August 9, 2011

TransAct Technologies Reports Second Quarter 2011 Results

HAMDEN, Conn., Aug. 9, 2011 (GLOBE NEWSWIRE) -- TransAct Technologies Incorporated (Nasdaq:TACT), a global leader in market-specific printers for transaction-based industries, today announced financial results for the three and six months ended June 30, 2011. Summary results for the periods are as follows:

 Three months ended June 30,Six months ended June 30,
(in $000s, except EPS)
2011

2010
%
change

2011

2010
%
change
Net Sales  $17,519 $16,443 6.5% $38,213 $30,651 24.7%
Operating income 2,210 1,798 22.9% 4,998 2,780 79.8%
Net income 1,442 1,145 25.9% 3,267 1,774 84.2%
Diluted earnings per share $0.15 $0.12 25.0% $0.34 $0.19  78.9%

"I am pleased with our second quarter 2011 results as we continue to grow our top line while successfully keeping our operating expenses in check, resulting in improving margins," said Bart C. Shuldman, Chairman and Chief Executive Officer of TransAct Technologies. "For the quarter, TransAct experienced a second consecutive quarter of significant growth in the lottery market, largely due to sales of our new thermal lottery printer for GTECH. We are also excited about the recent contract we signed for our new EPICENTRAL™ software system, which will be going live shortly, as well as the announcement of our acquisition of Printrex, Inc. which we believe will be a key component in our growth strategy going forward."

Mr. Shuldman continued, "For the second quarter of 2011, our overall lottery printer sales were up 103% from the prior-year quarter due to significant orders from GTECH for our new thermal lottery printer. Overall casino and gaming printer sales declined 6% from the prior-year period; domestic casino and gaming printer sales increased 14% in the quarter even as the domestic market continues to struggle, as we believe we gained market share during the quarter. However, international casino and gaming printer sales declined 16% during the quarter, as higher sales into the Asia-Pacific market could not offset a decline of printer shipments related to video lottery terminal installations in Italy during 2010 that did not repeat in 2011. Banking and POS printer sales declined 29%, as we experienced lower POS sales primarily due to fulfilling a large order to a retail customer in the second quarter of 2010. TransAct Services Group revenue increased by 1% compared to the second quarter of 2010, primarily due to a 14% increase in sales of consumable products mostly offset by lower service revenue. Lastly, our balance sheet remains solid, with $10.9 million in cash and no debt outstanding as of June 30, 2011."

Second Quarter 2011 Results

Revenue for the second quarter of 2011 was $17.5 million, an increase of 7% compared to $16.4 million in the prior-year period. Gross margin for the second quarter of 2011 was 38.0%, compared to 37.4% in the prior-year quarter due to lower manufacturing overhead expenses on higher sales volume. Operating expenses were $4.5 million, an increase of $0.1 million from the prior-year period, driven largely by a restructuring charge of $0.2 million related to the closing of the New Britain, CT service facility. Excluding this charge, operating expenses declined $0.1 million from the prior-year period. The Company recorded net income in the second quarter of 2011 of approximately $1.4 million, or $0.15 per diluted share, compared to net income of approximately $1.1 million, or $0.12 per diluted share, in the prior-year period. 

Commenting on the financial results, Steven A. DeMartino, President and Chief Financial Officer of TransAct Technologies said, "We are pleased with our quarterly financial results that were again driven by higher lottery printer sales. In addition, we were able to increase our gross margin in the quarter and raise our operating margin to 12.6%, once again demonstrating the leverage in our business model." 

Six Month 2011 Results

Revenue for the six months ended June 30, 2011 was $38.2 million, an increase of 25% compared to $30.7 million in the prior-year period. Gross margin for the six months ended June 30, 2011 was 35.6%, a decrease of approximately 140 basis points from 37.0% in the prior-year period. Operating expenses for the first half of 2011, which included a restructuring charge of $0.2 million related to the closing of the New Britain, CT service facility, were $8.6 million, consistent with the prior-year period. Excluding the restructuring charge, operating expenses declined $0.2 million from the prior-year period. The Company recorded net income of approximately $3.3 million, or $0.34 per diluted share, for the six months ended June 30, 2011, compared to net income of approximately $1.8 million, or $0.19 per diluted share, for the prior-year period. 

Subsequent Event

On August 3, 2011, TransAct announced it entered into an agreement to acquire substantially all the assets of Printrex, Inc., a leading manufacturer of high-performance specialty printers primarily sold into the oil and gas exploration market, for $4 million plus contingent consideration related to new products under development. The acquisition is expected to close in the third quarter of 2011, subject to customary closing conditions.

Liquidity and Capital Resources

As of June 30, 2011, TransAct had approximately $10.9 million in cash and cash equivalents, and no debt obligations outstanding under its $20 million revolving credit facility. During the second quarter of 2011, the Company repurchased 108,763 shares for approximately $1.3 million (average price of $11.94 per share) under its stock repurchase program. TransAct's $10 million repurchase program allows the Company to repurchase up to $8.0 million in additional shares through May 2013.

Investor Conference Call / Webcast Details

TransAct will review detailed second quarter 2011 results during a conference call today at 5:00 PM EDT. The conference call-in number is 888-312-9837. A replay of the call will be available from 8:00 PM EDT on Tuesday, August 9 through midnight EDT on Tuesday, August 16 by telephone at 877-870-5176; passcode 4706779. 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 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.

The TransAct Technologies, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10061

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, the Company's ability to successfully integrate the Printrex business with its existing operations, 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 contractor manufacturer for the assembly of a large portion of our products in China; 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.

TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
   
 Three Months EndedSix Months Ended
(In thousands, except per share amounts)June 30,June 30,
 2011 20102011 2010
Net sales$17,519 $16,443$38,213 $30,651
Cost of sales10,856 10,28824,618 19,307
Gross profit6,663 6,15513,595 11,344
       
Operating expenses:      
Engineering, design and product development815 7991,584 1,544
Selling and marketing1,653 1,6183,172 3,201
General and administrative1,801 1,9403,657 3,819
Restructuring184 --184 --
 4,453 4,3578,597 8,564
Operating income2,210 1,7984,998 2,780
       
Other expense:      
Interest, net7 611 8
Other, net2 217 8
 9 828 16
       
Income before income taxes2,219 1,8065,026 2,796
Income taxes777 6611,759 1,022
Net income$1,442 $1,1453,267 $1,774
       
Net income per common share:      
Basic$0.15 $0.12$0.35 $0.19
Diluted$0.15 $0.12$0.34 $0.19
       
Shares used in per share calculation:      
Basic9,388 9,3949,417 9,371
Diluted9,667 9,5629,676 9,543
 
 
SUPPLEMENTAL INFORMATION — SALES BY SALES UNIT:
 Three months endedSix months ended
 June 30,June 30,
 2011 20102011 2010
Banking and point-of-sale$2,826 $3,964$5,288 $6,317
Casino and gaming5,947 6,29912,901 13,260
Lottery4,973 2,45012,515 4,106
TransAct Services Group3,773 3,7307,509 6,968
Total net sales$17,519 $16,443$38,213 $30,651
 
 
TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 June 30, December 31,
(In thousands)2011 2010
Assets:   
Current assets:   
Cash and cash equivalents$10,948 $11,285
Receivables, net10,414 10,864
Inventories12,704 12,795
Deferred tax assets1,705 1,705
Other current assets493 403
Total current assets36,264 37,052
    
Fixed assets, net3,604 4,071
Goodwill1,469 1,469
Deferred tax assets784 789
Intangible and other assets, net774 240
 6,631 6,569
Total assets$42,895 $43,621
    
Liabilities and Shareholders' Equity:   
Current liabilities:   
Accounts payable$5,184 $8,342
Accrued liabilities2,466 2,865
Deferred revenue272 320
Total current liabilities7,922 11,527
    
Deferred revenue, net of current portion271 295
Deferred rent, net of current portion375 393
Other liabilities338 272
 984 960
Total liabilities8,906 12,487
    
Shareholders' equity:   
Common stock108 106
Additional paid-in capital24,296 22,875
Retained earnings20,204 16,937
Accumulated other comprehensive loss, net of tax(61) (69)
Treasury stock, at cost(10,558) (8,715)
Total shareholders' equity33,989 31,134
Total liabilities and shareholders' equity$42,895 $43,621
    
CONTACT: TransAct Technologies Incorporated

         Steven DeMartino, President and Chief Financial Officer

         203-859-6810

         

         ICR Inc.

         William Schmitt

         203-682-8200


Close window | Back to top

Copyright 2014 TransAct Technologies Incorporated