TransAct Technologies (TACT) 10-Q 10 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	TRANSACT TECHNOLOGIES INC
Entity Central Index Key	0001017303
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		7,457,160
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 1,944	$ 4,691
Accounts receivable, net	6,836	8,025
Inventories, net	14,387	12,835
Prepaid income taxes	663	809
Other current assets	1,115	677
Total current assets	24,945	27,037
Fixed assets, net of accumulated depreciation of $20,660 and $20,518, respectively	2,413	2,272
Right-of-use asset, net of accumulated amortization of $211 and $0	3,479	0
Goodwill	2,621	2,621
Deferred tax assets	2,239	2,198
Intangible assets, net of accumulated amortization of $3,542, and $3,487, respectively	746	797
Other assets	31	31
Total noncurrent assets	11,529	7,919
Total assets	36,474	34,956
Current liabilities:
Accounts payable	2,267	3,483
Accrued liabilities	2,002	2,765
Operating Lease, Liability, Current	909	0
Deferred revenue	402	384
Total current liabilities	5,580	6,632
Deferred revenue, net of current portion	240	265
Lease liability	2,808	0
Deferred rent, net of current portion	0	250
Other liabilities	218	242
Total noncurrent liabilities	3,266	757
Total liabilities	8,846	7,389
Shareholders' equity:
Common stock, $0.01 par value, 20,000,000 shares authorized; 11,500,502 and 11,463,141 shares issued, respectively; 7,455,660 and 7,418,299 shares outstanding, respectively	115	115
Additional paid-in capital	32,103	32,129
Retained earnings	27,593	27,515
Accumulated other comprehensive loss, net of tax	(73)	(82)
Treasury stock, at cost, 4,044,842 shares	(32,110)	(32,110)
Total shareholders' equity	27,628	27,567
Total liabilities and shareholders' equity	$ 36,474	$ 34,956

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets:
Fixed assets, accumulated depreciation	$ 20,660	$ 20,518
Right-of-use asset, accumulated amortization	211	0
Intangible assets, accumulated amortization	$ 3,542	$ 3,487
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	11,500,502	11,463,141
Common stock, shares outstanding (in shares)	7,455,660	7,418,299
Treasury stock (in shares)	4,044,842	4,044,842

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) [Abstract]
Net sales	$ 11,550	$ 12,243
Cost of sales	5,464	6,381
Gross profit	6,086	5,862
Operating expenses:
Engineering, design and product development	1,165	1,221
Selling and marketing	1,854	1,573
General and administrative	2,290	2,212
Operating expenses	5,309	5,006
Operating income	777	856
Interest and other income (expense):
Interest, net	(6)	(8)
Other, net	90	10
Interest and other income (expense)	84	2
Income before income taxes	861	858
Income tax provision	115	178
Net income	$ 746	$ 680
Net income per common share:
Basic (in dollars per share)	$ 0.10	$ 0.09
Diluted (in dollars per share)	$ 0.10	$ 0.09
Shares used in per-share calculation:
Basic (in shares)	7,461	7,533
Diluted (in shares)	7,619	7,901
Dividends declared and paid per common share (in dollars per share)	$ 0.09	$ 0.09

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) [Abstract]
Net income	$ 746	$ 680
Foreign currency translation adjustment, net of tax	9	(1)
Comprehensive income	$ 755	$ 679

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net income	$ 746	$ 680
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation expense	173	161
Depreciation and amortization	252	221
Deferred income taxes	(35)	12
Foreign currency transaction gains	(66)	(9)
Changes in operating assets and liabilities:
Accounts receivable	1,210	2,297
Inventories	(1,484)	(2)
Prepaid income taxes	147	161
Other current and long term assets	(437)	(46)
Right of Use Asset	(3,479)	0
Accounts payable	(1,254)	(740)
Lease Liabilities	3,718	0
Accrued liabilities and other liabilities	(1,045)	(872)
Net cash provided by operating activities	(1,554)	1,863
Cash flows from investing activities:
Capital expenditures	(298)	(298)
Additions to capitalized software	(4)	(10)
Net cash used in investing activities	(302)	(308)
Cash flows from financing activities:
Payment of dividends on common stock	(668)	(673)
Purchases of common stock for treasury	0	(1,562)
Proceeds from stock option exercises	0	94
Withholding taxes paid on stock issuances	(199)	(246)
Net cash used in financing activities	(867)	(2,387)
Effect of exchange rate changes on cash and cash equivalents	(24)	(6)
Decrease in cash and cash equivalents	(2,747)	(838)
Cash and cash equivalents, beginning of period	4,691	5,507
Cash and cash equivalents, end of period	1,944	4,669
Supplemental schedule of non-cash investing activities:
Capital expenditures included in accounts payable	$ 59	$ 122

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income [Member]	Total
Beginning balance at Dec. 31, 2017	$ 114	$ 31,353	$ 24,756	$ (30,110)	$ (99)	$ 26,014
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense		161
Issuance of shares from exercise of stock options		94
Relinquishment of stock options and deferred stock units to pay withholding taxes		(246)
Net income			680			680
Dividends declared and paid on common stock			(673)
Purchase of treasury stock				(1,562)
Foreign currency translation adjustment, net of tax					(1)	(1)
Ending balance at Mar. 31, 2018		31,362	24,763	(31,672)	(100)	$ 24,467
Supplemental share information
Issuance of shares from stock awards (in shares)						62,788
Relinquishment of stock awards to pay withholding taxes (in shares)						17,219
Purchase of treasury stock (in shares)						122,780
Dividends declared and paid per common share (in dollars per share)						$ 0.09
Beginning balance at Dec. 31, 2018	$ 115	32,129	27,515	(32,110)	(82)	$ 27,567
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense		173
Issuance of shares from exercise of stock options		0
Relinquishment of stock options and deferred stock units to pay withholding taxes		(199)
Net income			746			746
Dividends declared and paid on common stock			(668)
Purchase of treasury stock				0
Foreign currency translation adjustment, net of tax					9	9
Ending balance at Mar. 31, 2019		$ 32,103	$ 27,593	$ (32,110)	$ (73)	$ 27,628
Supplemental share information
Issuance of shares from stock awards (in shares)						56,998
Relinquishment of stock awards to pay withholding taxes (in shares)						19,637
Purchase of treasury stock (in shares)						0
Dividends declared and paid per common share (in dollars per share)						$ 0.09

Basis of presentation

Basis of presentation	3 Months Ended
	Mar. 31, 2019
Basis of presentation [Abstract]
Basis of presentation	1. Basis of presentation The accompanying unaudited financial statements of TransAct Technologies Incorporated (“TransAct”, the “Company”, “we”, “us”, or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP 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, 2018 Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2018 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 exchange rate as of the date the transaction was recognized, with the resulting translation gain or loss recorded in “Accumulated other comprehensive loss, net of tax”, in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Changes in Shareholders’ Equity. Transaction gains and losses are included in “Other, net” in the Condensed Consolidated Statements of Income. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year.

Revenue

Revenue	3 Months Ended
	Mar. 31, 2019
Revenue [Abstract]
Revenue	2. Revenue We account for revenue in accordance with ASC Topic 606: Revenue from Contracts with Customers. Disaggregation of revenue The following table disaggregates our revenue by market-type, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Sales and usage-based taxes are excluded from revenues. Three Months Ended March 31, 2019 United States International Total (In thousands) Restaurant solutions $ 832 $ 96 $ 928 POS Automation and Banking 1,259 18 1,277 Casino and Gaming 3,424 2,059 5,483 Lottery 697 – 697 Printrex 297 45 342 TransAct Services Group 2,498 325 2,823 Total net sales $ 9,007 $ 2,543 $ 11,550 Contract balances Our contract liabilities consist of customer pre-payments and deferred revenue. Customer prepayments are reported as “Accrued Liabilities” in current liabilities in the Condensed Consolidated Balance Sheets. Customer prepayments represent customer payments made in advance of performance obligations in instances where credit has not been extended and are recognized as revenue when the performance obligation is complete. Deferred revenue is reported separately in current liabilities and non-current liabilities and consists of our extended warranty contracts, technical support for our restaurant solution terminals, EPICENTRAL™ maintenance contracts and testing service contracts, and is recognized as revenue as (or when) we perform under the contract. We do not have any contract asset balances as of March 31, 2019 or December 31, 2018. For the first three months of 2019, we recognized revenue of $150 thousand related to our contract liabilities at December 31, 2018. Total contract liabilities consist of the following: March 31, 2019 December 31, 2018 (In thousands) Customer pre-payments $ 59 $ 50 Deferred revenue, current 402 384 Deferred revenue, non-current 240 265 Total contract liabilities $ 701 $ 699 Remaining performance obligations Remaining performance obligations represent the transaction price of firm orders for which a good or service has not been delivered to our customer. As of March 31, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $5.1 million. The Company expects to recognize revenue on $4.3 million of its remaining performance obligations within the next 12 months, $0.7 million within the next 24 months and the balance of these remaining performance obligations within the next 36 months.

Inventories, net

Inventories, net	3 Months Ended
	Mar. 31, 2019
Inventories, net [Abstract]
Inventories, net	3. Inventories, net The components of inventories, net were: March 31, 2019 December 31, 2018 (In thousands) Raw materials and purchased component parts $ 7,386 $ 6,593 Work-in-process 140 29 Finished goods 6,861 6,213 $ 14,387 $ 12,835

Accrued product warranty liabil

Accrued product warranty liability	3 Months Ended
	Mar. 31, 2019
Accrued product warranty liability [Abstract]
Accrued product warranty liability	4. Accrued product warranty liability We generally warrant our products for up to 24 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, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Balance, beginning of period $ 273 $ 267 Warranties issued 40 80 Warranty settlements (60 ) (69 ) Balance, end of period $ 253 $ 278 As of March 31, 2019, $199 thousand of the accrued product warranty liability were classified as current in "Accrued liabilities" in the Condensed Consolidated Balance Sheets and the remaining $54 thousand was classified as non-current in "Other liabilities".

Earnings per share

Earnings per share	3 Months Ended
	Mar. 31, 2019
Earnings per share [Abstract]
Earnings per share	5. 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, 2019 2018 (In thousands, except per share data) Net income $ 746 $ 680 Shares: Basic: Weighted average common shares outstanding 7,461 7,533 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 158 368 Diluted: Weighted average common and common equivalent shares outstanding 7,619 7,901 Net income per common share: Basic $ 0.10 $ 0.09 Diluted $ 0.10 $ 0.09 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, 2019 and 2018, there were 540 thousand and 147 thousand, respectively, of potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share.

Shareholders' equity

Shareholders' equity	3 Months Ended
	Mar. 31, 2019
Shareholders' equity [Abstract]
Shareholders' equity	6. Shareholders’ equity For the three months ended March 31, 2019, our Board of Directors declared a quarterly cash dividend of $0.09 per share, totaling $668 thousand, which was paid on March 15, 2019 to common shareholders of record at the close of business on February 20, 2019. For the three months ended March 31, 2018, dividends declared and paid totaled $673 thousand, or $0.09 per share.

Leases

Leases	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Leases	7. Leases ASU 2016-02, “Leases” The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. If risks and rewards are conveyed without the transfer of control, the lease is treated as financing. If the lessor does not convey risks and rewards or control, the lease is treated as operating. We have elected certain of the practical expedients available under ASC 842 upon adoption. We have applied the practical expedient which allows prospective transition to ASC 842 on January 1, 2019. Under this transition practical expedient, we did not reassess lease classification, embedded leases or initial direct costs. We have applied the practical expedient for short-term leases. We have lease agreements that include lease and non-lease components, and we have not elected the practical expedients to combine these components for any of our leases. The adoption of ASC 842 had no effect on our Consolidated Statement of Income or Consolidated Statement of Cash Flows. Upon adoption of ASC 842, we recorded a $3.7 million right-of-use asset and a $3.9 million lease liability. The adoption of the new standard had no impact on retained earnings. We enter into lease agreements for the use of real estate space and certain other Right of use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease right of use assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, the Company determines its incremental borrowing rate by using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Our lease right of use assets exclude lease incentives. Our leases have remaining lease terms of one to eight years, some of which include options to extend. The majority of our leases with options to extend provide for extensions of up to five years with the ability to terminate the lease within one year. The exercise of lease renewal options is at our sole discretion and our lease right of use assets and liabilities reflect only the options we are reasonably certain that we will exercise. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense for the quarter ended March 31, 2019 was $237 thousand. The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands): Three Months Ended March 31, 2019 Operating cash flows from leases $ (257 ) The following summarizes additional information related to our leases: Three Months Ended March 31, 2019 Weighted average remaining lease term (in years) 5.4 Weighted average discount rate 3.7% The maturity of the Company’s operating lease liabilities as of March 31, 2019 are as follows (in thousands): 2019 $ 773 2020 1,032 2021 701 2022 432 2023 268 Thereafter 888 Total undiscounted lease payments 4,094 Less imputed interest 377 Total lease liabilities $ 3,717 Prior to the adoption of ASC 842, rental commitments on an undiscounted basis were approximately $4.3 million at December 31, 2018 under non-cancelable operating leases and were payable as follows: $1.0 million in 2019; $1.0 million in 2020; $0.7 million in 2021; $0.4 million in 2022, $0.3 million in 2023 and $0.9 million thereafter.

Income taxes

Income taxes	3 Months Ended
	Mar. 31, 2019
Income taxes [Abstract]
Income taxes	8. Income taxes We recorded an income tax provision for the first quarter of 2019 of $115 thousand at an effective tax rate of 13.4%, compared to an income tax provision during the first quarter of 2018 of $178 thousand at an effective tax rate of 20.7%. The effective tax rate for the first quarter of 2019 was lower as it included the foreign-derived intangible income (“FDII”) deduction under the Tax Cuts and Jobs Act (the “Tax Reform Act”). The FDII deduction was not included in the effective tax rate for the first quarter of 2018 as the interpretive guidance for the deduction was not yet released. We are subject to U.S. federal income tax, as well as income tax in certain U.S. state and foreign jurisdictions. We have substantially concluded all U.S. federal, state and local income tax, and foreign tax regulatory examination matters through 2014. However, our federal tax returns for the years 2015 through 2017 remain open to examination. Various U.S. state and foreign tax jurisdiction tax years remain open to examination as well, but we believe that any additional assessment would be immaterial to the Condensed Consolidated Financial Statements. As of March 31, 2019, we had $105 thousand of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. We expect that $25 thousand of the $105 thousand of unrecognized tax benefits will reverse in 2019 upon the expiration of the statute of limitations. We recognize interest and penalties related to uncertain tax positions in the income tax provision reported as "Deferred tax assets" in the Condensed Consolidated Balance Sheet. As of March 31, 2019, we had $20 thousand of accrued interest and penalties related to uncertain tax positions. The Company maintains a valuation allowance against certain deferred tax assets where realization is not certain. In February 2018, the FASB issued ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive income,”

Basis of presentation (Policies

Basis of presentation (Policies)	3 Months Ended
	Mar. 31, 2019
Basis of presentation [Abstract]
Basis of accounting	The accompanying unaudited financial statements of TransAct Technologies Incorporated (“TransAct”, the “Company”, “we”, “us”, or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP 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, 2018 Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2018 included in our Annual Report on Form 10-K.
Foreign currency translation	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 exchange rate as of the date the transaction was recognized, with the resulting translation gain or loss recorded in “Accumulated other comprehensive loss, net of tax”, in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Changes in Shareholders’ Equity. Transaction gains and losses are included in “Other, net” in the Condensed Consolidated Statements of Income.

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Mar. 31, 2019
Revenue [Abstract]
Disaggregation of revenue	Disaggregation of revenue The following table disaggregates our revenue by market-type, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Sales and usage-based taxes are excluded from revenues. Three Months Ended March 31, 2019 United States International Total (In thousands) Restaurant solutions $ 832 $ 96 $ 928 POS Automation and Banking 1,259 18 1,277 Casino and Gaming 3,424 2,059 5,483 Lottery 697 – 697 Printrex 297 45 342 TransAct Services Group 2,498 325 2,823 Total net sales $ 9,007 $ 2,543 $ 11,550
Contract liabilities	Contract balances Our contract liabilities consist of customer pre-payments and deferred revenue. Customer prepayments are reported as “Accrued Liabilities” in current liabilities in the Condensed Consolidated Balance Sheets. Customer prepayments represent customer payments made in advance of performance obligations in instances where credit has not been extended and are recognized as revenue when the performance obligation is complete. Deferred revenue is reported separately in current liabilities and non-current liabilities and consists of our extended warranty contracts, technical support for our restaurant solution terminals, EPICENTRAL™ maintenance contracts and testing service contracts, and is recognized as revenue as (or when) we perform under the contract. We do not have any contract asset balances as of March 31, 2019 or December 31, 2018. For the first three months of 2019, we recognized revenue of $150 thousand related to our contract liabilities at December 31, 2018. Total contract liabilities consist of the following: March 31, 2019 December 31, 2018 (In thousands) Customer pre-payments $ 59 $ 50 Deferred revenue, current 402 384 Deferred revenue, non-current 240 265 Total contract liabilities $ 701 $ 699

Inventories, net (Tables)

Inventories, net (Tables)	3 Months Ended
	Mar. 31, 2019
Inventories, net [Abstract]
Inventories, net	The components of inventories, net were: March 31, 2019 December 31, 2018 (In thousands) Raw materials and purchased component parts $ 7,386 $ 6,593 Work-in-process 140 29 Finished goods 6,861 6,213 $ 14,387 $ 12,835

Accrued product warranty liab_2

Accrued product warranty liability (Tables)	3 Months Ended
	Mar. 31, 2019
Accrued product warranty liability [Abstract]
Product warranty liability	The following table summarizes the activity recorded in the accrued product warranty liability during the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Balance, beginning of period $ 273 $ 267 Warranties issued 40 80 Warranty settlements (60 ) (69 ) Balance, end of period $ 253 $ 278

Earnings per share (Tables)

Earnings per share (Tables)	3 Months Ended
	Mar. 31, 2019
Earnings per share [Abstract]
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, 2019 2018 (In thousands, except per share data) Net income $ 746 $ 680 Shares: Basic: Weighted average common shares outstanding 7,461 7,533 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 158 368 Diluted: Weighted average common and common equivalent shares outstanding 7,619 7,901 Net income per common share: Basic $ 0.10 $ 0.09 Diluted $ 0.10 $ 0.09

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Cash Flows for Operating Leases	The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands): Three Months Ended March 31, 2019 Operating cash flows from leases $ (257 )
Operating Lease Weighted Average Remaining Lease Term and Discount Rate	The following summarizes additional information related to our leases: Three Months Ended March 31, 2019 Weighted average remaining lease term (in years) 5.4 Weighted average discount rate 3.7%
Maturity of Operating Lease Liabilities	The maturity of the Company’s operating lease liabilities as of March 31, 2019 are as follows (in thousands): 2019 $ 773 2020 1,032 2021 701 2022 432 2023 268 Thereafter 888 Total undiscounted lease payments 4,094 Less imputed interest 377 Total lease liabilities $ 3,717

Revenue, Disaggregation of Reve

Revenue, Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of revenue [Abstract]
Total net sales	$ 11,550	$ 12,243
United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	9,007
International [Member]
Disaggregation of revenue [Abstract]
Total net sales	2,543
Restaurant Solutions [Member]
Disaggregation of revenue [Abstract]
Total net sales	928
Restaurant Solutions [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	832
Restaurant Solutions [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	96
POS Automation and Banking [Member]
Disaggregation of revenue [Abstract]
Total net sales	1,277
POS Automation and Banking [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	1,259
POS Automation and Banking [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	18
Casino and Gaming [Member]
Disaggregation of revenue [Abstract]
Total net sales	5,483
Casino and Gaming [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	3,424
Casino and Gaming [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	2,059
Lottery [Member]
Disaggregation of revenue [Abstract]
Total net sales	697
Lottery [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	697
Lottery [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	0
Printrex [Member]
Disaggregation of revenue [Abstract]
Total net sales	342
Printrex [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	297
Printrex [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	45
TransAct Services Group [Member]
Disaggregation of revenue [Abstract]
Total net sales	2,823
TransAct Services Group [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	2,498
TransAct Services Group [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	$ 325

Revenue, Contract Balances (Det

Revenue, Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Revenue [Abstract]
Revenue recognized	$ 150
Contract liabilities [Abstract]
Customer pre-payments	59	$ 50
Deferred revenue, current	402	384
Deferred revenue, non-current	240	265
Total contract liabilities	$ 701	$ 699

Revenue, Remaining Performance

Revenue, Remaining Performance Obligations (Details) $ in Millions	Mar. 31, 2019USD ($)
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 5.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 4.3
Expected timing of satisfaction, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 0.7
Expected timing of satisfaction, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Remaining performance obligations [Abstract]
Remaining performance obligations
Expected timing of satisfaction, period	12 months

Inventories, net (Details)

Inventories, net (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Inventories, net [Abstract]
Raw materials and purchased component parts	$ 7,386	$ 6,593
Work-in-process	140	29
Finished goods	6,861	6,213
Inventories, net	$ 14,387	$ 12,835

Accrued product warranty liab_3

Accrued product warranty liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accrued product warranty liability [Roll Forward]
Balance, beginning of period	$ 273	$ 267
Warranties issued	40	80
Warranty settlements	(60)	(69)
Balance, end of period	253	$ 278
Accrued product warranty liability, current	199
Accrued product warranty liability, non-current	$ 54
Maximum [Member]
Warranty [Abstract]
Product warranty period	24 months

Earnings per share (Details)

Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings per share [Abstract]
Net income	$ 746	$ 680
Shares [Abstract]
Basic: Weighted average common shares outstanding (in shares)	7,461	7,533
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method (in shares)	158	368
Diluted: Weighted average common and common equivalent shares outstanding (in shares)	7,619	7,901
Net income per common share [Abstract]
Basic (in dollars per share)	$ 0.10	$ 0.09
Diluted (in dollars per share)	$ 0.10	$ 0.09
Stock Awards [Member]
Earnings per share [Abstract]
Anti-dilutive securities excluded from computation of earnings per dilutive share (in shares)	540	147

Shareholders' equity (Details)

Shareholders' equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Dividends [Abstract]
Dividends declared and paid per common share (in dollars per share)	$ 0.09	$ 0.09
Payment of dividend on common stock	$ 668	$ 673
Dividends, date paid	Mar. 15, 2019
Dividends, date of record	Feb. 20, 2019
Stock repurchase program [Abstract]
Common stock repurchased (in shares)	0	122,780

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Right-of-use asset	$ 3,479	$ 0
Lease liability	2,808	0
Leases [Abstract]
Operating lease expense	237
Cash Flows Related to Operating Leases
Operating cash flows from leases	$ (257)
Operating Lease Weighted Average Remaining Lease Term and Discount Rate [Abstract]
Weighted average remaining lease term	5 years 4 months 24 days
Weighted average discount rate	3.70%
Maturity of Operating Lease Liabilities [Abstract]
2019	$ 773
2020	1,032
2021	701
2022	432
2023	268
Thereafter	888
Total undiscounted lease payments	4,094
Less imputed interest	377
Total lease liabilities	$ 3,717
Future Minimum Rental Commitments Under Non-Cancelable Operating Leases [Abstract]
Total undiscounted rental commitments		4,300
2019		1,000
2020		1,000
2021		700
2022		400
2023		300
Thereafter		900
Minimum [Member]
Leases [Abstract]
Remaining lease terms	1 year
Maximum [Member]
Leases [Abstract]
Remaining lease terms	8 years
Extension period for leases	5 years
Termination period for leases	1 year
ASC 842 [Member]
Leases [Abstract]
Right-of-use asset		3,700
Lease liability		$ 3,900

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income taxes [Abstract]
Income tax provision	$ 115	$ 178
Effective tax rate	13.40%	20.70%
Unrecognized tax benefits that would favorably affect effective income tax rate if recognized	$ 105
Unrecognized tax benefits that will lapse upon expiration of statute of limitations	25
Accrued interest and penalties related to uncertain tax positions	$ 20