Release Details
Transact Technologies Reports 2017 Third Quarter Results
Reports 2017 Third Quarter Revenue of
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Summary of 2017 Q3 Results (In millions, except per share and percentage data) |
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Three Months Ended |
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| 2017 | 2016 | |||||
| Net sales | $ | 15.5 | $ | 14.5 | ||
| Gross profit | $ | 7.5 | $ | 5.9 | ||
| Gross margin | 48.4% | 40.9% | ||||
| Operating income | $ | 2.6 | $ | 1.2 | ||
| Net income | $ | 1.8 | $ | 0.9 | ||
| Net income per diluted share | $ | 0.24 | $ | 0.12 | ||
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Non-GAAP(1): |
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| EBITDA | $ | 2.9 | $ | 1.6 | ||
| Adjusted EBITDA | $ | 3.0 | $ | 1.7 | ||
| (1) | A reconciliation of each non-GAAP financial measure to the most comparable Generally Accepted Accounting Principles ("GAAP") financial measure is included in this release. See "Non-GAAP Financial Measures" below for a discussion of these metrics. |
"The benefit from our execution on this strategy is increasingly evident
in our financial results, as the Company generated strong profitability
in the 2017 third quarter. In particular, gross margin increased 750
basis points year over year to a record 48.4% in the 2017 third quarter,
which led to record quarterly diluted EPS of
"During the third quarter, we successfully completed the effort to staff
our sales team devoted exclusively to the restaurant solutions product
line and this team is already building a significant pipeline of new
business activity. At the same time, we are establishing a recurring
revenue business model around the AccuDate terminal portfolio by
offering our AccuDate customers a lineup of proprietary labels. In
addition, as we begin to convert the growing backlog for our AccuDate XL
into sales, we will seek to continue to build our recurring revenue
through technical support and service contracts which provide access to
TransAct's leading global customer support. We believe restaurant
solutions technologies, including easy-to-use products that help ensure
food safety, represent the largest opportunity in the restaurant
industry today and TransAct's positioning as a leading one-stop shop for
food safety and labeling needs will allow us to further monetize this
opportunity. In addition, TransAct's partnerships with leading software
providers such as
"Looking at our other businesses, the casino and gaming and lottery
markets remained relatively stable in the third quarter as printer sales
and Epicentral installations contributed to domestic growth. We remain
confident that our recent decision to bring all European casino sales
in-house will lead to an improvement in international casino and gaming
contributions going forward. Our lottery business continues to benefit
from the industry's shift towards extended contracts which is keeping
our global installed base of lottery printers in the field longer and
driving increased demand for spare parts sales. We also saw continued
signs of activity in the domestic market for Printrex oil and gas
printers and our
Review of Balance Sheet and Capital Return Initiatives
At
Summary of 2017 Third Quarter Operating Results
TransAct generated 2017 third quarter net sales of
Record gross margin of 48.4% in the 2017 third quarter compared to gross
margin of 40.9% in the 2016 third quarter, reflects a favorable sales
mix featuring growing sales of AccuDate terminals and higher spare parts
sales. Higher gross margins in the 2017 third quarter, combined with a
7% rise in net sales, drove a 27% increase in gross profit to
Total operating expenses for the 2017 third quarter were
TransAct generated operating income of
2017 Third 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 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 because the Company considers share-based compensation to be a non-cash expense similar to depreciation and amortization. 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 because these measures are: (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) financial measurements that are used by lenders and other parties to evaluate creditworthiness; and (iii) used by the Company's management for various purposes including strategic planning and forecasting, assessing financial performance, 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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| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
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| Three Months Ended | Nine Months Ended | |||||||
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| 2017 | 2016 | 2017 | 2016 | |||||
| Net sales |
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| Cost of sales | 8,005 | 8,559 | 23,075 | 25,849 | ||||
| Gross profit | 7,519 | 5,915 | 20,042 | 17,783 | ||||
| Operating expenses: | ||||||||
| Engineering, design and product development | 1,147 | 1,133 | 3,160 | 3,458 | ||||
| Selling and marketing | 1,895 | 1,808 | 5,601 | 5,460 | ||||
| General and administrative | 1,886 | 1,737 | 5,968 | 5,589 | ||||
| 4,928 | 4,678 | 14,729 | 14,507 | |||||
| Operating income | 2,591 | 1,237 | 5,313 | 3,276 | ||||
| Interest and other income (expense): | ||||||||
| Interest, net | (9) | (7) | (25) | (18) | ||||
| Other, net | - | (3) | (8) | 13 | ||||
| (9) | (10) | (33) | (5) | |||||
| Income before income taxes | 2,582 | 1,227 | 5,280 | 3,271 | ||||
| Income tax provision | 769 | 344 | 1,657 | 1,010 | ||||
| Net income |
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| Net income per common share: | ||||||||
| Basic |
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| Diluted |
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| Shares used in per share calculation: | ||||||||
| Basic | 7,408 | 7,498 | 7,404 | 7,673 | ||||
| Diluted | 7,586 | 7,549 | 7,504 | 7,724 | ||||
| SUPPLEMENTAL INFORMATION - SALES BY SALES UNIT: | ||||||||
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Three months ended | Nine months ended | ||||||
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| 2017 | 2016 | 2017 | 2016 | |||||
| Restaurant solutions |
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| POS automation and banking | 1,829 | 2,889 | 6,335 | 8,407 | ||||
| Casino and gaming | 5,111 | 5,612 | 14,213 | 16,204 | ||||
| Lottery | 2,160 | 2,226 | 7,928 | 7,311 | ||||
| Printrex | 358 | 67 | 818 | 398 | ||||
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4,263 | 2,711 | 10,472 | 7,806 | ||||
| Total net sales |
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43,117 |
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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| (Unaudited) | ||||
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| (In thousands) | 2017 | 2016 | ||
| Assets: | ||||
| Current assets: | ||||
| Cash and cash equivalents |
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| Accounts receivable, net | 11,331 | 10,585 | ||
| Inventories, net | 8,171 | 9,707 | ||
| Other current assets | 834 | 372 | ||
| Total current assets | 23,861 | 23,167 | ||
| Fixed assets, net | 2,237 | 2,241 | ||
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2,621 | 2,621 | ||
| Deferred tax assets | 3,549 | 3,432 | ||
| Intangible assets, net | 332 | 545 | ||
| Other assets | 36 | 36 | ||
| 8,775 | 8,875 | |||
| Total assets |
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| Liabilities and Shareholders' Equity: | ||||
| Current liabilities: | ||||
| Accounts payable |
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| Accrued liabilities | 2,666 | 2,394 | ||
| Income taxes payable | 143 | 19 | ||
| Deferred revenue | 152 | 117 | ||
| Total current liabilities | 5,970 | 7,424 | ||
| Deferred revenue, net of current portion | 67 | 67 | ||
| Deferred rent, net of current portion | 269 | 178 | ||
| Other liabilities | 212 | 264 | ||
| 548 | 509 | |||
| Total liabilities | 6,518 | 7,933 | ||
| Shareholders' equity: | ||||
| Common stock | 112 | 112 | ||
| Additional paid-in capital | 30,377 | 29,701 | ||
| Retained earnings | 25,838 | 24,157 | ||
| Accumulated other comprehensive loss, net of tax | (99) | (109) | ||
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(30,110) | (29,752) | ||
| Total shareholders' equity | 26,118 | 24,109 | ||
| Total liabilities and shareholders' equity |
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RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA NON-GAAP FINANCIAL MEASURES (Unaudited) |
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| Three Months Ended | Nine Months Ended | |||||||
| (In thousands) |
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| 2017 | 2016 | 2017 | 2016 | |||||
| Net income |
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| Interest expense, net | 9 | 7 | 25 | 18 | ||||
| Income tax provision | 769 | 344 | 1,657 | 1,010 | ||||
| Depreciation and amortization | 264 | 319 | 866 | 962 | ||||
| EBITDA | 2,855 | 1,553 | 6,171 | 4,251 | ||||
| Share-based compensation expense | 188 | 168 | 484 | 473 | ||||
| Adjusted EBITDA |
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6,655 |
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View source version on businesswire.com: http://www.businesswire.com/news/home/20171101006581/en/
Investor:
President and Chief Financial Officer
203-859-6810
or
JCIR
212-835-8500
tact@jcir.com
Source:
News Provided by Acquire Media