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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: to:
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Commission file number: 0-21121
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TRANSACT TECHNOLOGIES INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 06-1456680
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7 LASER LANE, WALLINGFORD, CT 06492
(Address of principal executive offices)
(Zip Code)
(203) 269-1198
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING APRIL 27, 2001
- ----- --------------------------
COMMON STOCK,
$.01 PAR VALUE 5,621,427
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TRANSACT TECHNOLOGIES INCORPORATED
INDEX
PART I. Financial Information: Page No.
- ------- ---------------------- --------
Item 1 Financial Statements
Consolidated condensed balance
sheets as of March 31, 2001 and
December 31, 2000 3
Consolidated condensed statements
of operations for the three months
ended March 31, 2001 and March 25, 2000 4
Consolidated condensed statements
of cash flow for the three months ended
March 31, 2001 and March 25, 2000 5
Notes to consolidated condensed
financial statements 6
Item 2 Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8
Item 3 Quantitative and Qualitative
Disclosures about Market Risk 11
PART II. Other Information:
- -------- ------------------
Item 6 Exhibits and Reports on Form 8-K 11
Signatures 12
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ITEM 1. FINANCIAL STATEMENTS
TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
MARCH 31, December 31,
(In thousands) 2001 2000
---- ----
ASSETS:
Current assets:
Cash and cash equivalents $ 169 $ 992
Receivables, net 5,267 6,137
Inventories 9,288 9,857
Other current assets 3,004 2,016
-------- --------
Total current assets 17,728 19,002
-------- --------
Fixed assets, net 6,347 6,794
Goodwill, net 1,626 1,678
Other assets 77 145
-------- --------
8,050 8,617
-------- --------
$ 25,778 $ 27,619
======== ========
LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK
AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 3,082 $ 2,690
Accrued liabilities 2,976 2,681
Accrued restructuring expenses (Note 5) 1,039 --
-------- --------
Total current liabilities 7,097 5,371
-------- --------
Long-term debt 4,178 5,944
Other liabilities 413 445
-------- --------
4,591 6,389
-------- --------
Mandatorily redeemable preferred stock 3,688 3,668
-------- --------
Shareholders' equity:
Common stock 56 56
Additional paid-in capital 6,114 6,069
Retained earnings 5,082 6,929
Unamortized restricted stock compensation (413) (477)
Loan receivable from officer (330) (330)
Accumulated other comprehensive loss (107) (56)
-------- --------
Total shareholders' equity 10,402 12,191
-------- --------
$ 25,778 $ 27,619
======== ========
See notes to consolidated condensed financial statements.
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TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
------------------
MARCH 31, March 25,
(In thousands, except per share data) 2001 2000
---- ----
Net sales $ 9,773 $ 11,238
Cost of sales 7,970 8,225
-------- --------
Gross profit 1,803 3,013
-------- --------
Operating expenses:
Engineering, design and product
development costs 818 860
Selling and marketing expenses 1,146 1,255
General and administrative expenses 1,507 1,222
Business consolidation and restructuring
expenses (Note 5) 1,024 --
-------- --------
4,495 3,337
-------- --------
Operating loss (2,692) (324)
-------- --------
Other income (expense):
Interest, net (94) (154)
Other, net 41 17
-------- --------
(53) (137)
-------- --------
Loss before income taxes (2,745) (461)
Income tax benefit (988) (161)
-------- --------
Net loss (1,757) (300)
Dividends and accretion charges on
preferred stock (90) --
-------- --------
Net loss available to common
shareholders $ (1,847) $ (300)
======== ========
Net loss per share:
Basic and diluted $ (0.33) $ (0.05)
======== ========
Weighted average common shares outstanding:
Basic and diluted 5,531 5,483
======== ========
See notes to consolidated condensed financial statements.
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TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(UNAUDITED)
THREE MONTHS ENDED
----------------------
MARCH 31, March 25,
(In thousands) 2001 2000
--------- ---------
Cash flows from operating activities:
Net loss $(1,757) $ (300)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 790 599
Loss (gain) on disposal of equipment 3 (4)
Changes in operating assets and liabilities:
Receivables 870 (1,709)
Inventories 569 (952)
Other current assets (988) (10)
Other assets (24) (58)
Accounts payable 392 671
Accrued liabilities and other liabilities 263 (33)
Accrued restructuring expenses 1,039 --
------- --------
Net cash provided by (used in) operating activities 1,157 (1,796)
------- --------
Cash flows from investing activities:
Purchases of fixed assets (138) (664)
------- --------
Net cash used in investing activities (138) (664)
------- --------
Cash flows from financing activities:
Bank line of credit (repayments) borrowings, net (1,766) 2,400
Proceeds from option exercises 45 19
Payment of cash dividends on preferred stock (70) --
------- --------
Net cash (used in) provided by financing activities (1,791) 2,419
------- --------
Effect of exchange rate changes on cash (51) (5)
------- --------
Decrease in cash and cash equivalents (823) (46)
Cash and cash equivalents at beginning of period 992 279
------- --------
Cash and cash equivalents at end of period $ 169 $ 233
======= ========
See notes to consolidated condensed financial statements.
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TRANSACT TECHNOLOGIES INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
1. In the opinion of TransAct Technologies Incorporated (the
"Company"), the accompanying unaudited consolidated condensed financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly its financial position as of
March 31, 2001, and the results of its operations and cash flows for
the three months ended March 31, 2001 and March 25, 2000. The December
31, 2000 consolidated condensed balance sheet has been derived from the
Company's audited financial statements at that date. These interim
financial statements should be read in conjunction with the audited
financial statements for the year ended December 31, 2000 included in
the Company's Annual Report on Form 10-K.
The financial position and results of operations of the
Company's foreign subsidiaries are measured using local currency as the
functional currency. Assets and liabilities of such subsidiaries have
been translated at end of period exchange rates, and related revenues
and expenses have been translated at weighted average exchange rates.
Transaction gains and losses are included in other income.
The results of operations for the three months ended March 31,
2001 and March 25, 2000 are not necessarily indicative of the results
to be expected for the full year.
Effective beginning in 2001, the Company's quarterly periods
end on the last day of the calendar quarter. Prior to 2001, the Company
reported quarterly results generally on thirteen-week quarterly
periods, each ending on the Saturday closest to month-end.
2. Earnings per share
Basic earnings per common share for the three months ended
March 31, 2001 and March 25, 2000 were based on the weighted average
number of shares outstanding during the period. Diluted earnings per
share for the same periods were based on the weighted average number of
shares after consideration of any dilutive effect of stock options and
warrants.
3. Inventories:
The components of inventory are:
March 31, December 31,
(In thousands) 2001 2000
-------- -----------
Raw materials and component parts $8,834 $9,603
Work-in-process 345 200
Finished goods 109 54
------ ------
$9,288 $9,857
====== ======
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TRANSACT TECHNOLOGIES INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
4. Significant transactions
On February 27, 2001, the Company amended the Webster Credit
Facility to (1) provide the Company with the ability to borrow up to
$1,500,000 in excess of the amount permitted under the Webster Credit
Facility's borrowing base formula ("Permitted Over-Formula Borrowing")
and (2) revise certain financial covenants. The Permitted Over-Formula
Borrowing is effective from March 1, 2001 through August 31, 2001.
5. Business consolidation and restructuring
On February 15, 2001, the Company announced plans to establish
a global engineering and manufacturing center at its Ithaca, NY
facility. As part of this strategic decision, the Company will
consolidate all manufacturing and engineering into its existing Ithaca,
NY facility and close its Wallingford, CT facility by the end of 2001.
Production is planned to continue at the Wallingford facility until the
end of 2001, with individual product lines scheduled to transfer over
the course of 2001. The closing of the Wallingford facility is expected
to result in the termination of employment of approximately 70
production, administrative and management employees. The Company
estimates that the non-recurring costs associated with the
consolidation, including severance pay, stay bonuses, employee
benefits, moving expenses, non-cancelable lease payments, and other
costs, will be approximately $3.0 to $3.5 million and will be
recognized during 2001.
The following table summarizes the components of the business
consolidation and restructuring charge, the amounts settled during the
quarter, and the remaining accrual as of March 31, 2001:
Three months
ended
(In thousands) March 31,
2001
------------
Employee severance and termination expenses (1) $ 195
Facility closure and consolidation expenses (2) 829
------------
Subtotal - Business consolidation and restructuring
expenses 1,024
Accelerated depreciation (3) 98
------------
Total business consolidation, restructuring and
related charges 1,122
Cash payments and non-cash items (4) (83)
------------
Accrual balance, end of period $1,039
============
(1) Employee severance and termination expenses are the estimated termination
salaries, benefits, outplacement, counseling services and other related
costs expected to be paid to employees who will be involuntarily terminated.
(2) Facility closure and consolidation expenses are the estimated costs to close
the Wallingford, CT facility including lease termination costs and other
related costs, all of which are in accordance with the restructuring plan.
The Wallingford facility closure is expected to be completed by the end of
2001.
(3) Represents accelerated depreciation on certain leasehold improvements and
other fixed assets, due to the closing of the Wallingford facility. These
charges are included in general and administrative expenses.
(4) Includes actual cash payments made, plus other non-cash charges including
accelerated depreciation and disposal losses on assets incurred during the
period.
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ITEM2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements included in this report, including without limitation
statements in this Management's Discussion and Analysis of Financial Condition
and Results of Operations, which are not historical facts are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
forward-looking statements involve risks and uncertainties, including, but not
limited to, customer acceptance and market share gains, both domestically and
internationally, in the face of substantial competition from competitors that
have broader lines of products and greater financial resources; introduction of
new products by competitors; successful product development; dependence on
significant customers; dependence on third parties for sales in Europe and Latin
America; economic conditions in the United States, Europe and Latin America;
marketplace acceptance of new products; risks associated with foreign
operations; the Company's ability to successfully consolidate its operations
into its Ithaca, NY facility; availability of third-party components at
reasonable prices; and the absence of price wars or other significant pricing
pressures affecting the Company's products in the United States or abroad.
Actual results may differ materially from those discussed in, or implied by, the
forward-looking statements.
PLANT CONSOLIDATION DURING 2001
In February 2001, the Company announced plans to establish a global engineering
and manufacturing center at its Ithaca, NY facility. As part of this strategic
decision, the Company will consolidate all manufacturing and engineering into
its existing Ithaca, NY facility and close its Wallingford, CT facility by the
end of 2001 (the "Consolidation"). The Company's technology shift to inkjet and
thermal printing from dot matrix impact printing has dramatically reduced the
labor content in printers and, therefore, lowers the required production
capacity. Production is planned to continue at the Wallingford facility until
the end of 2001, with individual product lines scheduled to transfer over the
course of 2001. The Company estimates that the non-recurring costs associated
with the Consolidation, including severance pay, stay bonuses, employee
benefits, moving expenses, non-cancelable lease payments and other costs, will
be in the $3.0 to $3.5 million range and will be recognized during 2001. The
Company expects the Consolidation will provide approximately $4.0 million in
annual cost savings, compared to 2000, beginning in 2002. See the "Liquidity and
Capital Resources" section for a discussion of the expected impact of the
Consolidation on the Company's future cash flows. Also see Note 5 to
Consolidated Condensed Financial Statements.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 25, 2000
- --------------------------------------------------------------------------------
NET SALES. Net sales by market for the current and prior year's quarter were as
follows:
Three months ended Three months ended
(In thousands, except %) March 31, 2001 March 25, 2000
------------------------- --------------------------
Point of sale $ 6,005 61.5 % $ 5,833 51.9 %
Gaming and lottery 1,928 19.7 3,947 35.1
Other 1,840 18.8 1,458 13.0
------------------------- --------------------------
$ 9,773 100.0 % $ 11,238 100.0 %
========================= ==========================
Net sales for the first quarter of 2001 decreased $1,465,000, or 13%, to
$9,773,000 from the prior year's first quarter, due to significantly lower
shipments into the Company's gaming and lottery market, partially offset by
increased sales into the point of sale ("POS") and the Company's other markets.
Point of sale: Sales of the Company's POS printers increased approximately
$172,000, or 3%. Domestic POS printer sales decreased slightly by $106,000, as
the Company continues to experience softness in demand from the Company's
domestic distributors.
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Point of sale (continued): International POS printer shipments increased
approximately $278,000 due largely to approximately $400,000 of shipments of the
Company's thermal fiscal printer in Europe. The Company did not make any thermal
fiscal printer shipments in the first quarter of 2000. The increase in
international shipments of fiscal printers was partially offset by lower printer
shipments to ICL Pathway for the British Post Office project. Shipments for the
British Post Office project totaled approximately $1,100,000 in the first
quarter of 2001 compared to $1,200,000 in the same quarter of 2000. The Company
completed shipping printers for the British Post Office project during the first
quarter of 2001, and no further shipments are expected. While the Company
expects to replace sales for the British Post Office project with sales of other
POS and gaming and lottery printers during 2001, if the Company is unable to do
so, the absence of such sales would have a material adverse impact on the
Company's operations and financial results for the remainder of 2001.
Gaming and lottery: Sales of the Company's gaming and lottery printers decreased
approximately $2,019,000, or 51%, from the first quarter a year ago. The primary
reason for the decrease of revenue in this market is the absence of printer
shipments of the Company's on-line lottery printers to GTECH Corporation
("GTECH")(a worldwide lottery terminal provider and major customer of the
Company) in the first quarter of 2001. Shipments of these printers and spares
totaled approximately $3,100,000 in the first quarter of 2000. The Company
received an order from GTECH in January 2001 approximating $14,000,000 for
additional on-line lottery printers that will be delivered from May to December
2001.
Offsetting the decrease of printer sales to GTECH was an increase of
approximately $1,100,000 in sales of the Company's new slot machine printer. The
new slot machine printer is primarily for use in Indian casinos in California
and casinos in Nevada. The Company expects sales of its slot machine printers to
continue to increase for the remainder of 2001.
Other: Sales of the Company's printers into other markets increased by $382,000,
or 26%, to $1,840,000 from the prior year's comparable quarter. The first
quarter of 2001 included shipments of approximately $1,000,000 of the Company's
thermal kiosk printers for use in a Canadian government application. No
shipments of these printers were made in the first quarter of 2000. This
increase was partially offset by lower sales (a decrease of approximately
$600,000) of the Company's ATM printer and related spares. Since printer sales
into this market are principally project-oriented, the Company cannot predict if
and when future sales may occur.
GROSS PROFIT. Gross profit decreased $1,210,000, or 40%, to $1,803,000 from the
prior year's quarter due primarily to lower volume of sales. The gross margin
also declined to 18.5% from 26.8%. Both gross profit and gross margin for the
first quarter of 2001 were adversely impacted by lower sales volume at the
Company's Wallingford facility, primarily due to the absence of on-line lottery
printer shipments to GTECH. The Company expects its gross margin to improve
slightly in the second quarter of 2001, and more significantly in the second
half of 2001, as the Company resumes printer shipments to GTECH.
ENGINEERING AND PRODUCT DEVELOPMENT. Engineering, design and product development
expenses decreased $42,000, or 5%, to $818,000 from the first quarter of 2000.
This decrease is primarily due to a reduction in engineering staff at the
Company's Wallingford facility. Engineering and product development expense
increased as a percentage of net sales to 8.4% from 7.6%, due largely to lower
sales volume in the first quarter of 2001 compared to 2000.
SELLING AND MARKETING. Selling and marketing expenses decreased $109,000, or 9%,
to $1,146,000 from the first quarter of 2000, and increased slightly as a
percentage of net sales to 11.7% from 11.2%. Such expenses decreased primarily
due to unusually high marketing and promotional expenses incurred during the
first quarter of 2000 related to preparation for the April 2000 launch of the
Company's new family of printers utilizing inkjet printing technology. This
decrease was partially offset by higher sales commissions resulting from an
increase in sales eligible for commissions in the first quarter of 2001 compared
to 2000.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased by
$285,000, or 23%, to $1,507,000 from the comparable prior year's quarter and
increased as a percentage of net sales to 15.4% from 10.9%. The increase
primarily resulted from (1) higher administrative compensation-related expenses
due largely to annual salary increases and (2) the inclusion of $98,000 of
accelerated depreciation on certain assets located at the Company's Wallingford,
CT facility (primarily leasehold improvements and computer equipment) whose
useful lives have been shortened as a result of the Consolidation. For the
remainder of 2001, accelerated depreciation on these assets are expected to be
approximately $98,000 per quarter.
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BUSINESS CONSOLIDATION AND RESTRUCTURING. During the first quarter of 2001, the
Company incurred approximately $1,024,000 of expenses related to the
Consolidation. These expenses primarily included a portion of employee severance
and termination expenses incurred during the quarter, and facility closure and
consolidation expenses (including moving expenses, estimated non-cancelable
lease payments and other costs). The Company estimates that the non-recurring
costs associated with the Consolidation will be in the $3.0 to $3.5 million
range and will be recognized during 2001. See Note 5 to the Consolidated
Condensed Financial Statements.
OPERATING LOSS. Operating loss increased $2,368,000, to $2,692,000 from $324,000
in the first quarter of 2000, primarily due to expenses related to the
Consolidation and lower gross margin resulting from lower sales in the first
quarter of 2001 compared to the first quarter of 2000.
INTEREST. Net interest expense decreased to $94,000 from $154,000 in the first
quarter of 2000 due to decreased average outstanding borrowings on the Company's
line of credit and a lower average interest rate on such borrowings. See
"Liquidity and Capital Resources" below.
INCOME TAXES. As a result of the Company's loss before income taxes, the Company
recorded an income tax benefit of $988,000 and $161,000, or an effective rate of
36% and 34.9%, in the first quarter of 2001 and 2000, respectively.
NET LOSS. The Company incurred a net loss during the first quarter of 2001 of
$1,757,000, or $0.33 per share (basic and diluted) after giving effect to
$90,000 of dividends and accretion charges on preferred stock issued in April
2000. This compares to a net loss of $300,000, or $0.05 per share (basic and
diluted) for the first quarter of 2000. In future quarters, dividends and
accretion charges on preferred stock will be approximately $90,000, before the
effect of any conversion or redemption of the preferred stock.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company reported cash generated from operations of $1,157,000 during the
first quarter of 2001 compared to cash used in operations of $1,796,000 during
the first quarter of 2000. The increase in cash generated is due to higher
collections of receivables and decreased inventory levels partially offset by
higher net losses. The Company's working capital decreased to $10,631,000 at
March 31, 2001 from $13,631,000 at December 31, 2000. The current ratio also
decreased to 2.50 at March 31, 2001 from 3.54 at December 31, 2000. Both the
decrease in working capital and the current ratio were largely due to (1) lower
receivables at March 31, 2001 resulting from lower sales volume in the first
quarter of 2001 compared to the fourth quarter of 2000, (2) the Company's effort
to lower inventory levels and (3) accrued restructuring expenses of
approximately $1.0 million related to the Consolidation. The Company expects its
working capital and current ratio to continue to decline for the remainder of
2001, as the majority of expenses related to the Consolidation will continue to
accrue during 2001, but are not expected to be paid until 2002.
On September 21, 2000, the Company entered into a new two-year revolving credit
facility (the "Webster Credit Facility") with Webster Bank expiring on September
21, 2002. The Webster Credit Facility replaced a previous credit facility with
Fleet National Bank. Under the Webster Credit Facility, the Company may borrow
up to $12 million, based on certain financial criteria of the Company at the
time of any borrowing, to fund working capital. Borrowings under the Webster
Credit Facility bear a floating rate of interest at the higher of the "Prime
Rate" as published in The Wall Street Journal or one-half of one percent (1/2%)
over the federal funds rate (as defined in the Webster Credit Facility). Under
certain circumstances, the Company may select a fixed interest rate for a
specified period of up to 90 days on borrowings based on the current LIBOR rate
(as adjusted as specified in the Webster Credit Facility) plus 2.5%, which may
be reduced to 2.25% on July 1, 2001 if there is no Event of Default (as defined
in the Webster Credit Facility). The Company will also pay a fee of
three-eighths of one percent (3/8%) on unused borrowing capacity under the
Webster Credit Facility. Borrowings under the Webster Credit Facility are
secured by a lien on all the assets of the Company. The Webster Credit facility
also imposes certain financial covenants on the Company and restricts the
payment of dividends on its common stock and the creation of other liens.
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On February 27, 2001, the Company amended the Webster Credit Facility to (1)
provide the Company with the ability to borrow up to $1,500,000 in excess of the
amount permitted under the Webster Credit Facility's borrowing base formula
("Permitted Over-Formula Borrowing") and (2) revise certain financial covenants.
The Permitted Over-Formula Borrowing is effective from March 1, 2001 through
August 31, 2001. The Company had $4,178,000 of outstanding borrowings under this
facility at March 31, 2001.
The Company's capital expenditures were approximately $138,000 and $664,000 for
the three months ended March 31, 2001 and March 25, 2000, respectively. These
expenditures primarily included new product tooling, largely for new inkjet
products in the 2000 period. The Company's total capital expenditures for 2001
are expected to be approximately $2,000,000, a majority for new product tooling.
The Company estimates that the non-recurring costs associated with the
Consolidation will be approximately $3.0 to $3.5 million, and will be recognized
during 2001. Of these costs, approximately $2.5 to $3.0 million will require
future cash outlays. The Company expects to pay approximately $500,000 to
$800,000 in 2001 and the remainder in 2002. The Company paid approximately
$17,000 of these costs during the first quarter of 2001.
The Company believes that cash flows generated from operations and borrowings
available under the Webster Credit Facility, as necessary, will provide
sufficient resources to meet the Company's working capital needs including costs
associated with the Consolidation, finance its capital expenditures and meet its
liquidity requirements through December 31, 2001.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
The Company's exposure to market risk for changes in interest rates
relates primarily to borrowings under the Webster Credit Facility. These
borrowings bear interest at variable rates and the fair value of this
indebtedness is not significantly affected by changes in market interest rates.
The Company, under the Webster Credit Facility, may, and has, fixed its rate of
interest at LIBOR plus the applicable margin for between 30 and 90 days on a
significant portion of its outstanding borrowings. The Company does not have any
other protection against interest rate fluctuations. An effective increase or
decrease of 10% in the current effective interest rates under the Webster Credit
Facility would not have a material effect on the Company's results of operations
or cash flow.
FOREIGN CURRENCY EXCHANGE RISK
A substantial portion of the Company's sales and purchases are
denominated in U.S. dollars and, as a result, the Company has relatively little
exposure to foreign currency exchange risk with respect to sales and purchases.
This exposure may change over time as business practices evolve and could have a
material adverse impact on its financial results in the future. The Company does
not use forward exchange contracts to hedge exposures denominated in foreign
currencies or any other derivative financial instruments for trading or
speculative purposes. The effect of an immediate 10% change in exchange rates
would not have a material impact on the Company's future results of operations
or cash flow.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits filed herein
Exhibit 11.1 Computation of earnings per share
b. Reports on Form 8-K
A Form 8-K was filed on February 15, 2001 to report
under Item 9 two press releases pursuant to Rule 101(e) of
Regulation FD.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANSACT TECHNOLOGIES INCORPORATED
----------------------------------
(Registrant)
May 14, 2001 /s/ Richard L. Cote
-------------------------------------------
Richard L. Cote
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
(Principal Financial Officer)
/s/ Steven A. DeMartino
------------------------------------------
Steven A. DeMartino
Vice President and Corporate Controller
(Principal Accounting Officer)
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EXHIBIT LIST
The following exhibits are filed herewith.
Exhibit
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11.1 Computation of earnings per share.
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