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): March 9, 2010
(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 March 9, 2010, TransAct Technologies Incorporated issued a press release announcing its financial results for the quarter and year ended December 31, 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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99.1
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Press Release dated March 9, 2010 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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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: March 9, 2010
3
EXHIBIT LIST
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
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Exhibit
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Description
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99.1
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Press Release dated March 9, 2010 of TransAct Technologies Incorporated
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4
Exhibit 99.1
TRANSACT
TECHNOLOGIES REPORTS FOURTH QUARTER 2009 RESULTS
HAMDEN, CT – March 9, 2010 –
TransAct Technologies Incorporated (NASDAQ: TACT), a global leader in
market-specific printers for transaction-based industries, today announced
financial results for the three months and the full year ended December 31,
2009. Summary results for these periods are as follows:
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Three
months ended December 31,
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Year ended
December 31,
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|||||||||||||||||||||||
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(in
$000s, except EPS)
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2009
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2008
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%
change
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2009
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2008
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%
change
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||||||||||||||||||
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Net
Sales
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$ | 13,926 | $ | 14,277 | (2.5 | %) | $ | 58,346 | $ | 62,207 | (6.2 | %) | ||||||||||||
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Operating
income
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281 | 608 | (53.8 | %) | 3,926 | 1,861 | (1) | 77.1 | % | |||||||||||||||
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Net
income
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186 | 636 | (70.8 | %) | 2,140 | 1,444 | (2) | 48.2 | % | |||||||||||||||
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Diluted
earnings per share
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$ | 0.02 | $ | 0.07 | (71.4 | %) | $ | 0.23 | $ | 0.15 | (3) | 53.3 | % | |||||||||||
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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 full year
ended December 31, 2008.
(2) Net
income includes $1,954,000 of FL Legal Fees, net of tax, in
the full year ended December 31, 2008.
(3) Diluted
earnings per share includes the negative impact of $0.21 from the FL Legal
Fees in the full year ended December 31, 2008.
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||||||||||||||||||||||||
“I am pleased with how our Company performed in 2009, especially given the continued weak overall economy which impacted our results in the fourth quarter,” said Bart C. Shuldman, Chairman, President and Chief Executive Officer of TransAct Technologies. “By the end of 2009, we completed the transition of a majority of our manufacturing to China and we began to see improving gross margin on products sold during the fourth quarter. Our move into the international gaming and casino market, our relationship with McDonald’s and our focus in the banking market drove revenue at TransAct during 2009 as we navigated through one of the most difficult economic times ever. Further, we continued to improve our balance sheet leading the Company to its strongest financial position ever as we entered 2010.”
Mr.
Shuldman continued, “For the fourth quarter of 2009, our international gaming
and casino sales continued to drive our results and increased 77% compared to
the fourth quarter of 2008. This increase helped to offset a 56%
decline in our domestic casino and gaming printer sales compared to the fourth
quarter of 2008, as the weakness we experienced throughout 2009 in our North
American replacement slot machine sales continued into the fourth
quarter. Our banking and point-of-sale (“POS”) sales declined 7% on a
quarter-over-quarter basis, as a significant increase in
our banking printer sales could not fully overcome lower POS printer sales due
to the impact of the recession on the POS market. Lottery sales,
which can vary significantly from quarter-to-quarter, rose by 21% due to an
increase in orders from our lottery customer in the fourth quarter of 2009
compared to the fourth quarter of 2008. TransAct Services Group
revenues increased by 6% compared to the fourth quarter of 2008, primarily due
to higher sales of replacement parts as well as increased service revenue
resulting from new service contracts, primarily in the banking
market. Finally, our balance sheet remains strong, with $10 million
in cash and no debt outstanding at December 31, 2009.”
Fourth
Quarter 2009 Results
Revenue
for the fourth quarter of 2009 was $13.9 million, a decrease of 2% compared to
$14.3 million in the prior-year period. Gross margin for the fourth
quarter of 2009 was 31.0%, compared to 33.7% 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 $4.0 million, a decrease of $0.2
million from the prior-year period driven largely by reduced selling and
marketing expenses. The Company recorded net income in the fourth
quarter of 2009 of approximately $0.2 million, or $0.02 per diluted share,
compared to net income of approximately $0.6 million, or $0.07 per diluted
share, in the prior-year period.
Commenting
on the financial results, Steven A. DeMartino, Executive Vice President and
Chief Financial Officer of TransAct Technologies said, “During the fourth
quarter of 2009, we completed the transition of a substantial portion of our
production to our lower-cost contract manufacturer in China. Despite
the completion of this move, which we expect to reduce our product costs
beginning in 2010, our gross margin for the fourth quarter of 2009 was impacted
by an unfavorable product mix, as we sold a higher percentage of lower margin
products than in the prior-year quarter. We expect our gross margin
in 2010 to steadily improve as we realize the full benefit from the completed
move of our production to China and expect a more favorable product mix
throughout the year.”
Full
Year 2009 Results
Revenue
for the year ended December 31, 2009 was $58.3 million, a decrease of 6%
compared to $62.2 million in the prior year. Gross margin for the
year ended December 31, 2009 was 32.3%, compared to 33.7% in the prior
year. Operating expenses were $15.5 million, a decrease of $3.6
million from the prior year driven largely by the absence of $3.0 million of
legal fees incurred in 2008 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 $2.1 million, or $0.23 per diluted share, for the year
ended December 31, 2009, compared to net income of approximately $1.4 million,
or $0.15 per diluted share, for 2008. Severance costs reduced net
income and earnings per share in 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 2008 by $2.0 million and $0.21,
respectively.
2010
Outlook
TransAct
expects both revenue and gross margin improvement in 2010 compared to 2009 based
on the current backlog of orders and forecasts of order flow provided by some of
the Company’s customers. The Company expects most of its sales growth
for 2010 to come from the international casino and gaming markets, as well as
some improvement in the replacement cycle in the domestic casino
market. Due to the timing of orders, the Company expects results in
the first quarter of 2010 to be the lowest of the year. Finally,
TransAct also expects to see solid free cash flow (cash provided by operations
less capital expenditures) again in 2010.
Liquidity
and Capital Resources
As of
December 31, 2009, TransAct had approximately $10.0 million in cash and cash
equivalents, and no debt obligations outstanding under its $20 million revolving
credit facility. During the fourth quarter of 2009, the Company did
not repurchase any shares under its stock repurchase program. As of
December 31, 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 fourth quarter 2009 results during a conference call today
at 5:00 PM EST. The conference call-in number is 888-452-4007. A replay of the
call will be available from 8:00 PM EST on Tuesday, March 9 through midnight EDT
on Tuesday, March 16 by telephone at 888-203-1112; passcode
2143777. 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 markets. Through
its webstore, http://www.transactsupplies.com,
and a direct selling team, TransAct addresses the growing on-line demand for
these products. 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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||||||||||||||||
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CONSOLIDATED
STATEMENTS OF INCOME
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||||||||||||||||
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(Unaudited)
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||||||||||||||||
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Three
Months Ended
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Year
Ended
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|||||||||||||||
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(In
thousands, except per share amounts)
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December
31,
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December
31,
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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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|||||||||||||
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Net
sales
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$ | 13,926 | $ | 14,277 | $ | 58,346 | $ | 62,207 | ||||||||
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Cost
of sales
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9,604 | 9,460 | 39,517 | 41,257 | ||||||||||||
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Gross
profit
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4,322 | 4,817 | 18,829 | 20,950 | ||||||||||||
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Operating
expenses:
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||||||||||||||||
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Engineering,
design and product development
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745 | 823 | 2,788 | 2,942 | ||||||||||||
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Selling
and marketing
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1,534 | 1,681 | 5,821 | 6,078 | ||||||||||||
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General
and administrative
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1,762 | 1,705 | 6,924 | 7,040 | ||||||||||||
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Legal
fees associated with lawsuit
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- | - | - | 3,029 | ||||||||||||
| 4,041 | 4,209 | 15,533 | 19,089 | |||||||||||||
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Operating
income
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281 | 608 | 3,296 | 1,861 | ||||||||||||
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Other
income (expense):
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||||||||||||||||
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Interest,
net
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(2 | ) | (5 | ) | (50 | ) | (11 | ) | ||||||||
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Other,
net
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(5 | ) | 272 | (33 | ) | 368 | ||||||||||
| (7 | ) | 267 | (83 | ) | 357 | |||||||||||
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Income
before income taxes
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274 | 875 | 3,213 | 2,218 | ||||||||||||
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Income
tax provision
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88 | 239 | 1,073 | 774 | ||||||||||||
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Net
income
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$ | 186 | $ | 636 | $ | 2,140 | $ | 1,444 | ||||||||
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Net
income per common share:
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||||||||||||||||
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Basic
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$ | 0.02 | $ | 0.07 | $ | 0.23 | $ | 0.16 | ||||||||
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Diluted
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$ | 0.02 | $ | 0.07 | $ | 0.23 | $ | 0.15 | ||||||||
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Shares
used in per share calculation:
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||||||||||||||||
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Basic
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9,320 | 9,305 | 9,289 | 9,308 | ||||||||||||
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Diluted
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9,486 | 9,424 | 9,377 | 9,489 | ||||||||||||
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SUPPLEMENTAL
INFORMATION – SALES BY SALES UNIT:
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||||||||||||||||
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Three
months ended
|
Year ended
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|||||||||||||||
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December
31,
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December
31,
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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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|||||||||||||
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Banking
and point-of-sale
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$ | 2,915 | $ | 3,136 | $ | 16,695 | $ | 11,866 | ||||||||
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Casino
and gaming
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4,484 | 5,341 | 17,526 | 22,299 | ||||||||||||
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Lottery
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3,150 | 2,607 | 9,551 | 15,731 | ||||||||||||
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TransAct
Services Group
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3,377 | 3,193 | 14,574 | 12,311 | ||||||||||||
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Total
net sales
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$ | 13,926 | $ | 14,277 | $ | 58,346 | $ | 62,207 | ||||||||
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TRANSACT
TECHNOLOGIES INCORPORATED
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CONSOLIDATED
BALANCE SHEETS
|
||||||||
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(Unaudited)
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||||||||
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December
31,
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December
31,
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|||||||
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(In
thousands)
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2009
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2008
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||||||
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Assets:
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||||||||
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Current
assets:
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Cash
and cash equivalents
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$ | 10,017 | $ | 2,000 | ||||
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Receivables,
net
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8,996 | 8,734 | ||||||
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Inventories
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5,952 | 9,919 | ||||||
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Refundable
income taxes
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270 | 35 | ||||||
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Deferred
tax assets
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2,240 | 2,054 | ||||||
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Other
current assets
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521 | 352 | ||||||
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Total
current assets
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27,996 | 23,094 | ||||||
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Fixed
assets, net
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4,551 | 5,563 | ||||||
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Goodwill
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1,469 | 1,469 | ||||||
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Deferred
tax assets
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669 | 1,759 | ||||||
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Intangibles
and other assets, net
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214 | 349 | ||||||
| 6,903 | 9,140 | |||||||
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Total
assets
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$ | 34,899 | $ | 32,234 | ||||
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Liabilities
and Shareholders’ Equity:
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||||||||
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Current
liabilities:
|
||||||||
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Accounts
payable
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$ | 5,052 | $ | 4,863 | ||||
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Accrued
liabilities
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1,890 | 2,847 | ||||||
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Deferred
revenue
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580 | 333 | ||||||
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Total
current liabilities
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7,522 | 8,043 | ||||||
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Deferred
revenue, net of current portion
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501 | 259 | ||||||
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Deferred
rent, net of current portion
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385 | 473 | ||||||
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Other
liabilities
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137 | 44 | ||||||
| 1,023 | 909 | |||||||
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Total
liabilities
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8,545 | 8,952 | ||||||
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Shareholders’
equity:
|
||||||||
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Common
stock
|
105 | 105 | ||||||
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Additional
paid-in capital
|
21,820 | 20,890 | ||||||
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Retained
earnings
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13,033 | 10,893 | ||||||
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Accumulated
other comprehensive loss, net of tax
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(66 | ) | (68 | ) | ||||
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Treasury
stock, at cost
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(8,538 | ) | (8,538 | ) | ||||
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Total
shareholders’ equity
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26,354 | 23,282 | ||||||
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Total
liabilities and shareholders’ equity
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$ | 34,899 | $ | 32,234 | ||||