(TRANSACT LOGO)
TRANSACT TECHNOLOGIES REPORTS
FIRST QUARTER 2006 RESULTS
-- Record Quarterly Revenue Driven By Double-Digit Growth
Across All Three Sales Units --
Wallingford, CT, May 1, 2006 - TransAct Technologies Incorporated (Nasdaq:
TACT), a leading producer of market specific printers for transaction-based
industries worldwide, today announced financial results for the three months
ended March 31, 2006.
Revenues for the first quarter of 2006 were $16.4 million, a 37% increase
compared to $12.0 million in the same period a year ago. The Company earned net
income for the first quarter of 2006 of $1.1 million compared to net income of
$0.2 million in the same period of 2005. Earnings per share for the three months
ended March 31, 2006 were $0.11 per diluted share compared to $0.02 per diluted
share in the same period a year ago.
Bart C. Shuldman, Chairman, President and Chief Executive Officer of TransAct
Technologies, said, "Our strong results this quarter across all of our markets
are a result of the investments we made in the business last year. We achieved
record quarterly sales in the first quarter, and significantly improved
profitability. Specifically, we reported double-digit revenue growth in all
three of our sales units."
GAMING AND LOTTERY
Gaming and Lottery revenue for the first quarter of 2006 was $8.6 million, up
58% compared to $5.5 million in the same period of 2005. Revenue growth was
driven by a combination of factors including increased market share in the
domestic casino market, continued growth in the international casino markets,
the benefits of a sales relationship with JCM and stronger lottery printer sales
to GTECH.
POS AND BANKING
POS and Banking revenue was $4.7 million in the first quarter of 2006, an
increase of 18% compared to $4.0 million in the first quarter of 2005. This
growth was largely attributable to increased sales of TransAct's line of inkjet
and thermal POS printers, including TransAct's new line of printers exclusively
for distributors launched last year and its BANKjet(R) 1500 printers used in
bank teller stations.
TRANSACT SERVICES GROUP
Revenue from the TransAct Services Group, which includes spare parts,
refurbished printers, consumables and services, was $3.1 million in the first
quarter of 2006, a 20% increase from $2.6 million in the year-ago period. The
success achieved in the first quarter was largely the result of the Company's
expanded sales team, the impact from our west coast service center which the
Company opened last year, and the growing installed base of TransAct printers in
the marketplace.
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OPERATIONS AND FINANCE
Steven A. DeMartino, Executive Vice President and Chief Financial Officer of
TransAct Technologies, commented, "This was a strong quarter for TransAct in
terms of both top and bottom line growth, as we executed well against our
business strategy. Gross margin for the first quarter of 2006 improved to 34.6%
from 30.6% in the first quarter of 2005 as a result of higher sales and
continued cost improvements. We also continued to strengthen our balance sheet
and generated over $2 million in cash from operations during the quarter. We
finished the quarter with $5.3 million of cash and no debt on our balance
sheet."
Mr. DeMartino continued, "As part of our stock repurchase program authorized by
our Board of Directors in March 2005, during the first quarter of 2006, we
repurchased 74,800 shares for approximately $700,000 bringing the total buyback
as of March 31, 2006 to 579,800 shares, or 6% of total shares outstanding, for a
total of approximately $4.6 million."
LOOKING FORWARD
Mr. Shuldman commented, "The investments we made in the business last year are
starting to pay off and we believe that the business momentum we experienced in
the first quarter will continue throughout 2006. We expect to continue to
deliver growth across all of our sales units. More specifically, growth in our
POS and banking business will be driven by our innovative product offerings and
our expanded sales team. Growth in the TransAct Services Group will be led by
our three fully operational service centers and an expanded sales team focused
solely on ramping up sales of TransAct Services Group products and services. We
also remain excited about the international gaming market and expect to continue
to gain market share in the domestic gaming market."
Mr. Shuldman concluded, "Overall, we are encouraged by the prospects for our
business and feel confident that we have built the organization needed to
achieve growth in revenue, profitability and market share. And with our newly
expanded sales team, growing product lines, and strategic marketing initiatives
in place, we are well positioned for success. We expect that the investments
made in 2005 will continue to pay returns for the remainder of 2006. We are
expecting this to be a year of growth in both revenue and profit. Based on the
momentum in our business, we are raising earnings per share guidance for the
full year 2006 to $0.42 to $0.46 per diluted share, up from our previous
guidance of $0.38 to $0.40 per diluted share, on revenues of approximately $65
million to $67 million. We anticipate revenues for the second quarter to be
between $16 and $17 million with net income in the range of $0.09 to $0.12 per
diluted share, compared to $0.03 per diluted share in the second quarter of
2005."
INVESTOR CONFERENCE CALL / WEBCAST DETAILS
TransAct will review detailed first quarter 2006 results and forward looking
guidance during a conference call today at 5:00PM EDT. The conference call-in
number is 201-689-8471. A replay of the call will be available from 8:00PM EDT
on Monday, May 1 through midnight EDT on Monday, May 8 by telephone at
201-612-7415. The account number to access the replay is 3055 and the password
is 199274. Investors can also access the conference call via a live webcast on
the Company's Web site at www.transact-tech.com. A replay of the call will be
archived on that Website for one week.
ABOUT TRANSACT TECHNOLOGIES INCORPORATED
TransAct Technologies Incorporated (Nasdaq:TACT) is the leader in developing and
manufacturing market-specific printers for transaction-based industries. These
industries include gaming, lottery, banking and hospitality. Each individual
market has distinct, critical requirements for printing and the transaction
isn't complete until the receipt and/or ticket is produced. TransAct printers
are designed
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from the ground up based on market specific requirements and are sold under the
Ithaca(R) and Epic product brands. TransAct distributes its products through
OEMs, value-added resellers, selected distributors, and direct to end-users.
TransAct has over two million printers installed around the world. TransAct also
has a strong focus on the after-market side of the business, with a high
commitment to printer service, supplies and spare parts. TransAct is
headquartered in Wallingford, CT. For more information on TransAct, visit
www.transact-tech.com or call 203.859.6800.
CONTACTS:
Steven DeMartino, Chief Financial Officer, 203-859-6810
or David Pasquale, 646-536-7006, or Denise Roche, 646-536-7008, both with The
Ruth Group
# # #
FORWARD-LOOKING STATEMENTS:
Certain statements in this press release include forward-looking statements.
Forward-looking statements generally can be identified by the use of
forward-looking terminology, such as "may", "will", "expect", "intend",
"estimate", "anticipate", "believe", "project" or "continue" or the negative
thereof or other similar words. All forward-looking statements involve risks and
uncertainties, including, 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 significant vendors; the ability to recruit and retain
quality employees as the Company grows; dependence on third parties for sales
outside the United States, including Australia, New Zealand, Europe and Latin
America; 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; availability of third-party components at
reasonable prices; price wars or other significant pricing pressures affecting
the Company's products in the United States or abroad; and the outcome of
lawsuits between TransAct and FutureLogic, Inc. 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.
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TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three months ended
(In thousands, except per share amounts) March 31,
-------------------------
2006 2005
-------- --------
Net sales $ 16,434 $ 12,036
Cost of sales 10,747 8,359
-------- --------
Gross profit 5,687 3,677
-------- --------
Operating expenses:
Engineering, design and product development 761 731
Selling and marketing 1,580 1,349
General and administrative 1,710 1,364
-------- --------
4,051 3,444
-------- --------
Operating income 1,636 233
-------- --------
Other income (expense):
Interest, net 14 20
Other, net (11) (1)
-------- --------
3 19
-------- --------
Income before income taxes 1,639 252
Income tax provision 582 89
-------- --------
Net income $ 1,057 $ 163
======== ========
Net income per common share:
Basic $ 0.11 $ 0.02
Diluted $ 0.11 $ 0.02
Shares used in per share calculation:
Basic 9,558 10,010
Diluted 9,868 10,452
SUPPLEMENTAL INFORMATION - SALES BY SALES UNIT:
Three months ended
March 31,
--------------------------
2006 2005
------- -------
Point of sale and banking $ 4,664 $ 3,954
Gaming and lottery 8,644 5,471
TransAct services group 3,126 2,611
------- -------
Total net sales $16,434 $12,036
======= =======
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TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
MARCH 31, December 31,
(In thousands) 2006 2005
-------- --------
ASSETS:
Current assets:
Cash and cash equivalents $ 5,289 $ 4,579
Receivables, net 10,082 8,359
Inventories 7,225 6,036
Refundable income taxes 150 295
Deferred tax assets 2,735 2,735
Other current assets 478 258
-------- --------
Total current assets 25,959 22,262
-------- --------
Fixed assets, net 5,144 4,510
Goodwill, net 1,469 1,469
Deferred tax assets 565 557
Intangibles and other assets 504 534
-------- --------
7,682 7,070
-------- --------
Total assets $ 33,641 $ 29,332
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 5,531 $ 2,859
Accrued liabilities 4,094 3,198
Accrued restructuring 420 420
Deferred revenue 455 410
-------- --------
Total current liabilities 10,500 6,887
-------- --------
Accrued restructuring 480 587
Deferred revenue 331 270
Other liabilities 338 331
-------- --------
1,149 1,188
-------- --------
Total liabilities 11,649 8,075
-------- --------
Shareholders' equity:
Common stock 103 102
Additional paid-in capital 17,864 17,497
Retained earnings 8,546 7,489
Accumulated other comprehensive income 44 36
Treasury stock (4,565) (3,867)
-------- --------
Total shareholders' equity 21,992 21,257
-------- --------
$ 33,641 $ 29,332
======== ========
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