Release Details
TransAct Technologies Reports 2018 Fourth Quarter and Full Year Results
2018 Fourth Quarter Net Sales of
| Summary of 2018 Q4 Results | ||||||||||
|
(In millions, except per share and percentage data) |
||||||||||
| Three Months Ended December 31, |
||||||||||
| 2018 | 2017 | |||||||||
| Net sales | $ | 11.8 | $ | 13.2 | ||||||
| Gross profit | $ | 5.9 | $ | 6.6 | ||||||
| Gross margin | 50.1 | % | 50.2 | % | ||||||
| Operating income | $ | 1.1 | $ | 1.5 | ||||||
| Net income (loss) | $ | 1.0 | $ | (0.4 | ) | |||||
| Net income (loss) per diluted share | $ | 0.12 | $ | (0.06 | ) | |||||
|
Non-GAAP(1): |
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| EBITDA | $ | 1.2 | $ | 1.7 | ||||||
| Adjusted EBITDA | $ | 1.3 | $ | 1.8 | ||||||
| Adjusted net income per diluted share | $ | 0.12 | $ | 0.12 | ||||||
|
(1) |
A reconciliation of each non-GAAP financial measure to the most comparable Generally Accepted Accounting Principles (“GAAP”) financial measure is included in this release. See “Non-GAAP Financial Measures” below for a discussion of these metrics. | |
“During the 2018 fourth quarter, global casino and gaming sales grew 21%
year over year as we further expanded our share of the global casino
market. In particular, we made initial shipments of our new Epic Edge
ticket-in/ticket-out printer for a large domestic operator’s upcoming
new casino opening. TransAct further benefited from our decision to
change our sales approach to direct sales in
“As we work to expand our restaurant solutions business, TransAct recently achieved a significant milestone for this large market opportunity. Earlier this week we announced the launch of BOHA!, our new comprehensive ecosystem of cloud-based SaaS (Software as a Service) apps and hardware solutions that we believe will transform how restaurant and food service companies manage their back-of-house operations. With BOHA!, TransAct can now deliver a full, single-vendor suite of integrated software applications and hardware solutions designed to help customers automate a wide array of their back-of-house operations. The suite of powerful BOHA! solutions, which is launching with nine cloud-based SaaS applications and four companion hardware devices, will allow our customers to easily deploy automation and technology in their work flows and devote more of their attention towards delivering the best possible customer experience. Additionally, increased back-of-house automation will allow our customers to operate more efficiently, helping to offset continuously rising food and labor costs.
“The launch of BOHA! culminates what has been a true team effort across the TransAct organization and we are delighted to bring our one-stop solution for restaurants and food service companies of all sizes to market. TransAct’s new BOHA! platform and its suite of solutions demonstrates to existing and potential customers that we listen and take seriously their ever-evolving needs. We have worked tirelessly with restaurant and food service operators to determine how to best address their critical operations and developed BOHA! to simplify their processes into a single platform, single portal solution that eliminates the complexity of deploying solutions from multiple vendors. In addition, BOHA! is designed as a future-proof platform capable of evolving along with our customers which we believe is crucial and of increasing importance as restaurants and food service operators continue to explore new and more efficient ways to operate their businesses.
“Looking to 2019, we are focused on an aggressive sales effort to drive awareness for BOHA! and to turn initial interest into contracts and deployments. We have been working with a select number of restaurant operators through the development of the BOHA! solution suite and are pleased to have secured an initial order from one of these customers. As we begin to generate hardware sales from our terminals, handhelds and sensors while simultaneously building a backlog of SaaS revenue based on recurring monthly fees associated with app usage, we are more confident than ever that the decision to focus intently on this significant market opportunity has the potential to deliver meaningful shareholder value over time. We are excited by what the future holds and believe that our shareholders will benefit from a suite of products that we expect will be a long-term driver of growth.”
Review of Balance Sheet and Capital Return Initiatives
At
Summary of 2018 Fourth Quarter Operating Results
TransAct generated 2018 fourth quarter net sales of
The Company recorded gross margin of 50.1% in the 2018 fourth quarter
compared to gross margin of 50.2% in the 2017 fourth quarter. Gross
profit in the 2018 fourth quarter was
Total operating expenses in the 2018 fourth quarter decreased 6% to
TransAct generated operating income of
2018 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 measures 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 these non-GAAP financial measures internally to focus management on the results of the Company’s core business. The presentation of this 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.
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; our dependence on
contract manufacturers for the assembly of a large portion of our
products in
- Financial tables follow -
| TRANSACT TECHNOLOGIES INCORPORATED | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||
| (In thousands, except per share amounts) | December 31, | December 31, | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||
| Net sales | $ | 11,755 | $ | 13,194 | $ | 54,587 | $ | 56,311 | ||||||||||
| Cost of sales | 5,869 | 6,574 | 27,844 | 29,649 | ||||||||||||||
| Gross profit | 5,886 | 6,620 | 26,743 | 26,662 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Engineering, design and product development | 1,066 | 1,143 | 4,576 | 4,303 | ||||||||||||||
| Selling and marketing | 1,753 | 1,960 | 7,203 | 7,561 | ||||||||||||||
| General and administrative | 1,994 | 2,016 | 8,205 | 7,984 | ||||||||||||||
| 4,813 | 5,119 | 19,984 | 19,848 | |||||||||||||||
| Operating income | 1,073 | 1,501 | 6,759 | 6,814 | ||||||||||||||
| Interest and other income (expense): | ||||||||||||||||||
| Interest, net | (6 | ) | (8 | ) | (27 | ) | (33 | ) | ||||||||||
| Other, net | (129 | ) | (1 | ) | (266 | ) | (9 | ) | ||||||||||
| (135 | ) | (9 | ) | (293 | ) | (42 | ) | |||||||||||
| Income before income taxes | 938 | 1,492 | 6,466 | 6,772 | ||||||||||||||
| Income tax provision (benefit) | (24 | ) | 1,904 | 1,040 | 3,561 | |||||||||||||
| Net income (loss) | $ | 962 | $ | (412 | ) | $ | 5,426 | $ | 3,211 | |||||||||
| Net income (loss) per common share: | ||||||||||||||||||
| Basic | $ | 0.13 | $ | (0.06 | ) | $ | 0.73 | $ | 0.43 | |||||||||
| Diluted | $ | 0.12 | $ | (0.06 | ) | $ | 0.70 | $ | 0.42 | |||||||||
| Shares used in per share calculation: | ||||||||||||||||||
| Basic | 7,431 | 7,478 | 7,444 | 7,423 | ||||||||||||||
| Diluted | 7,717 | 7,478 | 7,759 | 7,592 | ||||||||||||||
| SUPPLEMENTAL INFORMATION – SALES BY SALES UNIT: | ||||||||||||||
|
|
Three Months Ended | Year Ended | ||||||||||||
| (In thousands) | December 31, | December 31, | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||
| Restaurant solutions | $ | 957 | $ | 1,407 | $ | 4,579 | $ | 4,758 | ||||||
| POS automation and banking | 1,372 | 1,570 | 7,273 | 7,905 | ||||||||||
| Casino and gaming | 5,319 | 4,402 | 26,593 | 18,615 | ||||||||||
| Lottery | 1,322 | 1,877 | 3,093 | 9,805 | ||||||||||
| Printrex | 235 | 234 | 1,297 | 1,052 | ||||||||||
| TransAct Services Group | 2,550 | 3,704 | 11,752 | 14,176 | ||||||||||
| Total net sales | $ | 11,755 | $ | 13,194 | $ | 54,587 | $ | 56,311 | ||||||
| TRANSACT TECHNOLOGIES INCORPORATED | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| December 31, | December 31, | |||||||||
| (In thousands) | 2018 | 2017 | ||||||||
| Assets: | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 4,691 | $ | 5,507 | ||||||
| Accounts receivable, net | 8,025 | 10,948 | ||||||||
| Inventories | 12,835 | 8,875 | ||||||||
| Other current assets | 1,486 | 1,031 | ||||||||
| Total current assets | 27,037 | 26,361 | ||||||||
| Fixed assets, net | 2,272 | 2,169 | ||||||||
| Goodwill | 2,621 | 2,621 | ||||||||
| Deferred tax assets | 2,198 | 2,308 | ||||||||
| Intangible assets, net | 797 | 458 | ||||||||
| Other assets | 31 | 33 | ||||||||
| 7,919 | 7,589 | |||||||||
| Total assets | $ | 34,956 | $ | 33,950 | ||||||
| Liabilities and Shareholders’ Equity: | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 3,483 | $ | 3,841 | ||||||
| Accrued liabilities | 2,765 | 3,339 | ||||||||
| Deferred revenue | 384 | 169 | ||||||||
| Total current liabilities | 6,632 | 7,349 | ||||||||
| Deferred revenue, net of current portion | 265 | 69 | ||||||||
| Deferred rent, net of current portion | 250 | 271 | ||||||||
| Other liabilities | 242 | 247 | ||||||||
| 757 | 587 | |||||||||
| Total liabilities | 7,389 | 7,936 | ||||||||
| Shareholders’ equity: | ||||||||||
| Common stock | 115 | 114 | ||||||||
| Additional paid-in capital | 32,129 | 31,353 | ||||||||
| Retained earnings | 27,515 | 24,756 | ||||||||
| Accumulated other comprehensive loss, net of tax | (82 | ) | (99 | ) | ||||||
| Treasury stock, at cost | (32,110 | ) | (30,110 | ) | ||||||
| Total shareholders’ equity | 27,567 | 26,014 | ||||||||
| Total liabilities and shareholders’ equity | $ | 34,956 | $ | 33,950 | ||||||
| TRANSACT TECHNOLOGIES INCORPORATED | ||||||||||||||
| RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING | ||||||||||||||
| NON-GAAP FINANCIAL MEASURES | ||||||||||||||
| (Unaudited, thousands of dollars, except percentages and per share amounts) | ||||||||||||||
|
Three months ended
December 31, 2018 |
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|
|
Reported |
Adjustments(1) |
Adjusted
Non-GAAP |
|||||||||||
| Operating expenses | $ | 4,813 | $ | - | $ | 4,813 | ||||||||
| % of net sales | 40.9 | % | 40.9 | % | ||||||||||
| Operating income | 1,073 | - | 1,073 | |||||||||||
| % of net sales | 9.1 | % | 9.1 | % | ||||||||||
| Income before income taxes | 938 | - | 938 | |||||||||||
| Income tax provision (benefit) | (24 | ) | - | (24 | ) | |||||||||
| Net income | 962 | - | 962 | |||||||||||
| Diluted net income per share | $ | 0.12 | - | $ | 0.12 | |||||||||
|
(1) No adjustments. |
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|
Three months ended
December 31, 2017 |
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|
|
Reported |
Adjustments(2) |
Adjusted
Non-GAAP |
|||||||||||
| Operating expenses | $ | 5,119 | $ | - | $ | 5,119 | ||||||||
| % of net sales | 38.8 | % | 38.8 | % | ||||||||||
| Operating income | 1,501 | - | 1,501 | |||||||||||
| % of net sales | 11.4 | % | 11.4 | % | ||||||||||
| Income before income taxes | 1,492 | - | 1,492 | |||||||||||
| Income tax provision | 1,904 | (1,315 | ) | 589 | ||||||||||
| Net income (loss) | (412 | ) | 1,315 | 903 | ||||||||||
| Diluted net income (loss) per share | $ | (0.06 | ) | $ | 0.18 | $ | 0.12 | |||||||
|
(2) |
Adjustment includes a $1,315 charge to income tax expense related to the write-down of deferred tax assets resulting from the Tax Cuts and Jobs Act of 2017 that was enacted in December 2017. | |||||
| TRANSACT TECHNOLOGIES INCORPORATED | ||||||||||||||
| RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING | ||||||||||||||
| NON-GAAP FINANCIAL MEASURES | ||||||||||||||
| (Unaudited, thousands of dollars, except percentages and per share amounts) | ||||||||||||||
|
Year ended
December 31, 2018 |
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|
|
Reported |
Adjustments(3) |
Adjusted
Non-GAAP |
|||||||||||
| Operating expenses | $ | 19,984 | $ | - | $ | 19,984 | ||||||||
| % of net sales | 36.6 | % | 36.6 | % | ||||||||||
| Operating income | 6,759 | - | 6,759 | |||||||||||
| % of net sales | 12.4 | % | 12.4 | % | ||||||||||
| Income before income taxes | 6,466 | - | 6,466 | |||||||||||
| Income tax provision | 1,040 | - | 1,040 | |||||||||||
| Net income | 5,426 | - | 5,426 | |||||||||||
| Diluted net income per share | $ | 0.70 | - | $ | 0.70 | |||||||||
|
(3) No adjustments. |
||||||||||||||
|
Year ended
December 31, 2017 |
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|
|
Reported |
Adjustments(4) |
Adjusted
Non-GAAP |
|||||||||||
| Operating expenses | $ | 19,848 | $ | - | $ | 19,848 | ||||||||
| % of net sales | 35.2 | % | 35.2 | % | ||||||||||
| Operating income | 6,814 | - | 6,814 | |||||||||||
| % of net sales | 12.1 | % | 12.1 | % | ||||||||||
| Income before income taxes | 6,772 | - | 6,772 | |||||||||||
| Income tax provision | 3,561 | (1,315 | ) | 2,246 | ||||||||||
| Net income | 3,211 | 1,315 | 4,526 | |||||||||||
| Diluted net income per share | $ | 0.42 | $ | 0.18 | $ | 0.60 | ||||||||
|
(4) |
Adjustment includes a $1,315 charge to income tax expense related to the write-down of deferred tax assets resulting from the Tax Cuts and Jobs Act of 2017 that was enacted in December 2017. | |||||
| TRANSACT TECHNOLOGIES INCORPORATED | ||||||||||||||||
| RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA | ||||||||||||||||
| NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| (In thousands) | December 31, | December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net income (loss) | $ | 962 | $ | (412 | ) | $ | 5,426 | $ | 3,211 | |||||||
| Interest expense, net | 6 | 8 | 27 | 33 | ||||||||||||
| Income tax provision (benefit) | (24 | ) | 1,904 | 1,040 | 3,561 | |||||||||||
| Depreciation and amortization | 258 | 215 | 997 | 1,081 | ||||||||||||
| EBITDA | 1,202 | 1,715 | 7,490 | 7,886 | ||||||||||||
| Share-based compensation expense | 105 | 125 | 629 | 609 | ||||||||||||
| Adjusted EBITDA | $ | 1,307 | $ | 1,840 | $ | 8,119 | $ | 8,495 | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190306005766/en/
Source:
Investor:
Steve DeMartino
President and Chief Financial
Officer
TransAct Technologies Incorporated
203-859-6810
Richard Land, Joseph Jaffoni, Jim Leahy
JCIR
212-835-8500 or tact@jcir.com