| 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 consumer traffic continues to increase during 2022, but that casinos and restaurants may delay purchases of new slot machines and our BOHA! products, respectively, due to labor shortages and supply issues caused by the
pandemic. Based on these assumptions, we anticipate that sales in casino and gaming and food service technology may continue to be negatively impacted for the foreseeable future. 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 requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Our estimates include those related to revenue recognition, accounts receivable, inventory obsolescence, goodwill and
intangible assets, the valuation of deferred tax assets and liabilities, depreciable lives of equipment, warranty obligations, share-based compensation and contingent liabilities. We base our estimates on historical experience and on various other
assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates used. 2. Revenue We account for revenue in accordance with ASC Topic 606: Revenue from Contracts with Customers. Disaggregation of revenue The following table disaggregates our revenue by market type, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are
affected by economic factors. Sales and usage-based taxes are excluded from revenues.
Three Months Ended
March 31,
2022
2021
(In thousands)
United States
International
Total
United States
International
Total
Food service technology
$
1,946
$
184
$
2,130
$
2,564
$
183
$
2,747
POS automation
1,300
–
1,300
1,160
4
1,164
Casino and gaming
2,788
1,974
4,762
1,964
901
2,865
Printrex
–
–
–
27
132
159
Transact Services Group
1,068
442
1,510
1,280
86
1,366
Total net sales
$
7,102
$
2,600
$
9,702
$
6,995
$
1,306
$
8,301 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 consisted of the following:
March 31, 2022
December 31, 2021
(In thousands)
Unbilled receivables, current
$
329
$
314
Unbilled receivables, non-current
253
308
Customer pre-payments
(253
)
(99
)
Deferred revenue, current
(823
)
(805
)
Deferred revenue, non-current
(171
)
(186
)
Total net contract liabilities
$
(665
)
$
(468
) Remaining performance obligations Remaining performance obligations represent the transaction price of firm orders for which a good or service has not been delivered to
our customer. As of March 31, 2022, the aggregate amount of transaction prices allocated to remaining performance obligations was $13.6 million. The Company expects to recognize revenue of $13.2
million of its remaining performance obligations within the next 12 months following March 31, 2022, $0.3 million within the next 24 months remaining 36 months 3. Inventories The components of inventories were:
March 31, 2022
December 31, 2021
(In thousands)
Raw materials and purchased component parts
$
7,456
$
6,479
Work-in-process
–
11
Finished goods
1,592
1,230
$
9,048
$
7,720 4. Accrued product warranty liability We generally provide warranties on our hardware products for up to 24 months and record the estimated cost of such product warranties at the time the sale is recorded. Estimated warranty costs are based upon actual past experience of product
repairs and the related estimated cost of labor and material to make the necessary repairs. The following table summarizes the activity recorded in the accrued product warranty liability during the three months ended March 31, 2022 and 2021:
Three Months Ended
March 31,
2022
2021
(In thousands)
Balance, beginning of period
$
101
$
140
Warranties issued
6
5
Warranty settlements
(17
)
(29
)
Balance, end of period
$
90
$
116 As of March 31, 2022, $72 thousand of the accrued product warranty liability was classified as current in “Accrued liabilities” in the Condensed Consolidated Balance Sheets and
the remaining $18 thousand was classified as non-current in “Other liabilities”. 5. Debt On March 13, 2020, we entered into a 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 6. Earnings per share The following table sets forth the reconciliation of basic weighted average shares outstanding and diluted weighted average shares outstanding:
Three Months Ended
March 31,
2022
2021
(In thousands, except per share data)
Net loss
$
(4,013
)
$
(2,206
)
Shares:
Basic: Weighted average common shares outstanding
9,886
8,948
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
9,886
8,948
Net loss per common share:
Basic
$
(0.41
)
$
(0.25
)
Diluted
$
(0.41
)
$
(0.25
) 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 March 31, 2022 and 2021, there were 943 thousand and 705 thousand, respectively, of potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share. Furthermore, in
periods when a net loss is reported, such as the three months ended March 31, 2022 and 2021, basic and diluted net loss per common share are calculated using the same method. 7. 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 four years, some of which include options to extend. Our leases with options to extend provide for
extensions of two On April 30,
2021, we entered into an amendment to modify the expiration date of our lease on our Hamden, Connecticut facility. . Operating lease expense for the three months ended March 31, 2022 and 2021 was $237 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 expenses include short-term lease costs, which were immaterial during the periods
presented. The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands):
Three Months Ended
March 31,
2022
2021
Operating cash outflows from leases
$
230
$
262 The following summarizes additional information related to our leases as of March 31, 2022 and December 31, 2021:
March 31, 2022
December 31, 2021
Weighted average remaining lease term (in years)
3.3
3.5
Weighted average discount rate
4.4
%
4.4
% The maturity of the Company’s operating lease liabilities as of March 31, 2022 and December 31, 2021 were as follows (in thousands):
March 31, 2022
December 31, 2021
2022
$
654
$
886
2023
719
721
2024
720
721
2025
425
426
2026
22
23
Total undiscounted lease payments
2,540
2,777
Less imputed interest
179
207
Total lease liabilities
$
2,361
$
2,570 8. Income taxes We recorded an income tax benefit for the first quarter of 2022 of $1.3 million at an effective tax rate of 23.9%, compared to an income tax benefit during the first quarter of 2021 of $0.6 million at an effective tax rate of 20.1%. The effective tax rate for the first quarter of 2022 is higher than the effective tax rate for the first quarter of 2021 as we are estimating an increase in the R&D
credit in 2022 compared to 2021 due to expected investment spending for our BOHA! products. We are subject to U.S. federal income tax, as well as income tax in certain U.S. state and foreign jurisdictions. We have substantially
concluded all U.S. federal, state and local income tax, and foreign tax regulatory examination matters through 2017. However, our federal tax returns for the years 2018 through 2020 remain open to examination. Various U.S. state and foreign tax
jurisdiction tax years remain open to examination as well, but we believe that any additional assessment would be immaterial to the Condensed Consolidated Financial Statements. As of March 31, 2022, we
had $144 thousand of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any
future periods. We expect that $28 thousand of the $144
thousand of unrecognized tax benefits will reverse in 2022 upon the expiration of the statute of limitations. We recognize interest and penalties related to uncertain
tax positions in the income tax provision reported as “Deferred tax assets” in the Condensed Consolidated Balance Sheet. As of , we had 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. 9. Subsequent events The Company has evaluated all events or transactions that occurred up to the date the Condensed 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.
Item 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward Looking Statements Certain statements included in this Quarterly Report on Form 10-Q for the period ended March 31, 2022 (this
“Report”), including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are not historical facts are “forward-looking statements” within the meaning of the U.S. federal
securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology, such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”,
“believe”, “project”, “plan” or “continue” or the negative thereof or other similar words. The Company cautions readers not to place undue reliance on any such forward-looking statements, each of which involves certain risks and uncertainties,
including, but not limited to, those listed in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 (our “2021 Form 10-K”), and in our other filings with the Securities and Exchange Commission (the “SEC”). Such risks
and uncertainties could cause actual results to differ materially from those discussed in, or implied by, the forward-looking statements. Any such risks and uncertainties may also be exacerbated by the ultimate impact of the COVID-19 pandemic and the
emergence of virus variants, which is unknown at this time, or by the Russia-Ukraine conflict and its impact on freight costs. In addition, statements made in this Report about the COVID-19 pandemic and the potential effects and impacts of the
COVID-19 pandemic on the Company’s business, financial condition, liquidity and results of operations may constitute forward-looking statements due to factors and future developments that are uncertain, unpredictable and, in many cases, beyond our
control, including the scope, duration and extent of the pandemic, actions taken by governmental authorities and businesses in response to the pandemic and any resurgences or variants, vaccination rates and the direct and indirect impact of the
pandemic on our employees, customers and third parties with which we conduct business, including difficulties or delays in manufacturing or delivery of inventory or other supply chain disruptions. Although management has taken steps to mitigate the
negative effect of such risks and uncertainties, including the impact of the COVID-19 pandemic, significant unfavorable changes could severely impact the assumptions used. Forward-looking statements speak only as of the date they are made, and we do
not undertake any obligation to update them to reflect the impact of subsequent events or circumstances, except as required by law. As used in this Report, unless the context otherwise requires, references to “we”, “us”, “our”, the “Company” and
“TransAct” refer to the consolidated operations of TransAct Technologies Incorporated and its consolidated subsidiaries. Overview TransAct is a global leader in developing and selling software-driven technology and printing solutions for high-growth markets
including food service technology, point of sale (“POS”) automation and casino and gaming. Our world-class products are designed from the ground up based on market and customer requirements and are sold under the BOHA!™, AccuDate™, Epic, EPICENTRAL®
and Ithaca® brand names. During 2019, we launched a new line of products for the food service technology market, the BOHA! branded suite of cloud-based applications and companion hardware solutions. The BOHA! software and hardware products help
restaurants, convenience stores and food service operators of all sizes automate food production in the back-of-house operations. Known and respected worldwide for innovative designs and real-world service reliability, our thermal printers and
terminals generate top-quality labels, coupons and transaction records such as receipts, tickets and other documents. We sell our technology to original equipment manufacturers (“OEMs”), value-added resellers, select distributors and directly to
end-users. Our product distribution spans across the Americas, Europe, the Middle East, Africa, Asia, Australia, New Zealand, the Caribbean Islands and the South Pacific. We also offer world-class service, support, labels, spare parts, accessories and
printing supplies to our growing worldwide base of products currently in use by our customers. Through our TransAct Services Group (“TSG”), we provide a complete range of supplies and consumables used in the printing activities of customers in the
restaurant and hospitality, retail, casino and gaming, and government markets. Through our webstore, www.transactsupplies.com, and our direct selling team, we address the demand for these products. We operate in one reportable segment, the design, development, and marketing of software-driven technology and printing solutions for high growth markets, and provide related services, supplies and spare parts. Impact of COVID-19 Pandemic During the first two months of 2020, our business trends were in line with internal expectations; however, the challenges posed by the
COVID-19 pandemic on the United States and global economy increased significantly as the first quarter of 2020 progressed and continued throughout the remainder of 2020 and into 2021. Though we began to experience some recovery during 2021 the
recovery slowed again in the first quarter of 2022 due to a resurgence of the Omicron variant, and unfortunately, the massive economic and social disruptions across the world persist due to COVID-19, including the emergence of virus variants, and the
measures implemented to mitigate its spread. The food service and casino and gaming industries have been particularly affected by the pandemic, and we expect such disruptions to continue to negatively impact our overall business for the foreseeable
future. As a result of the COVID-19 pandemic and measures implemented to mitigate its spread, we experienced decreased demand for our products
and lower than anticipated sales beginning in the second half of March 2020 and continuing through 2021 and the first quarter of 2022, particularly in our food service technology and casino and gaming markets. We experienced some improvement in demand
during the second half of 2020 continuing through 2021 and the first quarter of 2022 compared to the second quarter of 2020, as state and local governments lifted certain measures implemented earlier in 2020 to mitigate the spread of the virus, but
demand remained lower than 2019. While we expect this improvement to continue during 2022 as compared to 2021, the exact timing and pace of recovery is unknown. We have also experienced supply chain disruptions, including delayed product shipments
from our two contract manufacturers located in Thailand and China that conduct almost all of our printer and BOHA! hardware manufacturing, due to reduced operations and part shortages at these facilities. Our inventory levels decreased significantly
during 2021 due to these supply chain disruptions, and although we have been able to increase inventory levels during the first quarter of 2022, continuing delays and further disruptions have led to an increased backlog, including increased freight
costs, and have impacted our ability to deliver products to our customers on time or at all. Below is a discussion of the impact we have experienced from the COVID-19 pandemic, and that we believe will continue to experience for the foreseeable future
in each of our markets. Food service
technology and POS automation . Casino and gaming . Printrex . TSG . Our gross margin has been negatively impacted, and we expect our gross margin to continue to be negatively impacted, while the COVID-19
pandemic and its economic effects on the markets we serve persists. As a result of the COVID-19 pandemic, we have experienced (1) lower sales levels compared to pre-pandemic levels, (2) increased material and shipping costs resulting from worldwide
supply disruptions and (3) increased product, contract manufacturing and labor costs resulting from inflation. Though we have implemented price increases during the first and second quarters of 2022 on all our products (except our FST products) to
help mitigate the product cost increases, we believe our gross margin will remain lower than pre-pandemic levels due to fixed manufacturing overhead expenses (such as facility costs, depreciation, etc.) that cannot be reduced or eliminated, even with
the lower sales level. While we began to experience a modest recovery starting in the second half of 2020 and continuing into 2021 the recovery slowed again
in the first quarter of 2022 due to a resurgence of the Omicron variant. We are beginning to see the recovery resume in the second quarter of 2022 which we expect to continue during the remainder of 2022, though the exact timing and pace of recovery
is unknown given uncertainty surrounding responsive measures to potential future resurgences of the virus, vaccination rates, the emergence of virus variants and the significant disruption that our customers and suppliers have already experienced and
may continue to experience. We have taken the following actions to increase liquidity and strengthen our financial position in an effort to mitigate the negative
impacts from the COVID-19 pandemic:
●
Public Offering – O .
●
PPP Loan - .
●
Employee Retention Credit –Under the provisions of the CARES Act, the Company was eligible for a refundable employee retention credit subject to certain criteria. In
connection with the CARES Act, the Company recognized the employee retention credit during the fourth quarter of 2021 as a $1.5 million “Gain from employee retention credit” in the Consolidated Statement of Operations for the year ended
December 31, 2021 and recorded a $1.5 million “Employee retention credit receivable” in the Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021. We expect to receive these funds during 2022 .
●
Credit Facility - .
●
Reduced Capital Expenditures - We limited capital expenditures during 2020 and gradually increased expenses during 2021 as our sales improved. Since the onset of the pandemic, our top priority has been the health and safety of our employees while continuing to provide our
customers with high-quality, personalized service. On March 20, 2020, we instituted work-from-home practices for the majority of our employees to reduce the spread of COVID-19 and to comply with government mandates. Because most of our employees
already had laptop computers with remote access into our IT systems, we experienced only minor reductions in productivity and minimal costs related to the implementation of our work-from-home practices. In addition, even with the move to a
work-from-home environment, our internal control structure remained operational and unchanged. As of October 4, 2021, all of our employees were fully vaccinated against COVID-19 and, as a result, we implemented a return-to-work
plan, reopening all of our facilities and ending our work-from-home practices. Our distribution centers, deemed an essential service, remained operational throughout the pandemic. During 2020, we implemented new COVID-19 policies, most of which were
still in place prior to ending our work-from-home practices, to specifically address health and safety guidelines for employees to adhere to and follow when at work. These policies were based on the COVID-19 safety guidelines recommended by the
Centers for Disease Control and Prevention. We have evaluated the recoverability of the assets on our
unaudited Condensed Consolidated Balance Sheet as of March 31, 2022 i Notwithstanding the foregoing, there is no assurance that the actions we have taken in response to the pandemic are sufficient or
adequate, and we may be required to take additional preventive or responsive measures, as the ultimate extent of the effects of the COVID-19 pandemic on the Company, our financial condition, results of operations, liquidity, and cash flows are
uncertain and are dependent on evolving developments which cannot be predicted at this time. See Part I, Item 1A, “Risk Factors”, of our 2021 Form 10-K for further discussion of risks related to COVID-19. Critical Accounting Judgments and Estimates Our discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial
Statements, which have been prepared by us in accordance with accounting principles generally accepted in the United States of America. The presentation of these financial statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Our estimates include those related to revenue recognition, accounts receivable, inventory obsolescence, goodwill and intangible assets, the
valuation of deferred tax assets and liabilities, depreciable lives of equipment, warranty obligations, share-based compensation and contingent liabilities. We base our estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances. There have been no material changes in our critical accounting judgements and estimates from the information presented in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition
and Results of Operations,” in our 2021 Form 10-K. Results of Operations: Three months ended March 31, 2022 compared to three months ended March 31, 2021 Net Sales:
Three Months Ended
Three Months Ended
(In thousands, except percentages)
March 31, 2022
March 31, 2021
$ Change
% Change
Food service technology (“FST”)
$
2,130
22.0
%
$
2,747
33.1
%
$
(617
)
(22.5
%)
POS automation
1,300
13.4
%
1,164
14.0
%
136
11.7
%
Casino and gaming
4,762
49.1
%
2,865
34.5
%
1,897
66.2
%
Printrex
–
0.0
%
159
1.9
%
(159
)
(100.0
%)
TSG
1,510
15.5
%
1,366
16.5
%
144
10.5
%
$
9,702
100.0
%
$
8,301
100.0
%
$
1,401
16.9
%
International *
$
2,600
26.8
%
$
1,306
15.7
%
$
1,294
99.1
%
*
International sales do not include sales of printers and terminals made to domestic distributors or other domestic customers who may, in turn, ship those printers and
terminals to international destinations. Net sales for the first quarter of 2022 increased $1.4
million, or 17%, compared to the first quarter of 2021. Printer, terminal and other hardware unit sales volume increased 25% to approximately 23,000 units, due primarily to a sales of 64% in the first quarter of 2022 compared to the first quarter of 2021. International sales for the first quarter of 2022 increased $1.3 million, or 99%, from the same period in 2021 primarily due to
increased sales in the international casino and gaming market, and to a lesser extent, increased sales in the international TSG market. Food service
technology: Sales of our worldwide
food service technology products for the and were as follows:
Three Months Ended
Three Months Ended
(In thousands, except percentages)
March 31, 2022
March 31, 2021
$ Change
% Change
Domestic
$
1,946
91.4
%
$
2,564
93.3
%
$
(618
)
(24.1
%)
International
184
8.6
%
183
6.7
%
1
0.5
%
$
2,130
100.0
%
$
2,747
100.0
%
$
(617
)
(22.5
%)
Three Months Ended
Three Months Ended
(In thousands, except percentages)
March 31, 2022
March 31, 2021
$ Change
% Change
Hardware
$
563
26.4
%
$
1,542
56.1
%
$
(979
)
(63.5
%)
Software, labels and other recurring revenue
1,567
73.6
%
1,205
43.9
%
362
30.0
%
$
2,130
100.0
%
$
2,747
100.0
%
$
(617
)
(22.5
%) The decrease in food service technology sales for the first
quarter of 2022 compared to the first quarter of 2021 POS automation: Sales of our worldwide POS automation products for the and were as follows:
Three Months Ended
Three Months Ended
(In thousands, except percentages)
March 31, 2022
March 31, 2021
$ Change
% Change
Domestic
$
1,300
100.0
%
$
1,160
99.7
%
$
140
12.1
%
International
–
0.0
%
4
0.3
%
(4
)
(100.0
%)
$
1,300
100.0
%
$
1,164
100.0
%
$
136
11.7
% The increase in POS automation sales during the first quarter of 2022 compared to the first quarter of 2021 was driven by a 12% increase
in domestic sales of our Ithaca® 9000 printer, primarily to McDonald’s, as POS automation sales continue to improve in 2022 compared to the negative impact that the COVID-19 pandemic had on POS automation sales during the first three months of 2021.
We expect sales of POS automation printers to be significantly higher in the second half of 2022 compared to the first quarter of 2022 based on the backlog of orders we have received for McDonald’s. Casino and gaming: Sales of our worldwide casino and gaming products for the and were as follows:
Three Months Ended
Three Months Ended
(In thousands, except percentages)
March 31, 2022
March 31, 2021
$ Change
% Change
Domestic
$
2,788
58.5
%
$
1,964
68.6
%
$
824
42.0
%
International
1,974
41.5
%
901
31.4
%
1,073
119.1
%
$
4,762
100.0
%
$
2,865
100.0
%
$
1,897
66.2
% The increase in domestic sales of our casino and gaming products for the first quarter of 2022 compared to the first quarter of 2021 was primarily The increase in international casino and gaming sales during the first quarter of 2022 compared to the first quarter of 2021 was due to
a 71% increase in sales of our thermal casino printers and a 397% increase in international sales of our off-premise gaming printers. These increases are attributable to the recovery of the international markets after significant negative impacts from
the COVID-19 pandemic. The international casino and gaming market recovered at a slower pace during 2021 compared to the domestic casino and gaming market. Printrex: P Sales of our worldwide Printrex printers for
the and were as follows:
Three Months Ended
Three Months Ended
(In thousands, except percentages)
March 31, 2022
March 31, 2021
$ Change
% Change
Domestic
$
–
0.0
%
$
27
17.0
%
$
(27
)
(100.0
%)
International
–
0.0
%
132
83.0
%
(132
)
(100.0
%)
$
–
0.0
%
$
159
100.0
%
$
(159
)
(100.0
%) During 2021, we decided to exit the Printrex business and in the fourth quarter of 2021 fulfilled last buy orders to our legacy
customers. We expect no future Printrex sales as we have shifted our focus away from this market and towards our higher value, technology-enabled food service technology terminals and casino and gaming products. TSG: Sales in our worldwide TSG market for the and were as
follows:
Three Months Ended
Three Months Ended
(In thousands, except percentages)
March 31, 2022
March 31, 2021
$ Change
% Change
Domestic
$
1,068
70.7
%
$
1,280
93.7
%
$
(212
)
(16.6
%)
International
442
29.3
%
86
6.3
%
356
414.0
%
$
1,510
100.0
%
$
1,366
100.0
%
$
144
10.5
% The decrease in domestic revenue from TSG during the first quarter of 2022 as compared to the first quarter of 2021 was due to lower
sales of legacy replacement parts, service revenue, and consumable products. Replacement part sales decreased 14% prima |
