Exhibit 99.1
TransAct Technologies
Reports Preliminary First Quarter 2024 Financial Results
Lands Eight New FST Accounts, Representing Potential
Terminal Sales of Nearly 1,000 Units
Casino and Gaming Sales Begin Normalization
Hamden, CT – May 7, 2024 – 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 first quarter ended March 31, 2024.
“We have continued confidence in our core
product offerings and our ability to win new customers in new deployment situations across a number of verticals, with eight new logos
added to our BOHA! platform in the quarter” said John Dillon, Chief Executive Officer of TransAct. “We are optimistic about
the future of TransAct as an agile, transaction validation platform providing tailored solutions to our customers and believe there is
significant opportunity in both the near and long-term to target new use cases with our existing products and to enter new markets further
down the road.”
First Quarter 2024 Financial Highlights
| • | Net Sales: Net sales for the first quarter
of 2024 were $10.7 million, down as expected due to the pull back in Casino and Gaming. The results were down 52% compared to $22.3 million
for the first quarter of 2023 largely as a result of the expected market dynamics and normalizing demand for our Casino and Gaming printers. |
| • | FST Recurring Revenue: FST recurring revenue
for the first quarter of 2024 was $2.4 million, up 3% compared to $2.3 million for the first quarter of 2023. |
| • | Gross Profit: Gross profit for the first
quarter of 2024 was $5.6 million, resulting in gross margin of 52.6%, compared to gross profit of $12.3 million for the first quarter
of 2023, which delivered a 55.0% gross margin. |
| • | Operating (loss) income: Operating
loss for the first quarter of 2024 was $(1.3) million, compared to operating income of $3.8 million for the first quarter of 2023. |
| • | Net (loss) income: Net loss for the first
quarter of 2024 was $(1.0) million, or $(0.10) per diluted share, based on 10.0 million weighted average common shares outstanding. Net
income for the comparable 2023 period was $3.1 million, or $0.31 per diluted share, based on 10.0 million weighted average common shares
outstanding. |
| • | EBITDA: EBITDA was negative $966 thousand
for the first quarter of 2024, compared to $4.2 million for the first quarter of 2023. |
| • | Adjusted EBITDA: Adjusted EBITDA was negative
$701 thousand for the first quarter of 2024, compared to $4.5 million for the first quarter of 2023. |
2024 Financial Outlook
| • | Total Net Sales: The Company currently
expects full year 2024 total net sales of between $45 million and $50 million. |
| • | Total Adjusted EBITDA: The Company currently
expects full year 2024 total adjusted EBITDA to be between negative $2.5 million and negative $3.5 million. |
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.
2024 First Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast
today, May 7, 2024, beginning at 8:30 a.m. ET to discuss the Company’s preliminary first quarter 2024 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 13746173 (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 “Company” followed by
“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 measures; (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. 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 (loss) income before
net interest expense, income taxes, depreciation, and amortization. A reconciliation of EBITDA to net (loss) income, the most comparable
GAAP financial measure, can be found attached to this release.
Adjusted EBITDA is defined as net (loss) income
before net interest (income) expense, income taxes, depreciation and amortization and is adjusted for (1) share-based compensation and
(2) 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. A reconciliation of adjusted EBITDA to net (loss) income, 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 ended March 31, 2024. 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 ended March 31,
2024. During the course of the preparation of the Company’s consolidated financial statements and related notes as of and for the
three months ended March 31, 2024, 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 identified and discussed in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and other reports filed with the Securities and Exchange
Commission. 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.
# # #
Investor Contact:
Ryan Gardella
ICR, Inc.
Ryan.Gardella@icrinc.com
- Financial tables follow-
TRANSACT TECHNOLOGIES INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Preliminary and Unaudited)
| | |
Three months ended
March 31, | |
| | |
2024 | | |
2023 | |
| | |
(In thousands, except per share data) | |
| | |
| | |
| |
| Net sales | |
$ | 10,687 | | |
$ | 22,270 | |
| Cost of sales | |
| 5,063 | | |
| 10,015 | |
| Gross profit | |
| 5,624 | | |
| 12,255 | |
| | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | |
| Engineering, design and product development | |
| 1,966 | | |
| 2,269 | |
| Selling and marketing | |
| 2,083 | | |
| 2,757 | |
| General and administrative | |
| 2,876 | | |
| 3,416 | |
| | |
| 6,925 | | |
| 8,442 | |
| Operating (loss) income | |
| (1,301 | ) | |
| 3,813 | |
| | |
| | | |
| | |
| Interest and other income (expense): | |
| | | |
| | |
| Interest, net | |
| 48 | | |
| (66 | ) |
| Other, net | |
| (60 | ) | |
| 21 | |
| | |
| (12 | ) | |
| (45 | ) |
| | |
| | | |
| | |
| (Loss) income before income taxes | |
| (1,313 | ) | |
| 3,768 | |
| Income tax benefit (expense) | |
| 277 | | |
| (629 | ) |
| Net (loss) income | |
$ | (1,036 | ) | |
$ | 3,139 | |
| | |
| | | |
| | |
| Net (loss) income per common share: | |
| | | |
| | |
| Basic | |
$ | (0.10 | ) | |
$ | 0.32 | |
| Diluted | |
$ | (0.10 | ) | |
$ | 0.31 | |
| | |
| | | |
| | |
| Shares used in per share calculation: | |
| | | |
| | |
| Basic | |
| 9,972 | | |
| 9,930 | |
| Diluted | |
| 9,972 | | |
| 10,043 | |
SUPPLEMENTAL INFORMATION
– SALES BY MARKET:
(Preliminary and Unaudited)
| | |
Three months ended
March 31, | |
| | |
2024 | | |
2023 | |
| | |
(In thousands) | |
| | |
| | |
| |
| Food service technology | |
$ | 3,300 | | |
$ | 3,458 | |
| POS automation | |
| 651 | | |
| 1,797 | |
| Casino and gaming | |
| 5,696 | | |
| 15,811 | |
| TransAct Services Group | |
| 1,040 | | |
| 1,204 | |
| Total net sales | |
$ | 10,687 | | |
$ | 22,270 | |
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Preliminary and Unaudited)
| | |
March 31, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| Assets: | |
(In thousands) | |
| Current assets: | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 10,631 | | |
$ | 12,321 | |
| Accounts receivable, net | |
| 7,780 | | |
| 9,824 | |
| Inventories | |
| 19,171 | | |
| 17,759 | |
| Prepaid income taxes | |
| 352 | | |
| 322 | |
| Other current assets | |
| 931 | | |
| 773 | |
| Total current assets | |
| 38,865 | | |
| 40,999 | |
| | |
| | | |
| | |
| Fixed assets, net | |
| 2,187 | | |
| 2,421 | |
| Right-of-use assets | |
| 1,371 | | |
| 1,602 | |
| Goodwill | |
| 2,621 | | |
| 2,621 | |
| Deferred tax assets | |
| 6,691 | | |
| 6,304 | |
| Intangible assets, net | |
| 50 | | |
| 88 | |
| Other assets | |
| 133 | | |
| 163 | |
| | |
| 13,053 | | |
| 13,199 | |
| Total assets | |
$ | 51,918 | | |
$ | 54,198 | |
| | |
| | | |
| | |
| Liabilities and Shareholders’ Equity: | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Revolving loan payable | |
$ | 2,250 | | |
$ | 2,250 | |
| Accounts payable | |
$ | 4,226 | | |
| 4,431 | |
| Accrued liabilities | |
| 4,126 | | |
| 4,947 | |
| Lease liabilities | |
| 941 | | |
| 929 | |
| Deferred revenue | |
| 925 | | |
| 1,079 | |
| Total current liabilities | |
| 12,468 | | |
| 13,636 | |
| | |
| | | |
| | |
| Deferred revenue, net of current portion | |
| 196 | | |
| 209 | |
| Lease liabilities, net of current portion | |
| 468 | | |
| 720 | |
| Other liabilities | |
| 215 | | |
| 219 | |
| | |
| 879 | | |
| 1,148 | |
| Total liabilities | |
| 13,347 | | |
| 14,784 | |
| | |
| | | |
| | |
| Shareholders’ equity: | |
| | | |
| | |
| Common stock | |
| 140 | | |
| 140 | |
| Additional paid-in capital | |
| 57,249 | | |
| 57,055 | |
| Retained earnings | |
| 13,342 | | |
| 14,378 | |
| Accumulated other comprehensive loss, net of tax | |
| (50 | ) | |
| (49 | ) |
| Treasury stock, at cost | |
| (32,110 | ) | |
| (32,110 | ) |
| Total shareholders’ equity | |
| 38,571 | | |
| 39,414 | |
| Total liabilities and shareholders’ equity | |
$ | 51,918 | | |
$ | 54,198 | |
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA
AND ADJUSTED EBITDA
NON-GAAP FINANCIAL MEASURES
(Preliminary and Unaudited)
| | |
Three Months Ended | |
| | |
March 31, | |
| | |
2024 | | |
2023 | |
| | |
(In thousands) | |
| | |
| | |
| |
| Net (loss) income | |
$ | (1,036 | ) | |
$ | 3,139 | |
| | |
| | | |
| | |
| Interest (income) expense, net | |
| (48 | ) | |
| 66 | |
| Income tax (benefit) expense | |
| (277 | ) | |
| 629 | |
| Depreciation and amortization | |
| 395 | | |
| 352 | |
| | |
| | | |
| | |
| EBITDA | |
| (966 | ) | |
| 4,186 | |
| | |
| | | |
| | |
| Share-based compensation expense | |
| 265 | | |
| 278 | |
| | |
| | | |
| | |
| Adjusted EBITDA | |
$ | (701 | ) | |
$ | 4,464 | |
| | |
| | | |
| | |
