Exhibit 99.1
(TRANSACT LOGO)
TRANSACT TECHNOLOGIES REPORTS
FIRST QUARTER 2004 RESULTS
RAISES FULL YEAR REVENUE AND EPS GUIDANCE
- First quarter 2004 net revenue increased to $15.1 million, 67%
year- over-year growth
- Gaming and lottery revenue increased 75% in the first quarter
versus the first quarter of the previous year
- Point of sale (POS) and banking revenue increased 59% in the
first quarter versus the first quarter of the previous year
- Gross margin improved to 36% in the first quarter of 2004 versus
27% in the first quarter of 2003
- EPS of $0.13 per diluted share on a post-stock split basis versus
guidance of $0.11 per diluted share
Wallingford, CT, May 3, 2004 - TransAct Technologies Incorporated (Nasdaq:
TACT), a leading producer of transaction-based printers for customers worldwide,
today announced financial results for the first quarter ended March 31, 2004.
Net revenue for the first quarter ended March 31, 2004 increased 67% to $15.1
million, from $9.0 million in the same period a year ago. The strong growth was
led by the gaming and lottery portion of TransAct's business, which had revenue
growth of 75% in the first quarter of 2004 versus the first quarter of 2003, due
primarily to the continued rollout of ticket-in/ticket-out slot machines in the
U.S. TransAct also experienced robust growth in the POS and banking market with
revenue from this segment increasing 59% in the first quarter of 2004 over the
first quarter of 2003, led by increased sales of the Company's BANKjet(R) line
of inkjet printers. Revenue from TransAct's spare parts, consumables and
services business increased 25% in the first quarter of 2004 from the year-ago
period, reflecting the Company's growing installed base of printers and
increased focus on the after-market business.
Net income in the first quarter of 2004 was $1.3 million or $0.13 per diluted
share, compared to a net loss of ($198,000) or ($0.03) per diluted share, in the
first quarter of 2003. The per share data in the first quarter of 2004 and 2003
has been adjusted to reflect the three-for-two stock split of the
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Company's common stock in the form of a 50 percent stock dividend. The Company
had provided first quarter guidance projecting revenue to be over $15 million
with net income of approximately $0.11 per diluted share on a post-stock split
basis.
Bart C. Shuldman, Chairman, President and Chief Executive Officer of TransAct
Technologies, said, "This was another impressive quarter for us as TransAct
continues to benefit from the roll-out of cashless gaming machines at casinos in
the U.S. We remain well positioned to capitalize on the market's expected growth
based on our best-in-class printers and our relationships with all the major
OEMs and manufacturers. We are also gaining traction internationally as we
leverage the success we continue to achieve in the U.S. Our results in the first
quarter also benefited from a 59% year-over-year growth in revenue in the POS
and banking segment of our business. This growth continues to be driven by sales
of our BANKjet(R) 1500 line of inkjet printers, as major financial institutions
refocus their businesses on local branches. Finally, our after-market business
continues to expand and will remain a major focus for us going forward given the
recurring revenue and higher margins associated with this business."
Richard L. Cote, Executive Vice President and Chief Financial Officer of
TransAct Technologies, commented, "Our results underscore the leverage we now
have in our business. In the first quarter of 2004, gross margin improved to 36%
from 27% in the year ago quarter. The significantly higher gross margin was the
result of higher revenue, favorable product mix, and additional cost savings.
While we also continue to diligently manage our costs, operating expenses were
higher in the first quarter due to our planned expansion of sales and marketing
efforts to support our growth. In addition, as part of our plan, we incurred
higher general and administrative costs related to the CFO succession plan and
higher professional fees, including those related to Sarbanes-Oxley compliance
initiatives. In connection with these initiatives, we have added a Corporate
Governance link to the investor relations section of our website. Turning to our
financial position, we generated $2.7 million in cash from operations during the
first quarter. As a result, we were able to pay off the $420,000 remaining on
our term loan and we now have no debt and almost $3 million of cash in
the bank."
LOOKING FORWARD
Shuldman concluded, "We continue to be optimistic about the momentum we have in
our business and our prospects. Growth in our gaming and lottery business is
expected to come from the continued rollout of the ticket-in/ticket-out
initiative in the casino market. While a majority of this growth will come from
our customers in North America, we expect to see initial orders from our
customers in the international markets. For example, shipments of our casino
printers to Aristocrat in Australia are expected to begin in late 2004. On the
lottery side of our business, our relationship with GTECH remains strong. Based
on current orders, significant shipments of our new thermal lottery printers to
GTECH are expected to be made in the third and fourth quarters of 2004. We also
expect to see continued year-over-year growth in our POS and banking business
driven by inkjet printer sales, as more hospitality, retail and banking
locations upgrade their current line of printers."
"As we enter the second quarter of 2004, we expect revenue for the second
quarter to be approximately $15.5 million to $16.0 million, with earnings of
approximately $0.11 per share to $0.13 per share. The gross margin in the second
quarter is expected to be lower than in first quarter of 2004, as we will ship
an order for a legacy printer from an important customer at a lower than typical
margin. Based on our current outlook, we now expect that revenue for the full
year 2004 will be in the range of $63 million to $65 million, with earnings in
the range of $0.49 to $0.52 per share, on a post-stock split basis. Overall, we
remain confident in TransAct's growth prospects given the fundamentals and
momentum in all of our markets and the leverage that now exists in our operating
model."
INVESTOR CONFERENCE CALL / WEBCAST DETAILS
TransAct will review detailed first quarter 2004 results and forward guidance on
Monday, May 3 at 5PM EDT. The conference call-in number is 973-582-2706. A
replay will be available from 8PM
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EDT on May 3 through 12AM EDT, May 10. The replay number is 973- 341-3080. The
confirmation number is 4682116. Investors can access the conference call via a
live webcast on the Company's website at www.transact-tech.com. A replay of the
call will be archived on that website for one week.
ABOUT TRANSACT TECHNOLOGIES INCORPORATED
TransAct (Nasdaq: TACT) designs, develops, manufactures and markets
transaction-based printers under the ITHACA(R) and MAGNETEC(R) names. In
addition, the Company markets related consumables, spare parts and service. The
Company's printers are used worldwide to provide receipts, tickets, coupons,
register journals and other documents. TransAct focuses on two core markets:
point-of-sale (POS) and gaming and lottery. TransAct sells its products to
original equipment manufacturers, value-added resellers and selected
distributors, as well as directly to end-users. The Company's product
distribution spans across the Americas, Europe, the Middle East, Africa, the
Caribbean Islands and the South Pacific. For further information, visit
TransAct's web site located at www.transact-tech.com.
CONTACTS:
Richard L. Cote, Chief Financial Officer, 203-269-1198 Ext. 6020 or
David Pasquale, 646-536-7006, or Jim Olecki, 646-536-7021 both with
The Ruth Group
# # #
FORWARD-LOOKING STATEMENTS:
The Company's forward-looking statements in this press release are subject to a
number of risks and uncertainties. Risks and uncertainties include, but are 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 into the marketplace by competitors; successful product
development; dependence on significant customers; dependence on third parties
for sales outside the United States, including Australia and New Zealand;
economic and political conditions in the United States, Australia, New Zealand,
Europe and Latin America; marketplace acceptance of new products, risks
associated with foreign operations; risks associated with the determination of
payments to a competitor that has advised the Company that certain of its
printers may use the competitor's patents; 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. The forward-looking statements
speak only as of the date of this release and the Company assumes no duty to
update them to reflect new, changing or unanticipated events or circumstances.
- TABLES FOLLOW -
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TRANSACT TECHNOLOGIES INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended
(In thousands, except per share amounts) March 31,
-------------------------
2004 2003
-------- --------
Net sales $ 15,075 $ 9,012
Cost of sales 9,657 6,571
-------- --------
Gross profit 5,418 2,441
-------- --------
Operating expenses:
Engineering, design and product
development 614 562
Selling and marketing 1,362 1,044
General and administrative 1,332 1,099
-------- --------
3,308 2,705
-------- --------
Operating income (loss) 2,110 (264)
-------- --------
Other income (expense):
Interest, net (10) (46)
Other, net (3) --
-------- --------
(13) (46)
-------- --------
Income (loss) before income taxes 2,097 (310)
Income tax provision (benefit) 755 (112)
-------- --------
Net income (loss) 1,342 (198)
Dividends and accretion on preferred stock (90) (90)
-------- --------
Net income (loss) available to common
shareholders $ 1,252 $ (288)
======== ========
Net income (loss) per share:
Basic $ 0.14 $ (0.03)
Diluted $ 0.13 $ (0.03)
Weighted average shares used in per share
calculation:
Basic 8,966 8,510
Diluted 9,800 8,510
SUPPLEMENTAL INFORMATION - SALES BY MARKET:
Three months ended
March 31,
-------------------------
2004 2003
-------- --------
Point of sale and banking $ 6,885 $ 4,331
Gaming and lottery 8,190 4,681
-------- --------
Total net sales $ 15,075 $ 9,012
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TRANSACT TECHNOLOGIES INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
(In thousands) 2004 2003
-------- ------------
ASSETS:
Current assets:
Cash and cash equivalents $ 2,925 $ 498
Receivables, net 7,788 9,074
Inventories 8,597 8,061
Deferred tax assets 2,340 2,340
Other current assets 309 509
-------- --------
Total current assets 21,959 20,482
-------- --------
Fixed assets, net 3,380 3,607
Goodwill, net 1,469 1,469
Other assets 797 803
-------- --------
5,646 5,879
-------- --------
Total assets $ 27,605 $ 26,361
======== ========
LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND SHAREHOLDERS' EQUITY:
Current liabilities:
Current portion of term loan $ -- $ 90
Accounts payable 2,570 3,288
Accrued liabilities 4,164 3,780
Deferred revenue 1,489 1,537
-------- --------
Total current liabilities 8,223 8,695
-------- --------
Long-term portion of term loan -- 330
Long-term portion of accrued restructuring 1,514 1,645
Other long-term liabilities 1,338 1,442
-------- --------
2,852 3,417
-------- --------
Total liabilities 11,075 12,112
-------- --------
Mandatorily redeemable convertible preferred stock 3,922 3,902
-------- --------
Shareholders' equity:
Common stock 61 60
Additional paid-in capital 10,619 8,441
Retained earnings 3,017 1,769
Unamortized restricted stock compensation (1,202) (30)
Accumulated other comprehensive income 113 107
-------- --------
Total shareholders' equity 12,608 10,347
-------- --------
$ 27,605 $ 26,361
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