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): November 2, 2009
(Exact
name of registrant as specified in its charter)
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Delaware
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0-21121
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06-1456680
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(State
or other jurisdiction of incorporation)
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(Commission
file number)
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(I.R.S.
employer identification no.)
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One
Hamden Center
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2319
Whitney Ave, Suite 3B, Hamden, CT
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06518
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(Address
of principal executive offices)
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(Zip
Code)
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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
November 2, 2009, TransAct Technologies Incorporated issued a press release
announcing its financial results for the quarter ended September 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
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Description
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|
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99.1
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Press
Release dated November 2, 2009 of TransAct Technologies
Incorporated
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2
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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||||
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By:
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/s/
Steven A. DeMartino
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|||
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Steven
A. DeMartino
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||||
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Executive
Vice President, Chief Financial Officer, Treasurer and
Secretary
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||||
Date:
November 2, 2009
3
EXHIBIT
LIST
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits:
|
Exhibit
|
Description
|
|
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99.1
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Press
Release dated November 2, 2009 of TransAct Technologies
Incorporated
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4
Exhibit
99.1
TRANSACT
TECHNOLOGIES REPORTS THIRD QUARTER 2009 RESULTS
Company
Achieves Record Quarterly Revenue
HAMDEN, CT – November 2, 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 nine months ended September 30,
2009. Summary results for these periods are as follows:
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Three
months ended September 30,
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Nine
months ended September 30,
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|||||||||||||||||||||||
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(in
$000s, except EPS)
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2009
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2008
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%
change
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2009
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2008
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%
change
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||||||||||||||||||
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Net
Sales
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$ | 17,982 | $ | 17,326 | 3.8 | % | $ | 44,420 | $ | 47,930 | (7.3 | %) | ||||||||||||
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Operating
income
|
1,794 | 1,913 | (6.2 | %) | 3,015 | 1,253 | (1) | 140.6 | % | |||||||||||||||
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Net
income
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1,184 | 1,210 | (2.1 | %) | 1,954 | 808 | (1) | 141.8 | % | |||||||||||||||
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Diluted
earnings per share
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$ | 0.13 | $ | 0.13 | 0.0 | % | $ | 0.21 | $ | 0.08 | (1) | 162.5 | % | |||||||||||
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(1)
Operating income includes $3,029,000 of legal fees related to the settled
lawsuit with FutureLogic, Inc. (the “FL Legal Fees”) in the nine months
ended September 30, 2008. Net income includes $1,920,000 of FL Legal
Fees, net of tax, in the nine months ended September 30,
2008. Diluted earnings per share includes the negative impact of
$0.21 from the FL Legal Fees in the nine months ended September 30,
2008.
|
||||||||||||||||||||||||
“We are
extremely pleased with our third quarter 2009 results,” said Bart C. Shuldman,
Chairman, President and Chief Executive Officer of TransAct
Technologies. “We stayed focused on our strategy and delivered solid
results despite the current economic climate. I am proud of the
focus and teamwork put forth by our employees who delivered a quarter of record
sales in these difficult economic times.”
Mr.
Shuldman continued, “Our banking and point-of-sale business experienced
significant quarter-over-quarter revenue growth of 95%, led primarily by orders
from a large banking customer and also increasing sales from the
McDonald’s coffee and grill initiative. TransAct Services Group (TSG)
revenues increased by 40% compared to the third quarter of 2008, primarily due
to continued strength in our consumables business, including significantly
higher inkjet cartridge sales to a large customer. Our
international gaming sales increased 49%, helping to offset a 29% decline in our
worldwide casino and gaming printer sales compared to the third quarter of 2008
that resulted largely from a continued slowdown in North American replacement
slot machine sales. Lottery sales, which can vary significantly from
quarter-to-quarter, declined by 30% due to the timing of orders from our lottery
customer. Finally, our balance sheet remains strong, with over $5.5
million in cash and no outstanding debt.”
Third
Quarter 2009 Results
Revenue
for the third quarter of 2009 was $18.0 million, an increase of 4% compared to
$17.3 million in the prior-year period. Gross margin for the quarter
was 30.7%, compared to 34.0% in the prior-year quarter as the Company worked to
use a substantial portion of its existing, higher cost domestic inventory and
also sold more lower margin products. Operating expenses were $3.7
million, a decrease of $0.3 million from the prior-year period driven largely by
reduced general and administrative expenses. The Company recorded net
income in the third quarter of 2009 of approximately $1.2 million, or $0.13 per
diluted share, comparable to the prior-year period.
Commenting
on the financial results, Steven A. DeMartino, Executive Vice President and
Chief Financial Officer of TransAct Technologies said, “Beginning in the third
quarter of 2008, we increased the amount of domestic inventory as we prepared
for the production transition to China. As the transition was
finalized this quarter, our manufacturing group converted a significant amount
of the domestic inventory into finished printers, allowing us to meet the
increase in demand while also helping to significantly reduce our inventory
levels. The additional labor and material costs required to convert
the domestic inventory into the printers we sold negatively impacted our gross
margin in the third quarter of 2009. However, as a result of the
conversion process, we were able to reduce our inventory by $5.7 million, or
47%, to $6.4 million at September 30, 2009, from its peak level of $12.1 million
on March 31, 2009. More importantly, with our higher cost domestic
inventories nearly depleted, we have now transitioned to our lower cost
China-sourced product. This should result in improving gross margin
as well as additional cash generation over the quarters
ahead. In fact, we now expect our year-end cash position to be
over $8 million.”
Nine
Month 2009 Results
Revenue
for the nine months ended September 30, 2009 was $44.4 million, a decrease of 7%
compared to $47.9 million in the prior-year period. Gross margin for
the nine months ended September 30, 2009 was 32.7%, compared to 33.7% in the
prior-year period. Operating expenses were $11.5 million, a decrease
of $3.4 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 $2.0 million, or $0.21 per diluted
share, for the nine months ended September 30, 2009, compared to net income of
approximately $0.8 million, or $0.08 per share, for the prior-year period in
2008. Severance costs reduced net income and earnings per share in
the first nine months of 2009 by $0.2 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 nine months of 2008 by $1.9 million
and $0.21, respectively.
Liquidity
and Capital Resources
As of
September 30, 2009, TransAct had approximately $5.5 million in cash and cash
equivalents, and no debt obligations outstanding under the Company’s $20 million
revolving credit facility. During the third quarter of 2009, the
Company did not repurchase any shares under its stock repurchase
program. As of September 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.
Investor
Conference Call / Webcast Details
TransAct
will review detailed third quarter 2009 results during a conference call today
at 5:00 PM EST. The conference call-in number is 888-359-3610. A replay of the
call will be available from 8:00 PM EST on Monday, November 2 through midnight
EST on Monday, November 9 by telephone at 888-203-1112; passcode
3094364. 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
contract manufacturer for the assembly of a large portion of the Company’s
products in China; dependence on ability to obtain competitive pricing and other
terms from our contract manufacturer and other suppliers; 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 INCOME
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||||||||||||||||
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(Unaudited)
|
||||||||||||||||
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Three
Months Ended
|
Nine
Months Ended
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|||||||||||||||
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(In
thousands, except per share amounts)
|
September
30,
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September
30,
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||||||||||||||
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2009
|
2008
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2009
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2008
|
|||||||||||||
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Net
sales
|
$ | 17,982 | $ | 17,326 | $ | 44,420 | $ | 47,930 | ||||||||
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Cost
of sales
|
12,457 | 11,432 | 29,913 | 31,797 | ||||||||||||
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Gross
profit
|
5,525 | 5,894 | 14,507 | 16,133 | ||||||||||||
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Operating
expenses:
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||||||||||||||||
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Engineering,
design and product development
|
683 | 713 | 2,043 | 2,119 | ||||||||||||
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Selling
and marketing
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1,434 | 1,430 | 4,287 | 4,397 | ||||||||||||
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General
and administrative
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1,614 | 1,838 | 5,162 | 5,335 | ||||||||||||
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Legal
fees associated with lawsuit
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- | - | - | 3,029 | ||||||||||||
| 3,731 | 3,981 | 11,492 | 14,880 | |||||||||||||
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Operating
income
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1,794 | 1,913 | 3,015 | 1,253 | ||||||||||||
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Other
income (expense):
|
||||||||||||||||
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Interest,
net
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(15 | ) | (3 | ) | (48 | ) | (6 | ) | ||||||||
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Other,
net
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2 | 102 | (28 | ) | 96 | |||||||||||
| (13 | ) | 99 | (76 | ) | 90 | |||||||||||
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Income
before income taxes
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1,781 | 2,012 | 2,939 | 1,343 | ||||||||||||
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Income
tax provision
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597 | 802 | 985 | 535 | ||||||||||||
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Net
income
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$ | 1,184 | $ | 1,210 | $ | 1,954 | $ | 808 | ||||||||
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Net
income per common share:
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||||||||||||||||
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Basic
|
$ | 0.13 | $ | 0.13 | $ | 0.21 | $ | 0.09 | ||||||||
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Diluted
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$ | 0.13 | $ | 0.13 | $ | 0.21 | $ | 0.08 | ||||||||
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Shares
used in per share calculation:
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||||||||||||||||
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Basic
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9,294 | 9,340 | 9,279 | 9,309 | ||||||||||||
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Diluted
|
9,418 | 9,630 | 9,326 | 9,509 | ||||||||||||
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SUPPLEMENTAL
INFORMATION – SALES BY SALES UNIT:
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||||||||||||||||
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Three
months ended
|
Nine
months ended
|
|||||||||||||||
|
September
30,
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September
30,
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|||||||||||||||
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2009
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2008
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2009
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2008
|
|||||||||||||
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Banking
and point-of-sale
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$ | 5,822 | $ | 2,984 | $ | 13,780 | $ | 8,730 | ||||||||
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Casino
and gaming
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4,726 | 6,681 | 13,042 | 16,958 | ||||||||||||
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Lottery
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3,335 | 4,728 | 6,401 | 13,124 | ||||||||||||
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TransAct
Services Group
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4,099 | 2,933 | 11,197 | 9,118 | ||||||||||||
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Total
net sales
|
$ | 17,982 | $ | 17,326 | $ | 44,420 | $ | 47,930 | ||||||||
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TRANSACT
TECHNOLOGIES INCORPORATED
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||||||||
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CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
(Unaudited)
|
||||||||
|
September
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
|
$ | 5,511 | $ | 2,000 | ||||
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Receivables,
net
|
11,028 | 8,734 | ||||||
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Inventories
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6,414 | 9,919 | ||||||
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Refundable
income taxes
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28 | 35 | ||||||
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Deferred
tax assets
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1,955 | 2,054 | ||||||
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Other
current assets
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546 | 352 | ||||||
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Total
current assets
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25,482 | 23,094 | ||||||
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Fixed
assets, net
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4,772 | 5,563 | ||||||
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Goodwill,
net
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1,469 | 1,469 | ||||||
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Deferred
tax assets
|
1,120 | 1,759 | ||||||
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Intangibles
and other assets, net
|
245 | 349 | ||||||
| 7,606 | 9,140 | |||||||
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Total
assets
|
$ | 33,088 | $ | 32,234 | ||||
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Liabilities
and Shareholders’ Equity:
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 3,659 | $ | 4,863 | ||||
|
Accrued
liabilities
|
2,048 | 2,847 | ||||||
|
Deferred
revenue
|
614 | 333 | ||||||
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Total
current liabilities
|
6,321 | 8,043 | ||||||
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Deferred
revenue, net of current portion
|
427 | 259 | ||||||
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Accrued
warranty, net of current portion
|
74 | 133 | ||||||
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Deferred
rent
|
435 | 473 | ||||||
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Other
liabilities
|
44 | 44 | ||||||
| 980 | 909 | |||||||
|
Total
liabilities
|
7,301 | 8,952 | ||||||
|
Shareholders’
equity:
|
||||||||
|
Common
stock
|
105 | 105 | ||||||
|
Additional
paid-in capital
|
21,439 | 20,890 | ||||||
|
Retained
earnings
|
12,847 | 10,893 | ||||||
|
Accumulated
other comprehensive loss, net of tax
|
(66 | ) | (68 | ) | ||||
|
Treasury
stock, at cost
|
(8,538 | ) | (8,538 | ) | ||||
|
Total
shareholders’ equity
|
25,787 | 23,282 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 33,088 | $ | 32,234 | ||||