Release Details
TransAct Technologies Reports 2016 First Quarter Results
Reports 2016 First Quarter Revenue of
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Summary of 2016 Q1 Results (In millions, except per share and percentage data) |
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Three Months Ended |
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2016 |
2015 | |||||||||
| Net sales | $ | 14.4 | $ | 16.2 | ||||||
| Gross profit | $ | 5.9 | $ | 6.5 | ||||||
| Gross margin |
41.0% |
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40.2% |
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| Operating income | $ | 0.9 | $ | 0.2 | ||||||
| EBITDA(1)(2) | $ | 1.3 | $ | 0.6 | ||||||
| Net income | $ | 0.6 | $ | 0.1 | ||||||
| Diluted earnings per share | $ | 0.08 | $ | 0.02 | ||||||
| Adjusted operating income(2) | $ | 0.9 | $ | 2.0 | ||||||
| Adjusted EBITDA(1)(2) | $ | 1.4 | $ | 2.5 | ||||||
| Adjusted net income(2) | $ | 0.6 | $ | 1.3 | ||||||
| Adjusted diluted earnings per share(2) | $ | 0.08 | $ | 0.16 | ||||||
| (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 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 included with this release. |
"Food safety has increasingly become a topic of intense focus and, importantly, an issue of brand protection in the restaurant and foodservice market, and interest in our AccuDate terminals from across the industry continues to grow. In order to provide some visibility into the progress we have made in securing sales opportunities for our food safety terminals, TransAct has won 44 distinct restaurant concepts/brands representing more than 80,000 potential terminals. Many of these wins give us access to sell to franchise operators at these restaurant companies, and we are making consistent progress with our sales execution against these opportunities. These wins represent a multi-year sales opportunity and we also expect to achieve consistent progress in securing additional wins for our AccuDate terminals with new restaurant and foodservice organizations.
"It is important to understand the ongoing evolution of TransAct's opportunity in the food safety market. Since entering the market with our AccuDate 9700 and effectively creating new technology for the restaurant kitchen, some existing and potential customers have increasingly indicated that they want our solution to play a far more integral role in their back of house operations. Based on this feedback, we first launched the AccuDate PRO in early 2015 to provide customers with a fully integrated solution. Many customers are evaluating the AccuDate PRO and TransAct won its first full restaurant roll-out for this terminal a few months ago. In addition, we are finalizing the development of our third terminal to address the needs of software developers seeking to provide custom solutions in certain segments of the restaurant and foodservice market. We are excited about this incremental sales opportunity.
"In our point of sale (POS) and banking business, we continued to execute in the first quarter on the strong demand from McDonald's for the Ithaca 9000 printer, as this customer continues to roll out new product and technology initiatives that utilize our printer.
"In the casino and gaming market, we continue to grow domestic share as
Review of Balance Sheet and Capital Return Initiatives
As of
Summary of 2016 First Quarter Operating Results
TransAct generated 2016 first quarter net sales of
Gross margin of 41.0% in the first quarter of 2016 compared to gross
margin of 40.2% in the year-ago quarter, reflecting the continued shift
in the Company's revenue mix towards sales of its higher-margin newer
products. Notwithstanding the higher gross margin, lower revenues in the
2016 quarter compared to the prior year period resulted in a 9% decline
in gross profit to
Total operating expenses for the 2016 first quarter were
TransAct recorded operating income of
2016 First 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
Non-GAAP Financial Measures
TransAct is providing 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 incurred in the first quarter of 2015.
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 incurred in the first quarter of 2015.
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 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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CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
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| (In thousands, except per share amounts) |
Three months ended |
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| 2016 | 2015 | ||
| Net sales |
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| Cost of sales | 8,472 | 9,672 | |
| Gross profit |
5,885 |
6,492 | |
| Operating expenses: | |||
| Engineering, design and product development | 1,236 | 868 | |
| Selling and marketing | 1,793 | 1,823 | |
| General and administrative |
1,917 |
1,840 | |
| Legal fees associated with lawsuit |
- |
1,744 | |
| 4,946 | 6,275 | ||
| Operating income | 939 | 217 | |
| Interest and other income (expense): | |||
| Interest, net | (4) | (6) | |
| Other, net | 1 | 14 | |
| (3) | 8 | ||
| Income before income taxes | 936 | 225 | |
| Income tax provision | 311 | 81 | |
| Net income |
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| Net income per common share: | |||
| Basic |
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| Diluted |
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| Shares used in per share calculation: | |||
| Basic | 7,834 | 7,856 | |
| Diluted | 7,883 | 7,876 | |
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SUPPLEMENTAL INFORMATION - SALES BY SALES UNIT: |
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Three months ended |
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| 2016 |
2015 |
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| Food safety, point of sale and banking |
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| Casino and gaming | 5,438 | 5,581 | |
| Lottery | 2,935 | 4,031 | |
| Printrex | 155 | 707 | |
| TransAct services group | 2,692 | 3,623 | |
| Total net sales |
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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
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| (In thousands) |
2016 |
2015 |
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| Assets: | ||||
| Current assets: | ||||
| Cash and cash equivalents |
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| Accounts receivable, net | 9,353 | 7,174 | ||
| Inventories | 9,921 | 11,296 | ||
| Deferred tax assets | 1,817 | 1,932 | ||
| Other current assets | 688 | 437 | ||
| Total current assets | 24,671 | 25,312 | ||
| Fixed assets, net | 2,552 | 2,507 | ||
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2,621 | 2,621 | ||
| Deferred tax assets | 1,215 | 1,213 | ||
| Intangible assets, net | 806 | 888 | ||
| Other assets | 28 | 28 | ||
| 7,222 | 7,257 | |||
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Total assets |
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| Liabilities and Shareholders' Equity: | ||||
| Current liabilities: | ||||
| Accounts payable |
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| Accrued liabilities | 1,635 | 2,838 | ||
| Income taxes payable | 76 | 245 | ||
| Deferred revenue | 221 | 604 | ||
| Total current liabilities | 5,880 | 6,329 | ||
| Deferred revenue, net of current portion | 80 | 77 | ||
| Deferred rent, net of current portion | 186 | 189 | ||
| Other liabilities | 289 | 246 | ||
| 555 | 512 | |||
| Total liabilities | 6,435 | 6,841 | ||
| Shareholders' equity: | ||||
| Common stock | 112 | 112 | ||
| Additional paid-in capital | 29,163 | 28,921 | ||
| Retained earnings | 22,958 | 22,956 | ||
| Accumulated other comprehensive loss, net of tax | (84) | (80) | ||
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(26,691) | (26,181) | ||
| Total shareholders' equity | 25,458 | 25,728 | ||
| Total liabilities and shareholders' equity |
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NON-GAAP FINANCIAL MEASURES (Unaudited, thousands of dollars, except percentages and per share amounts) |
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Three months ended
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Reported |
Adjustments(1) |
Adjusted
Non-GAAP |
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| Operating expenses |
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$- |
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| % of net sales |
34.5 |
% |
34.5 |
% |
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| Operating income | 939 | - | 939 | |||||
| % of net sales |
6.5 |
% |
6.5 |
% |
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| Income before income taxes | 936 | - | 936 | |||||
| Income tax provision | 311 | - | 311 | |||||
| Net income | 625 | - | 625 | |||||
| Diluted net income per share |
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$- |
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| (1) | No adjustments. |
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Three months ended
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Reported |
Adjustments (2) |
Adjusted
Non-GAAP |
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| Operating expenses |
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| % of net sales |
38.8 |
% |
28.0 |
% |
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| Operating income | 217 | 1,744 | 1,961 | |||||
| % of net sales |
1.3 |
% |
12.1 |
% |
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| Income before income taxes | 225 |
1,744 |
1,969 | |||||
| Income tax provision | 81 | 628 | 709 | |||||
| Net income | 144 | 1,116 | 1,260 | |||||
| Diluted net income per share |
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| (2) |
Adjustment includes |
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RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA NON-GAAP FINANCIAL MEASURES (Unaudited) |
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Three Months Ended |
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| (In thousands) |
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| 2016 | 2015 | |||
| Net income |
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| Interest expense, net | 4 | 6 | ||
| Income tax provision | 311 | 81 | ||
| Depreciation and amortization | 324 | 361 | ||
| EBITDA | 1,264 | 592 | ||
| Share-based compensation expense | 145 | 142 | ||
| Legal fees associated with lawsuit | - | 1,744 | ||
| Adjusted EBITDA |
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Investor:
President and Chief Financial Officer
or
JCIR
212-835-8500
tact@jcir.com
Source:
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