TransAct Technologies (TACT) 10-Q 12 Nov 21 2021 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Oct. 31, 2021
Cover page.
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Document Transition Report	false
Entity File Number	0-21121
Entity Registrant Name	TRANSACT TECHNOLOGIES INC
Entity Central Index Key	0001017303
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		9,835,379

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 18,658	$ 10,359
Accounts receivable, net	6,501	3,377
Note receivable	0	100
Inventories	6,369	11,286
Prepaid income taxes	2,519	2,409
Other current assets	1,182	644
Total current assets	35,229	28,175
Fixed assets, net of accumulated depreciation of $- and $19,979, respectively	2,332	1,950
Note receivable, net of current portion	0	1,584
Right-of-use asset	2,750	3,618
Goodwill	2,621	2,621
Deferred tax assets	4,506	2,939
Intangible assets, net of accumulated amortization of $- and $4,005, respectively	435	583
Other assets	476	777
Total noncurrent assets	13,120	14,072
Total assets	48,349	42,247
Current liabilities:
Accounts payable	1,676	1,691
Accrued liabilities	3,511	3,665
Lease liability	816	837
Deferred revenue	768	504
Total current liabilities	6,771	6,697
Long-term debt	0	2,173
Deferred revenue, net of current portion	207	111
Lease liability, net of current portion	1,956	2,864
Other liabilities	135	166
Total noncurrent liabilities	2,298	5,314
Total liabilities	9,069	12,011
Shareholders' equity:
Common stock, $0.01 par value, 20,000,000 shares authorized; - and 12,976,227 shares issued, respectively; - and 8,931,385 shares outstanding, respectively	139	130
Additional paid-in capital	54,873	42,536
Retained earnings	16,308	19,718
Accumulated other comprehensive income (loss), net of tax	70	(38)
Treasury stock, at cost, 4,044,842 shares	(32,110)	(32,110)
Total shareholders' equity	39,280	30,236
Total liabilities and shareholders' equity	$ 48,349	$ 42,247

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Assets:
Fixed assets, accumulated depreciation	$ 20,421	$ 19,979
Intangible assets, accumulated amortization	$ 4,152	$ 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)	13,880,221	12,976,227
Common stock, shares outstanding (in shares)	9,835,379	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		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
CONSOLIDATED STATEMENTS OF INCOME [Abstract]
Net sales	$ 10,637	$ 7,300	$ 28,263	$ 22,832
Cost of sales	6,320	3,951	17,432	12,275
Gross profit	4,317	3,349	10,831	10,557
Operating expenses:
Engineering, design and product development	1,876	1,445	5,483	4,197
Selling and marketing	1,899	1,258	5,109	4,885
General and administrative	2,146	2,125	7,264	6,987
Operating expenses	5,921	4,828	17,856	16,069
Operating loss	(1,604)	(1,479)	(7,025)	(5,512)
Interest and other expense:
Interest, net	(29)	(19)	(71)	(41)
Gain (Loss) on Non-Recourse Debt	2,173	0	2,173	0
Other, net	(69)	116	(169)	(60)
Interest and other expense	2,075	97	1,933	(101)
Loss before income taxes	471	(1,382)	(5,092)	(5,613)
Income tax benefit	(439)	(515)	(1,682)	(1,901)
Net loss	$ 910	$ (867)	$ (3,410)	$ (3,712)
Net loss per common share:
Basic (in dollars per share)	$ 0.10	$ (0.11)	$ (0.37)	$ (0.49)
Diluted (in dollars per share)	$ 0.09	$ (0.11)	$ (0.37)	$ (0.49)
Shares used in per-share calculation:
Basic (in shares)	9,408	7,548	9,112	7,533
Diluted (in shares)	9,846	7,548	9,112	7,533

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract]
Net loss	$ 910	$ (867)	$ (3,410)	$ (3,712)
Foreign currency translation adjustment, net of tax	23	(84)	108	(3)
Comprehensive loss	$ 933	$ (951)	$ (3,302)	$ (3,715)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net loss	$ (3,410)	$ (3,712)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on the forgiveness of long-term debt	(2,173)	0
Share-based compensation expense	952	644
Depreciation and amortization	721	758
Deferred income taxes	(1,573)	(2,008)
Gain on the sale of fixed assets	(8)	0
Foreign currency transaction losses	175	59
Changes in operating assets and liabilities:
Accounts receivable	(3,124)	1,429
Inventories	4,922	(446)
Prepaid income taxes	(110)	87
Other current and long-term assets	(213)	150
Accounts payable	(241)	(685)
Accrued liabilities and other liabilities	143	(508)
Net cash used in operating activities	(3,939)	(4,232)
Cash flows from investing activities:
Capital expenditures	(804)	(634)
Proceeds from the sale of fixed assets	8	0
Collection of note receivable	1,598
Issuance of note receivable		(600)
Net cash provided by (used in) investing activities	802	(1,234)
Cash flows from financing activities:
Revolving credit line borrowings	0	2,756
Revolving credit line payments	0	(2,756)
Long-term debt borrowings	0	2,173
Proceeds from Issuance of Common Stock	12,214	0
Payment of common stock issuance costs	(867)	(71)
Proceeds from stock option exercises	284	353
Withholding taxes paid on stock issuances	(100)	(41)
Payment of bank financing costs	(31)	(213)
Net cash provided by financing activities	11,500	2,201
Effect of exchange rate changes on cash and cash equivalents	(64)	9
Decrease in cash and cash equivalents	8,299	(3,256)
Cash and cash equivalents, beginning of period	10,359	4,203
Cash and cash equivalents, end of period	18,658	947
Supplemental schedule of non-cash investing activities:
Capital expenditures included in accounts payable	$ 115	$ 15

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), Net of Tax [Member]	Total
Beginning balance at Dec. 31, 2019	$ 115	$ 32,604	$ 25,348		$ (31)	$ 25,926
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Value, New Issues	0	0
Share-based compensation expense		644
Issuance of shares from exercise of stock options	1	353
Relinquishment of stock awards and restricted stock units to pay for withholding taxes		(41)
Net loss			(3,712)			(3,712)
Foreign currency translation adjustment, net of tax					(3)	(3)
Ending balance at Sep. 30, 2020	116	33,560	21,636	$ (32,110)	(34)	$ 23,168
Supplemental share information
Issuance of shares from stock awards (in shares)						93
Stock Issued During Period, Shares, New Issues						0
Relinquishment of stock awards to pay withholding taxes (in shares)						14
Beginning balance at Jun. 30, 2020	116	33,329	22,503		50	$ 23,888
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Value, New Issues	0	0
Share-based compensation expense		231
Issuance of shares from exercise of stock options	0	0
Relinquishment of stock awards and restricted stock units to pay for withholding taxes		0
Net loss			(867)			(867)
Foreign currency translation adjustment, net of tax					(84)	(84)
Ending balance at Sep. 30, 2020	116	33,560	21,636	(32,110)	(34)	$ 23,168
Supplemental share information
Issuance of shares from stock awards (in shares)						2
Stock Issued During Period, Shares, New Issues						0
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]
Stock Issued During Period, Value, New Issues	9	11,201
Share-based compensation expense		952
Issuance of shares from exercise of stock options	0	284
Relinquishment of stock awards and restricted stock units to pay for withholding taxes		(100)
Net loss			(3,410)			(3,410)
Foreign currency translation adjustment, net of tax					108	108
Ending balance at Sep. 30, 2021	139	54,873	16,308	(32,110)	70	$ 39,280
Supplemental share information
Issuance of shares from stock awards (in shares)						94
Stock Issued During Period, Shares, New Issues						842
Relinquishment of stock awards to pay withholding taxes (in shares)						32
Beginning balance at Jun. 30, 2021	130	43,408	15,398		47	$ 26,873
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Value, New Issues	9	11,201
Share-based compensation expense		257
Issuance of shares from exercise of stock options	0	7
Relinquishment of stock awards and restricted stock units to pay for withholding taxes		0
Net loss			910			910
Foreign currency translation adjustment, net of tax					23	23
Ending balance at Sep. 30, 2021	$ 139	$ 54,873	$ 16,308	$ (32,110)	$ 70	$ 39,280
Supplemental share information
Issuance of shares from stock awards (in shares)						3
Stock Issued During Period, Shares, New Issues						842
Relinquishment of stock awards to pay withholding taxes (in shares)						0

Basis of presentation

Basis of presentation	9 Months Ended
	Sep. 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 nine months ended September 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 nine months 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 Offerings – On October 16, 2020 and August 16, 2021, the Company raised net proceeds of $8.7 million and $11.3 million (including the exercise of the underwriters overallotment option on August 20, 2021), respectively, after deducting underwriting discounts, commissions and offering expenses, through underwritten public offerings and sold an aggregate of 1,380,000 and 842,375 shares of common stock, respectively. ● 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 and gradually increased expenses during 2021 as our sale improved. 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	9 Months Ended
	Sep. 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 disaggregate 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 September 30, 2021 2020 (In thousands) United States International Total United States International Total Food service technology $ 3,065 $ 217 $ 3,282 $ 2,081 $ 268 $ 2,349 POS automation 1,188 – 1,188 739 3 742 Casino and gaming 2,656 1,380 4,036 1,552 457 2,009 Printrex – 160 160 5 102 107 TransAct Services Group 1,856 115 1,971 1,910 183 2,093 Total net sales $ 8,765 $ 1,872 $ 10,637 $ 6,287 $ 1,013 $ 7,300 Nine Months Ended September 30, 2021 2020 (In thousands) United States International Total United States International Total Food service technology $ 8,616 $ 487 $ 9,103 $ 4,376 $ 548 $ 4,924 POS automation 3,600 8 3,608 2,774 7 2,781 Casino and gaming 7,058 3,310 10,368 5,080 3,220 8,300 Lottery – – – 817 – 817 Printrex 52 379 431 72 160 232 TransAct Services Group 4,388 365 4,753 5,184 594 5,778 Total net sales $ 23,714 $ 4,549 $ 28,263 $ 18,303 $ 4,529 $ 22,832 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 months ended , we recognized revenue of $ million related to our contract liabilities at . Total net contract (liabilities) assets consisted of the following: September 30, 2021 December 31, 2020 (In thousands) Unbilled receivables, current $ 306 $ 290 Unbilled receivables, non-current 376 591 Customer pre-payments (49 ) (216 ) Deferred revenue, current (768 ) (504 ) Deferred revenue, non-current (207 ) (111 ) Total net contract (liabilities) assets $ (342 ) $ 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 September 30, 2021, the aggregate amount of transaction prices allocated to remaining performance obligations was $4.6 million. The Company expects to recognize revenue on $4.1 million of its remaining performance obligations within the next 12 months following September 30, 2021, $0.4 million within the next 24 months remaining 36 months

Note receivable

Note receivable	9 Months Ended
	Sep. 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 months ended and , we recorded $ thousand and $ thousand of interest income, respectively.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2021
Inventories [Abstract]
Inventories	4. Inventories The components of inventories were: September 30, 2021 December 31, 2020 (In thousands) Raw materials and purchased component parts $ 4,213 $ 5,467 Finished goods 2,156 5,819 $ 6,369 $ 11,286

Accrued product warranty liabil

Accrued product warranty liability	9 Months Ended
	Sep. 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 nine months ended September 30, 2021 and 2020: Nine Months Ended September 30, 2021 2020 (In thousands) Balance, beginning of period $ 140 $ 215 Warranties issued 39 53 Warranty settlements (70 ) (107 ) Balance, end of period $ 109 $ 161 As of September 30, 2021, $88 thousand of the accrued product warranty liability was classified as current in “Accrued liabilities” in the Condensed Consolidated Balance Sheets and the remaining $21 thousand was classified as non-current in “Other liabilities”.

Debt

Debt	9 Months Ended
	Sep. 30, 2021
Debt [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	9 Months Ended
	Sep. 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 Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (In thousands, except per share data) Net income (loss) $ 910 $ (867 ) $ (3,410 ) $ (3,712 ) Shares: Basic: Weighted average common shares outstanding 9,408 7,548 9,112 7,533 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 438 – – – Diluted: Weighted average common and common equivalent shares outstanding 9,846 7,548 9,112 7,533 Net income (loss) per common share: Basic $ 0.10 $ (0.11 ) $ (0.37 ) $ (0.49 ) Diluted $ 0.09 $ (0.11 ) $ (0.37 ) $ (0.49 ) 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	9 Months Ended
	Sep. 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	9 Months Ended
	Sep. 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 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 September 30, 2021 and 2020 was $235 thousand and $243 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 months ended and was $ thousand and $ thousand, respectively. The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands): Nine Months Ended September 30, 2021 2020 Operating cash outflows from leases $ 750 $ 779 The following summarizes additional information related to our leases as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Weighted average remaining lease term (in years) 3.7 4.9 Weighted average discount rate 4.4 % 4.1 % The maturity of the Company’s operating lease liabilities as of September 30, 2021 and December 31, 2020 were as follows (in thousands): September 30, 2021 December 31, 2020 2021 $ 232 $ 971 2022 886 879 2023 720 713 2024 721 718 2025 426 464 Thereafter 23 180 Total undiscounted lease payments 3,008 3,925 Less imputed interest 236 224 Total lease liabilities $ 2,772 $ 3,701

Income taxes

Income taxes	9 Months Ended
	Sep. 30, 2021
Income taxes [Abstract]
Income taxes	10. Income taxes We recorded an income tax benefit for the third quarter of of $ thousand at an effective tax rate of , compared to an income tax benefit for the third 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 2017. However, our federal tax returns for the years 2018 through 2020 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, 2021, we had $97 thousand of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. For the third quarter of 2021, we recognized $24 thousand of previously unrecognized tax benefits as the statute of limitations on the use of our 2017 research and development credit expired during the third quarter of 2021. We recognize interest and penalties related to uncertain tax positions in the income tax provision. As of September 30, 2021, we had $17 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 likely.

Subsequent events

Subsequent events	9 Months Ended
	Sep. 30, 2021
Subsequent events [Abstract]
Subsequent events	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 condensed consolidated financial statements.

Basis of presentation (Policies

Basis of presentation (Policies)	9 Months Ended
	Sep. 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)	9 Months Ended
	Sep. 30, 2021
Revenue [Abstract]
Disaggregation of Revenue	Disaggregation of revenue The following tables disaggregate 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 September 30, 2021 2020 (In thousands) United States International Total United States International Total Food service technology $ 3,065 $ 217 $ 3,282 $ 2,081 $ 268 $ 2,349 POS automation 1,188 – 1,188 739 3 742 Casino and gaming 2,656 1,380 4,036 1,552 457 2,009 Printrex – 160 160 5 102 107 TransAct Services Group 1,856 115 1,971 1,910 183 2,093 Total net sales $ 8,765 $ 1,872 $ 10,637 $ 6,287 $ 1,013 $ 7,300 Nine Months Ended September 30, 2021 2020 (In thousands) United States International Total United States International Total Food service technology $ 8,616 $ 487 $ 9,103 $ 4,376 $ 548 $ 4,924 POS automation 3,600 8 3,608 2,774 7 2,781 Casino and gaming 7,058 3,310 10,368 5,080 3,220 8,300 Lottery – – – 817 – 817 Printrex 52 379 431 72 160 232 TransAct Services Group 4,388 365 4,753 5,184 594 5,778 Total net sales $ 23,714 $ 4,549 $ 28,263 $ 18,303 $ 4,529 $ 22,832
Net Contract (Liabilities) Assets	September 30, 2021 December 31, 2020 (In thousands) Unbilled receivables, current $ 306 $ 290 Unbilled receivables, non-current 376 591 Customer pre-payments (49 ) (216 ) Deferred revenue, current (768 ) (504 ) Deferred revenue, non-current (207 ) (111 ) Total net contract (liabilities) assets $ (342 ) $ 50

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2021
Inventories [Abstract]
Inventories	The components of inventories were: September 30, 2021 December 31, 2020 (In thousands) Raw materials and purchased component parts $ 4,213 $ 5,467 Finished goods 2,156 5,819 $ 6,369 $ 11,286

Accrued product warranty liab_2

Accrued product warranty liability (Tables)	9 Months Ended
	Sep. 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 nine months ended September 30, 2021 and 2020: Nine Months Ended September 30, 2021 2020 (In thousands) Balance, beginning of period $ 140 $ 215 Warranties issued 39 53 Warranty settlements (70 ) (107 ) Balance, end of period $ 109 $ 161

Earnings per share (Tables)

Earnings per share (Tables)	9 Months Ended
	Sep. 30, 2021
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 Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (In thousands, except per share data) Net income (loss) $ 910 $ (867 ) $ (3,410 ) $ (3,712 ) Shares: Basic: Weighted average common shares outstanding 9,408 7,548 9,112 7,533 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 438 – – – Diluted: Weighted average common and common equivalent shares outstanding 9,846 7,548 9,112 7,533 Net income (loss) per common share: Basic $ 0.10 $ (0.11 ) $ (0.37 ) $ (0.49 ) Diluted $ 0.09 $ (0.11 ) $ (0.37 ) $ (0.49 )

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 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): Nine Months Ended September 30, 2021 2020 Operating cash outflows from leases $ 750 $ 779
Additional Information Related to Leases	The following summarizes additional information related to our leases as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Weighted average remaining lease term (in years) 3.7 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 September 30, 2021 and December 31, 2020 were as follows (in thousands): September 30, 2021 December 31, 2020 2021 $ 232 $ 971 2022 886 879 2023 720 713 2024 721 718 2025 426 464 Thereafter 23 180 Total undiscounted lease payments 3,008 3,925 Less imputed interest 236 224 Total lease liabilities $ 2,772 $ 3,701

Basis of presentation (Details)

Basis of presentation (Details) $ in Thousands	Oct. 16, 2020USD ($)shares	Sep. 30, 2021USD ($)Manufacturershares	Sep. 30, 2020shares	Sep. 30, 2021USD ($)Manufacturershares	Sep. 30, 2020USD ($)shares	May 01, 2020USD ($)	Mar. 13, 2020USD ($)
Basis of presentation [Abstract]
Number of manufacturers in China and Thailand | Manufacturer		2		2
Proceeds from Public Offering	$ 8,700			$ 12,214	$ 0
Shares sold in Public Offering (in shares) | shares	1,380,000	842,000	0	842,000	0
PPP Loan [Member]
Basis of presentation [Abstract]
Face amount						$ 2,200
Revolving Credit Facility [Member]
Basis of presentation [Abstract]
Maximum borrowing capacity		$ 10,000		$ 10,000			$ 10,000

Revenue, Disaggregation of Reve

Revenue, Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Disaggregation of revenue [Abstract]
Net sales	$ 10,637	$ 7,300	$ 28,263	$ 22,832
United States [Member]
Disaggregation of revenue [Abstract]
Net sales	8,765	6,287	23,714	18,303
International [Member]
Disaggregation of revenue [Abstract]
Net sales	1,872	1,013	4,549	4,529
Food Service Technology [Member]
Disaggregation of revenue [Abstract]
Net sales	3,282	2,349	9,103	4,924
Food Service Technology [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales	3,065	2,081	8,616	4,376
Food Service Technology [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales	217	268	487	548
POS Automation [Member]
Disaggregation of revenue [Abstract]
Net sales	1,188	742	3,608	2,781
POS Automation [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales	1,188	739	3,600	2,774
POS Automation [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales	0	3	8	7
Casino and Gaming [Member]
Disaggregation of revenue [Abstract]
Net sales	4,036	2,009	10,368	8,300
Casino and Gaming [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales	2,656	1,552	7,058	5,080
Casino and Gaming [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales	1,380	457	3,310	3,220
Lottery [Member]
Disaggregation of revenue [Abstract]
Net sales			0	817
Lottery [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales			0	817
Lottery [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales			0	0
Printrex [Member]
Disaggregation of revenue [Abstract]
Net sales	160	107	431	232
Printrex [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales	0	5	52	72
Printrex [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales	160	102	379	160
TransAct Services Group [Member]
Disaggregation of revenue [Abstract]
Net sales	1,971	2,093	4,753	5,778
TransAct Services Group [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales	1,856	1,910	4,388	5,184
TransAct Services Group [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales	$ 115	$ 183	$ 365	$ 594

Revenue, Contract Balances (Det

Revenue, Contract Balances (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2020
Revenue [Abstract]
Revenue recognized	$ 600
Contract liabilities [Abstract]
Unbilled receivables, current		$ 306	$ 290
Unbilled receivables, non-current		376	591
Customer pre-payments		(49)	(216)
Deferred revenue, current		(768)	(504)
Deferred revenue, non-current		(207)	(111)
Total net contract (liabilities) assets		$ (342)	$ 50

Revenue, Remaining Performance

Revenue, Remaining Performance Obligations (Details) $ in Millions	Sep. 30, 2021USD ($)
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 4.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01
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]: 2022-10-01
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 0.4
Expected timing of satisfaction, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01
Remaining performance obligations [Abstract]
Remaining performance obligations
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		9 Months Ended
	Mar. 31, 2021	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Sep. 30, 2021
Note receivable [Abstract]
Interest rate						4.50%
Collection of note receivable	$ 1,600					$ 1,598
Interest income		$ 0	$ 18	$ 17	$ 49

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Inventories [Abstract]
Raw materials and purchased component parts	$ 4,213	$ 5,467
Finished goods	2,156	5,819
Inventories	$ 6,369	$ 11,286

Accrued product warranty liab_3

Accrued product warranty liability (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Accrued product warranty liability [Roll Forward]
Balance, beginning of period	$ 140	$ 215
Warranties issued	39	53
Warranty settlements	(70)	(107)
Balance, end of period	109	$ 161
Accrued product warranty liability, current	88
Other Liabilities [Member]
Accrued product warranty liability [Roll Forward]
Accrued product warranty liability, non-current	$ 21
Maximum [Member]
Warranty [Abstract]
Product warranty period	24 months

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Jul. 21, 2021	May 01, 2020	Mar. 13, 2020
Revolving Credit Facility [Member]
Debt [Abstract]
Maximum borrowing capacity	$ 10,000			$ 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	$ 4,200
Revolving Credit Facility [Member] | Minimum [Member]
Debt [Abstract]
Additional borrowing capacity		$ 750
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		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Earnings per share [Abstract]
Net loss	$ 910	$ (867)	$ (3,410)	$ (3,712)
Shares [Abstract]
Basic: Weighted average common shares outstanding (in shares)	9,408	7,548	9,112	7,533
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method (in shares)	438	0	0	0
Diluted: Weighted average common and common equivalent shares outstanding (in shares)	9,846	7,548	9,112	7,533
Net (loss) income per common share [Abstract]
Basic (in dollars per share)	$ 0.10	$ (0.11)	$ (0.37)	$ (0.49)
Diluted (in dollars per share)	$ 0.09	$ (0.11)	$ (0.37)	$ (0.49)
Stock Awards [Member]
Earnings per share [Abstract]
Anti-dilutive securities excluded from computation of earnings per dilutive share (in shares)	300	1,400	400	1,400

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	Apr. 30, 2021	Feb. 28, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Leases [Abstract]
Operating lease expense			$ 235	$ 243	$ 717	$ 735
Operating cash flows from leases					$ 750	$ 779
Weighted average remaining lease term			3 years 8 months 12 days		3 years 8 months 12 days		4 years 10 months 24 days
Weighted average discount rate			4.40%		4.40%		4.10%
Maturity of Operating Lease Liabilities [Abstract]
2021			$ 232		$ 232		$ 971
2022			886		886		879
2023			720		720		713
2024			721		721		718
2025			426		426		464
Thereafter			23		23		180
Total undiscounted lease payments			3,008		3,008		3,925
Less imputed interest			236		236		224
Total lease liabilities			$ 2,772		$ 2,772		$ 3,701
Minimum [Member]
Leases [Abstract]
Remaining lease terms			1 year		1 year
Extension period for leases			2 years		2 years
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
Increase (decrease) in right-of-use-asset		$ 1,500
Increase (decrease) in operating lease liability		$ 1,500
Facility in Hamden, Connecticut [Member]
Leases [Abstract]
Extension period for leases	2 years
Increase (decrease) in right-of-use-asset	$ (300)
Increase (decrease) in operating lease liability	$ (300)

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2017
Income taxes [Abstract]
Income tax provision (benefit)	$ (439)	$ (515)	$ (1,682)	$ (1,901)
Effective tax rate	(93.20%)	37.30%	33.00%	33.90%
U.S. corporate income tax rate			21.00%		34.00%
Unrecognized tax benefits that would favorably affect effective income tax rate if recognized	$ 97		$ 97
Unrecognized tax benefits that will lapse upon expiration of statute of limitations		$ 24
Accrued interest and penalties related to uncertain tax positions	$ 17		$ 17