TransAct Technologies reports third quarter 2012 results

Shulman added: "Further, our confidence in our future as well as our strong cash flow generation led us for the first time in our company's history to implement a quarterly dividend program. Looking ahead, we expect a much stronger fourth quarter of 2012 compared to the third quarter of 2012, aided by initial revenue contributions from our recently launched Food Safety and Nutritional Labeling Terminal, newly launched color oil and gas Printrex printers and consumables, and significant order flow for our lottery printers from Gtech."

He continued, "For the third quarter of 2012, our worldwide casino and gaming sales increased 4% from the prior year period, led by solid international growth in Europe and Asia. Printrex printer sales for the third quarter of 2012 were $1.2 million, up from $0.5 million in the prior-year period, as the prior-year period included only approximately six weeks of sales from Printrex, which we acquired in August 2011. Lottery sales from Gtech were up 58% from the prior-year period to us$ 2.5 million due to the timing of orders as we will ship most of our 2012 lottery printers in the second half of 2012. TransAct Services Group revenue increased 10% compared to the prior-year period, led by strong sales of our new paper testing services and sales of spare parts in the international markets. Banking and POS printer sales declined 35% compared to the prior-year period on expected lower POS sales due to the substantial completion of the McDonald's U.S. rollout for its combined beverage, grill and POS system upgrade initiatives. Lastly, our balance sheet remains solid with us$ 8.6 million in cash and no debt outstanding as of September 30, 2012."

2012 Outlook
TransAct expects fourth quarter 2012 revenue of at least us$ 19 million and diluted earnings per share, excluding the AVY Legal Fees, of at least us$ 0.20 due largely to the initial revenue contributions from the new Printrex oil and gas color printers, Food Safety and Nutritional Labeling Terminals as well as a backlog of lottery printer orders from GTECH.

Quarterly Dividend Declared
In September 2012, the company announced it had implemented a quarterly cash dividend policy. The Board of Directors of the firm has declared its first quarterly dividend payment of $0.06 per share, which will be payable on December 12, 2012 to shareholders of record at the close of business on November 21, 2012. On an annualized basis, the quarterly dividend announced today represents an annual yield of 3.2% based on the $7.60 per share closing price of the firm's stock on November 2, 2012.

The company anticipates paying a cash dividend in March, June, September and December of each year. However, future declarations of dividends are subject to Board of Director approval and may be adjusted as business needs or market conditions change.

Third Quarter 2012 Results
Revenue for the third quarter of 2012 was us$ 15.4 million, an increase of 9% compared to us$ 14.1 million in the prior-year period. Gross margin for the third quarter of 2012 was 37%, compared to 37.9% in the prior-year quarter due primarily to a less favorable sales mix. Operating expenses were us$ 5.6 million, an increase of $1.4 million from the prior-year period, driven mainly by us$ 1 million of legal fees and other expenses related to the lawsuit with Avery Dennison Corporation, as well as the full quarter effect of Printrex expenses.

Excluding legal fees, operating expenses increased by us$ 0.4 million, or 9%, compared to the prior-year period. The Company recorded breakeven GAAP net income and diluted earnings per share in the third quarter of 2012, compared to GAAP net income of us$ 0.8 million in the prior-year period. Excluding legal fees, the company recorded adjusted net income in the third quarter of 2012 of us$ 0.7 million.

Commenting on the financial results, Steven A. DeMartino, President and CFO of TransAct Technologies said, "During the third quarter 2012, we were pleased with our overall revenue growth, especially during these uncertain times. In addition, we successfully launched three new products which will start to add to our revenue in the fourth quarter of 2012 while also completing the final integration of Printrex into TransAct's operations. With the integration completed, we expect to see cost savings of approximately $0.2 million per quarter beginning in the fourth quarter of 2012."