Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2019shares | |
Cover [Abstract] | |
Entity Registrant Name | TRANSACT TECHNOLOGIES INC |
Entity Central Index Key | 0001017303 |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Shell Company | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 0 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q3 |
Entity Address, State or Province | CT |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,207 | $ 4,691 |
Accounts receivable, net | 8,350 | 8,025 |
Note receivable | 1,006 | 0 |
Inventories, net | 12,700 | 12,835 |
Prepaid income taxes | 795 | 809 |
Other current assets | 1,251 | 677 |
Total current assets | 25,309 | 27,037 |
Fixed assets, net of accumulated depreciation of $20,660 and $20,518, respectively | 2,578 | 2,272 |
Right-of-use asset, net of accumulated amortization of $211 and $0 | 3,055 | 0 |
Goodwill | 2,621 | 2,621 |
Deferred tax assets | 2,311 | 2,198 |
Intangible assets, net of accumulated amortization of $3,542, and $3,487, respectively | 910 | 797 |
Other assets | 31 | 31 |
Total noncurrent assets | 11,506 | 7,919 |
Total assets | 36,815 | 34,956 |
Current liabilities: | ||
Accounts payable | 2,698 | 3,483 |
Accrued liabilities | 2,696 | 2,765 |
Operating Lease, Liability, Current | 932 | 0 |
Deferred revenue | 517 | 384 |
Total current liabilities | 6,843 | 6,632 |
Deferred revenue, net of current portion | 190 | 265 |
Lease liability | 2,329 | 0 |
Deferred rent, net of current portion | 0 | 250 |
Other liabilities | 170 | 242 |
Total noncurrent liabilities | 2,689 | 757 |
Total liabilities | 9,532 | 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 | 32,474 | 32,129 |
Retained earnings | 26,820 | 27,515 |
Accumulated other comprehensive loss, net of tax | (16) | (82) |
Treasury stock, at cost, 4,044,842 shares | (32,110) | (32,110) |
Total shareholders' equity | 27,283 | 27,567 |
Total liabilities and shareholders' equity | $ 36,815 | $ 34,956 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Fixed assets, accumulated depreciation | $ 21,007 | $ 20,518 |
Intangible assets, accumulated amortization | $ 3,677 | $ 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) | 11,515,090 | 11,463,141 |
Common stock, shares outstanding (in shares) | 7,470,248 | 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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) [Abstract] | ||||
Net sales | $ 11,686 | $ 15,838 | $ 34,586 | $ 42,832 |
Cost of sales | 6,140 | 7,834 | 17,250 | 21,975 |
Gross profit | 5,546 | 8,004 | 17,336 | 20,857 |
Operating expenses: | ||||
Engineering, design and product development | 1,048 | 1,106 | 3,328 | 3,510 |
Selling and marketing | 1,947 | 1,798 | 5,890 | 5,450 |
General and administrative | 2,239 | 1,888 | 6,720 | 6,211 |
Operating expenses | 5,234 | 4,792 | 15,938 | 15,171 |
Operating income | 312 | 3,212 | 1,398 | 5,686 |
Interest and other income (expense): | ||||
Interest, net | 0 | (7) | (13) | (21) |
Other, net | (71) | (50) | (123) | (137) |
Interest and other income (expense) | (71) | (57) | (136) | (158) |
Income before income taxes | 241 | 3,155 | 1,262 | 5,528 |
Income tax provision | (143) | 581 | (54) | 1,064 |
Net income | $ 384 | $ 2,574 | $ 1,316 | $ 4,464 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.05 | $ 0.35 | $ 0.18 | $ 0.60 |
Diluted (in dollars per share) | $ 0.05 | $ 0.33 | $ 0.17 | $ 0.57 |
Shares used in per-share calculation: | ||||
Basic (in shares) | 7,470 | 7,413 | 7,464 | 7,449 |
Diluted (in shares) | 7,753 | 7,758 | 7,658 | 7,774 |
Dividends declared and paid per common share (in dollars per share) | $ 0.09 | $ 0.09 | $ 0.27 | $ 0.27 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) [Abstract] | ||||
Net income | $ 384 | $ 2,574 | $ 1,316 | $ 4,464 |
Foreign currency translation adjustment, net of tax | (33) | 11 | 66 | 0 |
Comprehensive income | $ 351 | $ 2,585 | $ 1,382 | $ 4,464 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 1,316 | $ 4,464 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Share-based compensation expense | 559 | 524 |
Depreciation and amortization | 747 | 739 |
Deferred income taxes | (104) | 35 |
Foreign currency transaction gains | 153 | 102 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (367) | (782) |
Inventories | 82 | (4,205) |
Prepaid income taxes | 11 | 467 |
Other current and long term assets | (576) | (2) |
Accounts payable | (853) | 2,496 |
Accrued liabilities and other liabilities | (120) | (341) |
Net cash provided by operating activities | 848 | 3,497 |
Cash flows from investing activities: | ||
Capital expenditures | (796) | (722) |
Additions to capitalized software | (304) | (466) |
Issuance of note receivable | (1,000) | 0 |
Net cash used in investing activities | (2,100) | (1,188) |
Cash flows from financing activities: | ||
Payment of dividends on common stock | (2,011) | (2,001) |
Purchases of common stock for treasury | 0 | (2,000) |
Proceeds from stock option exercises | 0 | 229 |
Withholding taxes paid on stock issuances | (214) | (265) |
Net cash used in financing activities | (2,225) | (4,037) |
Effect of exchange rate changes on cash and cash equivalents | (7) | 16 |
Decrease in cash and cash equivalents | (3,484) | (1,712) |
Cash and cash equivalents, beginning of period | 4,691 | 5,507 |
Cash and cash equivalents, end of period | 1,207 | 3,795 |
Supplemental schedule of non-cash investing activities: | ||
Capital expenditures included in accounts payable | $ 91 | $ 68 |
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 |
Ending balance at Jun. 30, 2018 | 114 | 31,533 | 25,310 | (32,110) | (110) | $ 24,737 |
Supplemental share information | ||||||
Dividends declared and paid per common share (in dollars per share) | $ 0.27 | |||||
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 | 524 | |||||
Issuance of shares from exercise of stock options | 229 | |||||
Relinquishment of stock options and deferred stock units to pay withholding taxes | (265) | |||||
Net income | 4,464 | 4,464 | ||||
Dividends declared and paid on common stock | (2,001) | |||||
Purchase of treasury stock | (2,000) | |||||
Foreign currency translation adjustment, net of tax | 0 | 0 | ||||
Ending balance at Sep. 30, 2018 | 31,841 | 27,219 | (32,110) | (99) | $ 26,965 | |
Supplemental share information | ||||||
Issuance of shares from stock awards (in shares) | 88,388 | |||||
Relinquishment of stock awards to pay withholding taxes (in shares) | 19,044 | |||||
Purchase of treasury stock (in shares) | 156,410 | |||||
Dividends declared and paid per common share (in dollars per share) | $ 0.27 | |||||
Beginning balance at Jun. 30, 2018 | 114 | 31,533 | 25,310 | (32,110) | (110) | $ 24,737 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 187 | |||||
Issuance of shares from exercise of stock options | 121 | |||||
Relinquishment of stock options and deferred stock units to pay withholding taxes | 0 | |||||
Net income | 2,574 | 2,574 | ||||
Dividends declared and paid on common stock | (665) | |||||
Purchase of treasury stock | 0 | |||||
Foreign currency translation adjustment, net of tax | 11 | 11 | ||||
Ending balance at Sep. 30, 2018 | 31,841 | 27,219 | (32,110) | (99) | $ 26,965 | |
Supplemental share information | ||||||
Issuance of shares from stock awards (in shares) | 13,250 | |||||
Relinquishment of stock awards to pay withholding taxes (in shares) | 0 | |||||
Purchase of treasury stock (in shares) | 0 | |||||
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 |
Ending balance at Jun. 30, 2019 | 115 | 32,301 | 27,108 | (32,110) | 17 | $ 27,431 |
Supplemental share information | ||||||
Dividends declared and paid per common share (in dollars per share) | $ 0.27 | |||||
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 | 559 | |||||
Issuance of shares from exercise of stock options | 0 | |||||
Relinquishment of stock options and deferred stock units to pay withholding taxes | (214) | |||||
Net income | 1,316 | 1,316 | ||||
Dividends declared and paid on common stock | (2,011) | |||||
Purchase of treasury stock | 0 | |||||
Foreign currency translation adjustment, net of tax | 66 | 66 | ||||
Ending balance at Sep. 30, 2019 | 32,474 | 26,820 | (32,110) | (16) | $ 27,283 | |
Supplemental share information | ||||||
Issuance of shares from stock awards (in shares) | 73,398 | |||||
Relinquishment of stock awards to pay withholding taxes (in shares) | 21,449 | |||||
Purchase of treasury stock (in shares) | 0 | |||||
Dividends declared and paid per common share (in dollars per share) | $ 0.27 | |||||
Beginning balance at Jun. 30, 2019 | $ 115 | 32,301 | 27,108 | (32,110) | 17 | $ 27,431 |
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 | 0 | |||||
Net income | 384 | 384 | ||||
Dividends declared and paid on common stock | (672) | |||||
Purchase of treasury stock | 0 | |||||
Foreign currency translation adjustment, net of tax | (33) | (33) | ||||
Ending balance at Sep. 30, 2019 | $ 32,474 | $ 26,820 | $ (32,110) | $ (16) | $ 27,283 | |
Supplemental share information | ||||||
Issuance of shares from stock awards (in shares) | 500 | |||||
Relinquishment of stock awards to pay withholding taxes (in shares) | 0 | |||||
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 | 9 Months Ended |
Sep. 30, 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 income (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 and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 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 Three Months Ended September 30, 2019 September 30, 2018 (In thousands) United States International Total United States International Total Restaurant Solutions $ 1,730 $ 221 $ 1,951 $ 1,326 $ 155 $ 1,481 POS automation and banking 1,494 20 1,514 1,910 23 1,933 Casino and gaming 2,849 2,225 5,074 5,733 2,534 8,267 Lottery 95 – 95 655 – 655 Printrex 213 83 296 304 147 451 TSG 2,490 266 2,756 2,739 312 3,051 Total net sales $ 8,871 $ 2,815 $ 11,686 $ 12,667 $ 3,171 $ 15,838 Nine Months Ended Nine Months Ended September 30, 2019 September 30, 2018 (In thousands) United States International Total United States International Total Restaurant Solutions $ 3,825 $ 462 $ 4,287 $ 3,609 $ 327 $ 3,936 POS automation and banking 4,392 43 4,435 5,765 136 5,901 Casino and gaming 9,765 6,423 16,188 14,084 7,190 21,274 Lottery 924 2 926 1,724 47 1,771 Printrex 740 183 923 833 229 1,062 TSG 6,947 880 7,827 8,180 708 8,888 Total net sales $ 26,593 $ 7,993 $ 34,586 $ 34,195 $ 8,637 $ 42,832 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, prepaid subscription revenue for our BOHA! software, 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 September 30, 2019 or December 31, 2018. For the first nine months of 2019, we recognized revenue of $489 thousand related to our contract liabilities at December 31, 2018. Total contract liabilities consist of the following: September 30, 2019 December 31, 2018 (In thousands) Customer pre-payments $ 69 $ 50 Deferred revenue, current 517 384 Deferred revenue, non-current 190 265 Total contract liabilities $ 776 $ 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 September 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $4.3 million. The Company expects to recognize revenue on $4.1 million of its remaining performance obligations within the next 12 months, $0.1 million within the next 24 months and the balance of these remaining performance obligations within the next 36 months. |
Inventories, net
Inventories, net | 9 Months Ended |
Sep. 30, 2019 | |
Inventories, net [Abstract] | |
Inventories, net | 4. Inventories, net The components of inventories, net were: September 30, 2019 December 31, 2018 (In thousands) Raw materials and purchased component parts $ 6,898 $ 6,593 Work-in-process 6 29 Finished goods 5,796 6,213 $ 12,700 $ 12,835 |
Accrued product warranty liabil
Accrued product warranty liability | 9 Months Ended |
Sep. 30, 2019 | |
Accrued product warranty liability [Abstract] | |
Accrued product warranty liability | 5. Accrued product warranty liability We generally provide warranties on 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 nine months ended September 30, 2019 and 2018: Nine Months Ended September 30, 2019 2018 (In thousands) Balance, beginning of period $ 273 $ 267 Warranties issued 138 233 Warranty settlements (190 ) (205 ) Balance, end of period $ 221 $ 295 As of September 30, 2019, $176 thousand of the accrued product warranty liability was classified as current in "Accrued liabilities" in the Condensed Consolidated Balance Sheets and the remaining $45 thousand was classified as non-current in "Other liabilities". |
Earnings per share
Earnings per share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings per share [Abstract] | |
Earnings per share | 7. 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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (In thousands, except per share data) Net income $ 384 $ 2,574 $ 1,316 $ 4,464 Shares: Basic: Weighted average common shares outstanding 7,470 7,413 7,464 7,449 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 283 345 194 325 Diluted: Weighted average common and common equivalent shares outstanding 7,753 7,758 7,658 7,774 Net income per common share: Basic $ 0.05 $ 0.35 $ 0.18 $ 0.60 Diluted $ 0.05 $ 0.33 $ 0.17 $ 0.57 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, as the inclusion of these stock awards in the computation of diluted earnings would be anti-dilutive. For the three months ended September 30, 2019 and 2018, there were 326 thousand and 147 thousand, respectively, of potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share. For the nine months ended September 30, 2019 and 2018, there were 462 thousand and 149 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 | 9 Months Ended |
Sep. 30, 2019 | |
Shareholders' equity [Abstract] | |
Shareholders' equity | 8. Shareholders’ equity For the three months ended September 30, 2019, our Board of Directors declared a quarterly cash dividend of $0.09 per share, totaling $672 thousand, which was paid on September 16, 2019 to common shareholders of record at the close of business on August 20, 2019. For the three months ended September 30, 2018, dividends declared and paid totaled $665 thousand, or $0.09 per share. Dividends declared and paid totaled $2.0 million, or $0.27 per share for both the nine months ended September 30, 2019 and 2018. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 9. 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 based on existing guidance for operating leases. 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 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 year 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 three and nine months ending September 30, 2019 was $256 thousand and $764 thousand, respectively, and were included within Cost of sales, Engineering, design and product development expense, Selling and marketing expense, and General and administrative expense. Operating costs include short-term lease costs which were immaterial during the period. The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands): Nine Months Ended September 30, 2019 Operating cash flows from leases $ (772 ) The following summarizes additional information related to our leases as of September 30, 2019: September 30, 2019 Weighted average remaining lease term (in years) 5.1 Weighted average discount rate 3.7 % The maturity of the Company’s operating lease liabilities as of September 30, 2019 are as follows (in thousands): September 30, 2019 2019 $ 258 2020 1,039 2021 708 2022 431 2023 265 Thereafter 882 Total undiscounted lease payments 3,583 Less imputed interest (322 ) Total lease liabilities $ 3,261 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 | 9 Months Ended |
Sep. 30, 2019 | |
Income taxes [Abstract] | |
Income taxes | 10. Income taxes We recorded an income tax benefit for the third quarter of 2019 of $143 thousand at an effective tax rate of -59.3 %, compared to an income tax provision during the third quarter of 2018 of $581 thousand at an effective tax rate of 18.4%. For the nine months ended September 30, 2019, we recorded an income tax benefit of $54 thousand at an effective tax rate of -4.3%, compared to an income tax provision during the nine months ended September 30, 2018 of $1.1 million at an effective tax rate of 19.2%. The effective tax rate for the both the third quarter of 2019 and nine months ended September 30, 2019 was unusually low and a benefit as it included the foreign-derived intangible income (“FDII”) deduction under the Tax Cuts and Jobs Act (the “Tax Reform Act”) as well as near breakeven pre-tax income in the second and third quarters of 2019. The FDII deduction was not included in the effective tax rate for the third quarter of 2018 or nine months ended September 30, 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 2015. However, our federal tax returns for the years 2016 through 2018 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. As of September 30, 2019, we had $79 thousand of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. During the third quarter of 2019, we recognized $25 thousand of previously unrecognized tax benefits as the statute of limitations on the use of our 2015 R&D credits expired during the third quarter of 2019. We recognize interest and penalties related to uncertain tax positions in the income tax provision. As of September 30, 2019, we had $15 thousand of accrued interest and penalties related to uncertain tax positions. The Company maintains a valuation allowance against certain deferred tax assets to reduce the future income tax benefits to expected realizable amounts.. 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,” which provides a new standard that permits entities to make a one-time reclassification from accumulated other comprehensive loss (“AOCL”) to retained earnings for the stranded tax effects resulting from the newly enacted corporate tax rates under the Tax Reform Act. We adopted ASU 2018-02 on January 1, 2019 and elected not to reclassify the income tax effects of the Tax Reform Act from AOCL to retained earnings. We continue to release disproportionate income tax effects from AOCL based on the aggregate portfolio approach. The adoption of ASU 2018-02 did not have an impact on our Condensed Consolidated Financial Statements. |
Basis of presentation (Policies
Basis of presentation (Policies) | 9 Months Ended |
Sep. 30, 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 income (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) | 9 Months Ended |
Sep. 30, 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 Three Months Ended September 30, 2019 September 30, 2018 (In thousands) United States International Total United States International Total Restaurant Solutions $ 1,730 $ 221 $ 1,951 $ 1,326 $ 155 $ 1,481 POS automation and banking 1,494 20 1,514 1,910 23 1,933 Casino and gaming 2,849 2,225 5,074 5,733 2,534 8,267 Lottery 95 – 95 655 – 655 Printrex 213 83 296 304 147 451 TSG 2,490 266 2,756 2,739 312 3,051 Total net sales $ 8,871 $ 2,815 $ 11,686 $ 12,667 $ 3,171 $ 15,838 Nine Months Ended Nine Months Ended September 30, 2019 September 30, 2018 (In thousands) United States International Total United States International Total Restaurant Solutions $ 3,825 $ 462 $ 4,287 $ 3,609 $ 327 $ 3,936 POS automation and banking 4,392 43 4,435 5,765 136 5,901 Casino and gaming 9,765 6,423 16,188 14,084 7,190 21,274 Lottery 924 2 926 1,724 47 1,771 Printrex 740 183 923 833 229 1,062 TSG 6,947 880 7,827 8,180 708 8,888 Total net sales $ 26,593 $ 7,993 $ 34,586 $ 34,195 $ 8,637 $ 42,832 |
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, prepaid subscription revenue for our BOHA! software, 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 September 30, 2019 or December 31, 2018. For the first nine months of 2019, we recognized revenue of $489 thousand related to our contract liabilities at December 31, 2018. Total contract liabilities consist of the following: September 30, 2019 December 31, 2018 (In thousands) Customer pre-payments $ 69 $ 50 Deferred revenue, current 517 384 Deferred revenue, non-current 190 265 Total contract liabilities $ 776 $ 699 |
Inventories, net (Tables)
Inventories, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventories, net [Abstract] | |
Inventories, net | The components of inventories, net were: September 30, 2019 December 31, 2018 (In thousands) Raw materials and purchased component parts $ 6,898 $ 6,593 Work-in-process 6 29 Finished goods 5,796 6,213 $ 12,700 $ 12,835 |
Accrued product warranty liab_2
Accrued product warranty liability (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accrued product warranty liability [Abstract] | |
Product warranty liability | The following table summarizes the activity recorded in the accrued product warranty liability during the nine months ended September 30, 2019 and 2018: Nine Months Ended September 30, 2019 2018 (In thousands) Balance, beginning of period $ 273 $ 267 Warranties issued 138 233 Warranty settlements (190 ) (205 ) Balance, end of period $ 221 $ 295 |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (In thousands, except per share data) Net income $ 384 $ 2,574 $ 1,316 $ 4,464 Shares: Basic: Weighted average common shares outstanding 7,470 7,413 7,464 7,449 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 283 345 194 325 Diluted: Weighted average common and common equivalent shares outstanding 7,753 7,758 7,658 7,774 Net income per common share: Basic $ 0.05 $ 0.35 $ 0.18 $ 0.60 Diluted $ 0.05 $ 0.33 $ 0.17 $ 0.57 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 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): Nine Months Ended September 30, 2019 Operating cash flows from leases $ (772 ) |
Operating Lease Weighted Average Remaining Lease Term and Discount Rate | The following summarizes additional information related to our leases as of September 30, 2019: September 30, 2019 Weighted average remaining lease term (in years) 5.1 Weighted average discount rate 3.7 % |
Maturity of Operating Lease Liabilities | The maturity of the Company’s operating lease liabilities as of September 30, 2019 are as follows (in thousands): September 30, 2019 2019 $ 258 2020 1,039 2021 708 2022 431 2023 265 Thereafter 882 Total undiscounted lease payments 3,583 Less imputed interest (322 ) Total lease liabilities $ 3,261 |
Revenue, Disaggregation of Reve
Revenue, Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of revenue [Abstract] | ||||
Total net sales | $ 11,686 | $ 15,838 | $ 34,586 | $ 42,832 |
United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 8,871 | 12,667 | 26,593 | 34,195 |
International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 2,815 | 3,171 | 7,993 | 8,637 |
Restaurant Solutions [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 1,951 | 1,481 | 4,287 | 3,936 |
Restaurant Solutions [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 1,730 | 1,326 | 3,825 | 3,609 |
Restaurant Solutions [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 221 | 155 | 462 | 327 |
POS Automation and Banking [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 1,514 | 1,933 | 4,435 | 5,901 |
POS Automation and Banking [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 1,494 | 1,910 | 4,392 | 5,765 |
POS Automation and Banking [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 20 | 23 | 43 | 136 |
Casino and Gaming [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 5,074 | 8,267 | 16,188 | 21,274 |
Casino and Gaming [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 2,849 | 5,733 | 9,765 | 14,084 |
Casino and Gaming [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 2,225 | 2,534 | 6,423 | 7,190 |
Lottery [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 95 | 655 | 926 | 1,771 |
Lottery [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 95 | 655 | 924 | 1,724 |
Lottery [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 0 | 0 | 2 | 47 |
Printrex [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 296 | 451 | 923 | 1,062 |
Printrex [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 213 | 304 | 740 | 833 |
Printrex [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 83 | 147 | 183 | 229 |
TransAct Services Group [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 2,756 | 3,051 | 7,827 | 8,888 |
TransAct Services Group [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | 2,490 | 2,739 | 6,947 | 8,180 |
TransAct Services Group [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total net sales | $ 266 | $ 312 | $ 880 | $ 708 |
Revenue, Contract Balances (Det
Revenue, Contract Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Revenue [Abstract] | ||
Revenue recognized | $ 489 | |
Contract liabilities [Abstract] | ||
Customer pre-payments | 69 | $ 50 |
Deferred revenue, current | 517 | 384 |
Deferred revenue, non-current | 190 | 265 |
Total contract liabilities | $ 776 | $ 699 |
Revenue, Remaining Performance
Revenue, Remaining Performance Obligations (Details) $ in Millions | Sep. 30, 2019USD ($) |
Remaining performance obligations [Abstract] | |
Remaining performance obligations | $ 4.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Remaining performance obligations [Abstract] | |
Remaining performance obligations | $ 4.1 |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Remaining performance obligations [Abstract] | |
Remaining performance obligations | $ 0.1 |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Remaining performance obligations [Abstract] | |
Remaining performance obligations | |
Expected timing of satisfaction, period | 12 months |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories, net [Abstract] | ||
Raw materials and purchased component parts | $ 6,898 | $ 6,593 |
Work-in-process | 6 | 29 |
Finished goods | 5,796 | 6,213 |
Inventories, net | $ 12,700 | $ 12,835 |
Accrued product warranty liab_3
Accrued product warranty liability (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Accrued product warranty liability [Roll Forward] | ||
Balance, beginning of period | $ 273 | $ 267 |
Warranties issued | 138 | 233 |
Warranty settlements | (190) | (205) |
Balance, end of period | 221 | $ 295 |
Accrued product warranty liability, current | 176 | |
Accrued product warranty liability, non-current | $ 45 | |
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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings per share [Abstract] | ||||
Net income | $ 384 | $ 2,574 | $ 1,316 | $ 4,464 |
Shares [Abstract] | ||||
Basic: Weighted average common shares outstanding (in shares) | 7,470 | 7,413 | 7,464 | 7,449 |
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method (in shares) | 283 | 345 | 194 | 325 |
Diluted: Weighted average common and common equivalent shares outstanding (in shares) | 7,753 | 7,758 | 7,658 | 7,774 |
Net income per common share [Abstract] | ||||
Basic (in dollars per share) | $ 0.05 | $ 0.35 | $ 0.18 | $ 0.60 |
Diluted (in dollars per share) | $ 0.05 | $ 0.33 | $ 0.17 | $ 0.57 |
Stock Awards [Member] | ||||
Earnings per share [Abstract] | ||||
Anti-dilutive securities excluded from computation of earnings per dilutive share (in shares) | 326 | 147 | 462 | 149 |
Shareholders' equity (Details)
Shareholders' equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Dividends [Abstract] | ||||||||
Dividends declared and paid per common share (in dollars per share) | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 |
Payment of dividend on common stock | $ 672 | $ 665 | $ 2,011 | $ 2,001 | ||||
Dividends, date paid | Sep. 16, 2019 | |||||||
Dividends, date of record | Aug. 20, 2019 | |||||||
Stock repurchase program [Abstract] | ||||||||
Common stock repurchased (in shares) | 0 | 0 | 0 | 156,410 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Right-of-use asset | $ 3,055 | $ 3,055 | $ 0 |
Lease liability | 2,329 | 2,329 | 0 |
Leases [Abstract] | |||
Operating lease expense | $ 256 | 764 | |
Cash Flows Related to Operating Leases | |||
Operating cash flows from leases | $ (772) | ||
Operating Lease Weighted Average Remaining Lease Term and Discount Rate [Abstract] | |||
Weighted average remaining lease term | 5 years 1 month 6 days | 5 years 1 month 6 days | |
Weighted average discount rate | 3.70% | 3.70% | |
Maturity of Operating Lease Liabilities [Abstract] | |||
2019 | $ 258 | $ 258 | |
2020 | 1,039 | 1,039 | |
2021 | 708 | 708 | |
2022 | 431 | 431 | |
2023 | 265 | 265 | |
Thereafter | 882 | 882 | |
Total undiscounted lease payments | 3,583 | 3,583 | |
Less imputed interest | 322 | 322 | |
Total lease liabilities | $ 3,261 | $ 3,261 | |
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 | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | |
Income taxes [Abstract] | |||||
Income tax provision | $ (143) | $ 581 | $ (54) | $ 1,064 | |
Effective tax rate | (59.30%) | 18.40% | (4.30%) | 19.20% | |
Unrecognized tax benefits that would favorably affect effective income tax rate if recognized | $ 79 | $ 79 | |||
Unrecognized tax benefits that will lapse upon expiration of statute of limitations | 25 | ||||
Accrued interest and penalties related to uncertain tax positions | $ 15 | $ 15 | |||
U.S. corporate income tax rate | 34.00% | ||||
Maximum [Member] | |||||
Income taxes [Abstract] | |||||
U.S. corporate income tax rate | 35.00% |