TransAct Technologies (TACT) 10-Q 14 Nov 23 2023 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Oct. 31, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
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		9,958,118

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 11,605	$ 7,946
Accounts receivable, net	12,184	13,927
Employee retention credit receivable	0	1,500
Inventories	17,559	12,028
Other current assets	1,306	724
Total current assets	42,654	36,125
Fixed assets, net of accumulated depreciation of $18,300 and $17,656, respectively	2,653	2,781
Right-of-use assets, net	1,824	2,488
Goodwill	2,621	2,621
Deferred tax assets	6,589	7,327
Intangible assets, net of accumulated amortization of $1,480 and $1,364, respectively	126	242
Other assets	198	248
Total noncurrent assets	14,011	15,707
Total assets	56,665	51,832
Current liabilities:
Revolving loan payable	2,250	2,250
Accounts payable	6,239	7,395
Accrued liabilities	5,723	4,077
Lease liabilities	915	875
Deferred revenue	977	1,329
Total current liabilities	16,104	15,926
Deferred revenue, net of current portion	201	143
Lease liabilities, net of current portion	965	1,683
Other liabilities	221	218
Total noncurrent liabilities	1,387	2,044
Total liabilities	17,491	17,970
Commitments and contingencies (see Notes 5 and 7)
Shareholders' equity:
Common stock, $0.01 par value, 20,000,000 shares authorized; 14,002,960 and 13,956,725 shares issued, respectively; 9,958,118 and 9,911,883 shares outstanding, respectively	140	139
Additional paid-in capital	56,807	56,282
Retained earnings	14,440	9,630
Accumulated other comprehensive loss, net of tax	(103)	(79)
Treasury stock, at cost (4,044,842 shares)	(32,110)	(32,110)
Total shareholders' equity	39,174	33,862
Total liabilities and shareholders' equity	$ 56,665	$ 51,832

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets:
Fixed assets, accumulated depreciation	$ 18,300	$ 17,656
Intangible assets, accumulated amortization	$ 1,480	$ 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)	14,002,960	13,956,725
Common stock, shares outstanding (in shares)	9,958,118	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		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 17,190	$ 17,856	$ 59,366	$ 40,181
Cost of sales	8,274	9,663	27,337	23,988
Gross profit	8,916	8,193	32,029	16,193
Operating expenses:
Engineering, design and product development	2,509	1,985	7,283	6,440
Selling and marketing	2,397	2,748	7,838	8,724
General and administrative	2,819	3,073	10,680	9,200
Operating expenses	7,725	7,806	25,801	24,364
Operating income (loss)	1,191	387	6,228	(8,171)
Interest and other (expense) income:
Interest, net	(73)	(53)	(207)	(145)
Other, net	(43)	132	(22)	(167)
Interest and other (expense) income	(116)	79	(229)	(312)
Income (loss) before income taxes	1,075	466	5,999	(8,483)
Income tax (expense) benefit	(169)	62	(1,189)	2,287
Net income (loss)	$ 906	$ 528	$ 4,810	$ (6,196)
Net income (loss) per common share:
Basic (in dollars per share)	$ 0.09	$ 0.05	$ 0.48	$ (0.63)
Diluted (in dollars per share)	$ 0.09	$ 0.05	$ 0.48	$ (0.63)
Shares used in per-share calculation:
Basic (in shares)	9,958	9,911	9,948	9,902
Diluted (in shares)	10,052	9,911	10,023	9,902

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net income (loss)	$ 906	$ 528	$ 4,810	$ (6,196)
Foreign currency translation adjustment, net of tax	(35)	(205)	(24)	(255)
Comprehensive income (loss)	$ 871	$ 323	$ 4,786	$ (6,451)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net income (loss)	$ 4,810	$ (6,196)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Share-based compensation expense	611	868
Depreciation and amortization	1,103	984
Deferred income taxes	746	(2,387)
Unrealized foreign currency transaction losses	22	165
Changes in operating assets and liabilities:
Accounts receivable	1,786	(6,343)
Employee retention credit receivable	1,500	0
Inventories	(5,584)	(3,551)
Prepaid income taxes	(178)	(51)
Other current and long-term assets	(344)	(137)
Accounts payable	(1,152)	1,926
Accrued liabilities and other liabilities	1,271	508
Net cash provided by (used in) operating activities	4,591	(14,214)
Cash flows from investing activities:
Capital expenditures	(788)	(955)
Net cash used in investing activities	(788)	(955)
Cash flows from financing activities:
Proceeds from bank borrowings	0	2,250
Withholding taxes paid on stock issuances	(86)	(119)
Payment of bank financing costs	0	(69)
Net cash (used in) provided by financing activities	(86)	2,062
Effect of exchange rate changes on cash and cash equivalents	(58)	14
Increase (decrease) in cash and cash equivalents	3,659	(13,093)
Cash and cash equivalents, beginning of period	7,946	19,457
Cash and cash equivalents, end of period	11,605	6,364
Supplemental schedule of non-cash investing activities:
Non-cash capital expenditure items	$ 36	$ 19

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		868
Relinquishment of stock awards to pay for withholding taxes		(119)
Net income (loss)			(6,196)			(6,196)
Foreign currency translation adjustment, net of tax					(255)	(255)
Ending balance at Sep. 30, 2022	139	55,995	9,370	(32,110)	(112)	$ 33,282
Supplemental Share Information:
Issuance of shares from stock awards (in shares)						65
Relinquishment of stock awards to pay withholding taxes (in shares)						26
Beginning balance at Jun. 30, 2022	139	55,708	8,842	(32,110)	93	$ 32,672
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from restricted stock units	0
Share-based compensation expense		287
Relinquishment of stock awards to pay for withholding taxes		0
Net income (loss)			528			528
Foreign currency translation adjustment, net of tax					(205)	(205)
Ending balance at Sep. 30, 2022	139	55,995	9,370	(32,110)	(112)	$ 33,282
Supplemental Share Information:
Issuance of shares from stock awards (in shares)						2
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		611
Relinquishment of stock awards to pay for withholding taxes		(86)
Net income (loss)			4,810			4,810
Foreign currency translation adjustment, net of tax					(24)	(24)
Ending balance at Sep. 30, 2023	140	56,807	14,440	(32,110)	(103)	$ 39,174
Supplemental Share Information:
Issuance of shares from stock awards (in shares)						58
Relinquishment of stock awards to pay withholding taxes (in shares)						12
Beginning balance at Jun. 30, 2023	140	56,594	13,534	(32,110)	(68)	$ 38,090
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from restricted stock units	0
Share-based compensation expense		213
Relinquishment of stock awards to pay for withholding taxes		0
Net income (loss)			906			906
Foreign currency translation adjustment, net of tax					(35)	(35)
Ending balance at Sep. 30, 2023	$ 140	$ 56,807	$ 14,440	$ (32,110)	$ (103)	$ 39,174
Supplemental Share Information:
Issuance of shares from stock awards (in shares)						1
Relinquishment of stock awards to pay withholding taxes (in shares)						0

Basis of presentation

Basis of presentation	9 Months Ended
	Sep. 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 nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023. Impact of Global Economic Conditions, Supply Chain Disruptions and the COVID-19 Pandemic 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. After experiencing significantly lower inventory and sales levels in 2021 due to supply chain disruptions, we were able to increase our inventory levels and minimize the impact to our customers in 2022 by successfully modifying our products that were affected by supply chain disruptions, as well as by 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 nine 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 the first nine months of 2023 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 – The Company received a refundable employee retention credit under the CARES Act in the first quarter of 2023. The Company previously 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 Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021. ● 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 ● Expense Reductions – During the third quarter of 2023, we began a cost reduction initiative to reduce our overall level of operating expenses that includes reducing employee headcount, trade show, advertising and other promotional marketing expenses, certain third party engineering resources and other expenses, and to a lesser extent, certain general and administrative expenses. When completed in the fourth quarter of 2023, we expect these actions will result in approximately $3 million of annualized savings beginning in 2024 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 increased substantially in 2022 and during the first nine 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	9 Months Ended
	Sep. 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 within Part II, Item 8. “Financial Statements and Supplementary Data” in the 2022 Form 10-K. There have been no changes to our significant accounting policies since the 2022 Form 10-K. 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	9 Months Ended
	Sep. 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 September 30, 2023 2022 (In thousands) United States International Total United States International Total Food service technology $ 4,049 $ 192 $ 4,241 $ 3,496 $ 252 $ 3,748 POS automation 1,575 69 1,644 5,228 – 5,228 Casino and gaming 5,411 3,608 9,019 3,758 3,985 7,743 TransAct Services Group 2,087 199 2,286 983 154 1,137 Total net sales $ 13,122 $ 4,068 $ 17,190 $ 13,465 $ 4,391 $ 17,856 Nine Months Ended September 30, 2023 2022 (In thousands) United States International Total United States International Total Food service technology $ 10,937 $ 657 $ 11,594 $ 8,723 $ 587 $ 9,310 POS automation 5,261 84 5,345 7,700 – 7,700 Casino and gaming 26,455 10,547 37,002 10,475 8,555 19,030 TransAct Services Group 4,791 634 5,425 3,396 745 4,141 Total net sales $ 47,444 $ 11,922 $ 59,366 $ 30,294 $ 9,887 $ 40,181 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: September 30, 2023 December 31, 2022 (In thousands) Unbilled receivables, current $ 194 $ 392 Unbilled receivables, net of current portion 144 163 Customer pre-payments (410 ) (101 ) Deferred revenue, current (977 ) (1,329 ) Deferred revenue, net of current portion (201 ) (143 ) Total net contract liabilities $ (1,250 ) $ (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 September 30, 2023, the aggregate amount of transaction prices allocated to remaining performance obligations was $12.0 million. The Company expects to recognize revenue of $11.7 million of its remaining performance obligations within the next 12 months following September 30, 2023, $0.2 million within the next 24 months balance 36 months

Inventories

Inventories	9 Months Ended
	Sep. 30, 2023
Inventories [Abstract]
Inventories	4. Inventories The components of inventories were: September 30, 2023 December 31, 2022 (In thousands) Raw materials and purchased component parts $ 10,069 $ 8,884 Finished goods 7,490 3,144 $ 17,559 $ 12,028

Debt

Debt	9 Months Ended
	Sep. 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 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 September 30, 2023, we remained in compliance with our excess availability covenant. As of September 30, 2023, we had $2.3 million of outstanding borrowings under the Siena Credit Facility and $6.8 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 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 the Company’s former Chief Executive Officer be reasonably acceptable to the Lender, and this amendment confirmed that John Dillon, the Company’s current Chief Executive Officer, is an acceptable successor and applied the same requirement to any future successor to Mr. Dillon.

Earnings per share

Earnings per share	9 Months Ended
	Sep. 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 Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In thousands, except per share data) Net income (loss) $ 906 $ 528 $ 4,810 $ (6,196 ) Shares: Basic: Weighted average common shares outstanding 9,958 9,911 9,948 9,902 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 94 – 75 – Diluted: Weighted average common and common equivalent shares outstanding 10,052 9,911 10,023 9,902 Net income (loss) per common share: Basic $ 0.09 $ 0.05 $ 0.48 $ (0.63 ) Diluted $ 0.09 $ 0.05 $ 0.48 $ (0.63 ) 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	9 Months Ended
	Sep. 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 nine months ended September 30, 2023 and 2022 was $742 thousand and $748 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): Nine Months Ended September 30, 2023 2022 Operating cash outflows from leases $ 756 $ 617 The following summarizes additional information related to our leases as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Weighted average remaining lease term (in years) 2.0 2.7 Weighted average discount rate 4.5 % 4.5 % The maturity of the Company’s operating lease liabilities as of September 30, 2023 and December 31, 2022 were as follows (in thousands): September 30, 2023 December 31, 2022 2023 216 972 2024 1,022 1,022 2025 711 710 2026 21 20 Total undiscounted lease payments 1,970 2,724 Less imputed interest 90 166 Total lease liabilities $ 1,880 $ 2,558

Income taxes

Income taxes	9 Months Ended
	Sep. 30, 2023
Income taxes [Abstract]
Income taxes	8. Income taxes We recorde d income tax expense in the third quarter of 2023 of $169 thousand at an effective tax rate of 15.7% compared to an income tax benefit in the third quarter of 2022 of $62 thousand at an effective tax rate of (13.3%). For the nine months ended September 30, 2023, we recorded income tax expense of $1.2 million at an effective tax rate of 19.8% (27.0%) 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 2019. However, our federal tax returns for the years 2020 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	9 Months Ended
	Sep. 30, 2023
Subsequent events [Abstract]
Subsequent events	9. Subsequent events In the fourth quarter of 2023, we completed an asset sale of our Printrex product line (essentially inventory on-hand) and plan to record a resulting non-operating gain of approximately $0.4 million in the fourth quarter of 2023. Prior to this sale, the last TransAct sales of Printrex products occurred in 2021. The Company has evaluated all other 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 other 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, 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 increased substantially in 2022 and during the first nine 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)	9 Months Ended
	Sep. 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)	9 Months Ended
	Sep. 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 September 30, 2023 2022 (In thousands) United States International Total United States International Total Food service technology $ 4,049 $ 192 $ 4,241 $ 3,496 $ 252 $ 3,748 POS automation 1,575 69 1,644 5,228 – 5,228 Casino and gaming 5,411 3,608 9,019 3,758 3,985 7,743 TransAct Services Group 2,087 199 2,286 983 154 1,137 Total net sales $ 13,122 $ 4,068 $ 17,190 $ 13,465 $ 4,391 $ 17,856 Nine Months Ended September 30, 2023 2022 (In thousands) United States International Total United States International Total Food service technology $ 10,937 $ 657 $ 11,594 $ 8,723 $ 587 $ 9,310 POS automation 5,261 84 5,345 7,700 – 7,700 Casino and gaming 26,455 10,547 37,002 10,475 8,555 19,030 TransAct Services Group 4,791 634 5,425 3,396 745 4,141 Total net sales $ 47,444 $ 11,922 $ 59,366 $ 30,294 $ 9,887 $ 40,181
Net Contract Liabilities	Total net contract liabilities consisted of the following: September 30, 2023 December 31, 2022 (In thousands) Unbilled receivables, current $ 194 $ 392 Unbilled receivables, net of current portion 144 163 Customer pre-payments (410 ) (101 ) Deferred revenue, current (977 ) (1,329 ) Deferred revenue, net of current portion (201 ) (143 ) Total net contract liabilities $ (1,250 ) $ (1,018 )

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2023
Inventories [Abstract]
Inventories	The components of inventories were: September 30, 2023 December 31, 2022 (In thousands) Raw materials and purchased component parts $ 10,069 $ 8,884 Finished goods 7,490 3,144 $ 17,559 $ 12,028

Earnings per share (Tables)

Earnings per share (Tables)	9 Months Ended
	Sep. 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 Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In thousands, except per share data) Net income (loss) $ 906 $ 528 $ 4,810 $ (6,196 ) Shares: Basic: Weighted average common shares outstanding 9,958 9,911 9,948 9,902 Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method 94 – 75 – Diluted: Weighted average common and common equivalent shares outstanding 10,052 9,911 10,023 9,902 Net income (loss) per common share: Basic $ 0.09 $ 0.05 $ 0.48 $ (0.63 ) Diluted $ 0.09 $ 0.05 $ 0.48 $ (0.63 )

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 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): Nine Months Ended September 30, 2023 2022 Operating cash outflows from leases $ 756 $ 617
Additional Information Related to Leases	The following summarizes additional information related to our leases as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Weighted average remaining lease term (in years) 2.0 2.7 Weighted average discount rate 4.5 % 4.5 %
Maturity of Operating Lease Liabilities	The maturity of the Company’s operating lease liabilities as of September 30, 2023 and December 31, 2022 were as follows (in thousands): September 30, 2023 December 31, 2022 2023 216 972 2024 1,022 1,022 2025 711 710 2026 21 20 Total undiscounted lease payments 1,970 2,724 Less imputed interest 90 166 Total lease liabilities $ 1,880 $ 2,558

Basis of presentation (Details)

Basis of presentation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2024	Dec. 31, 2021	Dec. 31, 2022	Mar. 13, 2020
Basis of presentation [Abstract]
Gain from employee retention credit						$ 1,500
Employee retention credit receivable	$ 0		$ 0			$ 1,500	$ 1,500
Operating expenses	$ 7,725	$ 7,806	$ 25,801	$ 24,364
Forecast [Member]
Basis of presentation [Abstract]
Operating expenses					$ (3,000)
Sienna Credit Facility [Member]
Basis of presentation [Abstract]
Maximum borrowing capacity								$ 10,000

Revenue, Disaggregation of Reve

Revenue, Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of revenue [Abstract]
Net sales	$ 17,190	$ 17,856	$ 59,366	$ 40,181
United States [Member]
Disaggregation of revenue [Abstract]
Net sales	13,122	13,465	47,444	30,294
International [Member]
Disaggregation of revenue [Abstract]
Net sales	4,068	4,391	11,922	9,887
Food Service Technology [Member]
Disaggregation of revenue [Abstract]
Net sales	4,241	3,748	11,594	9,310
Food Service Technology [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales	4,049	3,496	10,937	8,723
Food Service Technology [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales	192	252	657	587
POS Automation [Member]
Disaggregation of revenue [Abstract]
Net sales	1,644	5,228	5,345	7,700
POS Automation [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales	1,575	5,228	5,261	7,700
POS Automation [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales	69	0	84	0
Casino and Gaming [Member]
Disaggregation of revenue [Abstract]
Net sales	9,019	7,743	37,002	19,030
Casino and Gaming [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales	5,411	3,758	26,455	10,475
Casino and Gaming [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales	3,608	3,985	10,547	8,555
TransAct Services Group [Member]
Disaggregation of revenue [Abstract]
Net sales	2,286	1,137	5,425	4,141
TransAct Services Group [Member] | United States [Member]
Disaggregation of revenue [Abstract]
Net sales	2,087	983	4,791	3,396
TransAct Services Group [Member] | International [Member]
Disaggregation of revenue [Abstract]
Net sales	$ 199	$ 154	$ 634	$ 745

Revenue, Contract Balances (Det

Revenue, Contract Balances (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Revenue [Abstract]
Revenue recognized	$ 1,200
Contract liabilities [Abstract]
Unbilled receivables, current	194	$ 392
Unbilled receivables, net of current portion	144	163
Customer pre-payments	(410)	(101)
Deferred revenue, current	(977)	(1,329)
Deferred revenue, net of current portion	(201)	(143)
Total net contract liabilities	$ (1,250)	$ (1,018)

Revenue, Remaining Performance

Revenue, Remaining Performance Obligations (Details) $ in Millions	Sep. 30, 2023 USD ($)
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 12
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01
Remaining performance obligations [Abstract]
Remaining performance obligations	$ 11.7
Expected timing of satisfaction, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
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]: 2025-10-01
Remaining performance obligations [Abstract]
Remaining performance obligations
Expected timing of satisfaction, period	12 months

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventories [Abstract]
Raw materials and purchased component parts	$ 10,069	$ 8,884
Finished goods	7,490	3,144
Inventories	$ 17,559	$ 12,028

Debt (Details)

Debt (Details) - Sienna Credit Facility [Member] - USD ($)	9 Months Ended
	Sep. 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	$ 6,800,000
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		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings per share [Abstract]
Net income (loss)	$ 906	$ 528	$ 4,810	$ (6,196)
Shares [Abstract]
Basic: Weighted average common shares outstanding (in shares)	9,958	9,911	9,948	9,902
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method (in shares)	94	0	75	0
Diluted: Weighted average common and common equivalent shares outstanding (in shares)	10,052	9,911	10,023	9,902
Net income (loss) per common share [Abstract]
Basic (in dollars per share)	$ 0.09	$ 0.05	$ 0.48	$ (0.63)
Diluted (in dollars per share)	$ 0.09	$ 0.05	$ 0.48	$ (0.63)
Stock Awards [Member]
Earnings per share [Abstract]
Anti-dilutive securities excluded from computation of earnings per dilutive share (in shares)				1,600

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Leases [Abstract]
Operating lease expense	$ 742	$ 748
Cash Flows Related to Operating Leases [Abstract]
Operating cash outflows from leases	$ 756	$ 617
Operating Lease Weighted Average Remaining Lease Term and Discount Rate [Abstract]
Weighted average remaining lease term	2 years		2 years 8 months 12 days
Weighted average discount rate	4.50%		4.50%
Maturity of Operating Lease Liabilities [Abstract]
2023	$ 216		$ 972
2024	1,022		1,022
2025	711		710
2026	21		20
Total undiscounted lease payments	1,970		2,724
Less imputed interest	90		166
Total lease liabilities	$ 1,880		$ 2,558

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income taxes [Abstract]
Income tax (expense) benefit	$ 169	$ (62)	$ 1,189	$ (2,287)
Effective tax rate	15.70%	(13.30%)	19.80%	(27.00%)

Subsequent events (Details)

Subsequent events (Details) $ in Millions	3 Months Ended
	Dec. 31, 2023 USD ($)
Plan [Member]
Subsequent Events [Abstract]
Gain on sale of assets	$ 0.4