Transact Technologies (TACT) Misses Q1 EPS by 5c, Revenues Miss

Transact Technologies (NASDAQ: TACT) reported Q1 EPS of ($0.13), $0.05 worse than the analyst estimate of ($0.08). Revenue for the quarter came in at $10.2 million versus the consensus estimate of $11.18 million.

First Quarter 2020 Financial Highlights

• Net Sales: Net Sales for the first quarter of 2020 were $10.2 million, down 11% compared to $11.6 million for the first quarter of 2019.
• Gross Profit: Gross profit for the first quarter of 2020 was $4.9 million, resulting in gross margin of 48.0%, compared to gross profit of $6.1 million in the first quarter of 2019, which resulted in a 52.7% gross margin.
• Operating income (loss): Operating loss for the first quarter of 2020 was $1.3 million, compared to operating income of $0.8 million in the first quarter of 2019.
• Net income (loss): Net loss for the first quarter of 2020 was $1.0 million, or $0.13 net loss per share, based on 7.5 million diluted weighted average common shares outstanding. Net income for the comparable 2019 period was $0.7 million, or $0.10 net income per share, based on 7.6 million diluted weighted average common shares outstanding.
• EBITDA: EBITDA was negative $1.2 million for the first quarter of 2020, compared to positive EBITDA of $1.1 million in the first quarter of 2019.
• Adjusted EBITDA: Adjusted EBITDA was negative $1.0 million for the first quarter of 2020, compared to positive adjusted EBITDA of $1.3 million in the first quarter of 2019.
• Liquidity: On March 16, 2020, the Company announced a new revolving credit facility of up to $10 million, subject to availability determined by a “borrowing base” calculation based on specified percentages of the Company’s eligible accounts receivable and inventory, of which $0.8 million was drawn as of March 31, 2020 and $0.1 million was drawn as of April 30, 2020, to provide adequate funding for business operations. In addition, on May 5, 2020, the Company announced it had received a $2.2 million loan under the Paycheck Protection Program to meet its payroll obligations and support ongoing operations.

“While the economic headwinds and disruptions in the quarter had an undeniable effect on our results, we are pleased with the upward trajectory of our Food Service Technology revenues prior to the industry disruptions that have occurred as a result of the COVID-19 crisis. We continue to be excited by the momentum of our BOHA! solution and the long-term opportunities it provides us,” said Bart C. Shuldman, Chairman and CEO of TransAct. “Unfortunately, COVID-19 is still causing massive disruptions across the world with widespread closures, and we expect this to continue to negatively impact our casino and gaming business as well as most restaurant and food service locations for the foreseeable future. While it is difficult to predict the magnitude of the impact that the spread of the virus and the associated stay at home orders will have on our customers and our business, we are confident in the steps we have taken to help us manage through these turbulent times.”

For earnings history and earnings-related data on Transact Technologies (TACT) click here.

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