HAMDEN, Conn., March 6, 2008 (PRIME NEWSWIRE) -- 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 year ended December 31, 2007.
Revenues for the fourth quarter of 2007 were $11.6 million, compared to $15.7 million in the same period a year ago. The Company recorded a GAAP net loss of $(1.3) million in the fourth quarter of 2007, compared to GAAP net income of $1.0 million in the same period of 2006. The GAAP net loss per share for the three months ended December 31, 2007 was $(0.14) per diluted share, compared to GAAP net income of $0.10 per diluted share in the same period a year ago. The GAAP results for the fourth quarter of 2007 included an incremental inventory reserve charge of $528,000 specifically related to certain obsolete electronic components and discontinued printer products, a charge of $39,000 for severance associated with the termination of certain employees under the previously announced business structure change, and $1.2 million of legal fees related to the ongoing litigation against FutureLogic, Inc. Excluding these items, pro forma net loss in the fourth quarter of 2007 was approximately $(0.1) million, or $(0.01) per diluted share. For further information regarding the presentation of pro forma non-GAAP financial measures, please refer to the "Financial Presentation" paragraph below.
Revenues for the year ended December 31, 2007 were $48.8 million, compared to $64.3 million in the same period a year ago. The Company recorded a GAAP net loss in 2007 of $(2.3) million, compared to GAAP net income of $3.9 million in 2006. The GAAP net loss per share in 2007 was $(0.24) per diluted share, compared to GAAP net income of $0.40 per diluted share in 2006. The GAAP results for 2007 included an incremental inventory reserve charge of $528,000 specifically related to certain obsolete electronic components and discontinued printer products, a charge of $187,000 for severance associated with the termination of certain employees under the previously announced business structure change, and $2.9 million of legal fees related to the ongoing litigation against FutureLogic, Inc. Excluding these items, pro forma net income in 2007 was approximately $0.1 million, or $0.01 per diluted share. For further information regarding the presentation of pro forma non-GAAP financial measures, please refer to the "Financial Presentation" paragraph below.
Bart C. Shuldman, Chairman, President and Chief Executive Officer of TransAct Technologies, said, "We are becoming increasingly optimistic about the prospects for all of 2008. Beginning with the first quarter of 2008, we believe we will experience revenue growth in most of our printer product lines compared to 2007. We are optimistic that the softness in the domestic casino and worldwide lottery market that affected our revenues in all of 2007 appears to be coming to an end. Industry reports indicate that as the year progresses the domestic casino market will continue to improve as new casinos are built and existing casinos begin upgrading their machines for server based gaming. Of note in the lottery market, we have already received approximately $8.0 million in thermal printer orders for shipment in 2008. We are also pleased with what we see for all of 2008 in our off-premise gaming market. This is an exciting opportunity for TransAct, especially in the international markets. And finally, having recently launched our new BANKjet(r) 2500 printer and implemented focused sales initiatives in the point of sale market, we expect to see revenues improve in our banking and point of sale market during 2008. Overall, we believe we are in an excellent position to capitalize on the initiatives we put in place in 2007."
Steven A. DeMartino, Executive Vice President and Chief Financial Officer of TransAct Technologies, commented, "Over the past year, we made significant efforts to reduce costs in our business while also focusing our sales efforts in specific areas of growth and profitability. We believe the cost controls that we implemented in 2007, coupled with our new sales initiatives, will favorably impact our results and improve our margins in 2008. Further, our balance sheet remains strong and we ended 2007 with $2.6 million of cash and no debt."
Mr. DeMartino continued, "During the fourth quarter of 2007, we purchased approximately 47,000 shares of our common stock for approximately $0.2 million under our $15 million stock repurchase program. This brings total shares purchased to date under the buyback plan to 1,034,000, for a total of approximately $8.0 million, at an average price of $7.73 per share."
Financial Presentation
The Company has provided pro forma non-GAAP financial measures because the Company believes that these amounts are helpful to investors and others to more accurately assess the ongoing nature of TransAct's core operations. The pro forma non-GAAP measures exclude the effect in the three months and year ended December 31, 2007 and 2006 of an incremental inventory reserve charge related to certain obsolete electronic components and discontinued printer products, severance associated with the termination of certain employees, legal fees related to the lawsuit with FutureLogic, Inc., and restructuring expenses related to the closing of the Company's Wallingford, CT facility. These items have been excluded from pro forma non-GAAP financial measures, as management does not believe that they are representative of underlying trends in the Company's performance. Their exclusion provides investors and others with additional information to more readily assess the Company's operating results. 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 the financial information prepared in accordance with GAAP.
Investor Conference Call / Webcast Details
TransAct will review detailed fourth quarter 2007 results during a conference call today at 5:00 PM ET. The conference call-in number is 201-689-8471. A replay of the call will be available from 8:00 PM ET on Thursday, March 6 through midnight ET on Thursday, March 13 by telephone at 201-612-7415. The account number to access the replay is 3055 and the password is 271524. Investors can also access the conference call via a live webcast on the Company's Web site at 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(r) and Epic product brands. TransAct distributes its products through OEMs, value-added resellers, selected distributors, and direct to end-users. TransAct has over two million printers installed around the world. TransAct also has a strong focus on the after-market side of the business, with a high commitment to printer service, supplies and spare parts. 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", "project" 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; reductions, delays or cancellations in orders from significant customers; dependence on significant vendors; 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; risks associated with potential future acquisitions; and the outcome of the lawsuit between TransAct and FutureLogic, Inc. 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 OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three months ended December 31,
--------------------------------------------------------
2007 2006
--------------------------- --------------------------
GAAP Adjust- Pro Forma GAAP Adjust- Pro Forma
Basis ments Basis Basis ments Basis
------- -------- ------- ------- ------- -------
Net sales $11,614 $ -- $11,614 $15,713 $ -- $15,713
Cost of sales 8,196 (528)(a) 7,668 10,219 -- 10,219
------- -------- ------- ------- ------- -------
Gross profit 3,418 528 3,946 5,494 -- 5,494
------- -------- ------- ------- ------- -------
Operating
expenses:
Engineering,
design and
product
development 845 -- 845 673 -- 673
Selling and
marketing 1,740 -- 1,740 2,008 -- 2,008
General and
administra-
tive 1,649 (39)(b) 1,610 1,729 (5)(b) 1,724
Legal fees
associated
with lawsuit 1,192 (1,192)(c) -- 40 (40)(c) --
Business con-
solidation
and restruc-
turing -- -- -- (479) 479(d) --
------- -------- ------- ------- ------- -------
5,426 (1,231) 4,195 3,971 434 4,405
------- -------- ------- ------- ------- -------
Operating in-
come (loss) (2,008) 1,759 (249) 1,523 (434) 1,089
------- -------- ------- ------- ------- -------
Other income
(expense):
Interest,
net 18 -- 18 42 -- 42
Other, net 17 -- 17 (22) -- (22)
------- -------- ------- ------- ------- -------
35 -- 35 20 -- 20
------- -------- ------- ------- ------- -------
Income (loss)
before income
taxes (1,973) 1,759 (214) 1,543 (434) 1,109
Income tax
provision
(benefit) (654) 542(e) (112) 560 (158)(e) 402
------- -------- ------- ------- ------- -------
Net income
(loss) $(1,319) $ 1,217 $ (102) $ 983 $ (276) $ 707
------- -------- ------- ------- ------- -------
Net income
(loss) per
share:
Basic $ (0.14) $ (0.01) $ 0.10 $ 0.07
Diluted $ (0.14) $ (0.01) $ 0.10 $ 0.07
Shares used in
per share
calculation:
Basic 9,284 9,284 9,546 9,546
Diluted 9,284 9,284 9,783 9,783
(a) Incremental inventory reserve charge of $528,000 specifically
related to certain obsolete electronic components and
discontinued printer products.
(b) Severance charge of $39,000 and $5,000 in 2007 and 2006,
respectively, associated with the termination of certain
employees.
(c) Legal expenses of $1,192,000 and $40,000 in 2007 and 2006,
respectively, related to the lawsuit with FutureLogic, Inc.
(d) Reversal of benefit of $479,000 in 2006 related to the closing
of the Company's Wallingford, CT facility.
(e) The tax effect on the adjustments.
TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year ended December 31,
--------------------------------------------------------
2007 2006
--------------------------- --------------------------
GAAP Adjust- Pro Forma GAAP Adjust- Pro Forma
Basis ments Basis Basis ments Basis
------- -------- ------- ------- ------- -------
Net sales $48,766 $ -- $48,766 $64,328 $ -- $64,328
Cost of
sales 32,770 (528)(a) 32,242 41,963 -- 41,963
------- -------- ------- ------- ------- -------
Gross profit 15,996 528 16,524 22,365 -- 22,365
------- -------- ------- ------- ------- -------
Operating
expenses:
Engineering,
design and
product de-
velopment 3,129 -- 3,129 2,824 -- 2,824
Selling and
marketing 6,708 -- 6,708 6,892 -- 6,892
General and
adminis-
trative 6,995 (187)(b) 6,808 6,925 (112)(b) 6,813
Legal fees
associated
with
lawsuit 2,907 (2,907)(c) -- 115 (115)(c) --
Business
consolida-
tion and
restruc-
turing 12 (12)(d) -- (479) 479(d) --
------- -------- ------- ------- ------- -------
19,751 (3,106) 16,645 16,277 252 16,529
------- -------- ------- ------- ------- -------
Operating
income
(loss) (3,755) 3,634 (121) 6,088 (252) 5,836
------- -------- ------- ------- ------- -------
Other income
(expense):
Interest,
net 76 -- 76 104 -- 104
Other, net 21 -- 21 (159) -- (159)
------- -------- ------- ------- ------- -------
97 -- 97 (55) -- (55)
------- -------- ------- ------- ------- -------
Income (loss)
before in-
come taxes (3,658) 3,634 (24) 6,033 (252) 5,781
Income tax
provision
(benefit) (1,384) 1,268(e) (116) 2,117 (88)(e) 2,029
------- -------- ------- ------- ------- -------
Net income
(loss) $(2,274) $ 2,366 $ 92 $ 3,916 $ (164) $ 3,752
------- -------- ------- ------- ------- -------
Net income
(loss) per
share:
Basic $ (0.24) $ 0.01 $ 0.41 $ 0.39
Diluted $ (0.24) $ 0.01 $ 0.40 $ 0.38
Shares used
in per share
calculation:
Basic 9,364 9,364 9,577 9,577
Diluted 9,364 9,552 9,870 9,870
(a) Incremental inventory reserve charge of $528,000 specifically
related to certain obsolete electronic components and
discontinued printer products.
(b) Severance charge of $187,000 and $112,000 in 2007 and 2006,
respectively, associated with the termination of certain
employees.
(c) Legal expenses of $2,907,000 and $115,000 in 2007 and 2006,
respectively, related to the lawsuit with FutureLogic, Inc.
(d) Charge of $12,000 in 2007 and reversal of benefit of $479,000
in 2006 related to the closing of the Company's Wallingford, CT
facility.
(e) The tax effect on the adjustments.
SUPPLEMENTAL INFORMATION - SALES BY SALES UNIT:
Three months ended Year ended
December 31, December 31,
----------------- -----------------
2007 2006 2007 2006
------- ------- ------- -------
Banking and point-of-sale $ 2,341 $ 4,140 $11,046 $16,858
Gaming and lottery 6,758 8,394 25,338 34,677
TransAct services group 2,515 3,179 12,382 12,793
------- ------- ------- -------
Total net sales $11,614 $15,713 $48,766 $64,328
------- ------- ------- -------
TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
December 31,
(In thousands) 2007 2006
-------- --------
Assets:
Current assets:
Cash and cash equivalents $ 2,561 $ 3,436
Receivables, net 6,128 11,422
Inventories 8,665 7,567
Refundable income taxes 51 42
Deferred tax assets 1,529 2,167
Other current assets 362 506
-------- --------
Total current assets 19,296 25,140
-------- --------
Fixed assets, net 6,338 5,938
Goodwill, net 1,469 1,469
Deferred tax assets 3,019 542
Intangibles and other assets 482 617
-------- --------
11,308 8,566
-------- --------
Total assets $ 30,604 $ 33,706
======== ========
Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable $ 4,688 $ 3,997
Accrued liabilities 2,852 3,796
Accrued restructuring expenses -- 315
Deferred revenue 522 389
-------- --------
Total current liabilities 8,062 8,497
-------- --------
Deferred revenue, net of current portion 211 508
Accrued warranty, net of current portion 91 160
Accrued rent 507 251
Other liabilities 125 --
-------- --------
934 919
-------- --------
Total liabilities 8,996 9,416
-------- --------
Shareholders' equity:
Common stock 104 104
Additional paid-in capital 19,872 19,105
Retained earnings 9,449 11,405
Accumulated other comprehensive income 178 168
Treasury stock (7,995) (6,492)
-------- --------
Total shareholders' equity 21,608 24,290
-------- --------
$ 30,604 33,706
======== ========