Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
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 $0.01 per share | |
Trading Symbol | TACT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 9,958,118 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 10,756 | $ 7,946 |
Accounts receivable, net | 14,441 | 13,927 |
Employee retention credit receivable | 0 | 1,500 |
Inventories | 15,408 | 12,028 |
Other current assets | 707 | 724 |
Total current assets | 41,312 | 36,125 |
Fixed assets, net of accumulated depreciation of $18,193 and $17,656, respectively | 2,838 | 2,781 |
Right-of-use asset, net | 2,053 | 2,488 |
Goodwill | 2,621 | 2,621 |
Deferred tax assets | 6,565 | 7,327 |
Intangible assets, net of accumulated amortization of $1,441 and $1,364, respectively | 165 | 242 |
Other assets | 333 | 248 |
Total noncurrent assets | 14,575 | 15,707 |
Total assets | 55,887 | 51,832 |
Current liabilities: | ||
Current portion of revolving loan payable | 2,250 | 2,250 |
Accounts payable | 6,321 | 7,395 |
Accrued liabilities | 5,511 | 4,077 |
Lease liability | 904 | 875 |
Deferred revenue | 1,222 | 1,329 |
Total current liabilities | 16,208 | 15,926 |
Deferred revenue, net of current portion | 152 | 143 |
Lease liability, net of current portion | 1,210 | 1,683 |
Other liabilities | 227 | 218 |
Total noncurrent liabilities | 1,589 | 2,044 |
Total liabilities | 17,797 | 17,970 |
Commitments and contingencies (see Notes 5 and 7) | ||
Shareholders' equity: | ||
Common stock, $0.01 par value, 20,000,000 shares authorized; 14,001,935 and 13,956,725 shares issued, respectively; 9,957,093 and 9,911,883 shares outstanding, respectively | 140 | 139 |
Additional paid-in capital | 56,594 | 56,282 |
Retained earnings | 13,534 | 9,630 |
Accumulated other comprehensive loss, net of tax | (68) | (79) |
Treasury stock, at cost (4,044,842 shares) | (32,110) | (32,110) |
Total shareholders' equity | 38,090 | 33,862 |
Total liabilities and shareholders' equity | $ 55,887 | $ 51,832 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Fixed assets, accumulated depreciation | $ 18,193 | $ 17,656 |
Intangible assets, accumulated amortization | $ 1,441 | $ 1,364 |
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) | 14,001,935 | 13,956,725 |
Common stock, shares outstanding (in shares) | 9,957,093 | 9,911,883 |
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, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||
Net sales | $ 19,906 | $ 12,623 | $ 42,176 | $ 22,325 |
Cost of sales | 9,048 | 7,189 | 19,063 | 14,325 |
Gross profit | 10,858 | 5,434 | 23,113 | 8,000 |
Operating expenses: | ||||
Engineering, design and product development | 2,505 | 2,172 | 4,774 | 4,455 |
Selling and marketing | 2,684 | 3,293 | 5,441 | 5,976 |
General and administrative | 4,445 | 2,923 | 7,861 | 6,127 |
Operating expenses | 9,634 | 8,388 | 18,076 | 16,558 |
Operating income (loss) | 1,224 | (2,954) | 5,037 | (8,558) |
Interest and other income (expense): | ||||
Interest, net | (68) | (28) | (134) | (92) |
Other, net | 0 | (264) | 21 | (299) |
Interest and other (expense) income | (68) | (292) | (113) | (391) |
Income (loss) before income taxes | 1,156 | (3,246) | 4,924 | (8,949) |
Income tax (expense) benefit | (391) | 870 | (1,020) | 2,225 |
Net income (loss) | $ 765 | $ (2,376) | $ 3,904 | $ (6,724) |
Net income (loss) per common share: | ||||
Basic (in dollars per share) | $ 0.08 | $ (0.24) | $ 0.39 | $ (0.68) |
Diluted (in dollars per share) | $ 0.08 | $ (0.24) | $ 0.39 | $ (0.68) |
Shares used in per-share calculation: | ||||
Basic (in shares) | 9,956 | 9,910 | 9,943 | 9,898 |
Diluted (in shares) | 10,017 | 9,910 | 10,016 | 9,898 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | ||||
Net income (loss) | $ 765 | $ (2,376) | $ 3,904 | $ (6,724) |
Foreign currency translation adjustment, net of tax | 9 | (8) | 11 | (50) |
Comprehensive income (loss) | $ 774 | $ (2,384) | $ 3,915 | $ (6,774) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 3,904 | $ (6,724) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Share-based compensation expense | 398 | 581 |
Depreciation and amortization | 722 | 625 |
Deferred income taxes | 762 | (2,227) |
Unrealized foreign currency transaction losses | 21 | 298 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (434) | (4,547) |
Employee retention credit receivable | 1,500 | 0 |
Inventories | (3,363) | (3,250) |
Other current and long-term assets | (86) | 26 |
Accounts payable | (1,063) | 789 |
Accrued liabilities and other liabilities | 1,329 | (159) |
Net cash provided by (used in) operating activities | 3,690 | (14,588) |
Cash flows from investing activities: | ||
Capital expenditures | (689) | (744) |
Net cash used in investing activities | (689) | (744) |
Cash flows from financing activities: | ||
Withholding taxes paid on stock issuances | (86) | (119) |
Payment of bank financing costs | 0 | (10) |
Net cash used in financing activities | (86) | (129) |
Effect of exchange rate changes on cash and cash equivalents | (105) | (103) |
Increase (decrease) in cash and cash equivalents | 2,810 | (15,564) |
Cash and cash equivalents, beginning of period | 7,946 | 19,457 |
Cash and cash equivalents, end of period | 10,756 | 3,893 |
Supplemental schedule of non-cash investing activities: | ||
Non-cash capital expenditure items | $ 41 | $ 7 |
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 (Loss) Income [Member] | Total |
Beginning balance at Dec. 31, 2021 | $ 139 | $ 55,246 | $ 15,566 | $ (32,110) | $ 143 | $ 38,984 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock from restricted stock units | 0 | |||||
Share-based compensation expense | 581 | |||||
Relinquishment of stock awards to pay for withholding taxes | (119) | |||||
Net income (loss) | (6,724) | (6,724) | ||||
Foreign currency translation adjustment, net of tax | (50) | (50) | ||||
Ending balance at Jun. 30, 2022 | 139 | 55,708 | 8,842 | (32,110) | 93 | $ 32,672 |
Supplemental Share Information: | ||||||
Issuance of shares from stock awards (in shares) | 63 | |||||
Relinquishment of stock awards to pay withholding taxes (in shares) | 26 | |||||
Beginning balance at Mar. 31, 2022 | 139 | 55,423 | 11,218 | (32,110) | 101 | $ 34,771 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock from restricted stock units | 0 | |||||
Share-based compensation expense | 285 | |||||
Relinquishment of stock awards to pay for withholding taxes | 0 | |||||
Net income (loss) | (2,376) | (2,376) | ||||
Foreign currency translation adjustment, net of tax | (8) | (8) | ||||
Ending balance at Jun. 30, 2022 | 139 | 55,708 | 8,842 | (32,110) | 93 | $ 32,672 |
Supplemental Share Information: | ||||||
Issuance of shares from stock awards (in shares) | 0 | |||||
Relinquishment of stock awards to pay withholding taxes (in shares) | 0 | |||||
Beginning balance at Dec. 31, 2022 | 139 | 56,282 | 9,630 | (32,110) | (79) | $ 33,862 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock from restricted stock units | 1 | |||||
Share-based compensation expense | 398 | |||||
Relinquishment of stock awards to pay for withholding taxes | (86) | |||||
Net income (loss) | 3,904 | 3,904 | ||||
Foreign currency translation adjustment, net of tax | 11 | 11 | ||||
Ending balance at Jun. 30, 2023 | 140 | 56,594 | 13,534 | (32,110) | (68) | $ 38,090 |
Supplemental Share Information: | ||||||
Issuance of shares from stock awards (in shares) | 57 | |||||
Relinquishment of stock awards to pay withholding taxes (in shares) | 12 | |||||
Beginning balance at Mar. 31, 2023 | 140 | 56,474 | 12,769 | (32,110) | (77) | $ 37,196 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock from restricted stock units | 0 | |||||
Share-based compensation expense | 120 | |||||
Relinquishment of stock awards to pay for withholding taxes | 0 | |||||
Net income (loss) | 765 | 765 | ||||
Foreign currency translation adjustment, net of tax | 9 | 9 | ||||
Ending balance at Jun. 30, 2023 | $ 140 | $ 56,594 | $ 13,534 | $ (32,110) | $ (68) | $ 38,090 |
Supplemental Share Information: | ||||||
Issuance of shares from stock awards (in shares) | 3 | |||||
Relinquishment of stock awards to pay withholding taxes (in shares) | 0 |
Basis of presentation
Basis of presentation | 6 Months Ended |
Jun. 30, 2023 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of presentation The . The 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 (the “2022 Form 10-K”). The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023. Impact of the COVID-19 Pandemic and Global Supply Chain Disruptions Since early 2020 and into the first quarter of 2022, the COVID-19 pandemic caused uncertainty and disruption in the global economy and financial markets. Similar to other companies, TransAct has also been impacted by global supply chain issues, increased shipping costs and inflationary pressures, which have increased our costs and, in some instances, slowed our ability to deliver products to our customers. During 2021, we experienced significantly lower sales levels. However, during 2022, we were able to increase our inventory levels and minimize the impact to our customers by successfully modifying our products that were affected by supply chain disruptions, as well as sourcing component parts from alternate suppliers. At the same time, after a slowdown resulting from the Omicron and other variants of COVID-19 that began to ease in the first six months of 2022, we continued to experience demand recovery during the remainder of 2022 and into 2023. Although we were able to increase inventory levels during 2022 and expect to continue to do so in the balance of 2023, there can be no assurance that new or continuing supply chain disruptions will not affect our products or that we will be able to make timely modifications to address any future supply chain issues that arise. Further, while we have offset most of our cost increases by increasing prices of our products, there can be no guarantee that we will not be impacted by the economic effects of any future cost increases that cannot be predicted, supply chain disruptions, inflationary pressures and potential new COVID-19 variants in the markets we serve and from which we source our supplies and parts. Balance Sheet, Cash Flow and Liquidity. 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 pandemic, supply chain disruptions and inflationary pressures: ● Employee Retention Credit – Under the provisions of the CARES Act, the Company received 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 and recorded $1.5 million as “Gain from employee retention credit” in the Consolidated Statement of Operations for the year ended December 31, 2021 and the related receivable as “Employee retention credit receivable” in the Consolidated Balance Sheet as of December 31, 2021 and 2022. We received these funds in the first quarter of 2023. ● Credit Facility – On March 13, 2020, we entered into a credit facility with Siena Lending Group LLC that provides a revolving credit line of up to $ million 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 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, inflation, rising interest rates, capital expenditures and other operating costs. Our current assumptions are that casinos and restaurants will remain open and consumer traffic will continue to remain strong during the remainder of 2023. Though demand for our products at casinos has increased substantially in 2022 and during the first six months of 2023, we cannot predict the ultimate impact of the current economic environment, including inflation, rising interest rates and supply chain disruptions on our customers, which may impact sales. We believe that we are positioned to withstand the impact of any potential economic downturn or slower than anticipated economic recovery. However, should conditions warrant, we believe we will be able to take additional financial and operational actions to cut costs and/or increase liquidity. 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, 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. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. |
Significant accounting policies
Significant accounting policies | 6 Months Ended |
Jun. 30, 2023 | |
Significant accounting policies [Abstract] | |
Significant accounting policies | 2. Significant accounting policies For a discussion of our significant accounting policies, see Note 2, Summary of significant accounting policies Recently Adopted Accounting Pronouncement In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments We adopted this standard effective January 1, 2023, and this standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements. We are exposed to credit losses primarily through our sales of products and software to commercial customers which are recorded as Accounts receivable, net on the Condensed Consolidated Balance Sheets. Our method for developing our allowance for credit losses involves making informed judgments regarding whether an adjustment is necessary to our historical loss experiences to reflect our expectations around current economic conditions and reasonable and supportable forecast periods, where applicable. We utilize current economic market data as well as other internal and external information available to us to inform our decision making in this process. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2023 | |
Revenue [Abstract] | |
Revenue | 3. 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 this 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, 2023 2022 (In thousands) United States International Total United States International Total Food service technology $ 3,625 $ 270 $ 3,895 $ 3,281 $ 151 $ 3,432 POS automation 1,904 – 1,904 1,172 – 1,172 Casino and gaming 9,475 2,697 12,172 3,929 2,596 6,525 Transact Services Group 1,721 214 1,935 1,345 149 1,494 Total net sales $ 16,725 $ 3,181 $ 19,906 $ 9,727 $ 2,896 $ 12,623 Six Months Ended June 30, 2023 2022 (In thousands) United States International Total United States International Total Food service technology $ 6,888 $ 465 $ 7,353 $ 5,227 $ 335 $ 5,562 POS automation 3,686 15 3,701 2,472 – 2,472 Casino and gaming 21,044 6,939 27,983 6,717 4,570 11,287 TransAct Services Group 2,704 435 3,139 2,413 591 3,004 Total net sales $ 34,322 $ 7,854 $ 42,176 $ 16,829 $ 5,496 $ 22,325 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, net” and “Other 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: June 30, 2023 December 31, 2022 (In thousands) Unbilled receivables, current $ 261 $ 392 Unbilled receivables, net of current portion 153 163 Customer pre-payments (24 ) (101 ) Deferred revenue, current (1,222 ) (1,329 ) Deferred revenue, net of current portion (152 ) (143 ) Total net contract liabilities $ (984 ) $ (1,018 ) 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, 2023, the aggregate amount of transaction prices allocated to remaining performance obligations was $15.7 million. The Company expects to recognize revenue of $15.4 million of its remaining performance obligations within the next 12 months following June 30, 2023, $0.2 million within the next 24 months balance 36 months |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2023 | |
Inventories [Abstract] | |
Inventories | 4. Inventories The components of inventories were: June 30, 2023 December 31, 2022 (In thousands) Raw materials and purchased component parts $ 10,338 $ 8,884 Finished goods 5,070 3,144 $ 15,408 $ 12,028 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt [Abstract] | |
Debt | 5. Debt Credit Facility On March 13, 2020, we entered into a credit facility (the “Siena Credit Facility”) with Siena Lending Group LLC (the “Lender”). The Siena Credit Facility provides for a revolving credit line of up to $10.0 million and was originally scheduled to expire 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 agreement governing the Siena Credit Facility restricts, among other things, our ability to incur additional indebtedness and create other liens. On July 21, 2021, the Company entered into an amendment (“Siena Credit Facility Amendment No. 1”) to the Loan and Security Agreement governing the Siena Credit Facility. Siena Credit Facility Amendment No. 1 changed the financial covenant under the Siena Credit Facility from a minimum EBITDA covenant to an excess availability covenant requiring that the Company maintain excess availability of at least $750 thousand under the Siena Credit Facility, tested as of the end of each calendar month, beginning with the calendar month ended July 31, 2021. From July 31, 2021 through June 30, 2023, we remained in compliance with our excess availability covenant. As of June 30, 2023, we had $2.3 million of outstanding borrowings under the Siena Credit Facility and $5.6 million of net borrowing capacity available under the Siena Credit Facility. On July 19, 2022, the Company and the Lender entered into Amendment No. 2 (“Siena Credit Facility Amendment No. 2”) to the Loan and Security Agreement governing the Siena Credit Facility, as amended by Siena Credit Facility Amendment No. 1. Also on July 19, 2022, the Company and the Lender entered into an Amended and Restated Fee Letter (the “Amended Fee Letter”) in connection with the Siena Credit Facility Amendment No. 2. Siena Credit Facility Amendment No. 2 did not modify the aggregate amount of the revolving commitment or the interest rate applicable to the loans . The changes to the Siena Credit Facility provided for in Siena Credit Facility Amendment No. 2 include, among other things, the following: (i) The extension of the maturity date from March 13, 2023 to March 13, 2025; and (ii) The termination of the existing blocked account control agreement and entry into a new “springing” deposit account control agreement, permitting the Company to direct the use of funds in its deposit account until such time as (a) the sum of excess availability under the Siena Credit Facility (as amended) and unrestricted cash is less than $5 million for 3 consecutive business days or (b) an event of default occurs and is continuing. In addition, the Amended Fee Letter requires the Company, while it retains the ability to direct the use of funds in the deposit account, to maintain outstanding borrowings of at least $2,250,000 in principal amount. If the Company does not have the ability to direct the use of funds in the deposit account, then the Amended Fee Letter requires the Company to pay interest on at least $2,250,000 principal amount of loans, whether or not such amount of loans is actually outstanding. On May 1, 2023, the Company and the Lender agreed to a letter amendment to the Loan and Security Agreement governing the Siena Credit Facility. Section 7.1(m) of the Loan and Security Agreement governing the Siena Credit Facility required that any successor to Mr. Shuldman be reasonably acceptable to the Lender, and this amendment confirmed that Mr. Dillon is an acceptable successor to Mr. Shuldman and applied the same requirement to any future successor to Mr. Dillon. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings per share [Abstract] | |
Earnings per share | 6. Earnings per share The following table sets forth the reconciliation of basic and diluted weighted average shares outstanding: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands, except per share data) Net income (loss) $ 765 $ (2,376 ) $ 3,904 $ (6,724 ) Shares: Basic: Weighted average common shares outstanding 9,956 9,910 9,943 9,898 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 61 – 73 – Diluted: Weighted average common and common equivalent shares outstanding 10,017 9,910 10,016 9,898 Net income (loss) per common share: Basic $ 0.08 $ (0.24 ) $ 0.39 $ (0.68 ) Diluted $ 0.08 $ (0.24 ) $ 0.39 $ (0.68 ) 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. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | 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 Sheets. Our leases have various lease terms, some of which include options to extend. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense for the six months ended June 30, 2023 and 2022 was $483 thousand and $487 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): Six Months Ended June 30, 2023 2022 Operating cash outflows from leases $ 504 $ 456 The following summarizes additional information related to our leases as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Weighted average remaining lease term (in years) 2.3 2.7 Weighted average discount rate 4.4 % 4.5 % The maturity of the Company’s operating lease liabilities as of June 30, 2023 and December 31, 2022 were as follows (in thousands): June 30, 2023 December 31, 2022 2023 469 972 2024 1,024 1,022 2025 712 710 2026 22 20 Total undiscounted lease payments 2,227 2,724 Less imputed interest 113 166 Total lease liabilities $ 2,114 $ 2,558 |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income taxes [Abstract] | |
Income taxes | 8. Income taxes We recorde d income tax expense in the second quarter of 2023 of $391 thousand at an effective tax rate of 33.8% compared to an income tax benefit in the second quarter of 2022 of $870 thousand at an effective tax rate of (26.8%). For the six months ended June 30, 2023, we recorded income tax expense of $1.0 million at an effective tax rate of 20.7% (24.9%) 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 2018. However, our federal tax returns for the years 2019 through 2022 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. 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, 2023 | |
Subsequent events [Abstract] | |
Subsequent events | 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 subsequent events that would have required adjustment or disclosure in the Condensed Consolidated Financial Statements. |
Basis of presentation (Policies
Basis of presentation (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Basis of Presentation [Abstract] | |
Basis of Accounting | The . The 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 (the “2022 Form 10-K”). |
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, inflation, rising interest rates, capital expenditures and other operating costs. Our current assumptions are that casinos and restaurants will remain open and consumer traffic will continue to remain strong during the remainder of 2023. Though demand for our products at casinos has increased substantially in 2022 and during the first six months of 2023, we cannot predict the ultimate impact of the current economic environment, including inflation, rising interest rates and supply chain disruptions on our customers, which may impact sales. We believe that we are positioned to withstand the impact of any potential economic downturn or slower than anticipated economic recovery. However, should conditions warrant, we believe we will be able to take additional financial and operational actions to cut costs and/or increase liquidity. 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, 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. |
Reclassifications | Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Significant accounting policies [Abstract] | |
Credit Losses | In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments We adopted this standard effective January 1, 2023, and this standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements. We are exposed to credit losses primarily through our sales of products and software to commercial customers which are recorded as Accounts receivable, net on the Condensed Consolidated Balance Sheets. Our method for developing our allowance for credit losses involves making informed judgments regarding whether an adjustment is necessary to our historical loss experiences to reflect our expectations around current economic conditions and reasonable and supportable forecast periods, where applicable. We utilize current economic market data as well as other internal and external information available to us to inform our decision making in this process. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following tables disaggregate our revenue by market type, as we believe this 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, 2023 2022 (In thousands) United States International Total United States International Total Food service technology $ 3,625 $ 270 $ 3,895 $ 3,281 $ 151 $ 3,432 POS automation 1,904 – 1,904 1,172 – 1,172 Casino and gaming 9,475 2,697 12,172 3,929 2,596 6,525 Transact Services Group 1,721 214 1,935 1,345 149 1,494 Total net sales $ 16,725 $ 3,181 $ 19,906 $ 9,727 $ 2,896 $ 12,623 Six Months Ended June 30, 2023 2022 (In thousands) United States International Total United States International Total Food service technology $ 6,888 $ 465 $ 7,353 $ 5,227 $ 335 $ 5,562 POS automation 3,686 15 3,701 2,472 – 2,472 Casino and gaming 21,044 6,939 27,983 6,717 4,570 11,287 TransAct Services Group 2,704 435 3,139 2,413 591 3,004 Total net sales $ 34,322 $ 7,854 $ 42,176 $ 16,829 $ 5,496 $ 22,325 |
Net Contract Liabilities | Total net contract liabilities consisted of the following: June 30, 2023 December 31, 2022 (In thousands) Unbilled receivables, current $ 261 $ 392 Unbilled receivables, net of current portion 153 163 Customer pre-payments (24 ) (101 ) Deferred revenue, current (1,222 ) (1,329 ) Deferred revenue, net of current portion (152 ) (143 ) Total net contract liabilities $ (984 ) $ (1,018 ) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventories [Abstract] | |
Inventories | The components of inventories were: June 30, 2023 December 31, 2022 (In thousands) Raw materials and purchased component parts $ 10,338 $ 8,884 Finished goods 5,070 3,144 $ 15,408 $ 12,028 |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings per share [Abstract] | |
Earnings per Share | The following table sets forth the reconciliation of basic and diluted weighted average shares outstanding: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands, except per share data) Net income (loss) $ 765 $ (2,376 ) $ 3,904 $ (6,724 ) Shares: Basic: Weighted average common shares outstanding 9,956 9,910 9,943 9,898 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 61 – 73 – Diluted: Weighted average common and common equivalent shares outstanding 10,017 9,910 10,016 9,898 Net income (loss) per common share: Basic $ 0.08 $ (0.24 ) $ 0.39 $ (0.68 ) Diluted $ 0.08 $ (0.24 ) $ 0.39 $ (0.68 ) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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, 2023 2022 Operating cash outflows from leases $ 504 $ 456 |
Additional Information Related to Leases | The following summarizes additional information related to our leases as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Weighted average remaining lease term (in years) 2.3 2.7 Weighted average discount rate 4.4 % 4.5 % |
Maturity of Operating Lease Liabilities | The maturity of the Company’s operating lease liabilities as of June 30, 2023 and December 31, 2022 were as follows (in thousands): June 30, 2023 December 31, 2022 2023 469 972 2024 1,024 1,022 2025 712 710 2026 22 20 Total undiscounted lease payments 2,227 2,724 Less imputed interest 113 166 Total lease liabilities $ 2,114 $ 2,558 |
Basis of presentation (Details)
Basis of presentation (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Mar. 13, 2020 | |
Basis of presentation [Abstract] | ||
Gain from employee retention credit | $ 1.5 | |
Sienna 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, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of revenue [Abstract] | ||||
Net sales | $ 19,906 | $ 12,623 | $ 42,176 | $ 22,325 |
United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 16,725 | 9,727 | 34,322 | 16,829 |
International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 3,181 | 2,896 | 7,854 | 5,496 |
Food Service Technology [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 3,895 | 3,432 | 7,353 | 5,562 |
Food Service Technology [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 3,625 | 3,281 | 6,888 | 5,227 |
Food Service Technology [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 270 | 151 | 465 | 335 |
POS Automation [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 1,904 | 1,172 | 3,701 | 2,472 |
POS Automation [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 1,904 | 1,172 | 3,686 | 2,472 |
POS Automation [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 0 | 0 | 15 | 0 |
Casino and Gaming [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 12,172 | 6,525 | 27,983 | 11,287 |
Casino and Gaming [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 9,475 | 3,929 | 21,044 | 6,717 |
Casino and Gaming [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 2,697 | 2,596 | 6,939 | 4,570 |
TransAct Services Group [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 1,935 | 1,494 | 3,139 | 3,004 |
TransAct Services Group [Member] | United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | 1,721 | 1,345 | 2,704 | 2,413 |
TransAct Services Group [Member] | International [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Net sales | $ 214 | $ 149 | $ 435 | $ 591 |
Revenue, Contract Balances (Det
Revenue, Contract Balances (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Revenue [Abstract] | ||
Revenue recognized | $ 1,000 | |
Contract liabilities [Abstract] | ||
Unbilled receivables, current | 261 | $ 392 |
Unbilled receivables, net of current portion | 153 | 163 |
Customer pre-payments | (24) | (101) |
Deferred revenue, current | (1,222) | (1,329) |
Deferred revenue, net of current portion | (152) | (143) |
Total net contract liabilities | $ (984) | $ (1,018) |
Revenue, Remaining Performance
Revenue, Remaining Performance Obligations (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Remaining performance obligations [Abstract] | |
Remaining performance obligations | $ 15.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Remaining performance obligations [Abstract] | |
Remaining performance obligations | $ 15.4 |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Remaining performance obligations [Abstract] | |
Remaining performance obligations | $ 0.2 |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | |
Remaining performance obligations [Abstract] | |
Remaining performance obligations | |
Expected timing of satisfaction, period | 12 months |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Inventories [Abstract] | ||
Raw materials and purchased component parts | $ 10,338 | $ 8,884 |
Finished goods | 5,070 | 3,144 |
Inventories | $ 15,408 | $ 12,028 |
Debt (Details)
Debt (Details) - Sienna Credit Facility [Member] - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 21, 2021 | Mar. 13, 2020 | |
Debt [Abstract] | |||
Maximum borrowing capacity | $ 10,000,000 | ||
Interest rate | 6.50% | ||
Deferred financing costs | $ 245,000 | ||
Percentage fee on unused borrowings | 0.50% | ||
Percentage of eligible accounts receivable | 85% | ||
Eligible inventory | $ 5,000,000 | ||
Percentage of eligible raw material | 50% | ||
Percentage of eligible finished goods inventory | 60% | ||
Additional borrowing capacity | $ 5,600,000 | ||
Balance outstanding | 2,300,000 | ||
Minimum excess availability and unrestricted cash required | $ 5,000,000 | ||
Number of days to maintain excess availability and unrestricted cash | 3 days | ||
Minimum principal amount to be maintained to direct use of funds in deposit account | $ 2,250,000 | ||
Minimum principal amount on which interest is paid | $ 2,250,000 | ||
Minimum [Member] | |||
Debt [Abstract] | |||
Additional borrowing capacity | $ 750,000 | ||
Prime Rate [Member] | |||
Debt [Abstract] | |||
Basis spread on variable rate | 1.75% | ||
Federal Funds Rate [Member] | |||
Debt [Abstract] | |||
Basis spread on variable rate | 2.25% |
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, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings per share [Abstract] | ||||
Net income (loss) | $ 765 | $ (2,376) | $ 3,904 | $ (6,724) |
Shares [Abstract] | ||||
Basic: Weighted average common shares outstanding (in shares) | 9,956 | 9,910 | 9,943 | 9,898 |
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method (in shares) | 61 | 0 | 73 | 0 |
Diluted: Weighted average common and common equivalent shares outstanding (in shares) | 10,017 | 9,910 | 10,016 | 9,898 |
Net income (loss) per common share [Abstract] | ||||
Basic (in dollars per share) | $ 0.08 | $ (0.24) | $ 0.39 | $ (0.68) |
Diluted (in dollars per share) | $ 0.08 | $ (0.24) | $ 0.39 | $ (0.68) |
Stock Awards [Member] | ||||
Earnings per share [Abstract] | ||||
Anti-dilutive securities excluded from computation of earnings per dilutive share (in shares) | 1,500 | 1,200 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Leases [Abstract] | |||
Operating lease expense | $ 483 | $ 487 | |
Cash Flows Related to Operating Leases [Abstract] | |||
Operating cash outflows from leases | $ 504 | $ 456 | |
Operating Lease Weighted Average Remaining Lease Term and Discount Rate [Abstract] | |||
Weighted average remaining lease term | 2 years 3 months 18 days | 2 years 8 months 12 days | |
Weighted average discount rate | 4.40% | 4.50% | |
Maturity of Operating Lease Liabilities [Abstract] | |||
2023 | $ 469 | $ 972 | |
2024 | 1,024 | 1,022 | |
2025 | 712 | 710 | |
2026 | 22 | 20 | |
Total undiscounted lease payments | 2,227 | 2,724 | |
Less imputed interest | 113 | 166 | |
Total lease liabilities | $ 2,114 | $ 2,558 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income taxes [Abstract] | ||||
Income tax (expense) benefit | $ 391 | $ (870) | $ 1,020 | $ (2,225) |
Effective tax rate | 33.80% | (26.80%) | 20.70% | (24.90%) |