2023 Fourth Quarter Net Sales of $13.3 Million,
down 26% on a Year-Over-Year Basis
Quarterly Food Service Technology (“FST”) Sales
of $4.7 Million, up 54% on a Year-Over-Year Basis
Quarterly Casino and Gaming Sales of $4.2
Million, down 62% on a Year-Over-Year Basis
TransAct Technologies Incorporated (Nasdaq: TACT) (“TransAct” or
the “Company”), a global leader in software-driven technology and
printing solutions for high-growth markets, today reported
preliminary results for the fourth quarter and full year ended
December 31, 2023.
“This was a year of change here at TransAct, and I believe that
the organization has emerged from this transition stronger, more
efficient, and operationally more effective,” said John Dillon,
Chief Executive Officer of TransAct. “On the FST side, we believe
that we now have the right team in the right places selling to
enterprise-level organizations with our new BOHA! Terminal 2, which
has seen a solid reception from customers and prospects so far. We
added twelve new logos to our BOHA! platform in the fourth quarter
and sold 1,235 terminals, and believe that we have the opportunity
to build momentum throughout the course of 2024.”
Fourth Quarter 2023 Financial Highlights
- Net Sales: Net sales for the fourth quarter of 2023 were
$13.3 million, down 26% compared to $18.0 million for the fourth
quarter of 2022.
- FST Recurring Revenue: FST recurring revenue for the
fourth quarter of 2023 was $3.2 million, up 33% compared to $2.4
million for the fourth quarter of 2022.
- Gross Profit: Gross profit for the fourth quarter of
2023 was $6.4 million, resulting in gross margin of 48.0%, compared
to gross profit of $8.2 million for the fourth quarter of 2022,
which delivered a 45.8% gross margin.
- Operating income (loss): Operating loss for the fourth
quarter of 2023 was $(0.5) million, compared to operating income of
$0.5 million for the fourth quarter of 2022.
- Net income (loss): Net loss for the fourth quarter of
2023 was $(62) thousand, or $(0.01) per diluted share, based on
10.0 million weighted average common shares outstanding. Net income
for the comparable 2022 period was $260 thousand, or $0.03 per
diluted share, based on 9.9 million weighted average common shares
outstanding.
- EBITDA: EBITDA was $0.3 million for the fourth quarter
of 2023, compared to $1.0 million for the fourth quarter of
2022.
- Adjusted EBITDA: Adjusted EBITDA was $0.6 million for
the fourth quarter of 2023, compared to $1.3 million for the fourth
quarter of 2022.
Full Year 2023 Financial Highlights
- Net Sales: Net sales for the full year 2023 were $72.6
million, up 25% compared to $58.1 million for the full year
2022.
- FST Recurring Revenue: FST recurring revenue for the
full year 2023 was $11.1 million, up 28% compared to $8.7 million
for the full year 2022.
- Gross Profit: Gross profit for the full year 2023 was
$38.4 million, resulting in gross margin of 52.9%, compared to
gross profit of $24.4 million for the full year 2022, which
delivered a 42.0% gross margin.
- Operating income (loss): Operating income for the full
year 2023 was $5.7 million, compared to an operating loss of $(7.7)
million for the full year 2022.
- Net income (loss): Net income for the full year 2023 was
$4.7 million, or $0.47 per diluted share, based on 10.0 million
weighted average common shares outstanding. Net loss for the full
year 2022 was $(5.9) million, or $(0.60) per diluted share, based
on 9.9 million weighted average common shares outstanding.
- Adjusted net income (loss): Adjusted net income for the
full year 2023 was $5.9 million, or $0.59 per diluted share.
Adjusted net loss for the full year 2022 was $(5.9) million, or
$(0.60) net loss per diluted share.
- EBITDA: EBITDA was $7.6 million for the full year 2023,
compared to an EBITDA loss of $(6.4) million for the full year
2022.
- Adjusted EBITDA: Adjusted EBITDA was $10.0 million for
the full year 2023, compared to an Adjusted EBITDA loss of $(5.2)
million for the full year 2022.
Recent Development
The Company announced that it engaged a strategic advisor to
assist in determining the best long-term strategy for its
business.
2024 Financial Outlook
- Total Net Sales: The Company currently expects full year
2024 total net sales of between $53 million and $58 million.
- Total Adjusted EBITDA: The Company currently expects
full year 2024 total adjusted EBITDA to be approximately
breakeven.
Our outlook for non-GAAP adjusted EBITDA is presented only on a
non-GAAP basis because not all of the information necessary for a
quantitative reconciliation of this forward-looking non-GAAP
financial measure to the most directly comparable GAAP financial
measure is available without unreasonable effort, primarily due to
uncertainties relating to the occurrence or amount of these
adjustments that may arise in the future. If one or more of the
currently unavailable items is applicable, some items could be
material, individually or in the aggregate, to GAAP reported
results.
2023 Fourth Quarter and Full Year Conference Call and
Webcast
TransAct is hosting a conference call and webcast today, March
12, 2024, beginning at 4:30 p.m. ET to discuss the Company’s
preliminary fourth quarter and full year 2023 results and other
matters. Both the call and the webcast are open to the general
public. The conference call number is 877-704-4453 and the
conference ID number is 13744766 (domestic or international).
Please call ten minutes prior to the presentation to ensure that
you are connected.
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 measures are helpful to
investors and others in assessing the ongoing nature of what the
Company’s management views as TransAct’s core operations. 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. The Company believes that these non-GAAP
financial measures provide relevant and useful information to an
investor 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 items that do not
reflect the Company’s ongoing operations and are excluded from the
calculation of such measure; (ii) used as financial measurements by
lenders and other parties to evaluate creditworthiness; and (iii)
used by the Company’s management for various purposes including
strategic planning and forecasting and assessing financial
performance. Adjusted net income (loss) and adjusted net income
(loss) per diluted share provide the Company with an understanding
of the results of the primary operations of the business by
excluding the effects of special items (for example, the $1.5
million severance charge related to the resignation of the
Company’s former Chief Executive Officer) that do not reflect the
ordinary earnings of the Company’s operations. The Company uses
these measures to evaluate period-over-period operating performance
because the Company believes this provides a more comparable
measure of the Company’s continuing business, as these measures
adjust for the special items that are not reflective of the normal
results of the business. The presentation of this 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 (loss) before net interest
expense, income taxes, depreciation, and amortization. A
reconciliation of EBITDA to net income (loss), the most comparable
GAAP financial measure, can be found attached to this release.
Adjusted EBITDA is defined as net income (loss) before net
interest expense, income taxes, depreciation and amortization and
is adjusted for (1) share-based compensation, (2) the $1.5 million
severance charge related to the resignation of the Company’s former
Chief Executive Officer and (3) any other items, when they occur,
that we believe do not reflect the ordinary earnings of the
Company’s ongoing business. 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. The Company also adjusts for the severance charge
related to the resignation of the Company’s former Chief Executive
Officer because the Company believes this charge does not reflect
the ordinary earnings of the Company’s operations. A reconciliation
of adjusted EBITDA to net income (loss), the most comparable GAAP
financial measure, can be found attached to this release.
Adjusted net income (loss) is defined as net income (loss)
adjusted for (1) the $1.5 million severance charge related to the
resignation of the Company’s former Chief Executive Officer and (2)
any other items, when they occur, that we believe do not reflect
the ordinary earnings of the Company’s ongoing business. A
reconciliation of adjusted net income (loss) to net income (loss),
the most comparable GAAP financial measure, can be found attached
to this release.
Adjusted net income (loss) per diluted share is defined as
adjusted net income (loss) divided by diluted shares outstanding. A
reconciliation of adjusted net income (loss) per diluted share to
net income (loss) per diluted share, the most comparable GAAP
financial measure, can be found attached to this release.
About TransAct Technologies Incorporated
TransAct Technologies Incorporated is a global leader in
developing and selling software-driven technology and printing
solutions for high-growth markets including food service, casino
and gaming, and POS automation. The Company’s solutions are
designed from the ground up based on customer requirements and are
sold under the BOHA!™, AccuDate™, EPICENTRAL®, Epic and Ithaca®
brands. TransAct has sold over 3.9 million printers, terminals and
other hardware devices around the world and is committed to
providing world-class service, spare parts, and accessories to
support its installed product base. Through the TransAct Services
Group, the Company also provides customers with a complete range of
supplies and consumable items both online at
http://www.transactsupplies.com and through its direct sales team.
TransAct is headquartered in Hamden, CT. For more information,
please visit http://www.transact-tech.com or call (203)
859-6800.
©2024 TRANSACT Technologies Incorporated. All rights reserved.
TransAct®, BOHA!™, AccuDate™, Epic Edge®, EPICENTRAL® and Ithaca®
are trademarks of TransAct Technologies Incorporated.
Cautionary Statement Regarding Preliminary Financial
Information
The Company has prepared the preliminary financial information
set forth below on a materially consistent basis with its
historical financial information and in good faith based upon its
internal reporting as of and for the three months and full year
ended December 31, 2023. This financial information is preliminary
and is thus inherently uncertain and subject to change as the
Company finalizes its financial results and related review for the
three months and audit for the full year ended December 31, 2023.
During the course of the preparation of the Company’s consolidated
financial statements and related notes as of and for the three
months and full year ended December 31, 2023, the Company may
identify items that could cause its final reported results to be
materially different from the preliminary financial information set
forth above. As a result, there can be no assurance that the
Company’s final results for this period will not differ from the
preliminary financial information.
This preliminary financial information should not be viewed as a
substitute for full financial statements prepared in accordance
with GAAP. In addition, this preliminary financial information is
not necessarily indicative of the results to be achieved for any
future period.
Forward-Looking Statements
Certain statements included in this press release may be
forward-looking statements within the meaning of the U.S. federal
securities laws, including the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are any statements other
than statements of historical fact. Forward-looking statements
represent current views about possible future events and are often
identified by the use of forward-looking terminology, such as
"may", "will", "could", "expect", "intend", "estimate",
"anticipate", "believe", "project”, "plan”, "predict”, "design" or
"continue", or the negative thereof, or other similar words.
Forward-looking statements are subject to certain risks,
uncertainties and assumptions. In the event that one or more of
such risks or uncertainties materialize, or one or more underlying
assumptions prove incorrect, actual results may differ materially
from those expressed or implied by the forward-looking statements.
Important factors and uncertainties that could cause actual results
to differ materially from those expressed or implied by the
forward-looking statements include, but are not limited to, the
following: the adverse effects of current economic conditions on
our business, operations, financial condition, results of
operations and capital resources, difficulties or delays in
manufacturing or delivery of inventory or other supply chain
disruptions, inflation and the Russia/Ukraine and Middle East
conflicts, an inability of our customers to make payments on time
or at all, diversion of management attention, a possible future
reduction in the value of goodwill or other intangible assets,
inadequate manufacturing capacity or a shortfall or excess of
inventory as a result of difficulty in predicting manufacturing
requirements due to volatile economic conditions, price increases
or decreased availability of component parts or raw materials,
exchange rate fluctuations, volatility of and decreases in trading
prices of our common stock and the availability of needed financing
on acceptable terms or at all; our ability to successfully develop
new products that garner customer acceptance and generate sales,
both domestically and internationally, in the face of substantial
competition; our reliance on an unrelated third party to develop,
maintain and host certain web-based food service application
software and develop and maintain selected components of our
downloadable software applications pursuant to a non-exclusive
license agreement, and the risk that interruptions in our
relationship with that third party could materially impair our
ability to provide services to our food service technology
customers on a timely basis or at all and could require substantial
expenditures to find or develop alternative software products; our
ability to successfully grow our business in the food service
technology market; risks associated with the pursuit of strategic
initiatives and business growth; general economic conditions; our
dependence on contract manufacturers for the assembly of a large
portion of our products in Asia; our dependence on significant
suppliers; our ability to recruit and retain quality employees; our
dependence on third parties for sales outside the United States;
marketplace acceptance of new products; risks associated with
foreign operations; the availability of third-party components at
reasonable prices; price wars, supply chain disruptions or other
significant pricing pressures affecting the Company’s products in
the United States or abroad; increased product costs or reduced
customer demand for our products due to changes in U.S. policy that
may result in trade wars or tariffs; our ability to protect
intellectual property; and other risk factors detailed in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2022, and other reports filed with the Securities and Exchange
Commission. Actual results may differ materially from those
discussed in, or implied by, the forward-looking statements. We
caution readers not to place undue reliance on forward-looking
statements, which speak only as of the date of this release. We
undertake no obligation to publicly or otherwise revise any
forward-looking statements, whether as a result of new information,
future events or other factors, except where we are expressly
required to do so by applicable law.
- Financial tables follow-
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Preliminary and
Unaudited)
Three months ended
Year ended
December 31,
December 31,
2023
2022
2023
2022
(In thousands, except per share
data)
Net sales
$13,265
$17,958
$72,631
$58,139
Cost of sales
6,894
9,739
34,231
33,727
Gross profit
6,371
8,219
38,400
24,412
Operating expenses:
Engineering, design and product
development
2,159
2,130
9,442
8,570
Selling and marketing
2,096
2,602
9,934
11,326
General and administrative
2,638
2,993
13,318
12,193
6,893
7,725
32,694
32,089
Operating (loss) income
(522
)
494
5,706
(7,677
)
Interest and other income (expense):
Interest, net
(48
)
(63
)
(255
)
(208
)
Other, net
474
151
452
(16
)
426
88
197
(224
)
(Loss) income before income taxes
(96
)
582
5,903
(7,901
)
Income tax benefit (expense)
34
(322
)
(1,155
)
1,965
Net (loss) income
$(62
)
$260
$4,748
$(5,936
)
Net (loss) income per common share:
Basic
$(0.01
)
$0.03
$0.48
$(0.60
)
Diluted
$(0.01
)
$0.03
$0.47
$(0.60
)
Shares used in per share calculation:
Basic
9,958
9,912
9,951
9,905
Diluted
9,958
9,921
10,021
9,905
SUPPLEMENTAL INFORMATION –
SALES BY MARKET:
(Preliminary and
Unaudited)
Three months ended
Year ended
December 31,
December 31,
2023
2022
2023
2022
(In thousands)
Food service technology
$4,714
$3,054
$16,308
$12,364
POS automation
1,577
2,959
6,922
10,659
Casino and gaming
4,190
10,999
41,192
30,029
TransAct Services Group
2,784
946
8,209
5,087
Total net sales
$13,265
$17,958
$72,631
$58,139
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Preliminary and
Unaudited)
December 31,
December 31,
2023
2022
(In thousands)
Assets:
Current assets:
Cash and cash equivalents
$12,321
$7,946
Accounts receivable, net
9,824
13,927
Employee retention credit receivable
-
1,500
Inventories
17,759
12,028
Other current assets
1,095
724
Total current assets
40,999
36,125
Fixed assets, net
2,421
2,781
Right-of-use assets, net
1,602
2,488
Goodwill
2,621
2,621
Deferred tax assets
6,304
7,327
Intangible assets, net
88
242
Other assets
163
248
13,199
15,707
Total assets
$54,198
$51,832
Liabilities and Shareholders’
Equity:
Current liabilities:
Revolving loan payable
$2,250
$2,250
Accounts payable
4,431
7,395
Accrued liabilities
4,947
4,077
Lease liabilities
929
875
Deferred revenue
1,079
1,329
Total current liabilities
13,636
15,926
Deferred revenue, net of current
portion
209
143
Lease liabilities, net of current
portion
720
1,683
Other liabilities
219
218
1,148
2,044
Total liabilities
14,784
17,970
Shareholders’ equity:
Common stock
140
139
Additional paid-in capital
57,055
56,282
Retained earnings
14,378
9,630
Accumulated other comprehensive loss, net
of tax
(49
)
(79
)
Treasury stock, at cost
(32,110
)
(32,110
)
Total shareholders’ equity
39,414
33,862
Total liabilities and shareholders’
equity
$54,198
$51,832
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF GAAP
EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL
MEASURES
(Preliminary and Unaudited,
thousands of dollars, except percentages and per share
amounts)
Three months ended
December 31, 2023
Reported
Adjustments(1)
Adjusted
Non-GAAP
Operating expenses
$6,893
$-
$6,893
% of net sales
52.0
%
52.0
%
Operating loss
(522
)
-
(522
)
% of net sales
(3.9
)%
(3.9
)%
Interest and other income
426
-
426
Loss before income taxes
(96
)
-
(96
)
Income tax benefit
34
-
34
Net loss
(62
)
-
(62
)
Net loss per common share:
Basic
$(0.01
)
$-
$(0.01
)
Diluted
$(0.01
)
$-
$(0.01
)
(1) No adjustments.
Three months ended
December 31, 2022
Reported
Adjustments(2)
Adjusted
Non-GAAP
Operating expenses
$7,725
$-
$7,725
% of net sales
43.0
%
43.0
%
Operating income
494
-
494
% of net sales
2.8
%
2.8
%
Interest and other income
88
-
88
Income before income taxes
582
-
582
Income tax (expense)
(322
)
-
(322
)
Net income
260
-
260
Net income per common share:
Basic
$0.03
$-
$0.03
Diluted
$0.03
$-
$0.03
(2) No adjustments.
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF GAAP
EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL
MEASURES
(Preliminary and Unaudited,
thousands of dollars, except percentages and per share
amounts)
Year ended
December 31, 2023
Reported
Adjustments(3)
Adjusted
Non-GAAP
Operating expenses
$32,694
$(1,461
)
$31,233
% of net sales
45.0
%
43.0
%
Operating income
5,706
1,461
7,167
% of net sales
7.9
%
9.9
%
Interest and other income
197
-
197
Income before income taxes
5,903
1,461
7,364
Income tax (expense)
(1,155
)
(303
)
(1,458
)
Net income
4,748
1,158
5,906
Net income per common share:
Basic
$0.48
$0.12
$0.60
Diluted
$0.47
$0.12
$0.59
(3) Adjustment includes a
severance charge of $1,461 incurred in April 2023 related to the
resignation of the Company’s former Chief Executive Officer.
Year ended
December 31, 2022
Reported
Adjustments(4)
Adjusted
Non-GAAP
Operating expenses
$32,089
$-
$32,089
% of net sales
55.2
%
55.2
%
Operating loss
(7,677
)
-
(7,677
)
% of net sales
(13.2
)%
(13.2
)%
Interest and other expense
(224
)
-
(224
)
Loss before income taxes
(7,901
)
-
(7,901
)
Income tax benefit
1,965
-
1,965
Net loss
(5,936
)
-
(5,936
)
Net loss per common share:
Basic
$(0.60
)
$-
$(0.60
)
Diluted
$(0.60
)
$-
$(0.60
)
(4) No adjustments.
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF NET INCOME
(LOSS) TO EBITDA AND ADJUSTED EBITDA
NON-GAAP FINANCIAL
MEASURES
(Preliminary and
Unaudited)
Three months ended
Year ended
December 31,
December 31,
2023
2022
2023
2022
(In thousands)
Net (loss) income
$(62
)
$260
$4,748
$(5,936
)
Interest expense, net
48
63
255
208
Income tax (benefit) expense
(34
)
322
1,155
(1,965
)
Depreciation and amortization
386
348
1,489
1,332
EBITDA
338
993
7,647
(6,361
)
Share-based compensation expense
249
287
860
1,155
Severance charge related to resignation of
the Company’s former Chief Executive Officer
-
-
1,461 -
Adjusted EBITDA
$587
$1,280
$9,968
$(5,206
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240312093818/en/
Investor: Ryan Gardella ICR, Inc.
Ryan.Gardella@icrinc.com
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