Release Details
TransAct Technologies Reports 2017 First Quarter Results
Reports 2017 First Quarter Revenue of
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Summary of 2017 Q1 Results (In millions, except per share and percentage data) |
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Three Months Ended |
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| 2017 | 2016 | |||||||
| Net sales | $ | 14.0 | $ | 14.4 | ||||
| Gross profit | $ | 6.1 | $ | 5.9 | ||||
| Gross margin | 43.5 | % | 41.0 | % | ||||
| Operating income | $ | 1.4 | $ | 0.9 | ||||
| Net income | $ | 0.9 | $ | 0.6 | ||||
| Net income per diluted share | $ | 0.13 | $ | 0.08 | ||||
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Non-GAAP(1): |
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| EBITDA | $ | 1.7 | $ | 1.3 | ||||
| Adjusted EBITDA | $ | 1.9 | $ | 1.4 | ||||
| (1) | A reconciliation of each non-GAAP financial measure to the most comparable Generally Accepted Accounting Principles ("GAAP") financial measure can be found included with this release. See "Non-GAAP Financial Measures" below for a discussion of these metrics. |
"During the first quarter we made several adjustments to our planned investments in our AccuDate sales and marketing initiatives, which are now beginning this quarter. We are working hard to build out our direct sales team for this market over the next several months. In addition, to better align with and generate a higher impact from the NRA Show 2017, the major restaurant and foodservice industry convention taking place later this month, we also strategically delayed our direct marketing campaign to the second quarter. This program is underway and we believe that by aligning it with the convention, we will drive a strong showing and higher market awareness for TransAct's AccuDate lineup. We look forward to growing momentum over the balance of 2017 and in the future as a result of these investments, particularly as we better position our AccuDate offerings as the industry's best choice for in-kitchen technology solutions.
"TransAct improved the value proposition of our industry-leading AccuDate restaurant terminal solutions in the first quarter with the introduction of an important partnership with Jolt, which will bring their cloud-based restaurant management software platform to the AccuDate XL. We believe this partnership will dramatically expand the market potential for our exciting new offering, which complements our existing relationship with Crunchtime, which provides us with an innovative platform for food preparation, food management and other back-of-house processes. Together, the software offerings further establish the AccuDate XL's valuable Android-based ecosystem, which makes our hardware offering unique in the restaurant and foodservice market today. Importantly, we recently secured our first sale of the AccuDate XL with Jolt along with a service agreement that will provide us with a key new source of attractive, high-margin recurring revenue as the customer installs these terminals. Furthermore, we are also pleased that this sale opens up what we expect will be a significant new recurring revenue opportunity for TransAct in that this customer has also agreed to become the Company's first label customer as we launch our newest strategic initiative which we believe, over time will make TransAct a one-stop shop for most AccuDate labeling needs.
"Since its introduction in early 2016, the AccuDate XL has significantly elevated the market profile of our entire AccuDate restaurant solution product set. Now comprised of the AccuDate 9700, PRO and XL, our range of solutions brings to restaurant and foodservice operators of all sizes a choice of fully customizable restaurant assistants. These solutions can easily handle all the grab ‘n go and food rotation labeling needs of any restaurant or foodservice operator while providing kitchen staffs with a powerful tool that can save money, greatly enhance operations and help grow their businesses. The AccuDate 9700 and AccuDate PRO have successfully found their way into kitchens and many operators are now demonstrating considerable interest in the AccuDate XL, particularly given the recent integrations with Jolt and Crunchtime.
"Casino and gaming sales in the first quarter benefited from casino
device printer shipments in support of a recent new property opening in
the
Review of Balance Sheet and Capital Return Initiatives
As of
Summary of 2017 First Quarter Operating Results
TransAct generated 2017 first quarter net sales of
Gross margin of 43.5% in the 2017 first quarter compared to gross margin
of 41.0% in the 2016 first quarter, reflecting a favorable sales mix.
Higher gross margins in the 2017 first quarter more than offset the 3%
decline in revenues, resulting in a 4% increase in gross profit to
Total operating expenses for the 2017 first quarter were
TransAct generated operating income of
2017 First 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
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 as the Company considers share-based compensation to be a non-cash expense similar to depreciation and amortization, and believes that it provides investors with an additional measure of the Company's liquidity. 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 and liquidity because this measure is: (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) a financial measurement that is used by lenders and other parties to evaluate creditworthiness and liquidity; and (iii) used by the Company's management for various purposes including strategic planning and forecasting, assessing financial performance and liquidity, 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; dependence on contract
manufacturers for the assembly of a large portion of our products in
- Financial tables follow -
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| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except per share amounts) |
Three months ended |
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| 2017 | 2016 | |||||||
| Net sales | $ | 13,997 | $ | 14,357 | ||||
| Cost of sales | 7,904 | 8,472 | ||||||
| Gross profit | 6,093 | 5,885 | ||||||
| Operating expenses: | ||||||||
| Engineering, design and product development | 993 | 1,236 | ||||||
| Selling and marketing | 1,672 | 1,793 | ||||||
| General and administrative | 2,012 | 1,917 | ||||||
| 4,677 | 4,946 | |||||||
| Operating income | 1,416 | 939 | ||||||
| Interest and other income (expense): | ||||||||
| Interest, net | (8 | ) | (4 | ) | ||||
| Other, net |
(6 |
) |
1 | |||||
| (14 | ) | (3 | ) | |||||
| Income before income taxes | 1,402 | 936 | ||||||
| Income tax provision | 459 | 311 | ||||||
| Net income | $ | 943 | $ | 625 | ||||
| Net income per common share: | ||||||||
| Basic | $ | 0.13 | $ | 0.08 | ||||
| Diluted | $ | 0.13 | $ | 0.08 | ||||
| Shares used in per share calculation: | ||||||||
| Basic | 7,396 | 7,834 | ||||||
| Diluted | 7,445 | 7,883 | ||||||
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SUPPLEMENTAL INFORMATION - SALES BY SALES UNIT: |
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Three months ended |
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| 2017 | 2016 | |||||
| Restaurant solutions | $ | 527 | $ | 822 | ||
| POS automation and banking | 2,458 | 2,315 | ||||
| Casino and gaming | 5,117 | 5,438 | ||||
| Lottery | 2,981 | 2,935 | ||||
| Printrex | 178 | 155 | ||||
| TransAct services group | 2,736 | 2,692 | ||||
| Total net sales | $ | 13,997 | $ | 14,357 | ||
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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited) | ||||||||
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| (In thousands) | 2017 | 2016 | ||||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,429 | $ | 2,503 | ||||
| Accounts receivable, net | 9,304 | 10,585 | ||||||
| Inventories, net | 9,962 | 9,707 | ||||||
| Other current assets | 541 | 372 | ||||||
| Total current assets | 22,236 | 23,167 | ||||||
| Fixed assets, net | 2,228 | 2,241 | ||||||
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2,621 | 2,621 | ||||||
| Deferred tax assets | 3,410 | 3,432 | ||||||
| Intangible assets, net | 464 | 545 | ||||||
| Other assets | 37 | 36 | ||||||
| 8,760 | 8,875 | |||||||
| Total assets | $ | 30,996 | $ | 32,042 | ||||
| Liabilities and Shareholders' Equity: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,556 | $ | 4,894 | ||||
| Accrued liabilities | 1,676 | 2,394 | ||||||
| Income taxes payable | 529 | 19 | ||||||
| Deferred revenue | 233 | 117 | ||||||
| Total current liabilities | 5,994 | 7,424 | ||||||
| Deferred revenue, net of current portion | 67 | 67 | ||||||
| Deferred rent, net of current portion | 179 | 178 | ||||||
| Other liabilities | 260 | 264 | ||||||
| 506 | 509 | |||||||
| Total liabilities | 6,500 | 7,933 | ||||||
| Shareholders' equity: | ||||||||
| Common stock | 112 | 112 | ||||||
| Additional paid-in capital | 29,761 | 29,701 | ||||||
| Retained earnings | 24,482 | 24,157 | ||||||
| Accumulated other comprehensive loss, net of tax | (107 | ) | (109 | ) | ||||
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(29,752 | ) | (29,752 | ) | ||||
| Total shareholders' equity | 24,496 | 24,109 | ||||||
| Total liabilities and shareholders' equity | $ | 30,996 | $ | 32,042 | ||||
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| RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA | ||||||
| NON-GAAP FINANCIAL MEASURES | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
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(In thousands) |
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| 2017 | 2016 | |||||
| Net income | $ | 943 | $ | 625 | ||
| Interest (income) expense, net | 8 | 4 | ||||
| Income tax provision | 459 | 311 | ||||
| Depreciation and amortization | 313 | 324 | ||||
| EBITDA | 1,723 | 1,264 | ||||
| Share-based compensation expense | 146 | 145 | ||||
| Adjusted EBITDA | $ | 1,869 | $ | 1,409 | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170503006186/en/
Investor:
President and Chief Financial Officer
203-859-6810
or
JCIR
212-835-8500 or tact@jcir.com
Source:
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