UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 5, 2009
(Exact name of registrant as specified in its charter)
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Delaware |
0-21121 |
06-1456680 |
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(State or other jurisdiction of incorporation) |
(Commission file number) |
(I.R.S. employer identification no.) |
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One Hamden Center |
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2319 Whitney Ave, Suite 3B, Hamden, CT |
06518 |
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(Address of principal executive offices) |
(Zip Code) |
Registrant's telephone number, including area code: (203) 859-6800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240-14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
The following information is being furnished pursuant to Item 2.02 “Results of Operations and Financial Condition” of Form 8-K. Such information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it
be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
On August 5, 2009, TransAct Technologies Incorporated issued a press release announcing its financial results for the quarter ended June 30, 2009. A copy of the press release is furnished as Exhibit 99.1 to this report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
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Exhibit |
Description | |
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99.1 |
Press Release dated August 5, 2009 of TransAct Technologies Incorporated |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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TRANSACT TECHNOLOGIES INCORPORATED | ||||
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By: |
/s/ Steven A. DeMartino | |||
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Steven A. DeMartino | ||||
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Executive Vice President, Chief Financial Officer, Treasurer and Secretary | ||||
Date: August 5, 2009
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EXHIBIT LIST
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
|
Exhibit |
Description | |
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99.1 |
Press Release dated August 5, 2009 of TransAct Technologies Incorporated |
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Exhibit 99.1
TRANSACT TECHNOLOGIES REPORTS SECOND QUARTER 2009 RESULTS
HAMDEN, CT – August 5, 2009 – TransAct Technologies Incorporated (NASDAQ: TACT), a global leader in market-specific printers for transaction-based industries, today announced financial results for the three and six months ended June 30, 2009. Summary results for
these periods are as follows:
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Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||||||||||
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(in $000s, except EPS) |
2009 |
2008 |
% change |
2009 |
2008 |
% change |
||||||||||||||||||
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Net Sales |
$ | 14,236 | $ | 16,319 | (12.8 | %) | $ | 26,438 | $ | 30,604 | (13.6 | %) | ||||||||||||
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Operating income (loss) (1) |
1,042 | 399 | 161.2 | % | 1,221 | (660 | ) |
NM |
||||||||||||||||
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Net income (loss) (1) |
649 | 290 | 123.8 | % | 770 | (402 | ) |
NM |
||||||||||||||||
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Diluted earnings (loss) per share(1) |
$ | 0.07 | $ | 0.03 | 133.3 | % | $ | 0.08 | $ | (0.04 | ) |
NM |
||||||||||||
|
(1) Operating income (loss) includes $1,132,000 and $3,029,000 of legal fees related to the settled lawsuit with FutureLogic, Inc. (the “FL Legal Fees”) in the three and six months ended June 30, 2008, respectively. Net income (loss) includes $651,000
and $1,875,000 of FL Legal Fees, net of tax, in the three and six months ended June 30, 2008, respectively. Net income (loss) per share includes the negative impact of $0.07 and $0.20 from the FL Legal Fees in the three and six months ended June 30, 2008, respectively. |
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“We are very pleased with our second quarter 2009 results,” said Bart C. Shuldman, Chairman, President and Chief Executive Officer of TransAct Technologies. “Despite the overall impact of the global recession on our markets and in particular the resulting slowdown in replacement slot machine sales in the domestic
casino market, TransAct performed well. We focused our efforts on areas we believed could deliver revenue growth this year while we continued to lower our costs to drive improved gross margin.”
Mr. Shuldman continued, “Our banking and point-of-sale business experienced significant revenue growth from a large banking customer and the McDonald’s coffee and grill initiative. Our banking business grew by over 800% and our McDonald’s business grew over 250% compared to the second quarter of 2008. TransAct
Services Group (TSG) continued to post year-over-year revenue gains despite a decline in retail transaction volume in the United States, as TSG revenue increased 7% compared to the second quarter of 2008. This growth was primarily due to continued strength in our consumables business, which was aided by growing internet sales. Our international gaming sales increased 9%, helping to offset a 36% decline in our overall casino and gaming printer sales compared to the second quarter of
2008 that resulted from a worldwide slowdown in replacement slot machine sales. Lottery sales, which can vary significantly from quarter-to-quarter, declined by 59% due to the timing of orders from our lottery customer. Finally, our cost control initiatives drove both higher gross margin and lower operating expenses compared to the second quarter of last year.”
Second Quarter Highlights
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· |
April 13, 2009 – TransAct Technologies selected exclusively by Creek Nation’s River Spirit Casino to provide Epic 950® printers |
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· |
April 28, 2009 – TransAct Technologies receives $3.6 million order from lottery customer |
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· |
June 2, 2009 – TransAct’s Epic 950® Printer Selected Exclusively by City of Dreams Entertainment Resort in Macau |
Second Quarter 2009 Results
Revenue for the second quarter of 2009 was $14.2 million, a decrease of 13% compared to $16.3 million in the prior-year period. Gross margin for the quarter was 34.1%, an increase of approximately 60 basis points from 33.5% in the prior-year quarter. Operating expenses were $3.8 million, a decrease of $1.2 million from
the prior-year period driven largely by the absence of $1.1 million of legal fees incurred in the prior-year period in connection with the now-settled litigation with FutureLogic, Inc., as well as a reduction in overall operating expenses from cost reduction actions taken during 2009. The Company recorded net income in the second quarter of 2009 of approximately $0.6 million, or $0.07 per diluted share, compared to net income of approximately $0.3 million, or $0.03 per diluted share, in the prior-year
period. Legal fees associated with the FutureLogic, Inc. litigation reduced net income and diluted earnings per share in the prior-year period by $0.7 million and $0.07, respectively.
Six Month 2009 Results
Revenue for the six months ended June 30, 2009 was $26.4 million, a decrease of 14% compared to $30.6 million in the prior-year period. Gross margin for the six months ended June 30, 2009 was 34.0%, an increase of approximately 50 basis points from 33.5% in the prior-year period. Operating expenses were $7.8 million,
a decrease of $3.1 million from the prior-year period driven largely by the absence of $3.0 million of legal fees incurred in the prior-year period in connection with the now-settled litigation with FutureLogic, Inc., as well as a reduction in overall operating expenses from cost reduction actions taken during 2009. The Company recorded net income of approximately $0.8 million, or $0.08 per diluted share, for the six months ended June 30, 2009, compared to a net loss of approximately $0.4 million,
or $0.04 per share, for the prior-year period in 2008. Severance costs reduced net income and earnings per share in the first half of 2009 by $0.1 million and $0.01, respectively, while legal fees associated with the FutureLogic, Inc. litigation reduced net income and diluted earnings per share in the first half of 2008 by $1.9 million and $0.20, respectively.
Liquidity and Capital Resources
As of June 30, 2009, TransAct had approximately $1.9 million in cash and cash equivalents, and no debt obligations outstanding under the Company’s $20 million revolving credit facility. During the second quarter of 2009, the Company did not repurchase any shares under its stock repurchase program. As of June 30,
2009, the Company had repurchased a total of 1,164,100 shares for approximately $8.5 million under its current authorization. TransAct’s $15 million repurchase program allows the Company to repurchase up to $6.5 million in additional shares through March 2010.
2009 Outlook
The Company expects stronger results for the remainder of 2009, compared to the first half of 2009, due to an increasing backlog of orders and forecasts of order flow provided by some of the Company’s customers. In addition, the Company continues to expect its free cash flow (cash provided by operations less capital expenditures)
for 2009 to exceed $3 million, adding to its current cash position of $1.9 million as of June 30, 2009.
Investor Conference Call / Webcast Details
TransAct will review detailed second quarter 2009 results during a conference call today at 5:00 PM EDT. The conference call-in number is 800-926-7061. A replay of the call will be available from 8:00 PM EDT on Wednesday, August 5 through midnight EDT on Wednesday, August 12 by telephone at 888-203-1112; passcode 4855677. Investors
can also access the conference call via a live webcast on the Company's Web site at http://www.transact-tech.com. A replay of the call will be archived on that Web site for one week.
About TransAct Technologies Incorporated
TransAct Technologies Incorporated (NASDAQ: TACT) is a leader in developing and manufacturing market-specific printers for transaction-based industries. These industries include casino, gaming, lottery, banking, kiosk and point-of-sale. Each individual market has distinct, critical requirements for printing and the transaction is
not complete until the receipt and/or ticket is produced. TransAct printers are designed from the ground up based on market specific requirements and are sold under the Ithaca® and Epic product brands. TransAct distributes its printers through OEMs, value-added resellers, selected distributors, and direct to end-users. TransAct has over two million printers installed around the world. TransAct is committed to world-class printer service, spare parts and accessories
required by a growing worldwide installed base of printers. Beyond printers, TransAct is a leader in providing printing supplies to the full transaction printer market. Through its TransAct Services Group, TransAct provides a complete range of supplies and consumables items used in the printing and scanning activities of customers in the hospitality, banking, retail, gaming and government verticals. Through its webstore, http://www.transactsupplies.com,
and an expert direct selling team, TransAct addresses the rapidly growing on-line demand for this product category. TransAct is headquartered in Hamden, CT. For more information on TransAct, visit http://www.transact-tech.com or call 203.859.6800.
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; introduction of new products into the marketplace by competitors; successful product development; dependence on significant customers; dependence
on significant vendors; dependence on a sole source contractor manufacturer for the assembly of a large portion of the Company’s products in China; the ability to protect intellectual property; the ability to recruit and retain quality employees as the Company grows; dependence on third parties for sales outside the United States, including Australia, New Zealand, Europe, Latin America and Asia; economic and political conditions in the United States, Australia, New Zealand, Europe, Latin America and Asia;
marketplace acceptance of new products; risks associated with foreign operations; availability of third-party components at reasonable prices; price wars or other significant pricing pressures affecting the Company's products in the United States or abroad; and risks associated with potential future acquisitions. Actual results may differ materially from those discussed in, or implied by, the forward-looking statements. The forward-looking statements speak only as of the date of this release and the Company assumes
no duty to update them to reflect new, changing or unanticipated events or circumstances.
Contact:
TransAct Technologies Incorporated
Steven DeMartino, EVP and Chief Financial Officer
203-859-6810
ICR Inc.
William Schmitt
203-682-8200
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TRANSACT TECHNOLOGIES INCORPORATED |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Unaudited) |
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Three Months Ended |
Six Months Ended |
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(In thousands, except per share amounts) |
June 30, |
June 30, |
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2009 |
2008 |
2009 |
2008 |
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Net sales |
$ | 14,236 | $ | 16,319 | $ | 26,438 | $ | 30,604 | ||||||||
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Cost of sales |
9,380 | 10,859 | 17,456 | 20,365 | ||||||||||||
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Gross profit |
4,856 | 5,460 | 8,982 | 10,239 | ||||||||||||
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Operating expenses: |
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Engineering, design and product development |
666 | 691 | 1,360 | 1,406 | ||||||||||||
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Selling and marketing |
1,455 | 1,516 | 2,853 | 2,967 | ||||||||||||
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General and administrative |
1,693 | 1,722 | 3,548 | 3,497 | ||||||||||||
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Legal fees associated with lawsuit |
- | 1,132 | - | 3,029 | ||||||||||||
| 3,814 | 5,061 | 7,761 | 10,899 | |||||||||||||
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Operating income (loss) |
1,042 | 399 | 1,221 | (660 | ) | |||||||||||
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Other expense: |
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Interest, net |
(18 | ) | (7 | ) | (33 | ) | (3 | ) | ||||||||
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Other, net |
(50 | ) | (8 | ) | (30 | ) | (6 | ) | ||||||||
| (68 | ) | (15 | ) | (63 | ) | (9 | ) | |||||||||
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Income (loss) before income taxes |
974 | 384 | 1,158 | (669 | ) | |||||||||||
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Income tax provision (benefit) |
325 | 94 | 388 | (267 | ) | |||||||||||
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Net income (loss) |
$ | 649 | $ | 290 | $ | 770 | $ | (402 | ) | |||||||
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Net income (loss) per common share: |
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Basic |
$ | 0.07 | $ | 0.03 | $ | 0.08 | $ | (0.04 | ) | |||||||
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Diluted |
$ | 0.07 | $ | 0.03 | $ | 0.08 | $ | (0.04 | ) | |||||||
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Shares used in per share calculation: |
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Basic |
9,284 | 9,309 | 9,271 | 9,294 | ||||||||||||
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Diluted |
9,353 | 9,516 | 9,280 | 9,294 | ||||||||||||
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SUPPLEMENTAL INFORMATION – SALES BY SALES UNIT: |
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Three months ended |
Six months ended |
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June 30, |
June 30, |
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2009 |
2008 |
2009 |
2008 |
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Banking and point-of-sale |
$ | 5,517 | $ | 3,013 | $ | 7,958 | $ | 5,746 | ||||||||
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Casino and gaming |
3,459 | 5,440 | 8,316 | 10,277 | ||||||||||||
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Lottery |
1,960 | 4,786 | 3,066 | 8,396 | ||||||||||||
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TransAct Services Group |
3,300 | 3,080 | 7,098 | 6,185 | ||||||||||||
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Total net sales |
$ | 14,236 | $ | 16,319 | $ | 26,438 | $ | 30,604 | ||||||||
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TRANSACT TECHNOLOGIES INCORPORATED |
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CONSOLIDATED BALANCE SHEETS |
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(Unaudited) |
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June 30, |
December 31, |
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(In thousands) |
2009 |
2008 |
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Assets: |
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Current assets: |
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Cash and cash equivalents |
$ | 1,934 | $ | 2,000 | ||||
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Receivables, net |
8,764 | 8,734 | ||||||
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Inventories |
10,421 | 9,919 | ||||||
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Refundable income taxes |
35 | 35 | ||||||
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Deferred tax assets |
2,055 | 2,054 | ||||||
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Other current assets |
541 | 352 | ||||||
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Total current assets |
23,750 | 23,094 | ||||||
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Fixed assets, net |
5,039 | 5,563 | ||||||
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Goodwill, net |
1,469 | 1,469 | ||||||
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Deferred tax assets |
1,375 | 1,759 | ||||||
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Intangibles and other assets, net |
282 | 349 | ||||||
| 8,165 | 9,140 | |||||||
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Total assets |
$ | 31,915 | $ | 32,234 | ||||
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Liabilities and Shareholders’ Equity: |
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Current liabilities: |
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Accounts payable |
$ | 3,907 | $ | 4,863 | ||||
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Accrued liabilities |
2,156 | 2,847 | ||||||
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Deferred revenue |
484 | 333 | ||||||
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Total current liabilities |
6,547 | 8,043 | ||||||
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Deferred revenue, net of current portion |
349 | 259 | ||||||
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Accrued warranty, net of current portion |
79 | 133 | ||||||
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Deferred rent |
450 | 473 | ||||||
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Other liabilities |
44 | 44 | ||||||
| 922 | 909 | |||||||
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Total liabilities |
7,469 | 8,952 | ||||||
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Shareholders’ equity: |
||||||||
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Common stock |
105 | 105 | ||||||
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Additional paid-in capital |
21,278 | 20,890 | ||||||
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Retained earnings |
11,663 | 10,893 | ||||||
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Accumulated other comprehensive loss, net of tax |
(62 | ) | (68 | ) | ||||
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Treasury stock, at cost |
(8,538 | ) | (8,538 | ) | ||||
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Total shareholders’ equity |
24,446 | 23,282 | ||||||
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Total liabilities and shareholders’ equity |
$ | 31,915 | $ | 32,234 | ||||