Release Details
TransAct Technologies Reports 2018 Second Quarter Results
2018 Second Quarter Net Sales Rise 8% to
| Summary of 2018 Q2 Results | ||||||||||||||||||
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(In millions, except per share and percentage data) |
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| Three Months Ended June 30, |
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| 2018 | 2017 | |||||||||||||||||
| Net sales | $ | 14.8 | $ | 13.6 | ||||||||||||||
| Gross profit | $ | 7.0 | $ | 6.4 | ||||||||||||||
| Gross margin | 47.4 | % | 47.3 | % | ||||||||||||||
| Operating income | $ | 1.6 | $ | 1.3 | ||||||||||||||
| Net income | $ | 1.2 | $ | 0.9 | ||||||||||||||
| Net income per diluted share | $ | 0.16 | $ | 0.12 | ||||||||||||||
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Non-GAAP(1): |
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| EBITDA | $ | 1.8 | $ | 1.6 | ||||||||||||||
| Adjusted EBITDA | $ | 2.0 | $ | 1.7 | ||||||||||||||
| (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. | |
“In the second quarter, we gained traction with our AccuDate restaurant
solutions terminal and software offerings, as we continued rollouts of
terminals to new and existing customers while also working on many new
customer opportunities. Inclusive of sales of AccuDate labels and
maintenance and support contracts, net sales for our restaurant
solutions portfolio was approximately
“Our successes to date indicate there is a significant opportunity for
TransAct to be a major participant and to capture large market share in
the restaurant solutions business, as restaurant and food service
companies more actively invest in both hardware and software technology
for the back of the house to transform every area of their operations.
Our product offerings remain at the forefront of innovation to address
these needs and we have a strong internal team of hardware and software
developers working on a comprehensive portfolio of solutions and
services that we believe will further position TransAct to achieve near
and long-term growth in this developing market. From the new AccuDate
XL2e terminal to the TransAct Enterprise Management System, both of
which were launched earlier this year to favorable response at the
National Restaurant Association Show in
“We also continue to generate strong results in our casino and gaming
business reflecting growing demand for our market-leading Epic printer
solutions. Our domestic business continues to gain market share as
domestic net sales rose 30% over the prior year period, driven by an
increased preference for our solutions by casino operators in an
improving slot sales and replacement environment. The strong growth in
our international sales reflects the rapid and significant progress that
we have made in
Mr. Shuldman concluded, “Our near and long-term success will be driven by the major opportunities that we are building for ourselves in the restaurant solutions marketplace and our expectation that we will continue to grow our world-wide casino and gaming business. We are actively investing in technology and hardware that will allow us to continue to monetize the evolving restaurant solutions opportunity and believe that we are ideally positioned to help restaurant operators enhance their back-of-house processes, reduce operating costs, protect their brands and customers and implement technology to grow their businesses. In addition, we expect our casino and gaming business will continue to be a strong driver of growth for the Company as we extend our industry leadership in both the domestic and international markets. The future is bright for TransAct and we look forward to continuing to deliver on our promise to create value for our shareholders in the coming quarters and years.”
Review of Balance Sheet and Capital Return Initiatives
At
Summary of 2018 Second Quarter Operating Results
TransAct generated 2018 second quarter net sales of
The Company recorded gross margin of 47.4% in the 2018 second quarter
compared to gross margin of 47.3% in the 2017 second quarter. The gross
margin in the 2018 second quarter remained strong reflecting the shift
in sales mix towards higher-value, technology-driven solutions. Gross
profit in the 2018 second quarter was
Total operating expenses in the 2018 second quarter increased 5% to
TransAct generated operating income of
2018 Second 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 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.
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
| TRANSACT TECHNOLOGIES INCORPORATED | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| (In thousands, except per share amounts) | June 30, | June 30, | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||
| Net sales | $ | 14,751 | $ | 13,596 | $ | 26,994 | $ | 27,593 | ||||||||||
| Cost of sales | 7,760 | 7,166 | 14,141 | 15,070 | ||||||||||||||
| Gross profit | 6,991 | 6,430 | 12,853 | 12,523 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Engineering, design and product development | 1,183 | 1,020 | 2,404 | 2,013 | ||||||||||||||
| Selling and marketing | 2,079 | 2,034 | 3,652 | 3,706 | ||||||||||||||
| General and administrative | 2,111 | 2,070 | 4,323 | 4,082 | ||||||||||||||
| 5,373 | 5,124 | 10,379 | 9,801 | |||||||||||||||
| Operating income | 1,618 | 1,306 | 2,474 | 2,722 | ||||||||||||||
| Interest and other income (expense): | ||||||||||||||||||
| Interest, net | (6 | ) | (8 | ) | (14 | ) | (16 | ) | ||||||||||
| Other, net | (97 | ) | (2 | ) | (87 | ) | (8 | ) | ||||||||||
| (103 | ) | (10 | ) | (101 | ) | (24 | ) | |||||||||||
| Income before income taxes | 1,515 | 1,296 | 2,373 | 2,698 | ||||||||||||||
| Income tax provision | 305 | 429 | 483 | 888 | ||||||||||||||
| Net income | $ | 1,210 | $ | 867 | $ | 1,890 | $ | 1,810 | ||||||||||
| Net income per common share: | ||||||||||||||||||
| Basic | $ | 0.16 | $ | 0.12 | $ | 0.25 | $ | 0.24 | ||||||||||
| Diluted | $ | 0.16 | $ | 0.12 | $ | 0.24 | $ | 0.24 | ||||||||||
| Shares used in per share calculation: | ||||||||||||||||||
| Basic | 7,401 | 7,408 | 7,467 | 7,402 | ||||||||||||||
| Diluted | 7,660 | 7,514 | 7,782 | 7,469 | ||||||||||||||
| SUPPLEMENTAL INFORMATION – SALES BY SALES UNIT: | ||||||||||||||
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Three Months Ended | Six Months Ended | ||||||||||||
| (In thousands) | June 30, | June 30, | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||
| Restaurant solutions | $ | 1,259 | $ | 1,021 | $ | 2,304 | $ | 1,548 | ||||||
| POS automation and banking | 2,252 | 2,048 | 3,968 | 4,506 | ||||||||||
| Casino and gaming | 7,067 | 3,985 | 13,007 | 9,102 | ||||||||||
| Lottery | 481 | 2,787 | 1,116 | 5,768 | ||||||||||
| Printrex | 336 | 282 | 611 | 460 | ||||||||||
| TransAct Services Group | 3,356 | 3,473 | 5,988 | 6,209 | ||||||||||
| Total net sales | $ | 14,751 | $ | 13,596 | $ | 26,994 | $ | 27,593 | ||||||
| TRANSACT TECHNOLOGIES INCORPORATED | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| June 30, | December 31, | |||||||||
| (In thousands) | 2018 | 2017 | ||||||||
| Assets: | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 3,756 | $ | 5,507 | ||||||
| Accounts receivable, net | 10,200 | 10,948 | ||||||||
| Inventories | 11,382 | 8,875 | ||||||||
| Other current assets | 710 | 1,031 | ||||||||
| Total current assets | 26,048 | 26,361 | ||||||||
| Fixed assets, net | 2,451 | 2,169 | ||||||||
| Goodwill | 2,621 | 2,621 | ||||||||
| Deferred tax assets | 2,285 | 2,308 | ||||||||
| Intangible assets, net | 411 | 458 | ||||||||
| Other assets | 31 | 33 | ||||||||
| 7,799 | 7,589 | |||||||||
| Total assets | $ | 33,847 | $ | 33,950 | ||||||
| Liabilities and Shareholders’ Equity: | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 5,202 | $ | 3,841 | ||||||
| Accrued liabilities | 3,040 | 3,339 | ||||||||
| Deferred revenue | 243 | 169 | ||||||||
| Total current liabilities | 8,485 | 7,349 | ||||||||
| Deferred revenue, net of current portion | 94 | 69 | ||||||||
| Deferred rent, net of current portion | 269 | 271 | ||||||||
| Other liabilities | 262 | 247 | ||||||||
| 625 | 587 | |||||||||
| Total liabilities | 9,110 | 7,936 | ||||||||
| Shareholders’ equity: | ||||||||||
| Common stock | 114 | 114 | ||||||||
| Additional paid-in capital | 31,533 | 31,353 | ||||||||
| Retained earnings | 25,310 | 24,756 | ||||||||
| Accumulated other comprehensive loss, net of tax | (110 | ) | (99 | ) | ||||||
| Treasury stock, at cost | (32,110 | ) | (30,110 | ) | ||||||
| Total shareholders’ equity | 24,737 | 26,014 | ||||||||
| Total liabilities and shareholders’ equity | $ | 33,847 | $ | 33,950 | ||||||
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TRANSACT TECHNOLOGIES INCORPORATED |
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RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA |
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| NON-GAAP FINANCIAL MEASURES | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||
| (In thousands) | June 30, | June 30, | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||
| Net income | $ | 1,210 | $ | 867 | $ | 1,890 | $ | 1,810 | ||||||
| Interest expense, net | 6 | 8 | 14 | 16 | ||||||||||
| Income tax provision | 305 | 429 | 483 | 888 | ||||||||||
| Depreciation and amortization | 259 | 289 | 480 | 602 | ||||||||||
| EBITDA | 1,780 | 1,593 | 2,867 | 3.316 | ||||||||||
| Share-based compensation expense | 176 | 150 | 337 | 296 | ||||||||||
| Adjusted EBITDA | $ | 1,956 | $ | 1,743 | 3,204 | $ | 3,612 | |||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180802005768/en/
Source:
Investor:
TransAct Technologies Incorporated
Steve
DeMartino, 203-859-6810
President and Chief Financial Officer
or
JCIR
Richard
Land, Joseph Jaffoni, Jim Leahy
212-835-8500 or tact@jcir.com