Document And Entity Information
Document And Entity Information - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Apr. 29, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Transact Technologies Incorporated | ||
Document Type | 10-Q | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 7,659,564 | ||
Entity Public Float | $ 49,000,000 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,017,303 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Mar. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 2,892,000 | $ 4,473,000 |
Accounts receivable, net | 9,353,000 | 7,174,000 |
Inventories | 9,921,000 | 11,296,000 |
Deferred tax assets | 1,817,000 | 1,932,000 |
Other current assets | 688,000 | 437,000 |
Total current assets | 24,671,000 | 25,312,000 |
Fixed assets, net | 2,552,000 | 2,507,000 |
Goodwill | 2,621,000 | 2,621,000 |
Deferred tax assets | 1,215,000 | 1,213,000 |
Intangible assets, net of accumulated amortization of $2,861 and $2,779, respectively | 806,000 | 888,000 |
Other assets | 28,000 | 28,000 |
7,222,000 | 7,257,000 | |
Total assets | 31,893,000 | 32,569,000 |
Current liabilities: | ||
Accounts payable | 3,948,000 | 2,642,000 |
Accrued liabilities | 1,635,000 | 2,838,000 |
Income taxes payable | 76,000 | 245,000 |
Deferred revenue | 221,000 | 604,000 |
Total current liabilities | 5,880,000 | 6,329,000 |
Deferred revenue, net of current portion | 80,000 | 77,000 |
Deferred rent, net of current portion | 186,000 | 189,000 |
Other liabilities | 289,000 | 246,000 |
555,000 | 512,000 | |
Total liabilities | 6,435,000 | 6,841,000 |
Shareholders’ equity: | ||
Common stock, $0.01 par value, 20,000,000 shares authorized; 11,181,581 and 11,170,881 shares issued, respectively; 7,729,922 and 7,782,292 shares outstanding, respectively | 112,000 | 112,000 |
Additional paid-in capital | 29,163,000 | 28,921,000 |
Retained earnings | 22,958,000 | 22,956,000 |
Accumulated other comprehensive loss, net of tax | (84,000) | (80,000) |
Treasury stock, at cost, 3,451,659 and 3,388,589 shares respectively | (26,691,000) | (26,181,000) |
Total shareholders’ equity | 25,458,000 | 25,728,000 |
Total liabilities and shareholders’ equity | $ 31,893,000 | $ 32,569,000 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Intangible assets, net of accumulated amortization of $2,861 and $2,779, respectively (in Dollars) | $ 2,861 | $ 2,779 |
Common stock par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 11,181,581 | 11,170,881 |
Common stock, shares outstanding | 7,729,922 | 7,782,292 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net sales | $ 14,357 | $ 16,164 |
Cost of sales | 8,472 | 9,672 |
Gross profit | 5,885 | 6,492 |
Operating expenses: | ||
Engineering, design and product development | 1,236 | 868 |
Selling and marketing | 1,793 | 1,823 |
General and administrative | 1,917 | 1,840 |
Legal fees associated with lawsuit (Note 7) | 1,744 | |
4,946 | 6,275 | |
Operating income | 939 | 217 |
Interest and other (expense) income: | ||
Interest, net | (4) | (6) |
Other, net | 1 | 14 |
(3) | 8 | |
Income before income taxes | 936 | 225 |
Income tax provision | 311 | 81 |
Net income | $ 625 | $ 144 |
Net income per common share: | ||
Basic (in Dollars per share) | $ 0.08 | $ 0.02 |
Diluted (in Dollars per share) | $ 0.08 | $ 0.02 |
Shares used in per-share calculation: | ||
Basic (in Shares) | 7,834 | 7,856 |
Diluted (in Shares) | 7,883 | 7,876 |
Dividends declared and paid per common share: (in Dollars per share) | $ 0.08 | $ 0.08 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net income | $ 625 | $ 144 |
Foreign currency translation adjustment, net of tax | (4) | (9) |
Comprehensive income | $ 621 | $ 135 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 625 | $ 144 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Share-based compensation expense | 145 | 142 |
Depreciation and amortization | 324 | 361 |
Deferred income tax provision (benefit) | 115 | (1) |
Foreign currency transaction gains | (2) | (13) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,179) | (1,711) |
Inventories | 1,375 | 1,040 |
Prepaid income taxes | 368 | |
Other current and long term assets | (252) | (186) |
Accounts payable | 1,305 | 3,633 |
Accrued liabilities and other liabilities | (1,677) | (1,025) |
Net cash (used in) provided by operating activities | (221) | 2,752 |
Cash flows from investing activities: | ||
Capital expenditures | (221) | (188) |
Net cash used in investing activities | (221) | (188) |
Cash flows from financing activities: | ||
Payment of dividends on common stock | (623) | (623) |
Purchases of common stock for treasury | (510) | (1,020) |
Net cash used in financing activities | (1,133) | (1,643) |
Effect of exchange rate changes on cash and cash equivalents | (6) | (3) |
(Decrease) Increase in cash and cash equivalents | (1,581) | 918 |
Cash and cash equivalents, beginning of period | 4,473 | 3,131 |
Cash and cash equivalents, end of period | 2,892 | $ 4,049 |
Supplemental schedule of non-cash investing activities: | ||
Capital expenditures funded by accounts payable | $ 66 |
1. Basis of presentation
1. Basis of presentation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Text Block [Abstract] | |
Business Description and Basis of Presentation [Text Block] | 1. Basis of presentation The accompanying unaudited financial statements of TransAct Technologies Incorporated have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America to be included in full year financial statements. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the periods presented have been included and are of a normal recurring nature. The December 31, 2015 Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015 included in our Annual Report on Form 10-K. The financial position and results of operations of our U.K. subsidiary are measured using local currency as the functional currency. Assets and liabilities of such subsidiary have been translated at the end of period exchange rates, and related revenues and expenses have been translated at the weighted average exchange rates with the resulting translation gain or loss recorded in accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets. Transaction gains and losses are included in other income in the Condensed Consolidated Statements of Income. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year. |
2. Inventories
2. Inventories | 1 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | 2. Inventories The components of inventories are: March 31, December 31, 2016 2015 (In thousands) Raw materials and purchased component parts $ 5,711 $ 6,627 Work-in-process 1 1 Finished goods 4,209 4,668 $ 9,921 $ 11,296 |
3. Accrued product warranty lia
3. Accrued product warranty liability | 3 Months Ended |
Mar. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
Product Warranty Disclosure [Text Block] | 3. Accrued product warranty liability We generally warrant our products for up to 36 months and record the estimated cost of such product warranties at the time the sale is recorded. Estimated warranty costs are based upon actual past experience of product repairs and the related estimated cost of labor and material to make the necessary repairs. The following table summarizes the activity recorded in the accrued product warranty liability during the three months ended March 31, 2016 and 2015: Three months ended March 31, 2016 2015 (In thousands) Balance, beginning of period $ 277 $ 287 Warranties issued 80 40 Warranty settlements (74) (71) Balance, end of period $ 283 256 Approximately $167,000 of the accrued product warranty liability is classified as current in Accrued liabilities at March 31, 2016 in the Condensed Consolidated Balance Sheets. The remaining $116,000 of the accrued product warranty liability is classified as long-term in Other liabilities. |
4. Earnings per share
4. Earnings per share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 4. Earnings per share The following table sets forth the reconciliation of basic weighted average shares outstanding and diluted weighted average shares outstanding: Three months ended March 31, 2016 2015 (In thousands, except per share data) Net income $ 625 $ 144 Shares: Basic: Weighted average common shares outstanding 7,834 7,856 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 49 20 Diluted: Weighted average common and common equivalent shares outstanding 7,883 7,876 Net income per common share: Basic $ 0.08 $ 0.02 Diluted $ 0.08 $ 0.02 The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options and restricted stock units, when the average market price of the common stock is lower than the exercise price of the related stock award during the period. These outstanding stock awards are not included in the computation of diluted earnings per share because the effect would be anti-dilutive. For the three months ended March 31, 2016 and 2015, there were 878,000 and 853,000, respectively, potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share. |
5. Shareholders' equity
5. Shareholders' equity | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 5. Shareholders’ equity Changes in shareholders’ equity for the three months ended March 31, 2016 were as follows (in thousands): We paid a portion of the 2015 incentive bonus for the chief executive officer and chief financial officer in the form of deferred stock units. Such deferred stock units were granted in February 2016 and were fully vested at the time of grant. |
6. Income taxes
6. Income taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 6. Income taxes We are subject to U.S. federal income tax as well as income tax of certain state and foreign jurisdictions. We have substantially concluded all U.S. federal income tax, state and local, and foreign tax matters through 2011. During 2013, an examination of our 2010 federal tax return was completed. However, our federal tax returns for the years 2012 through 2014 remain open to examination. Various state and foreign tax jurisdiction tax years remain open to examination as well, though we believe that any additional assessment would be immaterial to the Condensed Consolidated Financial Statements. No state or foreign tax jurisdiction income tax returns are currently under examination. As of March 31, 2016, we had $114,000 of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. |
7. Commitments and contingencie
7. Commitments and contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 7. Commitments and contingencies On June 8, 2012, Avery Dennison Corporation (“AD”) filed a civil complaint against us and a former employee of ours and of AD, in the Court of Common Pleas (the “Court”) in Lake County, Ohio. The complaint alleged that we and this former employee misappropriated unspecified trade secrets and confidential information from AD related to the design of our food safety terminals. The complaint requested a preliminary and permanent injunction against us from manufacturing and selling our Ithaca® 9700 and 9800 food safety terminals. On July 16, 2012, we filed our answer, affirmative defenses and counterclaims, seeking all available damages including legal fees. A hearing on the plaintiff's motion for preliminary injunction took place in August 2012, and in November 2012, the Court denied this request. AD filed an appeal of the Court’s ruling to the Eleventh Appellate District, which heard oral arguments on the appeal on July 16, 2013. On July 23, 2013, AD requested that the Eleventh Appellate District enjoin our further sale and marketing of the food safety terminals, pending the Court of Appeals’ decision. On July 29, 2013, we opposed this request. On October 15, 2013, the Eleventh District Court of Appeals affirmed the lower court’s decision in our favor and denied AD’s further request of an injunction pending the Court of Appeals’ decision. On October 24, 2013, AD filed a motion seeking that the Court of Appeals reconsider its decision. On April 16, 2014, the Court of Appeals denied AD’s motion to reconsider its decision. On July 28, 2014, AD filed a motion requesting leave from the Court to file an amended complaint and indicating that it has elected to pursue only its claim for damages, dropping its claim for injunctive relief. On September 4, 2014, the Court granted AD’s motion to file an amended complaint. On September 25, 2014, we filed our answer, affirmative defenses and counterclaims with respect to the amended complaint, seeking all available damages including legal fees. On January 30, 2015, we filed a motion for summary judgment seeking judgment in our favor on all counts as to the Company. On the same day, AD filed two motions for partial summary judgment. On February 17, 2015, we opposed both of AD’s motions, and AD opposed our motion. On February 23, 2015, the Company filed a reply brief in support of its motion for summary judgment. A trial was scheduled to begin on April 21, 2015, however, on March 25, 2015 the parties executed a confidential settlement agreement and release (the “Settlement Agreement”) in which the parties mutually agreed to resolve the dispute that was the subject of the lawsuit filed by AD against the Company to the parties’ mutual satisfaction. Under the terms of the Settlement Agreement, we agreed to pay AD $3,600,000 payable on or before April 8, 2015 and also to qualify certain AD labels for use on our food safety terminals at an estimated cost of $25,000. We made the $3,600,000 payment to AD on April 8, 2015 and borrowed $2,500,000 under our revolving credit facility with TD Bank to fund the payment. We recorded the total expense of $3,625,000 in the fourth quarter 2014 as an operating expense included in the line item “Legal fees and settlement expenses associated with lawsuit” on the Consolidated Statement of Operations and as a current liability included in the line item “Accrued lawsuit settlement expenses” on the Consolidated Balance Sheet. In the second quarter of 2015, we reversed $25,000 of this expense because AD did not provide the label testing information by the due date required per the settlement agreement. |
8. Accounting pronouncements
8. Accounting pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 8. Accounting pronouncements In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with Customers." This ASU is intended to clarify the principles for recognizing revenue by removing inconsistencies in revenue requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. In April 2015, the FASB voted to defer the effective date of the new revenue recognition standard by one year. As a result, the provisions of this ASU are now effective for interim and annual periods beginning after December 15, 2017. We are currently evaluating the impact this ASU may have on our consolidated financial position, results of operations or cash flows. |
2. Inventories (Tables)
2. Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | The components of inventories are: March 31, December 31, 2016 2015 (In thousands) Raw materials and purchased component parts $ 5,711 $ 6,627 Work-in-process 1 1 Finished goods 4,209 4,668 $ 9,921 $ 11,296 |
3. Accrued product warranty l16
3. Accrued product warranty liability (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability [Table Text Block] | We generally warrant our products for up to 36 months Three months ended March 31, 2016 2015 (In thousands) Balance, beginning of period $ 277 $ 287 Warranties issued 80 40 Warranty settlements (74) (71) Balance, end of period $ 283 256 |
4. Earnings per share (Tables)
4. Earnings per share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three months ended March 31, 2016 2015 (In thousands, except per share data) Net income $ 625 $ 144 Shares: Basic: Weighted average common shares outstanding 7,834 7,856 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 49 20 Diluted: Weighted average common and common equivalent shares outstanding 7,883 7,876 Net income per common share: Basic $ 0.08 $ 0.02 Diluted $ 0.08 $ 0.02 |
2. Inventories (Details) - Inve
2. Inventories (Details) - Inventory components - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory components [Abstract] | ||
Raw materials and purchased component parts | $ 5,711 | $ 6,627 |
Work-in-process | 1 | 1 |
Finished goods | 4,209 | 4,668 |
$ 9,921 | $ 11,296 |
3. Accrued product warranty l19
3. Accrued product warranty liability (Details) | Mar. 31, 2016USD ($) |
Product Warranties Disclosures [Abstract] | |
Product Warranty Accrual, Current | $ 167,000 |
Product Warranty Accrual, Noncurrent | $ 116,000 |
3. Accrued product warranty l20
3. Accrued product warranty liability (Details) - Warranty Activity - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Warranty Activity [Abstract] | ||
Balance, beginning of period | $ 277 | $ 287 |
Warranties issued | 80 | 40 |
Warranty settlements | (74) | (71) |
Balance, end of period | $ 283 | $ 256 |
4. Earnings per share (Details)
4. Earnings per share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units | $ 878,000 | $ 853,000 |
4. Earnings per share (Details
4. Earnings per share (Details) - Earnings per share reconciliation - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share Reconciliation [Abstract] | ||
Net income (in Dollars) | $ 625 | $ 144 |
Shares: | ||
Basic: Weighted average common shares outstanding | 7,834 | 7,856 |
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method | 49 | 20 |
Diluted: Weighted average common and common equivalent shares outstanding | 7,883 | 7,876 |
Net income per common share: | ||
Basic (in Dollars per share) | $ 0.08 | $ 0.02 |
Diluted (in Dollars per share) | $ 0.08 | $ 0.02 |
6. Income taxes (Details)
6. Income taxes (Details) | Mar. 31, 2016USD ($) |
Income Tax Disclosure [Abstract] | |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 114,000 |
7. Commitments and contingenc24
7. Commitments and contingencies (Details) - USD ($) | 3 Months Ended | |||
Jun. 30, 2015 | Mar. 31, 2015 | Mar. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Litigation Settlement, Amount | $ 3,600,000 | |||
Loss Contingency, Settlement Agreement, Terms | $ 25,000 | |||
Estimated Litigation Liability, Current | $ 3,625,000 | $ 1,635,000 | $ 2,838,000 | |
Loss Contingency Accrual, Provision | $ 25,000 |