TransAct Technologies (TACT) 10-Q 11 Aug 21 2021 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Apr. 30, 2021
Cover page.
Entity Registrant Name	TRANSACT TECHNOLOGIES INC
Entity Central Index Key	0001017303
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Document Transition Report	false
Entity File Number	0-21121
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	06-1456680
Entity Address, Address Line One	One Hamden Center
Entity Address, Address Line Two	2319 Whitney Avenue, Suite 3B
Entity Address, City or Town	Hamden
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06518
City Area Code	203
Local Phone Number	859-6800
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	TACT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		8,991,504

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 7,960	$ 10,359
Accounts receivable, net	5,741	3,377
Note receivable	0	100
Inventories	8,734	11,286
Prepaid income taxes	2,499	2,409
Other current assets	864	644
Total current assets	25,798	28,175
Fixed assets, net of accumulated depreciation of $20,124 and $19,979, respectively	1,843	1,950
Note receivable, net of current portion	0	1,584
Right-of-use asset	2,952	3,618
Goodwill	2,621	2,621
Deferred tax assets	4,147	2,939
Intangible assets, net of accumulated amortization of $4,056 and $4,005, respectively	481	583
Other assets	573	777
Total noncurrent assets	12,617	14,072
Total assets	38,415	42,247
Current liabilities:
Accounts payable	2,780	1,691
Accrued liabilities	2,466	3,665
Lease liability	809	837
Deferred revenue	742	504
Total current liabilities	6,797	6,697
Long-term debt	2,173	2,173
Deferred revenue, net of current portion	232	111
Lease liability, net of current portion	2,167	2,864
Other liabilities	173	166
Total noncurrent liabilities	4,745	5,314
Total liabilities	11,542	12,011
Shareholders' equity:
Common stock, $0.01 par value, 20,000,000 shares authorized; 13,010,383 and 12,976,227 shares issued, respectively; 8,965,541 and 8,931,385 shares outstanding, respectively	130	130
Additional paid-in capital	43,408	42,536
Retained earnings	15,398	19,718
Accumulated other comprehensive income (loss), net of tax	47	(38)
Treasury stock, at cost, 4,044,842 shares	(32,110)	(32,110)
Total shareholders' equity	26,873	30,236
Total liabilities and shareholders' equity	$ 38,415	$ 42,247

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Assets:
Fixed assets, accumulated depreciation	$ 20,282	$ 19,979
Intangible assets, accumulated amortization	$ 4,107	$ 4,005
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)	13,035,321	12,976,227
Common stock, shares outstanding (in shares)	8,990,479	8,931,385
Treasury stock (in shares)	4,044,842	4,044,842

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
CONSOLIDATED STATEMENTS OF INCOME [Abstract]
Net sales	$ 9,325	$ 5,285	$ 17,626	$ 15,532
Cost of sales	6,000	2,995	11,112	8,324
Gross profit	3,325	2,290	6,514	7,208
Operating expenses:
Engineering, design and product development	1,804	1,367	3,607	2,752
Selling and marketing	1,767	1,419	3,210	3,627
General and administrative	2,509	2,242	5,118	4,862
Operating expenses	6,080	5,028	11,935	11,241
Operating loss	(2,755)	(2,738)	(5,421)	(4,033)
Interest and other (expense) income:
Interest, net	(29)	(25)	(42)	(22)
Other, net	(17)	(11)	(100)	(176)
Interest and other expense	(46)	(36)	(142)	(198)
Loss before income taxes	(2,801)	(2,774)	(5,563)	(4,231)
Income tax benefit	(687)	(921)	(1,243)	(1,386)
Net loss	$ (2,114)	$ (1,853)	$ (4,320)	$ (2,845)
Net loss per common share:
Basic (in dollars per share)	$ (0.24)	$ (0.25)	$ (0.48)	$ (0.38)
Diluted (in dollars per share)	$ (0.24)	$ (0.25)	$ (0.48)	$ (0.38)
Shares used in per-share calculation:
Basic (in shares)	8,976	7,543	8,962	7,525
Diluted (in shares)	8,976	7,543	8,962	7,525

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract]
Net loss	$ (2,114)	$ (1,853)	$ (4,320)	$ (2,845)
Foreign currency translation adjustment, net of tax	32	10	85	81
Comprehensive loss	$ (2,082)	$ (1,843)	$ (4,235)	$ (2,764)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities:
Net loss	$ (4,320)	$ (2,845)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense	695	413
Depreciation and amortization	486	495
Deferred income taxes	(1,209)	(1,485)
Gain on the sale of fixed assets	(8)	0
Foreign currency transaction losses	107	215
Changes in operating assets and liabilities:
Accounts receivable	(2,350)	3,060
Inventories	2,591	101
Prepaid income taxes	(90)	49
Other current and long term assets	29	73
Accounts payable	1,012	(1,660)
Accrued liabilities and other liabilities	(862)	(725)
Net cash used in operating activities	(3,919)	(2,309)
Cash flows from investing activities:
Capital expenditures	(159)	(489)
Collection of note receivable	1,598
Issuance of note receivable		(600)
Proceeds from Sales of Assets, Investing Activities	8	0
Net cash provided by (used in) investing activities	1,447	(1,089)
Cash flows from financing activities:
Revolving credit line borrowings	0	2,756
Revolving credit line payments	0	(2,750)
Long-term debt borrowings	0	2,173
Proceeds from stock option exercises	277	353
Withholding taxes paid on stock issuances	(100)	(41)
Payment of bank financing costs	(31)	(213)
Net cash (used in) provided by financing activities	146	2,278
Effect of exchange rate changes on cash and cash equivalents	(73)	(1)
Decrease in cash and cash equivalents	(2,399)	(1,121)
Cash and cash equivalents, beginning of period	10,359	4,203
Cash and cash equivalents, end of period	7,960	3,082
Supplemental cash flow information:
Capital expenditures included in accounts payable	$ 100	$ 36

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Beginning balance at Dec. 31, 2019	$ 115	$ 32,604	$ 25,348		$ (31)	$ 25,926
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense		413
Issuance of shares from exercise of stock options	1	353
Relinquishment of stock awards and deferred stock units to pay for withholding taxes		(41)
Net loss			(2,845)			(2,845)
Foreign currency translation adjustment, net of tax					81	81
Ending balance at Jun. 30, 2020	116	33,329	22,503	$ (32,110)	50	$ 23,888
Supplemental share information
Issuance of shares from stock awards (in shares)						91
Relinquishment of stock awards to pay withholding taxes (in shares)						14
Beginning balance at Mar. 31, 2020	116	33,103	24,356		40	$ 25,505
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense		226
Issuance of shares from exercise of stock options	0	0
Relinquishment of stock awards and deferred stock units to pay for withholding taxes		0
Net loss			(1,853)			(1,853)
Foreign currency translation adjustment, net of tax					10	10
Ending balance at Jun. 30, 2020	116	33,329	22,503	(32,110)	50	$ 23,888
Supplemental share information
Issuance of shares from stock awards (in shares)						9
Relinquishment of stock awards to pay withholding taxes (in shares)						0
Beginning balance at Dec. 31, 2020	130	42,536	19,718		(38)	$ 30,236
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense		695
Issuance of shares from exercise of stock options	0	277
Relinquishment of stock awards and deferred stock units to pay for withholding taxes		(100)
Net loss			(4,320)			(4,320)
Foreign currency translation adjustment, net of tax					85	85
Ending balance at Jun. 30, 2021	130	43,408	15,398	(32,110)	47	$ 26,873
Supplemental share information
Issuance of shares from stock awards (in shares)						92
Relinquishment of stock awards to pay withholding taxes (in shares)						32
Beginning balance at Mar. 31, 2021	130	42,816	17,512		15	$ 28,363
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense		431
Issuance of shares from exercise of stock options	0	186
Relinquishment of stock awards and deferred stock units to pay for withholding taxes		(25)
Net loss			(2,114)			(2,114)
Foreign currency translation adjustment, net of tax					32	32
Ending balance at Jun. 30, 2021	$ 130	$ 43,408	$ 15,398	$ (32,110)	$ 47	$ 26,873
Supplemental share information
Issuance of shares from stock awards (in shares)						27
Relinquishment of stock awards to pay withholding taxes (in shares)						1

Basis of presentation

Basis of presentation	6 Months Ended
	Jun. 30, 2021
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, 2020 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 in our Annual Report on Form 10-K for the year ended December 31, 2020. 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 Operations. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021. Impact of the COVID-19 Pandemic In the first quarter of 2020, the COVID-19 pandemic and the resulting social distancing measures, including closures and restricted openings of restaurants and casinos implemented by federal, state and local authorities, negatively impacted customer demand and disrupted portions of our supply chain, including delayed product shipments from our two manufacturers located in China and Thailand. While we began to experience a modest recovery starting in the second half of 2020 into 2021 and expect this recovery to continue during the remainder of 2021, the exact timing and pace of recovery is unknown given uncertainty surrounding responsive measures to the spread of virus variants or any potential future resurgences of the virus and the significant disruption that our customers have already experienced and may continue to experience. In light of this uncertainty, we implemented a number of cost saving measures during 2020 to help mitigate the impact on our financial position and operations and continued to limit discretionary spending during the first half of 2021. We are monitoring indicators of demand recovery, including our sales pipeline, customer orders and product shipments to ascertain an estimate of the ultimate impact of the COVID-19 pandemic on our business; however, the length and ultimate severity of the reduction in demand due to the pandemic remains uncertain. Balance Sheet, Cash Flow and Liquidity. In addition to the expense management actions implemented during , we took the following actions to increase liquidity and strengthen our financial position: ● Public Offering – On October 16, 2020, the Company raised net proceeds of $8.7 million, after deducting underwriting discounts, commissions and offering expenses, through an underwritten public offering (the “Offering”) and sold an aggregate of 1,380,000 shares of common stock. ● PPP Loan – On May 1, 2020, the Company was granted a $2.2 million loan (the “PPP Loan”) under the Paycheck Protection Program (the “PPP”) administered by the Small Business Administration (“SBA”) established under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act"), which enabled us to return employees we furloughed earlier in 2020 to full time employment and to restore employees to full pay following certain pay cuts. On July 8, 2021, we received notice that the PPP Loan had been forgiven as of July 1, 2021. See Note 6 for further details regarding the PPP Loan. ● New Credit Facility – On March 13, 2020, we entered into a new credit facility with Siena Lending Group LLC that provides a revolving credit line of up to $10.0 million, subject to a borrowing base. See Note 6 for further details regarding this facility. ● Reduced Capital Expenditures – We limited capital expenditures during 2020. We may further modify or supplement the expense management measures we have implemented and the actions we have taken to increase liquidity as the timing and extent of customer demand recovery develops. After reviewing whether conditions and/or events raise substantial doubt about our ability to meet future financial obligations over the 12 months following the date on which the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q were issued, including consideration of the actions taken to manage expenses and liquidity, we believe that our net cash to be provided by operations combined with our cash and cash equivalents and borrowing availability under our revolving credit facility will provide sufficient liquidity to fund our current obligations, capital spending, and working capital requirements and to comply with the financial covenants of our credit facility over at least 12 months following the date that the Condensed Consolidated Financial Statements were issued. Use of Assumptions and Estimates Management’s belief that the Company will be able to fund its planned operations over the 12 months following the date on which the Condensed Consolidated Financial Statements were issued is based on assumptions which involve significant judgment and estimates of future revenues, capital expenditures and other operating costs. Our current assumptions are that casinos and restaurants remain open and continue to gradually increase capacity limitations during 2021, but that many casinos and restaurants may delay purchases of new slot machines and our BOHA! products, respectively, as their businesses gradually return to pre-pandemic levels of capacity and operations. Based on these assumptions, we anticipate that sales in casino and gaming and food service technology will continue to be negatively impacted through at least 2021. We have performed a sensitivity analysis on these assumptions to forecast the potential impact of a slower-than-anticipated recovery and believe that we are positioned to withstand the impact of lower-than-anticipated sales and that we will be able to take additional financial and operational actions to cut costs and/or increase liquidity, if necessary. These actions may include additional expense reductions and capital raising activities. In addition, the presentation of the accompanying unaudited financial statements

Revenue

Revenue	6 Months Ended
	Jun. 30, 2021
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 tables 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 June 30, 2021 2020 (In thousands) United States International Total United States International Total Food service technology $ 2,987 $ 87 $ 3,074 $ 1,056 $ 148 $ 1,204 POS automation 1,252 4 1,256 481 - 481 Casino and gaming 2,438 1,029 3,467 970 390 1,360 Lottery - - - 817 - 817 Printrex 25 87 112 6 2 8 TransAct Services Group 1,252 164 1,416 1,271 144 1,415 Total net sales $ 7,954 $ 1,371 $ 9,325 $ 4,601 $ 684 $ 5,285 Six Months Ended June 30, 2021 2020 (In thousands) United States International Total United States International Total Food service technology $ 5,551 $ 270 $ 5,821 $ 2,295 $ 280 $ 2,575 POS automation 2,412 8 2,420 2,035 4 2,039 Casino and gaming 4,402 1,930 6,332 3,528 2,763 6,291 Lottery - - - 817 - 817 Printrex 52 219 271 67 58 125 TransAct Services Group 2,532 250 2,782 3,274 411 3,685 Total net sales $ 14,949 $ 2,677 $ 17,626 $ 12,016 $ 3,516 $ 15,532 Contract balances Contract assets consist of unbilled receivables. Pursuant to the over-time revenue recognition model, revenue may be recognized prior to the customer being invoiced. An unbilled receivable is recorded to reflect revenue that is recognized when such revenue exceeds the amount invoiced to the customer. Unbilled receivables are separated into current and non-current assets and included within “Accounts receivable” and “Other non-current assets” in the Condensed Consolidated Balance Sheets. 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 and 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 food service technology terminals, EPICENTRAL® maintenance contracts and prepaid software subscriptions for our BOHA! software applications, and is recognized as revenue as (or when) we perform under the contract. For the six months ended June 30, 2021, we recognized revenue of $ million related to our contract liabilities at . Total net contract (liabilities) assets consisted of the following: June 30, 2021 December 31, 2020 (In thousands) Unbilled receivables, current $ 296 $ 290 Unbilled receivables, non-current 441 591 Customer pre-payments (87 ) (216 ) Deferred revenue, current (742 ) (504 ) Deferred revenue, non-current (232 ) (111 ) Total net contract (liabilities) assets $ (324 ) $ 50 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 June 30, 2021, the aggregate amount of transaction prices allocated to remaining performance obligations was $5.0 million. The Company expects to recognize revenue on $4.4 million of its remaining performance obligations within the next 12 months following June 30, 2021, $0.4 million within the next 24 months and the balance of these remaining performance obligations recognized within the next 36 months.

Note receivable

Note receivable	6 Months Ended
	Jun. 30, 2021
Note receivable [Abstract]
Note receivable	3. Note receivable The note receivable balance relates to loans given to a third-party software developer from whom we license our food service technology software with an interest rate of , which were originally due in April 2020. In March 2021, we received payment in the amount of $ million representing the remaining principal balance and interest due from the third-party. For the six months ended June 30, 2021 and 2020, we recorded $ thousand and $ thousand of interest income, respectively.

Inventories

Inventories	6 Months Ended
	Jun. 30, 2021
Inventories, net [Abstract]
Inventories, net	4. Inventories The components of inventories were: June 30, 2021 December 31, 2020 (In thousands) Raw materials and purchased component parts $ 5,373 $ 5,467 Finished goods 3,361 5,819 $ 8,734 $ 11,286

Accrued product warranty liabil

Accrued product warranty liability	6 Months Ended
	Jun. 30, 2021
Accrued product warranty liability [Abstract]
Accrued product warranty liability	5. Accrued product warranty liability We generally provide hardware 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 six months ended June 30, 2021 and 2020: Six Months Ended June 30, 2021 2020 (In thousands) Balance, beginning of period $ 140 $ 215 Warranties issued 19 55 Warranty settlements (45 ) (78 ) Balance, end of period $ 114 $ 192 As of June 30, 2021, $87 thousand of the accrued product warranty liability was classified as current in “Accrued liabilities” in the Condensed Consolidated Balance Sheets and the remaining $27 thousand was classified as non-current in “Other liabilities”.

Debt

Debt	6 Months Ended
	Jun. 30, 2021
Borrowings [Abstract]
Debt	6. Debt On March 13, 2020, we entered into a new credit facility (the “Siena Credit Facility”) with Siena Lending Group LLC. The Siena Credit Facility provides for a revolving credit line of up to $10.0 million expiring on March 13, 2023. Borrowings under the Siena Credit Facility bear a floating rate of interest equal to the greatest of (i) the prime rate plus 1.75%, (ii) the federal funds rate plus 2.25%, and (iii) 6.50%. The total deferred financing costs related to expenses incurred to complete the Siena Credit Facility was $245 thousand, which were reported as “Other current assets” in current assets and “Other assets” in non-current assets in the Condensed Consolidated Balance Sheets. We also pay a fee of 0.50% on unused borrowings under the Siena Credit Facility. Borrowings under the Siena Credit Facility are secured by a lien on substantially all the assets of the Company. The Siena Credit Facility imposes a financial covenant on the Company and borrowings are subject to a borrowing base based on (i) 85% of eligible accounts receivable plus the lesser of (a) $5.0 million and (b) 50% of eligible raw material and 60% of finished goods inventory. The three month period from April 1, 2020 to June 30, 2020 was the first period we were subject to the financial covenant which required the Company to maintain a minimum EBITDA and continued through the 12-month period from April 1, 2020 to March 31, 2021. On July 21, On May 1, 2020 (the “Loan Date”), the Company was granted the PPP Loan from Berkshire Bank in the aggregate amount of $ million, pursuant to the PPP. The PPP Loan, which was evidenced by a Note dated the Loan Date issued by the Company (the “Note”) in favor of Berkshire Bank, as lender (the “PPP Lender”), was scheduled to mature on May 1, 2022 and had a fixed interest rate of

Earnings per share

Earnings per share	6 Months Ended
	Jun. 30, 2021
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 Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands, except per share data) Net loss $ (2,114 ) $ (1,853 ) $ (4,320 ) $ (2,845 ) Shares: Basic: Weighted average common shares outstanding 8,976 7,543 8,962 7,525 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method – – – – Diluted: Weighted average common and common equivalent shares outstanding 8,976 7,543 8,962 7,525 Net loss per common share: Basic $ (0.24 ) $ (0.25 ) $ (0.48 ) $ (0.38 ) Diluted $ (0.24 ) $ (0.25 ) $ (0.48 ) $ (0.38 ) 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 and , there were million and million, respectively, of potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share. For the and , there were million and million, respectively, of potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share.

Shareholders' equity

Shareholders' equity	6 Months Ended
	Jun. 30, 2021
Shareholders' equity [Abstract]
Shareholders' equity	8. Shareholders’ equity On January 23, 2020, our Board of Directors announced the cessation of our quarterly cash dividend on the Company’s common stock. The final dividend payment was made in December 2019.

Leases

Leases	6 Months Ended
	Jun. 30, 2021
Leases [Abstract]
Leases	9. Leases We account for leases in accordance with ASC Topic 842: Leases. We enter into lease agreements for the use of real estate space and certain equipment under operating leases and we have no financing leases. Our leases are included in “Right-of-use-assets” and “Lease liabilities” in our Condensed Consolidated Balance Sheet. Our leases have remaining lease terms of one year to five years, some of which include options to extend. Our leases with options to extend provide for extensions of two to five years with the ability to terminate the lease within one year. On February 28, 2020, we entered into an amendment to extend the lease on our facility in Ithaca, New York, . The lease, which was last amended on January 14, 2016, was scheduled to expire on May 31, 2021. The lease amendment provided for an extension of the lease for four additional years from June 1, 2021 to May 31, 2025. On April 30, 2021, we entered into an amendment to modify the expiration date of our lease on our Hamden, CT facility. . Operating lease expense for the three months ended June 30, 2021 and 2020 was $239 thousand and $241 thousand, respectively, and is reported as “Cost of sales”, “Engineering, design and product development expense”, “Selling and marketing expense”, and “General and administrative expense” in the Condensed Consolidated Statements of Operations. Operating lease expense for the six months ended June 30, 2021 and 2020 was $ thousand and $ thousand, respectively. The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands): Six Months Ended June 30, 2021 2020 Operating cash outflows from leases $ 522 $ 519 The following summarizes additional information related to our leases as of June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 Weighted average remaining lease term (in years) 3.9 4.9 Weighted average discount rate 4.4 % 4.1 % The maturity of the Company’s operating lease liabilities as of June 30, 2021 and December 31, 2020 were as follows (in thousands): June 30, 2021 December 31, 2020 2021 $ 463 $ 971 2022 887 879 2023 722 713 2024 722 718 2025 427 464 Thereafter 24 180 Total undiscounted lease payments 3,245 3,925 Less imputed interest 269 224 Total lease liabilities $ 2,976 $ 3,701

Income taxes

Income taxes	6 Months Ended
	Jun. 30, 2021
Income taxes [Abstract]
Income taxes	10. Income taxes We recorded an income tax benefit for the second quarter of of $ thousand at an effective tax rate of , compared to an income tax benefit for the second quarter of of $ thousand at an effective tax rate of . For the , we recorded an income tax benefit of $ million at an effective tax rate of , compared to an income tax benefit for the of $ million at an effective tax rate of . We are subject to U.S. federal income tax, as well as income tax in certain U.S. states and foreign jurisdictions. We have substantially concluded all U.S. federal, state and local income tax, and foreign tax regulatory examination matters through 2016. However, our federal tax returns for the years 2017 through 2019 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 June 30, 2021, we had $121 thousand of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. We expect $24 thousand of the $121 thousand of unrecognized tax benefits will reverse in the third quarter of 2021 upon the expiration of the applicable statute of limitations. We recognize interest and penalties related to uncertain tax positions in the income tax provision. As of June 30, 2021, we had $25 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.

Subsequent events

Subsequent events	6 Months Ended
	Jun. 30, 2021
Subsequent events [Abstract]
Subsequent events	6. Debt On March 13, 2020, we entered into a new credit facility (the “Siena Credit Facility”) with Siena Lending Group LLC. The Siena Credit Facility provides for a revolving credit line of up to $10.0 million expiring on March 13, 2023. Borrowings under the Siena Credit Facility bear a floating rate of interest equal to the greatest of (i) the prime rate plus 1.75%, (ii) the federal funds rate plus 2.25%, and (iii) 6.50%. The total deferred financing costs related to expenses incurred to complete the Siena Credit Facility was $245 thousand, which were reported as “Other current assets” in current assets and “Other assets” in non-current assets in the Condensed Consolidated Balance Sheets. We also pay a fee of 0.50% on unused borrowings under the Siena Credit Facility. Borrowings under the Siena Credit Facility are secured by a lien on substantially all the assets of the Company. The Siena Credit Facility imposes a financial covenant on the Company and borrowings are subject to a borrowing base based on (i) 85% of eligible accounts receivable plus the lesser of (a) $5.0 million and (b) 50% of eligible raw material and 60% of finished goods inventory. The three month period from April 1, 2020 to June 30, 2020 was the first period we were subject to the financial covenant which required the Company to maintain a minimum EBITDA and continued through the 12-month period from April 1, 2020 to March 31, 2021. On July 21, On May 1, 2020 (the “Loan Date”), the Company was granted the PPP Loan from Berkshire Bank in the aggregate amount of $ million, pursuant to the PPP. The PPP Loan, which was evidenced by a Note dated the Loan Date issued by the Company (the “Note”) in favor of Berkshire Bank, as lender (the “PPP Lender”), was scheduled to mature on May 1, 2022 and had a fixed interest rate of 11. Subsequent events The Company has evaluated all events or transactions that occurred up to the date the consolidated financial statements were available to be issued. Based upon this review, the Company did not identify any additional subsequent events that would have required adjustment or disclosure in the consolidated financial statements, other than receiving notifications from Berkshire Bank and the SBA regarding forgiveness of the PPP Loan on July 8, 2021, and the Credit Facility Amendment to the Siena Credit Facility signed on July 21, 2021, both of which are disclosed in Note 6.

Basis of presentation (Policies

Basis of presentation (Policies)	6 Months Ended
	Jun. 30, 2021
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, 2020 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 in our Annual Report on Form 10-K for the year ended December 31, 2020.
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 Operations.
Use of assumptions and estimates	Use of Assumptions and Estimates Management’s belief that the Company will be able to fund its planned operations over the 12 months following the date on which the Condensed Consolidated Financial Statements were issued is based on assumptions which involve significant judgment and estimates of future revenues, capital expenditures and other operating costs. Our current assumptions are that casinos and restaurants remain open and continue to gradually increase capacity limitations during 2021, but that many casinos and restaurants may delay purchases of new slot machines and our BOHA! products, respectively, as their businesses gradually return to pre-pandemic levels of capacity and operations. Based on these assumptions, we anticipate that sales in casino and gaming and food service technology will continue to be negatively impacted through at least 2021. We have performed a sensitivity analysis on these assumptions to forecast the potential impact of a slower-than-anticipated recovery and believe that we are positioned to withstand the impact of lower-than-anticipated sales and that we will be able to take additional financial and operational actions to cut costs and/or increase liquidity, if necessary. These actions may include additional expense reductions and capital raising activities. In addition, the presentation of the accompanying unaudited financial statements

Revenue (Tables)

Revenue (Tables)	6 Months Ended
	Jun. 30, 2021
Revenue [Abstract]
Disaggregation of revenue	Disaggregation of revenue The following tables 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 June 30, 2021 2020 (In thousands) United States International Total United States International Total Food service technology $ 2,987 $ 87 $ 3,074 $ 1,056 $ 148 $ 1,204 POS automation 1,252 4 1,256 481 - 481 Casino and gaming 2,438 1,029 3,467 970 390 1,360 Lottery - - - 817 - 817 Printrex 25 87 112 6 2 8 TransAct Services Group 1,252 164 1,416 1,271 144 1,415 Total net sales $ 7,954 $ 1,371 $ 9,325 $ 4,601 $ 684 $ 5,285 Six Months Ended June 30, 2021 2020 (In thousands) United States International Total United States International Total Food service technology $ 5,551 $ 270 $ 5,821 $ 2,295 $ 280 $ 2,575 POS automation 2,412 8 2,420 2,035 4 2,039 Casino and gaming 4,402 1,930 6,332 3,528 2,763 6,291 Lottery - - - 817 - 817 Printrex 52 219 271 67 58 125 TransAct Services Group 2,532 250 2,782 3,274 411 3,685 Total net sales $ 14,949 $ 2,677 $ 17,626 $ 12,016 $ 3,516 $ 15,532
Net contract assets (liabilities)	June 30, 2021 December 31, 2020 (In thousands) Unbilled receivables, current $ 296 $ 290 Unbilled receivables, non-current 441 591 Customer pre-payments (87 ) (216 ) Deferred revenue, current (742 ) (504 ) Deferred revenue, non-current (232 ) (111 ) Total net contract (liabilities) assets $ (324 ) $ 50

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2021
Inventories, net [Abstract]
Inventories	The components of inventories were: June 30, 2021 December 31, 2020 (In thousands) Raw materials and purchased component parts $ 5,373 $ 5,467 Finished goods 3,361 5,819 $ 8,734 $ 11,286

Accrued product warranty liab_2

Accrued product warranty liability (Tables)	6 Months Ended
	Jun. 30, 2021
Accrued product warranty liability [Abstract]
Product warranty liability	The following table summarizes the activity recorded in the accrued product warranty liability during the six months ended June 30, 2021 and 2020: Six Months Ended June 30, 2021 2020 (In thousands) Balance, beginning of period $ 140 $ 215 Warranties issued 19 55 Warranty settlements (45 ) (78 ) Balance, end of period $ 114 $ 192

Earnings per share (Tables)

Earnings per share (Tables)	6 Months Ended
	Jun. 30, 2021
Earnings per share [Abstract]
Earnings per share	Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands, except per share data) Net loss $ (2,114 ) $ (1,853 ) $ (4,320 ) $ (2,845 ) Shares: Basic: Weighted average common shares outstanding 8,976 7,543 8,962 7,525 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method – – – – Diluted: Weighted average common and common equivalent shares outstanding 8,976 7,543 8,962 7,525 Net loss per common share: Basic $ (0.24 ) $ (0.25 ) $ (0.48 ) $ (0.38 ) Diluted $ (0.24 ) $ (0.25 ) $ (0.48 ) $ (0.38 )

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2021
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): Six Months Ended June 30, 2021 2020 Operating cash outflows from leases $ 522 $ 519
Additional information related to leases	The following summarizes additional information related to our leases as of June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 Weighted average remaining lease term (in years) 3.9 4.9 Weighted average discount rate 4.4 % 4.1 %
Maturity of operating lease liabilities	The maturity of the Company’s operating lease liabilities as of June 30, 2021 and December 31, 2020 were as follows (in thousands): June 30, 2021 December 31, 2020 2021 $ 463 $ 971 2022 887 879 2023 722 713 2024 722 718 2025 427 464 Thereafter 24 180 Total undiscounted lease payments 3,245 3,925 Less imputed interest 269 224 Total lease liabilities $ 2,976 $ 3,701

Basis of presentation (Details)

Basis of presentation (Details) $ in Millions	Oct. 16, 2020USD ($)shares	Jun. 30, 2021USD ($)Manufacturer	May 01, 2020USD ($)
Basis of presentation [Abstract]
Number of manufacturers in China and Thailand | Manufacturer		2
Proceeds from Public Offering	$ 8.7
Shares sold in Public Offering (in shares) | shares	1,380,000
PPP Loan [Member]
Basis of presentation [Abstract]
Face amount			$ 2.2
Revolving Credit Facility [Member]
Basis of presentation [Abstract]
Maximum borrowing capacity		$ 10

Revenue, Disaggregation of Reve

Revenue, Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of revenue [Abstract]
Total net sales	$ 9,325	$ 5,285	$ 17,626	$ 15,532
United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	7,954	4,601	14,949	12,016
International [Member]
Disaggregation of revenue [Abstract]
Total net sales	1,371	684	2,677	3,516
Food Service Technology [Member]
Disaggregation of revenue [Abstract]
Total net sales	3,074	1,204	5,821	2,575
Food Service Technology [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	2,987	1,056	5,551	2,295
Food Service Technology [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	87	148	270	280
POS Automation and Banking [Member]
Disaggregation of revenue [Abstract]
Total net sales	1,256	481	2,420	2,039
POS Automation and Banking [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	1,252	481	2,412	2,035
POS Automation and Banking [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	4	0	8	4
Casino and Gaming [Member]
Disaggregation of revenue [Abstract]
Total net sales	3,467	1,360	6,332	6,291
Casino and Gaming [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	2,438	970	4,402	3,528
Casino and Gaming [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	1,029	390	1,930	2,763
Lottery [Member]
Disaggregation of revenue [Abstract]
Total net sales	0	817	0	817
Lottery [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	0	817	0	817
Lottery [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	0	0	0	0
Printrex [Member]
Disaggregation of revenue [Abstract]
Total net sales	112	8	271	125
Printrex [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	25	6	52	67
Printrex [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	87	2	219	58
TransAct Services Group [Member]
Disaggregation of revenue [Abstract]
Total net sales	1,416	1,415	2,782	3,685
TransAct Services Group [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Total net sales	1,252	1,271	2,532	3,274
TransAct Services Group [Member] | International [Member]
Disaggregation of revenue [Abstract]
Total net sales	$ 164	$ 144	$ 250	$ 411

Revenue, Contract Balances (Det

Revenue, Contract Balances (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Revenue [Abstract]
Revenue recognized	$ 500
Contract liabilities [Abstract]
Unbilled receivables, current	296	$ 290
Unbilled receivables, non-current	441	591
Customer pre-payments	(87)	(216)
Deferred revenue, current	(742)	(504)
Deferred revenue, non-current	(232)	(111)
Contract with Customer, Asset (Liability), net	$ (324)	$ 50

Revenue, Remaining Performance

Revenue, Remaining Performance Obligations (Details) $ in Millions	Jun. 30, 2021USD ($)
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 4.4
Expected timing of satisfaction, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 0.4
Expected timing of satisfaction, period	12 months

Note receivable (Details)

Note receivable (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended
	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Note receivable [Abstract]
Interest rate			4.50%
Collection of note receivable	$ 1,600		$ 1,598
Interest income		$ 18	$ 17	$ 31

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Inventories, net [Abstract]
Raw materials and purchased component parts	$ 5,373	$ 5,467
Finished goods	3,361	5,819
Inventories	$ 8,734	$ 11,286

Accrued product warranty liab_3

Accrued product warranty liability (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Accrued product warranty liability [Roll Forward]
Balance, beginning of period	$ 140	$ 215
Warranties issued	19	55
Warranty settlements	(45)	(78)
Balance, end of period	114	$ 192
Accrued product warranty liability, current	87
Other Liabilities [Member]
Accrued product warranty liability [Roll Forward]
Accrued product warranty liability, non-current	$ 27
Maximum [Member]
Warranty [Abstract]
Product warranty period	24 months

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	May 01, 2020	Mar. 13, 2020
Revolving Credit Facility [Member]
Debt [Abstract]
Maximum borrowing capacity	$ 10,000
Maturity date	Mar. 13, 2023
Interest rate	6.50%
Deferred financing costs			$ 245
Percentage fee on unused borrowings	0.50%
Percentage of eligible accounts receivable	85.00%
Eligible inventory	$ 5,000
Percentage of eligible raw material	50.00%
Percentage of eligible finished goods inventory	60.00%
Additional borrowing capacity	$ 4,700
Revolving Credit Facility [Member] | Prime Rate [Member]
Debt [Abstract]
Basis spread on variable rate	1.75%
Revolving Credit Facility [Member] | Federal Funds Rate [Member]
Debt [Abstract]
Basis spread on variable rate	2.25%
PPP Loan [Member]
Debt [Abstract]
Maturity date	May 1, 2022
Interest rate	1.00%
Face amount		$ 2,200

Earnings per share (Details)

Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Earnings per share [Abstract]
Net loss	$ (2,114)	$ (1,853)	$ (4,320)	$ (2,845)
Shares [Abstract]
Basic: Weighted average common shares outstanding (in shares)	8,976	7,543	8,962	7,525
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method (in shares)	0	0	0	0
Diluted: Weighted average common and common equivalent shares outstanding (in shares)	8,976	7,543	8,962	7,525
Net (loss) income per common share [Abstract]
Basic (in dollars per share)	$ (0.24)	$ (0.25)	$ (0.48)	$ (0.38)
Diluted (in dollars per share)	$ (0.24)	$ (0.25)	$ (0.48)	$ (0.38)
Stock Awards [Member]
Earnings per share [Abstract]
Anti-dilutive securities excluded from computation of earnings per dilutive share (in shares)	300	1,400	700	1,300

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Feb. 28, 2020
Leases [Abstract]
Right-of-use-asset	$ 2,952		$ 2,952		$ 3,618
Lease liability	2,976		2,976		$ 3,701
Operating lease expense	$ 239	$ 241	482	$ 492
Operating cash flows from leases			$ 522	$ 519
Weighted average remaining lease term	3 years 10 months 24 days		3 years 10 months 24 days		4 years 10 months 24 days
Weighted average discount rate	4.40%		4.40%		4.10%
Maturity of Operating Lease Liabilities [Abstract]
2021	$ 463		$ 463		$ 971
2022	887		887		879
2023	722		722		713
2024	722		722		718
2025	427		427		464
Thereafter	24		24		180
Total undiscounted lease payments	3,245		3,245		3,925
Less imputed interest	269		269		224
Total lease liabilities	$ 2,976		$ 2,976		$ 3,701
Minimum [Member]
Leases [Abstract]
Remaining lease terms	1 year		1 year
Maximum [Member]
Leases [Abstract]
Remaining lease terms	5 years		5 years
Extension period for leases	5 years		5 years
Termination period for leases			1 year
Facility in Ithaca, New York [Member]
Leases [Abstract]
Extension period for leases	4 years		4 years
Right-of-use-asset						$ 1,500
Lease liability						1,500
Maturity of Operating Lease Liabilities [Abstract]
Total lease liabilities						$ 1,500

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2021	Sep. 30, 2020	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2017
Income taxes [Abstract]
Income tax provision (benefit)	$ (687)		$ (921)	$ (1,243)	$ (1,386)
Effective tax rate	24.50%		33.20%	22.30%	32.80%
U.S. corporate income tax rate				21.00%		34.00%
Unrecognized tax benefits that would favorably affect effective income tax rate if recognized	$ 121			$ 121
Unrecognized tax benefits that will lapse upon expiration of statute of limitations		$ 24
Accrued interest and penalties related to uncertain tax positions	$ 25			$ 25