Release Details
Transact Technologies Reports 2014 Fourth Quarter Revenue of $12.3 Million
|
Summary of 2014 Q4 and Full Year Results (In millions, except per share and percentage data) |
||||||||||||||||||||
|
Three Months Ended |
Year Ended |
|||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| Net sales | $ | 12.3 | $ | 12.5 | $ | 53.1 | $ | 60.1 | ||||||||||||
| Gross profit | $ | 4.9 | $ | 5.0 | $ | 21.7 | $ | 25.1 | ||||||||||||
| Gross margin | 39.9 | % | 39.9 | % | 40.9 | % | 41.7 | % | ||||||||||||
| Operating (loss) income | $ | (1.2 | ) | $ | 1.5 | $ | (0.1 | ) | $ | 6.6 | ||||||||||
| EBITDA(1) | $ | (0.8 | ) | $ | 1.8 | $ | 1.3 | $ | 8.3 | |||||||||||
| Net (loss) income | $ | (0.7 | ) | $ | 1.1 | $ | (0.1 | ) | $ | 4.9 | ||||||||||
| Diluted (loss)earnings per share | $ | (0.08 | ) | $ | 0.13 | $ | (0.01 | ) | $ | 0.57 | ||||||||||
| Adjusted operating income(2) | $ | 0.4 | $ | 0.9 | $ | 1.9 | $ | 6.2 | ||||||||||||
| Adjusted EBITDA(1) | $ | 0.8 | $ | 1.3 | $ | 3.8 | $ | 8.4 | ||||||||||||
| Adjusted net income(2) | $ | 0.4 | $ | 0.7 | $ | 1.3 | $ | 4.7 | ||||||||||||
| Adjusted diluted earnings per share(2) | $ | 0.05 | $ | 0.08 | $ | 0.15 | $ | 0.54 | ||||||||||||
|
(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, employee termination expenses and accrued contingent consideration 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 attached to this release. |
|
"To address the ongoing challenges of the domestic casino market and the
related impact to our operating results, late in fiscal 2014 we effected
a significant reduction in our overall cost structure, achieving our
goal of removing approximately
"Our Ithaca® line of food safety terminals remains an attractive high-growth opportunity for TransAct as we recently secured new business with a number of well-known global restaurant and food service operators. We expect these new customer wins and the ongoing acceptance of our Ithaca 9700 terminal to accelerate market adoption of this product line this year leading to revenue growth in 2015.
"Our Epicentral® promotional and bonusing print system continues to gain awareness among global casino operators as performance data from casinos where it is now enabled clearly demonstrates the strong returns operators can generate from installing the system. Accordingly, we expect sales of Epicentral to increase year over year reflecting new domestic and international installations that are expected to come on line over the course of 2015.
"Despite the significant decline in oil prices and the resulting slowdown in oil and gas drilling, the continued success of our Printrex® 980 office printer is expected to drive higher profit contributions from our Printrex product line in 2015, particularly as we benefit from growth in our recurring, high margin Printrex-related consumables business. Finally, later in 2015, we expect to generate initial contributions from our Responder MP2 all-in-one mobile printing solution as we enter the large machine-to-machine (M2M) vertical market. Customer reactions to the Responder MP2, our first printer for the M2M market, have been very encouraging."
Balance Sheet and Capital Return Review
As of
Summary of 2014 Fourth Quarter Operating Results
TransAct generated 2014 fourth quarter net sales of
Gross margin of 39.9% in the fourth quarter of 2014 is consistent with
the prior-year gross margin and gross profit was
Total operating expenses for the 2014 fourth quarter were
The Company recorded an operating loss of
2014 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 has provided 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, employee termination expenses and adjustments to accrued contingent consideration from the Printrex acquisition.
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, employee termination expenses and adjustments to accrued contingent consideration from the Printrex acquisition.
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 are 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
|
|
||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||
| (In thousands, except per share amounts) |
|
|
||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| Net sales | $ | 12,296 | $ | 12,528 | $ | 53,108 | $ | 60,141 | ||||||||||||
| Cost of sales | 7,385 | 7,527 | 31,397 | 35,049 | ||||||||||||||||
| Gross profit | 4,911 | 5,001 | 21,711 | 25,092 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Engineering, design and product development | 868 | 1,017 | 4,302 | 4,065 | ||||||||||||||||
| Selling and marketing | 1,851 | 1,644 | 7,920 | 7,346 | ||||||||||||||||
| General and administrative | 1,967 | 769 | 7,756 | 6,588 | ||||||||||||||||
| Legal fees associated with lawsuit | 1,405 | 78 | 1,880 | 476 | ||||||||||||||||
| 6,091 | 3,508 | 21,858 | 18,475 | |||||||||||||||||
| Operating income (loss) | (1,180 | ) | 1,493 | (147 | ) | 6,617 | ||||||||||||||
| Interest and other income (expense): | ||||||||||||||||||||
| Interest, net | (11 | ) | (14 | ) | (49 | ) | (23 | ) | ||||||||||||
| Other, net | (22 | ) | (74 | ) | (33 | ) | (63 | ) | ||||||||||||
| (33 | ) | (88 | ) | (82 | ) | (86 | ) | |||||||||||||
| Income (loss) before income taxes | (1,213 | ) | 1,405 | (229 | ) | 6,531 | ||||||||||||||
| Income tax provision (benefit) | (536 | ) | 296 | (171 | ) | 1,596 | ||||||||||||||
| Net income (loss) |
( |
) | $ | 1,109 | (58 | ) | $ | 4,935 | ||||||||||||
| Net income (loss) per common share: | ||||||||||||||||||||
| Basic |
( |
) | $ | 0.13 |
( |
) | $ | 0.57 | ||||||||||||
| Diluted |
( |
) | $ | 0.13 |
( |
) | $ | 0.57 | ||||||||||||
| Shares used in per share calculation: | ||||||||||||||||||||
| Basic | 8,146 | 8,331 | 8,307 | 8,589 | ||||||||||||||||
| Diluted | 8,146 | 8,558 | 8,307 | 8,703 | ||||||||||||||||
| SUPPLEMENTAL INFORMATION - SALES BY SALES UNIT: | ||||||||||||||||
|
|
Three months ended | Year ended | ||||||||||||||
|
|
|
|||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Food safety, banking and POS | $ | 2,164 | $ | 2,189 | $ | 9,308 | $ | 11,296 | ||||||||
| Casino and gaming | 5,003 | 5,727 | 22,731 | 27,300 | ||||||||||||
| Lottery | 1,618 | 1,561 | 4,761 | 4,450 | ||||||||||||
| Printrex | 897 | 849 | 3,910 | 4,335 | ||||||||||||
|
|
2,614 | 2,202 | 12,398 | 12,760 | ||||||||||||
| Total net sales | $ | 12,296 | $ | 12,528 | $ | 53,108 | $ | 60,141 | ||||||||
|
|
||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
|
|
|
|||||||||
| (In thousands) | 2014 | 2013 | ||||||||
| Assets: | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 3,131 | $ | 2,936 | ||||||
| Accounts receivable, net | 9,094 | 13,234 | ||||||||
| Inventories | 11,806 | 13,509 | ||||||||
| Deferred tax assets | 1,806 | 1,655 | ||||||||
| Other current assets | 898 | 887 | ||||||||
| Total current assets | 26,735 | 32,221 | ||||||||
| Fixed assets, net | 2,438 | 2,732 | ||||||||
| Goodwill | 2,621 | 2,621 | ||||||||
| Deferred tax assets | 1,068 | 920 | ||||||||
| Intangible assets, net | 1,341 | 1,856 | ||||||||
| Other assets | 26 | 58 | ||||||||
| 7,494 | 8,187 | |||||||||
| Total assets | $ | 34,229 | $ | 40,408 | ||||||
| Liabilities and Shareholders' Equity: | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 2,365 | $ | 4,749 | ||||||
| Accrued liabilities | 3,320 | 2,215 | ||||||||
| Income taxes payable | 13 | 26 | ||||||||
| Accrued contingent consideration | - | 60 | ||||||||
| Deferred revenue | 313 | 300 | ||||||||
| Total current liabilities | 6,011 | 7,350 | ||||||||
| Deferred revenue, net of current portion | 64 | 103 | ||||||||
| Deferred rent, net of current portion | 172 | 244 | ||||||||
| Other liabilities | 225 | 190 | ||||||||
| 461 | 537 | |||||||||
| Total liabilities | 6,472 | 7,887 | ||||||||
| Shareholders' equity: | ||||||||||
| Common stock | 111 | 111 | ||||||||
| Additional paid-in capital | 28,167 | 27,674 | ||||||||
| Retained earnings | 24,712 | 27,326 | ||||||||
| Accumulated other comprehensive loss, net of tax | (72 | ) | (63 | ) | ||||||
| Treasury stock, at cost | (25,161 | ) | (22,527 | ) | ||||||
| Total shareholders' equity | 27,757 | 32,521 | ||||||||
| Total liabilities and shareholders' equity | $ | 34,229 | $ | 40,408 | ||||||
|
NON-GAAP FINANCIAL MEASURES (Unaudited, thousands of dollars, except percentages and per share amounts) |
|||||||||||||||
|
Three months ended
|
|||||||||||||||
|
|
Reported |
Adjustments(1) |
Adjusted
Non-GAAP |
||||||||||||
| Operating expenses | $ | 6,091 |
( |
) | $ | 4,467 | |||||||||
| % of net sales | 49.5 | % | 36.3 | % | |||||||||||
| Operating income (loss) | (1,180 | ) | 1,624 | 444 | |||||||||||
| % of net sales | (9.6 | %) | 3.6 | % | |||||||||||
| Income (loss) before income taxes | (1,213 | ) | 1,624 | 411 | |||||||||||
| Income tax provision (benefit) | (536 | ) | 568 | 32 | |||||||||||
| Net income (loss) | (677 | ) | 1,056 | 379 | |||||||||||
| Diluted net income (loss) per share |
( |
) | $ | 0.13 | $ | 0.05 | |||||||||
|
(1) |
Adjustment includes (i) |
||||
|
Three months ended
|
|||||||||||||||
|
|
Reported |
Adjustments (2) |
Adjusted
Non-GAAP |
||||||||||||
| Operating expenses | $ | 3,508 | $ | 622 | $ | 4,130 | |||||||||
| % of net sales | 28.0 | % | 33.0 | % | |||||||||||
| Operating income | 1,493 | (622 | ) | 871 | |||||||||||
| % of net sales | 11.9 | % | 7.0 | % | |||||||||||
| Income before income taxes | 1,405 | (622 | ) | 783 | |||||||||||
| Income tax provision | 296 | (218 | ) | 78 | |||||||||||
| Net income | 1,109 | (404 | ) | 705 | |||||||||||
| Diluted net income per share | $ | 0.13 |
( |
) | $ | 0.08 | |||||||||
|
(2) |
Adjustment includes (i) |
||||
|
NON-GAAP FINANCIAL MEASURES (Unaudited, thousands of dollars, except percentages and per share amounts) |
|||||||||||||||
|
Year ended
|
|||||||||||||||
|
|
Reported |
Adjustments(3) |
Adjusted
Non-GAAP |
||||||||||||
| Operating expenses | $ | 21,858 |
( |
) | $ | 19,819 | |||||||||
| % of net sales | 41.2 | % | 37.3 | % | |||||||||||
| Operating income (loss) | (147 | ) | 2,039 | 1,892 | |||||||||||
| % of net sales | (0.3 | %) | 3.6 | % | |||||||||||
| Income (loss) before income taxes | (229 | ) | 2,039 | 1,810 | |||||||||||
| Income tax provision (benefit) | (171 | ) | 714 | 543 | |||||||||||
| Net income (loss) | (58 | ) | 1,325 | 1,267 | |||||||||||
| Diluted net income (loss) per share |
( |
) | $ | 0.16 | $ | 0.15 | |||||||||
|
(3) |
Adjustment includes (i) |
||||
|
Year ended
|
|||||||||||||||
|
|
Reported |
Adjustments (4) |
Adjusted
Non-GAAP |
||||||||||||
| Operating expenses | $ | 18,475 | $ | 424 | $ | 18,899 | |||||||||
| % of net sales | 30.7 | % | 31.4 | % | |||||||||||
| Operating income | 6,617 | (424 | ) | 6,193 | |||||||||||
| % of net sales | 11.0 | % | 10.3 | % | |||||||||||
| Income before income taxes | 6,531 | (424 | ) | 6,107 | |||||||||||
| Income tax provision | 1,596 | (148 | ) | 1,448 | |||||||||||
| Net income | 4,935 | (276 | ) | 4,659 | |||||||||||
| Diluted net income per share | $ | 0.57 |
( |
) | $ | 0.54 | |||||||||
|
(4) |
Adjustment includes (i) |
||||
|
NON-GAAP FINANCIAL MEASURES (Unaudited) |
||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||
| (In thousands) |
|
|
||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| Net income (loss) |
( |
) | $ | 1,109 |
( |
) | $ | 4,935 | ||||||||||||
| Interest (income) expense, net | 11 | 14 | 49 | 23 | ||||||||||||||||
| Income tax provision (benefit) | (536 | ) | 296 | (171 | ) | 1,596 | ||||||||||||||
| Depreciation and amortization | 361 | 427 | 1,445 | 1,741 | ||||||||||||||||
| EBITDA | (841 | ) | 1,846 | 1,265 | 8,295 | |||||||||||||||
| Share-based compensation expense | 64 | 124 | 506 | 521 | ||||||||||||||||
| Legal fees associated with lawsuit | 1,405 | 78 | 1,880 | 476 | ||||||||||||||||
| Employee termination expense | 219 | - | 219 | - | ||||||||||||||||
| Adjustment to accrued contingent consideration | - | (700 | ) | (60 | ) | (900 | ) | |||||||||||||
| Adjusted EBITDA | $ | 847 | $ | 1,348 | $ | 3,810 | $ | 8,392 | ||||||||||||
Investors:
President and Chief Financial Officer
or
JCIR
212-835-8500
tact@jcir.com
Source:
News Provided by Acquire Media