Mar 5, 2018
TransAct Technologies Reports 2017 Fourth Quarter and Full Year Results
2017 Fourth Quarter Net Sales of
“We are currently working alongside our main software partners on addressing several opportunities with large national restaurant and foodservice brands that would significantly expand the market penetration of our AccuDate terminals and proprietary labels. We have shipped initial units to these customers as we work towards full-scale roll-outs which we expect to begin in the second quarter of 2018. Momentum for our restaurant solutions business continues to build, reflecting the benefits that our terminals offer to our customers and the successes we are achieving with our internally-driven sales efforts.
“While we are still in the early stages of executing on the large restaurant solutions market opportunity, our AccuDate terminals are beginning to demonstrate that they can benefit restaurant and foodservice operators by lowering costs and providing needed food safety technology. As we continue to demonstrate these benefits to the industry, customer appreciation is growing for our lineup of AccuDate terminals and related label and technical service offerings and we have established a growing pipeline of opportunities which we expect to begin converting to shipments in 2018.
“Our casino and gaming business is similarly positioned to grow, as
demonstrated by the 34% year-over year-increase in domestic casino and
gaming printer sales in the fourth quarter of 2017. As we noted on our
third quarter call, in late 2017, we decided to address an issue in our
European casino and gaming market by converting to a direct sales model
Mr. Shuldman concluded, “We remain confident in our view that the next wave of technology investment by the foodservice industry will be concentrated on the back-of-the-house as operators look to enhance their processes, reduce costs and protect their brands through the use of new hardware and software technology. Our easy-to-use AccuDate terminals, in conjunction with our portfolio of label products, position TransAct as a one-stop shop serving this exciting opportunity and we look forward to serving customers’ needs while further evolving our product line. We believe this opportunity and our focus on offering leading technology solutions, such as our AccuDate terminals and related software and labels, is the right formula to deliver attractive financial returns and long-term value for our shareholders and we are excited by the prospects for our Company in 2018.”
New Share Repurchase Authorization; Review of Balance Sheet and Capital Return Initiatives
TransAct announced today that its Board of Directors has approved a new
stock repurchase program, effective immediately, which replaces the
Company’s prior program that expired on
Summary of 2017 Fourth Quarter Operating Results
TransAct generated 2017 fourth quarter net sales of
The Company had record gross margin of 50.2% in the 2017 fourth quarter
compared to gross margin of 44.2% in the 2016 fourth quarter. The strong
gross margin reflects a favorable sales mix including strong lottery
spare parts sales and growing sales of AccuDate terminal consumables.
Higher gross margin in the 2017 fourth quarter more than offset the 3%
decline in net sales to drive a 10% increase in gross profit to
Total operating expenses for the 2017 fourth quarter were
TransAct generated operating income of
2017 Fourth 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 is providing certain non-GAAP financial measures because the Company believes that these amounts are helpful to investors and others in assessing the ongoing nature of what the Company’s management views as TransAct’s core operations. The Company believes that the non-GAAP financial measures of EBITDA and adjusted EBITDA provide relevant and useful information, which is widely used by analysts, investors and competitors in the Company’s markets as well as by the Company’s management in assessing the Company’s performance. 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, and should be read in conjunction with, the financial information prepared in accordance with GAAP.
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 GAAP financial measure, can be found attached to this release.
Adjusted EBITDA is defined as net income before net interest expense, income taxes, depreciation and amortization and is adjusted for share-based compensation. The Company adjusts EBITDA for share-based compensation because the Company considers share-based compensation to be a non-cash expense similar to depreciation and amortization. A reconciliation of adjusted EBITDA to net income, the most comparable GAAP financial measure, can be found attached to this release.
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. EBITDA and adjusted EBITDA may be useful to an investor in 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 non-recurring items 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, assessing financial performance and paying incentive compensation.
Adjusted net income is defined as net income adjusted for the
tax-effected impact of special items (a
Adjusted net income per diluted share is defined as adjusted net income divided by diluted shares outstanding. A reconciliation of adjusted net income per diluted share to net income per diluted share, the most comparable GAAP financial measure, can be found attached to this release.
Adjusted net income and adjusted net 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 (a
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