International edition
September 23, 2020

Revenue for the second quarter of 2010 was us$ 16.4 million

TransAct Technologies reports second quarter 2010 results

(US).- TransAct Technologies announced financial results for the three and six months ended June 30. "I am very pleased with our second quarter 2010 performance as we continue to rebound strongly from a difficult 2009," said Bart C. Shuldman, Chairman and CEO of the company.

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art C. Shuldman then added: "TransAct experienced considerable year-over-year growth in the casino market for the second quarter, reflecting our focus on the international casino market, and an impressive feat given the state of the domestic casino market. Even with the domestic market struggling, we posted our second consecutive quarter of year-over-year growth in our domestic casino sales, which we believe led to a considerable gain in domestic market share in the second quarter. On top of double-digit growth on the top line, our transition to manufacturing in China contributed substantially to a 330 basis point gross margin increase from the prior-year quarter. Looking forward, with our continued focus on the growing international casino market and anticipated strong sales in our point-of-sale ("POS") market due in part to McDonald's POS system upgrade, we expect to have a strong second half of the year."

Shuldman continued: "For the second quarter of 2010, our overall casino and gaming sales were up 82% from the prior-year quarter - continuing the torrid pace of growth compared to last year. These results were driven by significant growth in the casino market alone, where we experienced a 226% increase in sales into the international market and a 20% increase in sales in the domestic market. Overall, banking and POS sales declined 28% on a quarter-over-quarter basis, as we experienced lower sales in our project-oriented banking market due to fulfilling a large order to a customer in the second quarter of 2009 that did not repeat in this year's quarter.”

He pointed: “However, we experienced solid revenue growth of 43% in the POS portion of the banking and POS market as McDonald's began its POS system upgrade program, as well as an uptick in our other POS printer sales. Lottery sales, which can vary significantly from quarter-to-quarter, rose by 25% due to an increase in orders from our lottery customer in the second quarter of 2010 compared to the second quarter of 2009. TransAct Services Group revenue increased by 13% compared to the second quarter of 2009, primarily due to strength in our consumables business, aided by higher service and replacement parts sales. Finally, our balance sheet remains very solid, with $8.6 million in cash and no debt outstanding at June 30, 2010."

Revenue for the second quarter of 2010 was us$ 16.4 million, an increase of 16% compared to us$ 14.2 million in the prior-year period. Gross margin for the second quarter of 2010 was 37.4%, compared to 34.1% in the prior-year quarter as the company experienced the full benefits from its completed shift of a substantial portion of its production to its lower-cost manufacturer in China, as well as a more favorable sales mix. Operating expenses were us$ 4.4 million, an increase of us$ 0.5 million from the prior-year period.

This increase was driven largely by higher general and administrative expenses due to increased employee compensation-related expenses and severance related to employee terminations due to the company's move of production to China. In addition, selling and marketing expenses rose primarily due to higher sales commissions and travel expenses resulting from higher sales volume. It recorded net income in the second quarter of 2010 of approximately us$ 1.1 million, compared to net income of approximately us$ 0.6 million in the prior-year period.

Commenting on the financial results, Steven A. DeMartino, President and Chief Financial Officer of TransAct Technologies, said, "We are very pleased to see another quarter of double-digit top line growth, but just as important, we were able to leverage our 330 basis point improvement in gross margin into a 360 basis point improvement in our operating profit margin, illustrating the leverage in our business model. In addition, we used our cash position to add inventory to meet the growing needs of our customers and the growth we expect in the coming quarters."

Revenue for the six months ended June 30, 2010 was us$ 30.7 million, an increase of 16% compared to us$ 26.4 million in the prior-year period. Gross margin for the six months ended June 30, 2010 was 37%, an increase of approximately 300 basis points from 34% in the prior-year period. Operating expenses were us$ 8.6 million, an increase of us$ 0.8 million from the prior-year period driven primarily by increased selling and marketing expenses, primarily from higher sales commissions and travel expenses resulting from higher sales volume.

In addition, both engineering and product development as well as general and administrative expenses rose largely due to increased employee compensation-related expenses. The company recorded net income of approximately us$ 1.8 million for the six months ended June 30, compared to net income of approximately us$ 0.8 million for the prior-year period in 2009.

For the second half of 2010, TransAct expects both revenue and gross margin improvement compared to 2009 based on the current backlog of orders and forecasts of order flow provided by some of the Company's customers. The company continues to expect its earnings per share for the second half of 2010 to be better than the first half.

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