Exhibit 99.1
[TRANSACT LETTERHEAD]
TRANSACT TECHNOLOGIES REPORTS
THIRD QUARTER 2006 RESULTS
Wallingford, CT, November 9, 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 September 30, 2006.
Revenues for the third quarter of 2006 were $15.3 million compared to $14.2
million in the same period a year ago. The Company earned net income for the
third quarter of 2006 of $1.0 million compared to $0.7 million in the same
period of 2005. Earnings per share for the three months ended September 30, 2006
were $0.10 per diluted share compared to $0.07 per diluted share in the same
period a year ago.
Revenues for the nine months ended September 30, 2006 were $48.6 million, a 26%
increase compared to $38.6 million in the same period a year ago. The Company
earned net income for the first nine months of 2006 of $2.9 million compared to
$1.1 million in the comparable year ago period. Earnings per share for the first
nine months of 2006 were $0.30 per diluted share compared to $0.11 per diluted
share in the same period a year ago.
Bart C. Shuldman, Chairman, President and Chief Executive Officer of TransAct
Technologies, said, "TransAct achieved another quarter of strong financial
performance, as we continue to benefit from the investments we made to the
business last year. Our accomplishments in 2006 are evident not only by the 26%
growth in sales and 166% growth in net income for the first nine months of 2006
compared to last year, but also by the products we have launched and contracts
we have signed."
Mr. Shuldman continued, "The initiatives we launched and partnerships we put in
place across our sales units last year are translating into both revenue and
market share growth this year. Specifically in Gaming, despite operating in what
can still be described as a weak domestic gaming market, we have experienced
significant sales growth in the third quarter of 2006 and are on track for a
record sales year. Our domestic gaming sales alone more than tripled this
quarter compared to the third quarter of last year, driven primarily by
increased domestic casino printer sales. We have also seen success in the
TransAct Services Group, which continues to benefit from our two services
centers, dedicated sales teams and a rapidly growing installed printer base.
However, sales in the third quarter of 2006 were impacted by a significant
decline in the sale of lottery printers to GTECH compared to the first and
second quarters of 2006, as sales to GTECH can fluctuate significantly between
quarters."
GAMING AND LOTTERY
Revenue from the Gaming and Lottery market for the third quarter of 2006 was
$8.5 million, up 46% compared to $5.8 million in the same period of 2005.
Revenue growth was driven by strong domestic casino printer sales as the Company
continues to gain market share through its sales relationship with JCM American
Corporation. Lottery printer sales to GTECH were flat compared to the third
quarter of 2005 and down significantly compared to the first and second quarters
of 2006.
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POS AND BANKING
Revenue from the POS and Banking market was $3.6 million in the third quarter of
2006, compared to $5.5 million in the third quarter of 2005. This decline was
due primarily to decreased sales of BANKjet(R) 1500 printers used in bank teller
stations, as the Company shipped printers for a large installation at a top-tier
financial services company in the third quarter of last year that did not repeat
in the third quarter of 2006. Sales were also impacted by lower sales of legacy
impact printers, which were partially offset by higher sales of thermal printers
in the POS market.
TRANSACT SERVICES GROUP
Revenue from the TransAct Services Group (TSG), which includes spare parts,
refurbished printers, consumables, extended maintenance and repair services, was
$3.2 million in the third quarter of 2006, representing a 12% increase compared
to $2.8 million in the year ago period. Revenue growth in the third quarter of
2006 benefited from the new contract the Company signed to supply inkjet
cartridges to a national office supply chain as well as increased services
revenue.
OPERATIONS AND FINANCE
Steven A. DeMartino, Executive Vice President and Chief Financial Officer of
TransAct Technologies, commented, "We continued to improve on both gross margin
and operating margin. Gross margin reached 35.6% this quarter compared to 32.2%
in the third quarter of 2005 due to a higher volume of sales, more favorable
sales mix and costs savings we achieved from increased sourcing of component
parts for our printers in Asia. Operating margin for the third quarter of 2006
also improved to 10.2% from 4.8% in the same quarter of 2005, largely the result
of the leverage we achieved on higher sales and continued control of our
operating expenses. Our balance sheet remains strong and we ended the quarter
with $4.6 million of cash and no debt."
Mr. DeMartino continued, "Under our $10 million stock repurchase program, we
purchased 17,500 shares for approximately $154,000 during the third quarter of
2006. This brings total shares purchased to date under the buyback plan to
597,300, for a total of approximately $4.7 million, at an average price of $7.90
per share."
LOOKING FORWARD
Mr. Shuldman commented, "2006 continues to be a much improved year for TransAct
for both top and bottom line growth. We are pleased with our financial results
to date and we expect to continue to see year-over-year sales growth in the
fourth quarter. Even with the lower lottery printer sales we experienced in the
third quarter of 2006, we are still on our way to a record sales year for
TransAct. We expect sales for the full year of 2006 to be in the $63 to $64
million range."
INVESTOR CONFERENCE CALL/WEBCAST DETAILS
TransAct will review detailed third quarter 2006 results and forward looking
guidance during a conference call today at 5:00PM ET. The conference call-in
number is 201-689-8471. A replay of the call will be available from 8:00PM ET on
Thursday, November 9 through midnight ET on Thursday, November 16 by telephone
at 201-612-7415. The account number to access the replay is 3055 and the
password is 217089. 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.
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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 is
not complete until the receipt and/or ticket is produced. TransAct printers are
designed 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, Latin
America and Asia; economic and political conditions in the United States,
Australia, New Zealand, Europe, Latin America, and Asia; marketplace acceptance
of new products; risks associated with foreign operations and Asia; 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; risks associated with potential future acquisitions; 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 Nine months ended
(In thousands, except per share amounts) September 30, September 30,
-------------------------------- ----------------------------------
2006 2005 2006 2005
--------------- --------------- --------------- ----------------
Net sales ................................. $ 15,276 $ 14,210 $ 48,615 $ 38,592
Cost of sales ............................. 9,838 9,634 31,744 26,085
--------------- --------------- --------------- ----------------
Gross profit .............................. 5,438 4,576 16,871 12,507
--------------- --------------- --------------- ----------------
Operating expenses:
Engineering, design and product
development ........................... 621 637 2,151 2,107
Selling and marketing .................. 1,593 1,627 4,884 4,523
General and administrative ............. 1,671 1,624 5,271 4,578
--------------- --------------- --------------- ----------------
3,885 3,888 12,306 11,208
--------------- --------------- --------------- ----------------
Operating income .......................... 1,553 688 4,565 1,299
--------------- --------------- --------------- ----------------
Other income (expense):
Interest, net .......................... 25 19 62 59
Other, net ............................. (55) 7 (137) 22
--------------- --------------- --------------- ----------------
(30) 26 (75) 81
--------------- --------------- --------------- ----------------
Income before income taxes ................ 1,523 714 4,490 1,380
Income tax provision ...................... 504 40 1,557 276
--------------- --------------- --------------- ----------------
Net income ................................ $ 1,019 $ 674 $ 2,933 $ 1,104
=============== ============== =============== ================
Net income per common share:
Basic .................................. $ 0.11 $ 0.07 $ 0.31 $ 0.11
Diluted ................................ $ 0.10 $ 0.07 $ 0.30 $ 0.11
Shares used in per share calculation:
Basic .................................. 9,623 9,817 9,588 9,932
Diluted ................................ 9,898 10,078 9,898 10,268
SUPPLEMENTAL INFORMATION - SALES BY SALES UNIT:
Three months ended Nine months ended
September 30, September 30,
------------------------------- ----------------------------------
2006 2005 2006 2005
--------------- -------------- --------------- ----------------
Point of sale and banking ................. $ 3,606 $ 5,544 $ 12,718 $ 12,653
Gaming and lottery ........................ 8,495 5,833 26,283 17,331
TransAct services group ................... 3,175 2,833 9,614 8,608
--------------- -------------- --------------- ----------------
Total net sales ........................ $ 15,276 $ 14,210 $ 48,615 $ 38,592
=============== ============== =============== ================
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TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
SEPTEMBER 30, December 31,
(In thousands) 2006 2005
------------- --------------
ASSETS:
Current assets:
Cash and cash equivalents ......... $ 4,629 $ 4,579
Receivables, net .................. 10,534 8,359
Inventories ....................... 7,430 6,036
Refundable income taxes ........... 178 295
Deferred tax assets ............... 2,614 2,735
Other current assets .............. 455 258
------------- --------------
Total current assets ............ 25,840 22,262
------------- --------------
Fixed assets, net .................... 5,922 4,510
Goodwill, net ........................ 1,469 1,469
Deferred tax assets .................. 702 557
Intangibles and other assets ......... 529 534
------------- --------------
8,622 7,070
------------- --------------
Total assets ...................... $ 34,462 $ 29,332
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable .................. $ 3,268 $ 2,859
Accrued liabilities ............... 4,337 3,198
Accrued restructuring ............. 420 420
Deferred revenue .................. 456 410
------------- --------------
Total current liabilities ....... 8,481 6,887
------------- --------------
Accrued restructuring ................ 281 587
Deferred revenue ..................... 562 270
Other liabilities .................... 327 331
------------- --------------
1,170 1,188
------------- --------------
Total liabilities ................. 9,651 8,075
------------- --------------
Shareholders' equity:
Common stock ...................... 104 102
Additional paid-in capital ........ 18,866 17,497
Retained earnings ................. 10,422 7,489
Accumulated other comprehensive
income .......................... 138 36
Treasury stock .................... (4,719) (3,867)
------------- --------------
Total shareholders' equity ...... 24,811 21,257
------------- --------------
$ 34,462 $ 29,332
============= ==============
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