TransAct Technologies Incorporated (Nasdaq:TACT) (“TransAct” or the
“Company”) today reported operating results for the third quarter ended
September 30, 2014, as summarized below:
Summary of 2014 Q3 Results
|
(In millions, except per share and percentage data)
|
|
|
|
Three Months Ended
|
|
|
September 30,
|
|
|
2014
|
|
2013
|
Net sales
|
|
$
|
13.4
|
|
|
$
|
16.8
|
|
Gross profit
|
|
$
|
5.3
|
|
|
$
|
7.2
|
|
Gross margin
|
|
|
39.5
|
%
|
|
|
43.0
|
%
|
Operating income
|
|
$
|
0.1
|
|
|
$
|
1.9
|
|
EBITDA(1)
|
|
$
|
0.4
|
|
|
$
|
2.3
|
|
Net income
|
|
$
|
0.1
|
|
|
$
|
1.5
|
|
Diluted earnings per share
|
|
$
|
0.01
|
|
|
$
|
0.17
|
|
|
|
|
|
|
Adjusted operating income(2)
|
|
$
|
0.4
|
|
|
$
|
2.1
|
|
Adjusted EBITDA(1)
|
|
$
|
0.9
|
|
|
$
|
2.6
|
|
Adjusted net income(2)
|
|
$
|
0.3
|
|
|
$
|
1.5
|
|
Adjusted diluted earnings per share(2)
|
|
$
|
0.04
|
|
|
$
|
0.18
|
|
(1)
|
|
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 Generally Accepted Accounting
Principles (“GAAP”) financial measure, can be found attached to this
release. Adjusted EBITDA is defined as net income before net
interest expense, income taxes, depreciation, amortization and
adjusted for share-based compensation and the impact of certain
legal fees and accrued contingent consideration as described later
in this release. A reconciliation of Adjusted EBITDA to net income,
the most comparable GAAP financial measure, can be found attached to
this release.
|
(2)
|
|
Reconciliations of GAAP financial measures to corresponding non-GAAP
financial measures can be found attached to this release.
|
|
Bart Shuldman, Chairman and Chief Executive Officer of TransAct,
commented, “As anticipated, the third quarter results reflect lower
overall contributions from casino and gaming operations as a result of
ongoing challenges in the gaming industry. Despite the current casino
and gaming industry environment, TransAct is maintaining its strong
world-wide market share of printer sales. Importantly, we are taking
direct action to bring our costs in line with the current outlook for
the domestic casino market through cost cutting initiatives of
approximately $1,000,000 on an annualized basis while simultaneously
continuing to invest in and fund our high growth opportunities. By
prioritizing our organizational focus on our Epicentral® promotional and
bonusing print system, our Ithaca® line of food safety terminals and our
Printrex® line of color printers for the oil and gas seismic and
exploration industry, we expect to grow our revenues while further
diversifying our revenue base which will benefit operating results as
our sales mix shifts toward higher gross margin businesses.
“Our Ithaca line of food safety terminals, which was launched with the
Ithaca 9700 a little over two years ago, remains an exciting high-growth
opportunity that we are actively pursuing. Recent approvals of the
Ithaca 9700 by a number of national restaurant and foodservice operators
highlight the progress we are achieving with industry operators in
demonstrating the effectiveness and benefits of this solution and our
ability to generate an attractive return on their investment. In
addition, we believe the Ithaca 9800 will be the next wave of technology
that certain restaurants and food service providers will need and we are
making consistent progress with the systems integration process with
large food service software providers for this terminal. We expect sales
of the Ithaca 9800 will help to further accelerate market penetration
and revenue contributions from this product line beginning late in 2015.
“With Epicentral-enabled casino locations continuing to report improved
performance metrics including increased visitation, new enrollment in
loyalty programs and additional play, we are gaining traction as the
casino and gaming industry is increasingly seeking cost-effective
solutions that demonstrate measurable success in growing revenue.
Epicentral remains an attractive growth opportunity for TransAct,
particularly as we continue to accelerate relationships with
international casino operators for this solution.
“The rollout of our Printrex oil and gas seismic and exploration color
printer for office installations is progressing very well as the pace of
sales has exceeded our initial expectations. This success is promising
for future results as each Printrex 980 office color printer generates
on average approximately $20,000 in annual recurring revenue, and the
annualized run rate for Printrex-related recurring consumables revenue
has now neared $1 million. We believe sales activity for this line of
products will continue to grow as we further penetrate the office market
and make consistent progress with the multi-step process to integrate
the Printrex 920 logging truck and offshore platform color printer into
the operations of oil and gas exploration businesses.”
Mr. Shuldman concluded, “With the high value our Epicentral, Ithaca and
Printrex products bring to their respective industries, the ongoing
rollout of these new products is expected to improve our future
financial performance. We continue to invest to support these business
lines, as well as the BANKjet 3000, our newest solution for the retail
banking industry which brings customer-favorite check image printing
capabilities to the teller window, and our Responder MP2 all-in-one
mobile printing solution is planned for launch at the end of this year
which will mark our entry into the large machine-to-machine (M2M)
vertical market. Management’s and our Board’s belief in our ability to
execute on these high growth opportunities is underscored by our ongoing
commitment to return capital to shareholders. In this regard, our
quarterly cash dividend represents an attractive annualized yield and
our recently announced 10b5-1 trading plan will enable TransAct to
repurchase up to $4 million of our outstanding shares on an accelerated
schedule.”
Solid Financial Flexibility and Review of Capital Return Initiatives
As of September 30, 2014, TransAct had approximately $3.1 million of
cash and cash equivalents and no debt. During the 2014 third quarter,
the Company paid a dividend to shareholders of $0.08 per share and
repurchased approximately 109,000 shares of its common stock for total
consideration of approximately $0.8 million. In the first nine months of
2014, the Company has returned approximately $2.7 million of capital to
shareholders.
Earlier this week, TransAct announced that its Board of Directors had
declared a quarterly cash dividend of $0.08 per share payable December
15, 2014, to shareholders of record at the close of business on November
20, 2014. In addition, the Board approved a modification to the August
2014 $7.5 million stock repurchase authorization.
The modified share repurchase plan authorizes the repurchase of up to $4
million of the Company’s outstanding shares through April 30, 2015
pursuant to a new Rule 10b5-1 trading plan. The Rule 10b5-1 plan allows
the Company to adopt a written plan for trading securities in a
non-discretionary, pre-scheduled manner including during normal
quarterly blackout periods. Reflecting the share repurchases completed
in the third quarter of 2014, TransAct has approximately $6.7 remaining
under its share repurchase authorization, $4.0 million of which is being
allocated to the recently approved Rule 10b5-1 trading plan.
Steve DeMartino, President and Chief Financial Officer of TransAct,
commented, “TransAct has the financial capacity to both invest in the
Epicentral, Ithaca and Printrex brands’ growth opportunities while
simultaneously supporting our goal to enhance shareholder value through
the return of capital. With a solid portfolio of innovative products for
high growth market opportunities now developed, we can reduce our level
of investment in product development during 2015. Combined with efforts
to reduce our overall cost structure, we believe the Company’s financial
foundation will continue to support our initiatives to profitably
diversify our revenue base.”
Summary of 2014 Third Quarter Operating Results
TransAct generated 2014 third quarter net sales of $13.4 million
compared with net sales of $16.8 million in the 2013 third quarter.
Casino and gaming revenue in the 2014 third quarter was $5.1 million
compared to $7.5 million in the prior year period, reflecting lower
sales of casino printers to original equipment manufacturers and lower
domestic Epicentral revenue as the year-ago period included one domestic
Epicentral software installation compared to no domestic installations
in the 2014 third quarter. International casino and gaming revenue
increased $0.5 million year over year reflecting higher printer sales
partially offset by lower international Epicentral revenue. Food safety,
point-of-sale (POS) and banking revenue decreased by $1.0 million to
$2.6 million in the 2014 third quarter and was essentially flat on a
quarterly sequential basis. Sales of the Ithaca® 9700 food safety
terminal in the prior-year quarter included a $1.5 million stocking
order to a large distributor that did not repeat in the 2014 third
quarter. Revenue from point-of-sale printers increased $0.3 million to
$1.7 million reflecting the continued rollout for a new checkout
application at McDonalds. Lottery printer sales for the 2014 third
quarter were $1.5 million, compared with lottery sales of $1.0 million
in the 2013 third quarter. Printrex® revenues were $1.0 million in the
2014 third quarter compared to $1.1 million in the year-ago period. The
Company’s TransAct Services Group recorded net sales of $3.2 million
compared to net sales of $3.5 million in the year-ago period, reflecting
a 50% year-over-year increase in Printrex-related consumables that was
more than offset by a decline in HP inkjet cartridge sales due to
year-over-year declines in the Company’s installed base as well as lower
spare parts and service revenue.
Gross margin of 39.5% in the third quarter of 2014 compares to gross
margin of 43.0% in the year-ago quarter, reflecting the year over year
revenue decline as well as an unfavorable shift in the sales mix. Gross
profit was $5.3 million compared to $7.2 million in the year-ago quarter.
Total operating expenses for the 2014 third quarter were $5.2 million
compared to $5.3 million in the year-ago quarter. Engineering, design
and product development expenses of $1.1 million were in line with the
year-ago period. Selling and marketing expenses decreased $0.2 million
to $1.8 million, reflecting lower variable expense on lower sales volume
and the shift of the Global Gaming Expo into the fourth quarter of 2014
compared to last year when this industry trade show was held in the
third quarter. General and administrative expenses were $1.9 million
compared to $2.0 million in the year-ago quarter, primarily reflecting
lower depreciation and amortization expense and lower professional fees.
TransAct incurred $0.4 million of legal fees related to the Avery
Dennison lawsuit compared to $0.1 million in the year-ago quarter.
The Company recorded operating income of $0.1 million for the 2014 third
quarter compared to $1.9 million in the 2013 third quarter. Excluding
the impact from the legal fees related to the Avery Dennison lawsuit and
an adjustment to accrued contingent consideration (detailed later in the
release), TransAct generated adjusted operating income of $0.4 million,
or 3.3% of net sales, in the third quarter of 2014 compared with
adjusted operating income of $2.1 million, or 12.3% of net sales, in the
year-ago period with the decline primarily attributable to the lower
revenue levels in the 2014 third quarter and an unfavorable sales mix
shift which impacted gross margins. Net income in the 2014 third quarter
was $0.1 million, or $0.01 per diluted share, compared to net income of
$1.5 million, or $0.17 per diluted share, in the prior-year period.
Adjusted net income was $0.3 million, or $0.04 per diluted share,
compared to $1.5 million, or $0.18 per diluted share, in the 2013 third
quarter.
2014 Third Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today, November 6,
2014, beginning at 4:30 p.m. ET. Both the call and the webcast are open
to the general public. The conference call number is 678-825-8259
(domestic or international). Please call five 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 has provided adjusted 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 adjusted non-GAAP measures exclude the effect in the
applicable periods presented of non-GAAP adjustments contained in the
tables included with this release. These items have been excluded from
adjusted 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.
Adjusted operating income is defined as operating income adjusted for
the impact of legal fees related to the lawsuit with Avery Dennison
Corporation and adjustments to accrued contingent consideration from the
Printrex acquisition.
Adjusted net income is defined as net income adjusted for the
tax-effected impact of legal fees related to the lawsuit with Avery
Dennison Corporation and adjustments to accrued contingent consideration
from the Printrex acquisition.
Adjusted diluted earnings per share is defined as adjusted net income
divided by diluted shares outstanding.
About TransAct Technologies Incorporated
TransAct Technologies Incorporated is a leader in developing and
manufacturing market-specific solutions, including printers, terminals,
software and other products for transaction-based and other industries.
These industries include casino and gaming, lottery, food safety,
banking, point-of-sale, hospitality, oil and gas, and medical and
mobile. 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 and products are designed from the
ground up based on market-specific requirements and are sold under the
Ithaca®, RESPONDER, Epic, EPICENTRAL® and Printrex® product brands.
TransAct distributes its printers and terminals through OEMs,
value-added resellers, selected distributors, and direct to end-users.
TransAct has over 2.5 million printers and terminals installed around
the world. TransAct is also committed to providing world-class printer
service, spare parts, accessories and printing supplies to its growing
worldwide installed base of products. Through its TransAct Services
Group, TransAct provides a complete range of supplies and consumable
items used in the printing and scanning activities of customers in the
hospitality, banking, retail, gaming, government and oil and gas
exploration 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, please 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" 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; 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
Asia; our ability to protect intellectual property; our ability to
recruit and retain quality employees as the Company grows; our
dependence on third parties for sales outside the United States,
including Australia, New Zealand, Europe, Latin America and Asia; the
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; the 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; our new line of food safety and oil and gas products will
drive increased adoption by customers; the outcome of the lawsuit
between TransAct and Avery Dennison Corporation; and other risk factors
detailed from time to time in TransAct's reports filed with the
Securities and Exchange Commission. 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 Ended
|
|
Nine Months Ended
|
(In thousands, except per share amounts)
|
|
September 30,
|
|
September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net sales
|
|
$
|
13,389
|
|
|
$
|
16,768
|
|
|
$
|
40,812
|
|
|
$
|
47,613
|
|
Cost of sales
|
|
|
8,103
|
|
|
|
9,562
|
|
|
|
24,012
|
|
|
|
27,522
|
|
Gross profit
|
|
|
5,286
|
|
|
|
7,206
|
|
|
|
16,800
|
|
|
|
20,091
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Engineering, design and product development
|
|
|
1,053
|
|
|
|
1,041
|
|
|
|
3,434
|
|
|
|
3,048
|
|
Selling and marketing
|
|
|
1,847
|
|
|
|
2,059
|
|
|
|
6,069
|
|
|
|
5,702
|
|
General and administrative
|
|
|
1,901
|
|
|
|
2,049
|
|
|
|
5,789
|
|
|
|
5,819
|
|
Legal fees associated with lawsuit
|
|
|
428
|
|
|
|
142
|
|
|
|
475
|
|
|
|
398
|
|
|
|
|
5,229
|
|
|
|
5,291
|
|
|
|
15,767
|
|
|
|
14,967
|
|
Operating income
|
|
|
57
|
|
|
|
1,915
|
|
|
|
1,033
|
|
|
|
5,124
|
|
|
|
|
|
|
|
|
|
|
Interest and other income (expense):
|
|
|
|
|
|
|
|
|
Interest, net
|
|
|
(12
|
)
|
|
|
(8
|
)
|
|
|
(38
|
)
|
|
|
(9
|
)
|
Other, net
|
|
|
9
|
|
|
|
(22
|
)
|
|
|
(11
|
)
|
|
|
11
|
|
|
|
|
(3
|
)
|
|
|
(30
|
)
|
|
|
(49
|
)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
54
|
|
|
|
1,885
|
|
|
|
984
|
|
|
|
5,126
|
|
Income tax provision
|
|
|
4
|
|
|
|
434
|
|
|
|
365
|
|
|
|
1,300
|
|
Net income
|
|
$
|
50
|
|
|
$
|
1,451
|
|
|
|
619
|
|
|
$
|
3,826
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.01
|
|
|
$
|
0.17
|
|
|
$
|
0.07
|
|
|
$
|
0.44
|
|
Diluted
|
|
$
|
0.01
|
|
|
$
|
0.17
|
|
|
$
|
0.07
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
8,337
|
|
|
|
8,582
|
|
|
|
8,362
|
|
|
|
8,675
|
|
Diluted
|
|
|
8,403
|
|
|
|
8,695
|
|
|
|
8,487
|
|
|
|
8,759
|
|
|
SUPPLEMENTAL INFORMATION – SALES BY SALES UNIT:
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Food safety, point-of-sale and banking
|
|
$
|
2,628
|
|
$
|
3,670
|
|
$
|
7,144
|
|
$
|
9,107
|
Casino and gaming
|
|
|
5,062
|
|
|
7,511
|
|
|
17,728
|
|
|
21,573
|
Lottery
|
|
|
1,473
|
|
|
1,025
|
|
|
3,143
|
|
|
2,889
|
Printrex
|
|
|
1,043
|
|
|
1,111
|
|
|
3,013
|
|
|
3,486
|
TransAct Services Group
|
|
|
3,183
|
|
|
3,451
|
|
|
9,784
|
|
|
10,558
|
Total net sales
|
|
$
|
13,389
|
|
$
|
16,768
|
|
$
|
40,812
|
|
$
|
47,613
|
|
TRANSACT TECHNOLOGIES INCORPORATED
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
September 30,
|
|
December 31,
|
(In thousands)
|
|
2014
|
|
2013
|
Assets:
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,071
|
|
|
$
|
2,936
|
|
Accounts receivable, net
|
|
|
11,173
|
|
|
|
13,234
|
|
Inventories
|
|
|
14,008
|
|
|
|
13,509
|
|
Deferred tax assets
|
|
|
1,633
|
|
|
|
1,655
|
|
Other current assets
|
|
|
1,001
|
|
|
|
887
|
|
Total current assets
|
|
|
30,886
|
|
|
|
32,221
|
|
|
|
|
|
|
Fixed assets, net
|
|
|
2,608
|
|
|
|
2,732
|
|
Goodwill
|
|
|
2,621
|
|
|
|
2,621
|
|
Deferred tax assets
|
|
|
900
|
|
|
|
920
|
|
Intangible assets, net
|
|
|
1,469
|
|
|
|
1,856
|
|
Other assets
|
|
|
38
|
|
|
|
58
|
|
|
|
|
7,636
|
|
|
|
8,187
|
|
Total assets
|
|
$
|
38,522
|
|
|
$
|
40,408
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity:
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
3,827
|
|
|
$
|
4,749
|
|
Accrued liabilities
|
|
|
2,903
|
|
|
|
2,215
|
|
Income taxes payable
|
|
|
7
|
|
|
|
26
|
|
Accrued contingent consideration
|
|
|
-
|
|
|
|
60
|
|
Deferred revenue
|
|
|
427
|
|
|
|
300
|
|
Total current liabilities
|
|
|
7,164
|
|
|
|
7,350
|
|
|
|
|
|
|
Deferred revenue, net of current portion
|
|
|
67
|
|
|
|
103
|
|
Deferred rent, net of current portion
|
|
|
190
|
|
|
|
244
|
|
Other liabilities
|
|
|
204
|
|
|
|
190
|
|
|
|
|
461
|
|
|
|
537
|
|
Total liabilities
|
|
|
7,625
|
|
|
|
7,887
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
Common stock
|
|
|
111
|
|
|
|
111
|
|
Additional paid-in capital
|
|
|
28,172
|
|
|
|
27,674
|
|
Retained earnings
|
|
|
26,033
|
|
|
|
27,326
|
|
Accumulated other comprehensive loss, net of tax
|
|
|
(66
|
)
|
|
|
(63
|
)
|
Treasury stock, at cost
|
|
|
(23,353
|
)
|
|
|
(22,527
|
)
|
Total shareholders’ equity
|
|
|
30,897
|
|
|
|
32,521
|
|
Total liabilities and shareholders’ equity
|
|
$
|
38,522
|
|
|
$
|
40,408
|
|
|
TRANSACT TECHNOLOGIES INCORPORATED
|
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO
CORRESPONDING
|
NON-GAAP FINANCIAL MEASURES
|
(Unaudited, thousands of dollars, except percentages and per
share amounts)
|
|
|
|
Three months ended
|
|
|
September 30, 2014
|
|
|
|
|
|
|
Adjusted
|
|
|
Reported
|
|
Adjustments(1)
|
|
Non-GAAP
|
Operating expenses
|
|
$
|
5,229
|
|
|
|
($388
|
)
|
|
$
|
4,841
|
|
% of net sales
|
|
|
39.1
|
%
|
|
|
|
|
36.2
|
%
|
|
|
|
|
|
|
|
Operating income
|
|
|
57
|
|
|
|
388
|
|
|
|
445
|
|
% of net sales
|
|
|
0.4
|
%
|
|
|
|
|
3.3
|
%
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
54
|
|
|
|
388
|
|
|
|
442
|
|
Income tax provision
|
|
|
4
|
|
|
|
136
|
|
|
|
140
|
|
Net income
|
|
|
50
|
|
|
|
252
|
|
|
|
302
|
|
Diluted net income per share
|
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
0.04
|
|
|
|
|
(1)
|
|
Adjustment includes (i) $40 of income related to an adjustment to
accrued contingent consideration from the Printrex acquisition and
(ii) $428 of legal and other expenses related to the lawsuit with
Avery Dennison Corporation. Such adjustments were tax effected using
an effective tax rate of 35%.
|
|
|
Three months ended
|
|
|
September 30, 2013
|
|
|
|
|
|
|
Adjusted
|
|
|
Reported
|
|
Adjustments (2)
|
|
Non-GAAP
|
Operating expenses
|
|
$
|
5,291
|
|
|
|
($142
|
)
|
|
$
|
5,149
|
|
% of net sales
|
|
|
31.6
|
%
|
|
|
|
|
30.7
|
%
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,915
|
|
|
|
142
|
|
|
|
2,057
|
|
% of net sales
|
|
|
11.4
|
%
|
|
|
|
|
12.3
|
%
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
1,885
|
|
|
|
142
|
|
|
|
2,027
|
|
Income tax provision
|
|
|
434
|
|
|
|
48
|
|
|
|
482
|
|
Net income
|
|
|
1,451
|
|
|
|
94
|
|
|
|
1,545
|
|
Diluted net income per share
|
|
$
|
0.17
|
|
|
$
|
0.01
|
|
|
$
|
0.18
|
|
|
|
|
(2)
|
|
Adjustment includes $142 of legal and other expenses related to the
lawsuit with Avery Dennison Corporation tax effected using an
effective tax rate of 33.5%.
|
|
TRANSACT TECHNOLOGIES INCORPORATED
|
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO
CORRESPONDING
|
NON-GAAP FINANCIAL MEASURES
|
(Unaudited, thousands of dollars, except percentages and per
share amounts)
|
|
|
|
Nine months ended
|
|
|
September 30, 2014
|
|
|
|
|
|
|
Adjusted
|
|
|
Reported
|
|
Adjustments(3)
|
|
Non-GAAP
|
Operating expenses
|
|
$
|
15,767
|
|
|
$
|
(415
|
)
|
|
$
|
15,352
|
|
% of net sales
|
|
|
38.6
|
%
|
|
|
|
|
37.6
|
%
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,033
|
|
|
|
415
|
|
|
|
1,448
|
|
% of net sales
|
|
|
2.5
|
%
|
|
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
984
|
|
|
|
415
|
|
|
|
1,399
|
|
Income tax provision
|
|
|
365
|
|
|
|
145
|
|
|
|
510
|
|
Net income
|
|
|
619
|
|
|
|
270
|
|
|
|
889
|
|
Diluted net income per share
|
|
$
|
0.07
|
|
|
$
|
0.03
|
|
|
$
|
0.10
|
|
|
|
|
(3)
|
|
Adjustment includes (i) $60 of income related to an adjustment to
accrued contingent consideration from the Printrex acquisition and
(ii) $475 of legal and other expenses related to the lawsuit with
Avery Dennison Corporation. Such adjustments were tax effected using
an effective tax rate of 35%.
|
|
|
Nine months ended
|
|
|
September 30, 2013
|
|
|
|
|
|
|
Adjusted
|
|
|
Reported
|
|
Adjustments (4)
|
|
Non-GAAP
|
Operating expenses
|
|
$
|
14,967
|
|
|
$
|
(198
|
)
|
|
$
|
14,769
|
|
% of net sales
|
|
|
31.4
|
%
|
|
|
|
|
31.0
|
%
|
|
|
|
|
|
|
|
Operating income
|
|
|
5,124
|
|
|
|
198
|
|
|
|
5,322
|
|
% of net sales
|
|
|
10.8
|
%
|
|
|
|
|
11.2
|
%
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
5,126
|
|
|
|
198
|
|
|
|
5,324
|
|
Income tax provision
|
|
|
1,300
|
|
|
|
66
|
|
|
|
1,366
|
|
Net income
|
|
|
3,826
|
|
|
|
132
|
|
|
|
3,958
|
|
Diluted net income per share
|
|
$
|
0.44
|
|
|
$
|
0.01
|
|
|
$
|
0.45
|
|
|
|
|
(4)
|
|
Adjustment includes (i) $200 of income related to an adjustment to
accrued contingent consideration from the Printrex acquisition and
(ii) $398 of legal and other expenses related to the lawsuit with
Avery Dennison Corporation. Such adjustments were tax effected using
an effective tax rate of 33.5%.
|
|
TRANSACT TECHNOLOGIES INCORPORATED
|
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
|
NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
(In thousands)
|
|
September 30,
|
|
September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net income
|
|
$
|
50
|
|
|
$
|
1,451
|
|
|
$
|
619
|
|
|
$
|
3,826
|
|
|
|
|
|
|
|
|
|
|
Interest (income) expense, net
|
|
|
12
|
|
|
|
8
|
|
|
|
38
|
|
|
|
9
|
|
Income tax provision
|
|
|
4
|
|
|
|
434
|
|
|
|
365
|
|
|
|
1,300
|
|
Depreciation and amortization
|
|
|
357
|
|
|
|
428
|
|
|
|
1,084
|
|
|
|
1,314
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
423
|
|
|
|
2,321
|
|
|
|
2,106
|
|
|
|
6,449
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense
|
|
|
133
|
|
|
|
121
|
|
|
|
442
|
|
|
|
397
|
|
Legal fees associated with lawsuit
|
|
|
428
|
|
|
|
142
|
|
|
|
475
|
|
|
|
398
|
|
Adjustment to accrued contingent consideration
|
|
|
(40
|
)
|
|
|
-
|
|
|
|
(60
|
)
|
|
|
(200
|
)
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
944
|
|
|
$
|
2,584
|
|
|
$
|
2,963
|
|
|
$
|
7,044
|
|
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