Transact Technologies (TACT) Misses Q4 EPS by 1c, Revenues Miss
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Transact Technologies (NASDAQ: TACT) reported Q4 EPS of $0.12, $0.01 worse than the analyst estimate of $0.13. Revenue for the quarter came in at $11.8 million versus the consensus estimate of $13.65 million.
Bart Shuldman, Chairman and Chief Executive Officer of TransAct, commented, “Throughout 2018 and to-date in 2019, the TransAct team has focused on building towards the transformational launch of BOHA!. This new ecosystem of cloud-based apps and companion hardware solutions is designed to address what we believe is a very large sales opportunity in providing critical back-of-house automation solutions to restaurant and foodservice operators. Importantly, while devoting resources to the development of the BOHA! solution suite, we simultaneously leveraged our strong position in the global casino and gaming industry throughout the year to drive further sales growth in this market. The growth in casino and gaming sales, combined with our increasing emphasis on the sale of higher value solutions, drove a 170 basis point improvement in our full year gross profit margin as well as a 69% and 67% improvement in 2018 full year net income and diluted earnings per share, respectively. This also delivered the cash flow that has allowed us to completely self-fund our all-important BOHA! development strategy.
“During the 2018 fourth quarter, global casino and gaming sales grew 21% year over year as we further expanded our share of the global casino market. In particular, we made initial shipments of our new Epic Edge ticket-in/ticket-out printer for a large domestic operator’s upcoming new casino opening. TransAct further benefited from our decision to change our sales approach to direct sales in Europe to better serve our large base of customers across the region. Our European direct sales team has achieved significant success for TransAct and their efforts were a key driver of the 43% full-year 2018 growth in casino and gaming sales to $26.6 million.
“As we work to expand our restaurant solutions business, TransAct recently achieved a significant milestone for this large market opportunity. Earlier this week we announced the launch of BOHA!, our new comprehensive ecosystem of cloud-based SaaS (Software as a Service) apps and hardware solutions that we believe will transform how restaurant and food service companies manage their back-of-house operations. With BOHA!, TransAct can now deliver a full, single-vendor suite of integrated software applications and hardware solutions designed to help customers automate a wide array of their back-of-house operations. The suite of powerful BOHA! solutions, which is launching with nine cloud-based SaaS applications and four companion hardware devices, will allow our customers to easily deploy automation and technology in their work flows and devote more of their attention towards delivering the best possible customer experience. Additionally, increased back-of-house automation will allow our customers to operate more efficiently, helping to offset continuously rising food and labor costs.
“The launch of BOHA! culminates what has been a true team effort across the TransAct organization and we are delighted to bring our one-stop solution for restaurants and food service companies of all sizes to market. TransAct’s new BOHA! platform and its suite of solutions demonstrates to existing and potential customers that we listen and take seriously their ever-evolving needs. We have worked tirelessly with restaurant and food service operators to determine how to best address their critical operations and developed BOHA! to simplify their processes into a single platform, single portal solution that eliminates the complexity of deploying solutions from multiple vendors. In addition, BOHA! is designed as a future-proof platform capable of evolving along with our customers which we believe is crucial and of increasing importance as restaurants and food service operators continue to explore new and more efficient ways to operate their businesses.
“Looking to 2019, we are focused on an aggressive sales effort to drive awareness for BOHA! and to turn initial interest into contracts and deployments. We have been working with a select number of restaurant operators through the development of the BOHA! solution suite and are pleased to have secured an initial order from one of these customers. As we begin to generate hardware sales from our terminals, handhelds and sensors while simultaneously building a backlog of SaaS revenue based on recurring monthly fees associated with app usage, we are more confident than ever that the decision to focus intently on this significant market opportunity has the potential to deliver meaningful shareholder value over time. We are excited by what the future holds and believe that our shareholders will benefit from a suite of products that we expect will be a long-term driver of growth.”
For earnings history and earnings-related data on Transact Technologies (TACT) click here.
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