TransAct. “We also added another 12 new FST accounts in the quarter, representing approximately 2,400 potential Terminal 2 sales opportunities. Our pipeline continues to hold strong under continued scrubbing, and as we further refine our process, we expect to further improve our go-to-market execution and generate improving conversion rates in 2025.”
Third Quarter 2024 Financial Highlights
-
Net Sales: Net sales for the third quarter of 2024 were
$10.9 million 6% sequentially and down37% compared to$17.2 million -
FST Recurring Revenue: FST recurring revenue for the third quarter of 2024 was
$2.9 million 4% sequentially, but down8% compared to$3.1 million -
Gross Profit: Gross profit for the third quarter of 2024 was
$5.2 million 48.1% , compared to gross profit of$8.9 million 51.9% gross margin. -
Operating (loss) income: Operating loss for the third quarter of 2024 was
$(837) thousand $(438) thousand $1.2 million -
Net (loss) income: Net loss for the third quarter of 2024 was
$(551) thousand $(0.06) $(319) thousand $(0.03)
This compares to net income for the third quarter of 2023 of$906 thousand $0.09 -
EBITDA: EBITDA was negative
$(533) thousand $(190) thousand $1.5 million -
Adjusted EBITDA: Adjusted EBITDA was negative
$(204) thousand $89 thousand $1.7 million
Updated 2024 Financial Outlook
-
Net Sales: The Company now expects full year 2024 net sales of between
$43 million $45 million -
Adjusted EBITDA: The Company continues to expect full year 2024 adjusted EBITDA to be between negative
$1 million $2 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 Third Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today, November 7, 2024, beginning at 4:30 p.m. ET to discuss the Company’s preliminary third 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 13749888. 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
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 expense, (2) the
Adjusted net (loss) income is defined as net (loss) income adjusted for the
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
©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 nine months ended September 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 nine months ended September 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 nine months ended September 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
- Financial tables follow-
TRANSACT TECHNOLOGIES INCORPORATED |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(Preliminary and Unaudited) |
||||||||||||||||
|
|
|||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
September 30, |
|
September 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands, except per share data) |
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
|
$ |
10,867 |
|
|
$ |
17,190 |
|
|
$ |
33,153 |
|
|
$ |
59,366 |
|
Cost of sales |
|
|
5,640 |
|
|
|
8,274 |
|
|
|
16,192 |
|
|
|
27,337 |
|
Gross profit |
|
|
5,227 |
|
|
|
8,916 |
|
|
|
16,961 |
|
|
|
32,029 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Engineering, design and product development |
|
|
1,640 |
|
|
|
2,509 |
|
|
|
5,405 |
|
|
|
7,283 |
|
Selling and marketing |
|
|
1,880 |
|
|
|
2,397 |
|
|
|
6,160 |
|
|
|
7,838 |
|
General and administrative |
|
|
2,544 |
|
|
|
2,819 |
|
|
|
7,972 |
|
|
|
10,680 |
|
|
|
|
6,064 |
|
|
|
7,725 |
|
|
|
19,537 |
|
|
|
25,801 |
|
Operating (loss) income |
|
|
(837 |
) |
|
|
1,191 |
|
|
|
(2,576 |
) |
|
|
6,228 |
|
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income (expense): |
|
|
|
|
|
|
|
|
||||||||
Interest, net |
|
|
42 |
|
|
|
(73 |
) |
|
|
116 |
|
|
|
(207 |
) |
Other, net |
|
|
96 |
|
|
|
(43 |
) |
|
|
43 |
|
|
|
(22 |
) |
|
|
|
138 |
|
|
|
(116 |
) |
|
|
159 |
|
|
|
(229 |
) |
|
|
|
|
|
|
|
|
|
||||||||
(Loss) income before income taxes |
|
|
(699 |
) |
|
|
1,075 |
|
|
|
(2,417 |
) |
|
|
5,999 |
|
Income tax benefit (expense) |
|
|
148 |
|
|
|
(169 |
) |
|
|
511 |
|
|
|
(1,189 |
) |
Net (loss) income |
|
$ |
(551 |
) |
|
$ |
906 |
|
|
$ |
(1,906 |
) |
|
$ |
4,810 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.06 |
) |
|
$ |
0.09 |
|
|
$ |
(0.19 |
) |
|
$ |
0.48 |
|
Diluted |
|
$ |
(0.06 |
) |
|
$ |
0.09 |
|
|
$ |
(0.19 |
) |
|
$ |
0.48 |
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used in per share calculation: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
10,006 |
|
|
|
9,958 |
|
|
|
9,992 |
|
|
|
9,948 |
|
Diluted |
|
|
10,006 |
|
|
|
10,052 |
|
|
|
9,992 |
|
|
|
10,023 |
|
|
|
|
|
|
|
|
|
|
||||||||
SUPPLEMENTAL INFORMATION – SALES BY MARKET:
|
|||||||||||
|
Three months ended |
|
Nine months ended |
||||||||
|
September 30, |
|
September 30, |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
(In thousands) |
||||||||||
|
|
|
|
|
|
||||||
Food service technology |
$ |
4,321 |
$ |
4,241 |
|
$ |
11,799 |
$ |
11,594 |
||
POS automation |
|
1,148 |
|
1,644 |
|
|
2,950 |
|
5,345 |
||
Casino and gaming |
|
4,534 |
|
9,019 |
|
|
15,589 |
|
37,002 |
||
TransAct Services Group |
|
864 |
|
2,286 |
|
|
2,815 |
|
5,425 |
||
Total net sales |
$ |
10,867 |
$ |
17,190 |
|
$ |
33,153 |
$ |
59,366 |
||
TRANSACT TECHNOLOGIES INCORPORATED |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(Preliminary and Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
September 30, |
|
December 31, |
||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands) |
||||||
Assets: |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
11,343 |
|
|
$ |
12,321 |
|
Accounts receivable, net |
|
|
7,421 |
|
|
|
9,824 |
|
Inventories |
|
|
16,851 |
|
|
|
17,759 |
|
Prepaid income taxes |
|
|
713 |
|
|
|
322 |
|
Other current assets |
|
|
1,079 |
|
|
|
773 |
|
Total current assets |
|
|
37,407 |
|
|
|
40,999 |
|
|
|
|
|
|
||||
Fixed assets, net |
|
|
1,986 |
|
|
|
2,421 |
|
Right-of-use assets, net |
|
|
1,380 |
|
|
|
1,602 |
|
Goodwill |
|
|
2,621 |
|
|
|
2,621 |
|
Deferred tax assets |
|
|
7,034 |
|
|
|
6,304 |
|
Intangible assets, net |
|
|
- |
|
|
|
88 |
|
Other assets |
|
|
75 |
|
|
|
163 |
|
|
|
|
13,096 |
|
|
|
13,199 |
|
Total assets |
|
$ |
50,503 |
|
|
$ |
54,198 |
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity: |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Revolving loan payable |
|
$ |
2,250 |
|
|
$ |
2,250 |
|
Accounts payable |
|
|
3,210 |
|
|
|
4,431 |
|
Accrued liabilities |
|
|
3,883 |
|
|
|
4,947 |
|
Lease liabilities |
|
|
983 |
|
|
|
929 |
|
Deferred revenue |
|
|
926 |
|
|
|
1,079 |
|
Total current liabilities |
|
|
11,252 |
|
|
|
13,636 |
|
|
|
|
|
|
||||
Deferred revenue, net of current portion |
|
|
240 |
|
|
|
209 |
|
Lease liabilities, net of current portion |
|
|
438 |
|
|
|
720 |
|
Other liabilities |
|
|
219 |
|
|
|
219 |
|
|
|
|
897 |
|
|
|
1,148 |
|
Total liabilities |
|
|
12,149 |
|
|
|
14,784 |
|
|
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
|
||||
Common stock |
|
|
141 |
|
|
|
140 |
|
Additional paid-in capital |
|
|
57,857 |
|
|
|
57,055 |
|
Retained earnings |
|
|
12,472 |
|
|
|
14,378 |
|
Accumulated other comprehensive loss, net of tax |
|
|
(6 |
) |
|
|
(49 |
) |
Treasury stock, at cost |
|
|
(32,110 |
) |
|
|
(32,110 |
) |
Total shareholders’ equity |
|
|
38,354 |
|
|
|
39,414 |
|
Total liabilities and shareholders’ equity |
|
$ |
50,503 |
|
|
$ |
54,198 |
|
|
|
|
|
|
||||
TRANSACT TECHNOLOGIES INCORPORATED |
|||||||||||
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
|
|||||||||||
(Preliminary and Unaudited, thousands of dollars, except percentages and per share amounts) |
|||||||||||
|
|
Three months ended
|
|||||||||
|
|
Reported |
|
Adjustments(1) |
|
Adjusted
|
|||||
Operating expenses |
|
$ |
6,064 |
|
|
$ |
- |
|
$ |
6,064 |
|
% of net sales |
|
|
55.8 |
% |
|
|
|
|
55.8 |
% |
|
|
|
|
|
|
|
|
|||||
Operating loss |
|
|
(837 |
) |
|
|
- |
|
|
(837 |
) |
% of net sales |
|
|
(7.7 |
)% |
|
|
|
|
(7.7 |
)% |
|
|
|
|
|
|
|
|
|||||
Interest and other income |
|
|
138 |
|
|
|
- |
|
|
138 |
|
Loss before income taxes |
|
|
(699 |
) |
|
|
- |
|
|
(699 |
) |
Income tax benefit |
|
|
148 |
|
|
|
- |
|
|
148 |
|
Net loss |
|
|
(551 |
) |
|
|
- |
|
|
(551 |
) |
Net loss per common share: |
|
|
|
|
|
|
|||||
Basic |
|
$ |
(0.06 |
) |
|
$ |
- |
|
$ |
(0.06 |
) |
Diluted |
|
$ |
(0.06 |
) |
|
$ |
- |
|
$ |
(0.06 |
) |
(1) No adjustments. |
|||||||||||
|
|
Three months ended
|
|||||||||
|
|
Reported |
|
Adjustments(2) |
|
Adjusted Non-GAAP |
|||||
Operating expenses |
|
$ |
7,725 |
|
|
$ |
- |
|
$ |
7,725 |
|
% of net sales |
|
|
44.9 |
% |
|
|
|
|
44.9 |
% |
|
|
|
|
|
|
|
|
|||||
Operating income |
|
|
1,191 |
|
|
|
- |
|
|
1,191 |
|
% of net sales |
|
|
6.9 |
% |
|
|
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
|||||
Interest and other expense |
|
|
(116 |
) |
|
|
- |
|
|
(116 |
) |
Income before income taxes |
|
|
1,075 |
|
|
|
- |
|
|
1,075 |
|
Income tax (expense) |
|
|
(169 |
) |
|
|
- |
|
|
(169 |
) |
Net income |
|
|
906 |
|
|
|
- |
|
|
906 |
|
Net income per common share: |
|
|
|
|
|
|
|||||
Basic |
|
$ |
0.09 |
|
|
$ |
- |
|
$ |
0.09 |
|
Diluted |
|
$ |
0.09 |
|
|
$ |
- |
|
$ |
0.09 |
|
(2) No adjustments. |
|||||||||||
TRANSACT TECHNOLOGIES INCORPORATED
|
|||||||||||
|
|
Nine months ended
|
|||||||||
|
|
Reported |
|
Adjustments(3) |
|
Adjusted
|
|||||
Operating expenses |
|
$ |
19,537 |
|
|
$ |
- |
|
$ |
19,537 |
|
% of net sales |
|
|
58.9 |
% |
|
|
|
|
58.9 |
% |
|
|
|
|
|
|
|
|
|||||
Operating loss |
|
|
(2,576 |
) |
|
|
- |
|
|
(2,576 |
) |
% of net sales |
|
|
(7.8 |
)% |
|
|
|
|
(7.8 |
)% |
|
|
|
|
|
|
|
|
|||||
Interest and other income |
|
|
159 |
|
|
|
- |
|
|
159 |
|
Loss before income taxes |
|
|
(2,417 |
) |
|
|
- |
|
|
(2,417 |
) |
Income tax benefit |
|
|
511 |
|
|
|
- |
|
|
511 |
|
Net loss |
|
|
(1,906 |
) |
|
|
- |
|
|
(1,906 |
) |
Net loss per common share: |
|
|
|
|
|
|
|||||
Basic |
|
$ |
(0.19 |
) |
|
$ |
- |
|
$ |
(0.19 |
) |
Diluted |
|
$ |
(0.19 |
) |
|
$ |
- |
|
$ |
(0.19 |
) |
(3) No adjustments. |
|||||||||||
|
|
Nine months ended
|
||||||||||
|
|
Reported |
|
Adjustments(4) |
|
Adjusted
|
||||||
Operating expenses |
|
$ |
25,801 |
|
|
$ |
(1,461 |
) |
|
$ |
24,340 |
|
% of net sales |
|
|
43.5 |
% |
|
|
|
|
41.0 |
% |
||
|
|
|
|
|
|
|
||||||
Operating income |
|
|
6,228 |
|
|
|
1,461 |
|
|
|
7,689 |
|
% of net sales |
|
|
10.5 |
% |
|
|
|
|
13.0 |
% |
||
|
|
|
|
|
|
|
||||||
Interest and other expense |
|
|
(229 |
) |
|
|
- |
|
|
|
(229 |
) |
Income before income taxes |
|
|
5,999 |
|
|
|
1,461 |
|
|
|
7,460 |
|
Income tax (expense) |
|
|
(1,189 |
) |
|
|
(70 |
) |
|
|
(1,259 |
) |
Net income |
|
|
4,810 |
|
|
|
1,391 |
|
|
|
6,201 |
|
Net income per common share: |
|
|
|
|
|
|
||||||
Basic |
|
$ |
0.48 |
|
|
$ |
0.14 |
|
|
$ |
0.62 |
|
Diluted |
|
$ |
0.48 |
|
|
$ |
0.14 |
|
|
$ |
0.62 |
|
(4) Adjustment includes a severance charge of |
||||||||||||
TRANSACT TECHNOLOGIES INCORPORATED
|
||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||
|
|
September 30, |
|
September 30, |
||||||||||
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
||
|
|
(In thousands) |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income |
|
$ |
(551 |
) |
|
$ |
906 |
|
$ |
(1,906 |
) |
|
$ |
4,810 |
|
|
|
|
|
|
|
|
|
||||||
Interest (income) expense, net |
|
|
(42 |
) |
|
|
73 |
|
|
(116 |
) |
|
|
207 |
Income tax (benefit) expense |
|
|
(148 |
) |
|
|
169 |
|
|
(511 |
) |
|
|
1,189 |
Depreciation and amortization |
|
|
208 |
|
|
|
381 |
|
|
844 |
|
|
|
1,103 |
|
|
|
|
|
|
|
|
|
||||||
EBITDA |
|
|
(533 |
) |
|
|
1,529 |
|
|
(1,689 |
) |
|
|
7,309 |
|
|
|
|
|
|
|
|
|
||||||
Share-based compensation expense |
|
|
329 |
|
|
|
213 |
|
|
873 |
|
|
|
611 |
Severance charge related to resignation of the Company’s former CEO |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
1,461 |
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA |
|
$ |
(204 |
) |
|
$ |
1,742 |
|
$ |
(816 |
) |
|
$ |
9,381 |
|
|
|
|
|
|
|
|
|
||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107947672/en/
Investor Contact:
Ryan Gardella
ICR, Inc.
Ryan.Gardella@icrinc.com
Source: TransAct Technologies Incorporated
