Release Details
TransAct Technologies Reports Preliminary 2019 Third Quarter Results
2019 Third Quarter Net Sales of
BOHA!-Related Recurring Revenue Increases 91% on a Quarterly Sequential Basis
As disclosed by the Company in a filing with the
Upon completion of additional procedures, the Company expects to finalize the operating results for the quarter ended
Summary of Preliminary 2019 Q3 Results |
|||||
(In millions, except per share and percentage data) |
|||||
|
Three Months Ended
|
||||
|
2019 |
2018 |
|||
Net sales |
$ |
11.7 |
$ |
15.8 |
|
Gross profit |
$ |
5.5 |
$ |
8.0 |
|
Gross margin |
|
47.5% |
|
50.5% |
|
Operating income |
$ |
0.3 |
$ |
3.2 |
|
Net income |
$ |
0.4 |
$ |
2.6 |
|
Net income per diluted share |
$ |
0.05 |
$ |
0.33 |
|
|
|
|
|||
Non-GAAP(1): |
|
|
|||
EBITDA |
$ |
0.5 |
$ |
3.4 |
|
Adjusted EBITDA |
$ |
0.7 |
$ |
3.6 |
|
“Over the last three months, we have secured two new agreements for the BOHA! ecosystem which include one of our BOHA! SaaS-based apps and the TransAct Enterprise Management System, both of which helped grow our base of recurring revenue, as well as upfront sales of the BOHA! Terminal. These new wins highlight the wide variety of customers the unique BOHA! ecosystem can address and the significant potential of our solution to generate attractive levels of recurring revenue for TransAct. A large corporate customer approved the sale of BOHA! into its more than 1,000 fast food franchise locations across
“The commercialization of our BOHA! suite of apps and hardware solutions is gaining momentum, with restaurant solutions recurring revenue nearly tripling in the 2019 third quarter compared to the prior-year period and nearly doubling over the 2019 second quarter. In addition, one of our earlier adopters of BOHA! has already indicated that they are reviewing the potential to significantly increase the number of BOHA! installations from the originally agreed to level. We also saw our engagements with potential new customers rise in the 2019 third quarter. This early success in both deploying BOHA! solutions with current customers and generating new sales leads and trial activity with potential new customers continues to give us a high level of confidence that TransAct can successfully execute on what we believe is a total addressable market opportunity that will potentially exceed
“Our market-leading casino and gaming printer business remains a foundation for our long-term success and at the Global Gaming Expo in
“As we look to the end of this year and in to 2020, we remain confident that BOHA! is on pace to become our largest-ever revenue generating opportunity. Our focus is on driving near- and long-term success for BOHA!, as we are determined to leverage our position in this emerging market to grow our business and create significant long-term value for our shareholders.”
Review of Preliminary Balance Sheet and Capital Return Initiatives
At
Summary of Preliminary 2019 Third Quarter Operating Results
On a preliminary basis, TransAct generated 2019 third quarter net sales of
Third quarter 2019 gross margin was 47.5% compared to 50.5% in the 2018 third quarter. Gross profit in the 2019 third quarter was
Total operating expenses in the 2019 third quarter of
TransAct generated operating income of
2019 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 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 that 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
Cautionary Statement Regarding Preliminary Financial Information
The Company has prepared the preliminary financial information set forth above on a materially consistent basis with its historical financial information and in good faith based upon its internal reporting as of and for the three months ended
This preliminary financial information should not be viewed as a substitute for full interim financial statements prepared in accordance with GAAP. In addition, this preliminary financial information for the three months ended
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 INCOME |
||||||||
(Preliminary and Unaudited) |
||||||||
|
|
|
|
|
||||
(In thousands, except per share amounts) |
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net sales |
|
$11,686 |
|
$15,838 |
|
$34,586 |
|
$42,832 |
Cost of sales |
|
6,140 |
|
7,834 |
|
17,250 |
|
21,975 |
Gross profit |
|
5,546 |
|
8,004 |
|
17,336 |
|
20,857 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Engineering, design and product development |
|
1,048 |
|
1,106 |
|
3,328 |
|
3,510 |
Selling and marketing |
|
1,947 |
|
1,798 |
|
5,890 |
|
5,450 |
General and administrative |
|
2,239 |
|
1,888 |
|
6,720 |
|
6,211 |
|
|
5,234 |
|
4,792 |
|
15,938 |
|
15,171 |
Operating income |
|
312 |
|
3,212 |
|
1,398 |
|
5,686 |
|
|
|
|
|
|
|
|
|
Interest and other expense: |
|
|
|
|
|
|
|
|
Interest, net |
|
- |
|
(7) |
|
(13) |
|
(21) |
Other, net |
|
(71) |
|
(50) |
|
(123) |
|
(137) |
|
|
(71) |
|
(57) |
|
(136) |
|
(158) |
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
241 |
|
3,155 |
|
1,262 |
|
5,528 |
Income tax provision (benefit) |
|
(143) |
|
581 |
|
(54) |
|
1,064 |
Net income |
|
$384 |
|
$2,574 |
|
$1,316 |
|
$4,464 |
|
|
|
|
|
|
|
|
|
Net income per common share: |
|
|
|
|
|
|
|
|
Basic |
|
$0.05 |
|
$0.35 |
|
$0.18 |
|
$0.60 |
Diluted |
|
$0.05 |
|
$0.33 |
|
$0.17 |
|
$0.57 |
|
|
|
|
|
|
|
|
|
Shares used in per share calculation: |
|
|
|
|
|
|
|
|
Basic |
|
7,470 |
|
7,413 |
|
7,464 |
|
7,449 |
Diluted |
|
7,753 |
|
7,758 |
|
7,658 |
|
7,774 |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION – SALES BY SALES UNIT: |
|||||
|
Three Months Ended
|
|
Nine Months Ended
|
||
(In thousands) |
|
||||
|
2019 |
2018 |
|
2019 |
2018 |
Restaurant solutions |
$1,382 |
$1,318 |
|
$3,140 |
$3,622 |
POS automation and banking |
1,514 |
1,933 |
|
4,435 |
5,901 |
Casino and gaming |
5,074 |
8,267 |
|
16,188 |
21,274 |
Lottery |
95 |
655 |
|
926 |
1,771 |
Printrex |
296 |
451 |
|
923 |
1,062 |
TransAct Services Group |
3,325 |
3,214 |
|
8,974 |
9,202 |
Total net sales |
$11,686 |
$15,838 |
$34,586 |
$42,832 |
TRANSACT TECHNOLOGIES INCORPORATED |
||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
(Preliminary and Unaudited) |
||||
|
|
September 30, |
|
December 31, |
(In thousands) |
|
2019 |
|
2018 |
Assets: |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$1,207 |
|
$4,691 |
Accounts receivable, net |
|
8,350 |
|
8,025 |
Notes receivable |
|
1,006 |
|
- |
Inventories, net |
|
12,643 |
|
12,835 |
Other current assets |
|
2,046 |
|
1,486 |
Total current assets |
|
25,252 |
|
27,037 |
|
|
|
|
|
Fixed assets, net |
|
2,578 |
|
2,272 |
Right of use assets, net |
|
3,055 |
|
- |
Goodwill |
|
2,621 |
|
2,621 |
Deferred tax assets |
|
2,311 |
|
2,198 |
Intangible assets, net |
|
910 |
|
797 |
Other assets |
|
31 |
|
31 |
|
|
11,506 |
|
7,919 |
Total assets |
|
$36,758 |
|
$34,956 |
|
|
|
|
|
Liabilities and Shareholders’ Equity: |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$2,641 |
|
$3,483 |
Accrued liabilities |
|
2,696 |
|
2,765 |
Lease liability |
|
932 |
|
- |
Deferred revenue |
|
517 |
|
384 |
Total current liabilities |
|
6,786 |
|
6,632 |
|
|
|
|
|
Deferred revenue, net of current portion |
|
190 |
|
265 |
Lease liability, net of current portion |
|
2,329 |
|
- |
Deferred rent, net of current portion |
|
- |
|
250 |
Other liabilities |
|
170 |
|
242 |
|
|
2,689 |
|
757 |
Total liabilities |
|
9,475 |
|
7,389 |
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
Common stock |
|
115 |
|
115 |
Additional paid-in capital |
|
32,474 |
|
32,129 |
Retained earnings |
|
26,820 |
|
27,515 |
Accumulated other comprehensive loss, net of tax |
|
(16) |
|
(82) |
Treasury stock, at cost |
|
(32,110) |
|
(32,110) |
Total shareholders’ equity |
|
27,283 |
|
27,567 |
Total liabilities and shareholders’ equity |
|
$36,758 |
|
$34,956 |
|
|
|
|
|
TRANSACT TECHNOLOGIES INCORPORATED |
||||||||
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA |
||||||||
NON-GAAP FINANCIAL MEASURES |
||||||||
(Preliminary and Unaudited) |
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||
(In thousands) |
|
September 30, |
|
September 30, |
||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income |
|
$384 |
|
$2,574 |
|
$1,316 |
|
$4,464 |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
- |
|
7 |
|
13 |
|
21 |
Income tax provision (benefit) |
|
(143) |
|
581 |
|
(54) |
|
1,064 |
Depreciation and amortization |
|
259 |
|
259 |
|
747 |
|
739 |
|
|
|
|
|
|
|
|
|
EBITDA |
|
500 |
|
3,421 |
|
2,022 |
|
6,288 |
|
|
|
|
|
|
|
|
|
Share-based compensation expense |
|
173 |
|
187 |
|
559 |
|
524 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$673 |
|
$3,608 |
|
$2,581 |
|
$6,812 |
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20191106006026/en/
Source:
Investors:
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