Release Details
TransAct Technologies Reports 2014 Third Quarter Revenue of $13.4 Million and Diluted EPS of $0.01
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Summary of 2014 Q3 Results |
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(In millions, except per share and percentage data) |
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Three Months Ended |
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| 2014 | 2013 | |||||||
| Net sales | $ | 13.4 | $ | 16.8 | ||||
| Gross profit | $ | 5.3 | $ | 7.2 | ||||
| Gross margin | 39.5 | % | 43.0 | % | ||||
| Operating income | $ | 0.1 | $ | 1.9 | ||||
| EBITDA(1) | $ | 0.4 | $ | 2.3 | ||||
| Net income | $ | 0.1 | $ | 1.5 | ||||
| Diluted earnings per share | $ | 0.01 | $ | 0.17 | ||||
| Adjusted operating income(2) | $ | 0.4 | $ | 2.1 | ||||
| Adjusted EBITDA(1) | $ | 0.9 | $ | 2.6 | ||||
| Adjusted net income(2) | $ | 0.3 | $ | 1.5 | ||||
| Adjusted diluted earnings per share(2) | $ | 0.04 | $ | 0.18 | ||||
| (1) | 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 Generally Accepted Accounting Principles ("GAAP") financial measure, can be found attached to this release. Adjusted EBITDA is defined as net income before net interest expense, income taxes, depreciation, amortization and adjusted for share-based compensation and the impact of certain legal fees and accrued contingent consideration as described later in this release. A reconciliation of Adjusted EBITDA to net income, the most comparable GAAP financial measure, can be found attached to this release. | |
| (2) | Reconciliations of GAAP financial measures to corresponding non-GAAP financial measures can be found attached to this release. | |
"Our Ithaca line of food safety terminals, which was launched with the Ithaca 9700 a little over two years ago, remains an exciting high-growth opportunity that we are actively pursuing. Recent approvals of the Ithaca 9700 by a number of national restaurant and foodservice operators highlight the progress we are achieving with industry operators in demonstrating the effectiveness and benefits of this solution and our ability to generate an attractive return on their investment. In addition, we believe the Ithaca 9800 will be the next wave of technology that certain restaurants and food service providers will need and we are making consistent progress with the systems integration process with large food service software providers for this terminal. We expect sales of the Ithaca 9800 will help to further accelerate market penetration and revenue contributions from this product line beginning late in 2015.
"With Epicentral-enabled casino locations continuing to report improved performance metrics including increased visitation, new enrollment in loyalty programs and additional play, we are gaining traction as the casino and gaming industry is increasingly seeking cost-effective solutions that demonstrate measurable success in growing revenue. Epicentral remains an attractive growth opportunity for TransAct, particularly as we continue to accelerate relationships with international casino operators for this solution.
"The rollout of our Printrex oil and gas seismic and exploration color
printer for office installations is progressing very well as the pace of
sales has exceeded our initial expectations. This success is promising
for future results as each Printrex 980 office color printer generates
on average approximately
Solid Financial Flexibility and Review of Capital Return Initiatives
As of
Earlier this week, TransAct announced that its Board of Directors had
declared a quarterly cash dividend of
The modified share repurchase plan authorizes the repurchase of up to
Summary of 2014 Third Quarter Operating Results
TransAct generated 2014 third quarter net sales of
Gross margin of 39.5% in the third quarter of 2014 compares to gross
margin of 43.0% in the year-ago quarter, reflecting the year over year
revenue decline as well as an unfavorable shift in the sales mix. Gross
profit was
Total operating expenses for the 2014 third quarter were
The Company recorded operating income of
2014 Third Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today,
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 has provided adjusted non-GAAP financial measures because the Company believes that these amounts are helpful to investors and others to more accurately assess the ongoing nature of TransAct's core operations. The adjusted non-GAAP measures exclude the effect in the applicable periods presented of non-GAAP adjustments contained in the tables included with this release. These items have been excluded from adjusted non-GAAP financial measures as management does not believe that they are representative of underlying trends in the Company's performance. Their exclusion provides investors and others with additional information to more readily assess the Company's operating results. The Company uses the non-GAAP financial measures internally to focus management on the results of the Company's core business. The presentation of this additional non-GAAP information is not considered superior to or a substitute for the financial information prepared in accordance with GAAP.
Adjusted operating income is defined as operating income adjusted for the impact of legal fees related to the lawsuit with Avery Dennison Corporation and adjustments to accrued contingent consideration from the Printrex acquisition.
Adjusted net income is defined as net income adjusted for the tax-effected impact of legal fees related to the lawsuit with Avery Dennison Corporation and adjustments to accrued contingent consideration from the Printrex acquisition.
Adjusted diluted earnings per share is defined as adjusted net income divided by diluted shares outstanding.
About
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 are not limited to,
customer acceptance and market share gains, both domestically and
internationally, in the face of substantial competition from competitors
that have broader lines of products and greater financial resources; our
competitors introducing new products into the marketplace; our ability
to successfully develop new products; our dependence on significant
customers; our dependence on significant vendors; dependence on contract
manufacturers for the assembly of a large portion of our products in
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| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| (In thousands, except per share amounts) |
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| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net sales | $ | 13,389 | $ | 16,768 | $ | 40,812 | $ | 47,613 | ||||||||
| Cost of sales | 8,103 | 9,562 | 24,012 | 27,522 | ||||||||||||
| Gross profit | 5,286 | 7,206 | 16,800 | 20,091 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Engineering, design and product development | 1,053 | 1,041 | 3,434 | 3,048 | ||||||||||||
| Selling and marketing | 1,847 | 2,059 | 6,069 | 5,702 | ||||||||||||
| General and administrative | 1,901 | 2,049 | 5,789 | 5,819 | ||||||||||||
| Legal fees associated with lawsuit | 428 | 142 | 475 | 398 | ||||||||||||
| 5,229 | 5,291 | 15,767 | 14,967 | |||||||||||||
| Operating income | 57 | 1,915 | 1,033 | 5,124 | ||||||||||||
| Interest and other income (expense): | ||||||||||||||||
| Interest, net | (12 | ) | (8 | ) | (38 | ) | (9 | ) | ||||||||
| Other, net | 9 | (22 | ) | (11 | ) | 11 | ||||||||||
| (3 | ) | (30 | ) | (49 | ) | 2 | ||||||||||
| Income before income taxes | 54 | 1,885 | 984 | 5,126 | ||||||||||||
| Income tax provision | 4 | 434 | 365 | 1,300 | ||||||||||||
| Net income | $ | 50 | $ | 1,451 | 619 | $ | 3,826 | |||||||||
| Net income per common share: | ||||||||||||||||
| Basic | $ | 0.01 | $ | 0.17 | $ | 0.07 | $ | 0.44 | ||||||||
| Diluted | $ | 0.01 | $ | 0.17 | $ | 0.07 | $ | 0.44 | ||||||||
| Shares used in per share calculation: | ||||||||||||||||
| Basic | 8,337 | 8,582 | 8,362 | 8,675 | ||||||||||||
| Diluted | 8,403 | 8,695 | 8,487 | 8,759 | ||||||||||||
| SUPPLEMENTAL INFORMATION - SALES BY SALES UNIT: | ||||||||||||
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Three months ended | Nine months ended | ||||||||||
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| 2014 | 2013 | 2014 | 2013 | |||||||||
| Food safety, point-of-sale and banking | $ |
2,628 |
$ | 3,670 | $ | 7,144 | $ | 9,107 | ||||
| Casino and gaming | 5,062 | 7,511 | 17,728 | 21,573 | ||||||||
| Lottery | 1,473 | 1,025 | 3,143 | 2,889 | ||||||||
| Printrex | 1,043 | 1,111 | 3,013 | 3,486 | ||||||||
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3,183 | 3,451 | 9,784 | 10,558 | ||||||||
| Total net sales | $ | 13,389 | $ | 16,768 | $ | 40,812 | $ | 47,613 | ||||
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| CONSOLIDATED BALANCE SHEETS | ||||||||
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| (In thousands) | 2014 | 2013 | ||||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,071 | $ | 2,936 | ||||
| Accounts receivable, net | 11,173 | 13,234 | ||||||
| Inventories | 14,008 | 13,509 | ||||||
| Deferred tax assets | 1,633 | 1,655 | ||||||
| Other current assets | 1,001 | 887 | ||||||
| Total current assets | 30,886 | 32,221 | ||||||
| Fixed assets, net | 2,608 | 2,732 | ||||||
| Goodwill | 2,621 | 2,621 | ||||||
| Deferred tax assets | 900 | 920 | ||||||
| Intangible assets, net | 1,469 | 1,856 | ||||||
| Other assets | 38 | 58 | ||||||
| 7,636 | 8,187 | |||||||
| Total assets | $ | 38,522 | $ | 40,408 | ||||
| Liabilities and Shareholders' Equity: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,827 | $ | 4,749 | ||||
| Accrued liabilities | 2,903 | 2,215 | ||||||
| Income taxes payable | 7 | 26 | ||||||
| Accrued contingent consideration | - | 60 | ||||||
| Deferred revenue | 427 | 300 | ||||||
| Total current liabilities | 7,164 | 7,350 | ||||||
| Deferred revenue, net of current portion | 67 | 103 | ||||||
| Deferred rent, net of current portion | 190 | 244 | ||||||
| Other liabilities | 204 | 190 | ||||||
| 461 | 537 | |||||||
| Total liabilities | 7,625 | 7,887 | ||||||
| Shareholders' equity: | ||||||||
| Common stock | 111 | 111 | ||||||
| Additional paid-in capital | 28,172 | 27,674 | ||||||
| Retained earnings | 26,033 | 27,326 | ||||||
| Accumulated other comprehensive loss, net of tax | (66 | ) | (63 | ) | ||||
| Treasury stock, at cost | (23,353 | ) | (22,527 | ) | ||||
| Total shareholders' equity | 30,897 | 32,521 | ||||||
| Total liabilities and shareholders' equity | $ | 38,522 | $ | 40,408 | ||||
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RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING |
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NON-GAAP FINANCIAL MEASURES |
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(Unaudited, thousands of dollars, except percentages and per share amounts) |
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Three months ended |
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Adjusted |
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Reported |
Adjustments(1) |
Non-GAAP |
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| Operating expenses | $ | 5,229 |
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) | $ | 4,841 | ||||||
| % of net sales | 39.1 | % | 36.2 | % | ||||||||
| Operating income | 57 | 388 | 445 | |||||||||
| % of net sales | 0.4 | % | 3.3 | % | ||||||||
| Income before income taxes | 54 | 388 | 442 | |||||||||
| Income tax provision | 4 | 136 | 140 | |||||||||
| Net income | 50 | 252 | 302 | |||||||||
| Diluted net income per share | $ | 0.01 | $ | 0.03 | $ | 0.04 | ||||||
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(1) |
Adjustment includes (i) |
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Three months ended |
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Adjusted |
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Reported |
Adjustments (2) |
Non-GAAP |
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| Operating expenses | $ | 5,291 |
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| % of net sales | 31.6 | % | 30.7 | % | ||||||||
| Operating income | 1,915 | 142 | 2,057 | |||||||||
| % of net sales | 11.4 | % | 12.3 | % | ||||||||
| Income before income taxes | 1,885 | 142 | 2,027 | |||||||||
| Income tax provision | 434 | 48 | 482 | |||||||||
| Net income | 1,451 | 94 | 1,545 | |||||||||
| Diluted net income per share | $ | 0.17 | $ | 0.01 | $ | 0.18 | ||||||
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(2) |
Adjustment includes |
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RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING |
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NON-GAAP FINANCIAL MEASURES |
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(Unaudited, thousands of dollars, except percentages and per share amounts) |
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Nine months ended |
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Adjusted |
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Reported |
Adjustments(3) |
Non-GAAP |
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| Operating expenses | $ | 15,767 | $ | (415 | ) | $ | 15,352 | |||||
| % of net sales | 38.6 | % | 37.6 | % | ||||||||
| Operating income | 1,033 | 415 | 1,448 | |||||||||
| % of net sales | 2.5 | % | 3.5 | % | ||||||||
| Income before income taxes | 984 | 415 | 1,399 | |||||||||
| Income tax provision | 365 | 145 | 510 | |||||||||
| Net income | 619 | 270 | 889 | |||||||||
| Diluted net income per share | $ | 0.07 | $ | 0.03 | $ | 0.10 | ||||||
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(3) |
Adjustment includes (i) |
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Nine months ended |
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Adjusted |
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Reported |
Adjustments (4) |
Non-GAAP |
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| Operating expenses | $ | 14,967 | $ | (198 | ) | $ | 14,769 | |||||
| % of net sales | 31.4 | % | 31.0 | % | ||||||||
| Operating income | 5,124 | 198 | 5,322 | |||||||||
| % of net sales | 10.8 | % | 11.2 | % | ||||||||
| Income before income taxes | 5,126 | 198 | 5,324 | |||||||||
| Income tax provision | 1,300 | 66 | 1,366 | |||||||||
| Net income | 3,826 | 132 | 3,958 | |||||||||
| Diluted net income per share | $ | 0.44 | $ | 0.01 | $ | 0.45 | ||||||
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(4) |
Adjustment includes (i) |
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RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA |
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NON-GAAP FINANCIAL MEASURES |
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(Unaudited) |
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| (In thousands) |
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| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net income | $ | 50 |
$ |
1,451 |
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$ | 619 | $ | 3,826 | |||||||
| Interest (income) expense, net | 12 | 8 | 38 | 9 | ||||||||||||
| Income tax provision | 4 | 434 | 365 | 1,300 | ||||||||||||
| Depreciation and amortization | 357 | 428 | 1,084 | 1,314 | ||||||||||||
| EBITDA | 423 | 2,321 | 2,106 | 6,449 | ||||||||||||
| Share-based compensation expense | 133 | 121 | 442 | 397 | ||||||||||||
| Legal fees associated with lawsuit | 428 | 142 | 475 | 398 | ||||||||||||
| Adjustment to accrued contingent consideration | (40 | ) | - | (60 | ) | (200 | ) | |||||||||
| Adjusted EBITDA | $ | 944 | $ | 2,584 | $ | 2,963 | $ | 7,044 | ||||||||
Investors:
President and Chief Financial Officer
or
JCIR
212-835-8500 or tact@jcir.com
Source:
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