Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify promising stocks [3] Group 2: TransAct Technologies Incorporated (TACT) - TACT has shown a four-week price change of 2.9%, indicating growing investor interest [4] - The stock has gained 5.3% over the past 12 weeks and has a beta of 1.27, suggesting it moves 27% more than the market [5] - TACT has a Momentum Score of A, indicating a favorable time to invest [6] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [7] - TACT is trading at a Price-to-Sales ratio of 0.83, suggesting it is undervalued at 83 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides TACT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies tailored to various investing styles, aimed at outperforming the market [9]

Financial Data and Key Metrics Changes - Total net sales for Q2 2025 were $13.8 million, up 6% sequentially and 19% year over year from $11.6 million [23] - Adjusted EBITDA for the quarter was positive at $478,000, an increase from $89,000 in the prior year period [30] - Gross margin for Q2 was 48.2%, down from 52.7% in the prior year period, attributed to a higher mix of lower-margin FST hardware sales [27] Business Line Data and Key Metrics Changes - Food Service Technology (FST) revenue rose to $4.8 million, up 14% year over year, with recurring FST revenue climbing to $3 million, showing solid gains [13][23] - Casino and gaming revenue reached $7.6 million, up 42% year over year and 14% sequentially, driven by improved market demand and new OEM partnerships [16][26] - POS automation sales declined 49% year over year to $590,000, expected to remain in the $500,000 to $600,000 range per quarter [26] Market Data and Key Metrics Changes - The casino and gaming market is experiencing a rebound, with normalized buying levels from major OEMs and new opportunities in non-casino charitable gaming applications [16][18] - The FST market is seeing strong momentum, with a focus on operational efficiency and sales process improvements contributing to positive results [14][20] Company Strategy and Development Direction - The company has acquired a perpetual license for the BOHA! software source code for $2.55 million, which is expected to generate significant benefits and cost savings in the future [8][12] - The strategy includes a "land and expand" approach to client acquisition, focusing on smaller initial sales with the potential for future expansions [15][37] - Management emphasizes disciplined investments and execution of the corporate plan to maximize shareholder value [20][21] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about the company's trajectory, expecting continued growth in FST and stability in the casino and gaming sectors [21][22] - The company raised its full-year revenue guidance to between $49 million and $53 million, reflecting confidence in ongoing market demand [21] - Management acknowledges the need to monitor broader economic factors affecting the casino and gaming industry but does not foresee long-term concerns [20] Other Important Information - The company expects to capitalize $3.55 million of the acquisition costs and begin amortizing it in early 2027 [12][31] - The balance sheet remains solid, with cash and cash equivalents of nearly $18 million at the end of Q2 [30] Q&A Session Summary Question: Satisfaction with FST sales excluding QSR - Management expressed excitement about progress in selling to newer client bases and emphasized the importance of customer engagement and sales training [34][36] Question: Potential for adding software components to QSR sales - Management confirmed ongoing discussions about adding software components to terminal sales for large QSRs [39][40] Question: Market share gains in casino and gaming - Management indicated a focus on gradually eroding competitors' market positions and emphasized the importance of being present in new opportunities [41][42]

Financial Agreement - TransAct Technologies Incorporated has agreed to purchase a licensed copy of the Code for $2,550,000, with payments structured across three milestones: $1,000,000 on the Effective Date, $775,000 upon acceptance of Phase Four, and $775,000 at the completion of the Support phase or within 12 months of the Effective Date[15]. - The total project cost is USD 1,007,000, structured on a payment milestone basis[83]. Licensing and Ownership - The agreement grants TransAct a non-exclusive, irrevocable, and perpetual license to use AD Intellectual Property in the Code for commercial purposes, allowing for modifications and distribution[11]. - TransAct has the right to make modifications to the Code at its own cost, while AD retains ownership of any modifications made by AD[13]. - AD will provide TransAct with one copy of the Code and necessary documentation in an agreed format[12]. Professional Services and Support - AD will provide professional services to assist TransAct in migrating the Code to its hosted environment, with fees outlined in a Statement of Work[14]. - Provider will set up automated build pipelines for each application, including code compilation and unit testing[59]. - Provider will furnish technical documentation, including architecture diagrams and API documentation, by the time of the face-to-face meeting[57]. - Provider will offer 90 days of email support following Client Validation, focusing on the hosted environment and development teams[67]. Project Management and Execution - The project will include a series of joint planning sessions to define timelines, key milestones, and roles, scheduled no later than 3 weeks after signing the Statement of Work[53]. - The project includes ten phases, with the first phase (Source Code Delivery) targeted for completion within 80 days from the start date[80]. - The final phase (DevOps and Confluence Data Transfer) is expected to be completed 28 days after Client Validation[80]. - All timelines are estimates, and delays due to Client's failure to perform obligations are not the responsibility of the Provider[82]. Client Responsibilities - Client is responsible for provisioning necessary hardware or cloud infrastructure to run the tech stack, with decisions made during the planning phase[59]. - The ongoing operation and monitoring of the BOHA Solution will fall under the Client's responsibility upon readiness[60]. - The project requires the Client to allocate sufficient technical resources with experience in Angular, .NET, SQL, Kotlin, Java, and Swift[78]. - Client validation period is set for 28 calendar days after the Application Walkthrough and Training[66]. Confidentiality and Liability - Confidential information shared between the parties is protected, with specific conditions under which it may be disclosed[19]. - Confidentiality obligations regarding proprietary information and trade secrets will survive the expiration of the Statement of Work[87]. - The agreement includes a limitation of liability clause, stating that neither party is liable for indirect or consequential damages, except for payment obligations[26]. - The agreement includes provisions for termination under specific conditions, such as material breach or bankruptcy[30]. Code Quality and Assurance - The Code is warranted to operate without material defects and is free from viruses, with AD committing to perform professional services in a workmanlike manner[24].

Industry Overview - The Zacks Computer-Peripheral Equipment industry includes companies that provide input, output, and storage devices, such as keyboards, mice, LCD panels, smart glasses, and gaming accessories [3] - The industry is characterized by intense competition, driving innovation and product relevance among participants [3] Current Trends - There is a shift in consumer preference from mobile gaming to professional gaming, which is expected to drive growth in the gaming peripherals market [4] - The 3D printing market is seen as a long-term investment opportunity, with increasing adoption across various sectors, including medical and automotive [4] - The expansion into price-sensitive regions like Asia Pacific and the Middle East & Africa is anticipated to enhance growth prospects [5] Demand and Market Dynamics - Improving commercial PC demand is likely to benefit the computer peripherals industry, particularly with the upcoming end of Microsoft's Windows 10 support in October 2025 [6] - The industry is currently facing macroeconomic challenges, including high inflation and interest rates, which are dampening IT spending and consumer demand [2][7] Financial Performance - The Zacks Computer-Peripheral Equipment industry has underperformed the S&P 500 and the broader technology sector, declining by 7.1% over the past 12 months [13] - The industry is trading at a forward 12-month price-to-sales (P/S) ratio of 0.62X, significantly lower than the S&P 500's 5.28X and the technology sector's 6.65X [16] Company Highlights - **TransAct Technologies**: Focuses on transaction-based printers and is benefiting from increased demand amid digital transformation. The Zacks Consensus Estimate for 2025 indicates a loss of 19 cents per share, an improvement from previous estimates [20][22] - **Immersion**: A leader in haptic technology with a strong patent portfolio, integrated into over three billion devices. The Zacks Consensus Estimate for fiscal 2026 earnings is 42 cents per share, unchanged over the past 60 days [25][27] - **LG Display**: Manufactures display panels with healthy demand from PC vendors. The Zacks Consensus Estimate for 2025 earnings is 25 cents per share, remaining stable over the past 60 days [30][32]

Group 1 - Momentum investing contrasts with the traditional strategy of "buy low and sell high," focusing instead on "buying high and selling higher" [1] - Identifying the right entry point for fast-moving stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] Group 2 - TransAct Technologies Incorporated (TACT) is highlighted as a strong candidate for investment due to its recent price momentum, with a four-week price change of 0.5% [3] - TACT has gained 2.8% over the past 12 weeks, indicating its ability to deliver positive returns over a longer timeframe [4] - The stock has a Momentum Score of A, suggesting it is an opportune time to invest [5] Group 3 - TACT has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investor interest [6] - The stock is trading at a Price-to-Sales ratio of 0.82, indicating it is reasonably valued at 82 cents for each dollar of sales [6] - TACT is positioned for significant growth potential, supported by its fast-paced momentum characteristics [7]

[Part I - Financial Information](index=4&type=section&id=PART%20I%20-%20Financial%20Information) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201%20Financial%20Statements) TransAct Technologies reported Q1 2025 net sales of $13.1 million and net income of $19 thousand, a significant improvement from prior year's net loss, with total assets at $44.2 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $14,178 | $14,394 | | Total current assets | $38,918 | $38,362 | | Total assets | $44,164 | $44,034 | | Total current liabilities | $12,752 | $12,884 | | Total liabilities | $13,223 | $13,401 | | Total shareholders' equity | $30,941 | $30,633 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net sales | $13,053 | $10,687 | | Gross profit | $6,359 | $5,624 | | Operating loss | $(15) | $(1,301) | | Net income (loss) | $19 | $(1,036) | | Basic EPS | $0.00 | $(0.10) | | Diluted EPS | $0.00 | $(0.10) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(161) | $(1,490) | | Net cash used in investing activities | $(10) | $(106) | | Net cash used in financing activities | $(50) | $(71) | | Decrease in cash and cash equivalents | $(216) | $(1,690) | | Cash and cash equivalents, end of period | $14,178 | $10,631 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 revenue grew **22.1%** driven by strong FST and Casino/Gaming sales, while gross margin declined due to product mix, and operating expenses decreased, leading to a near break-even operating loss [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Q1 2025 net sales increased **22.1%** to **$13.1 million**, primarily from FST and Casino/Gaming growth, while gross margin declined due to product mix, and operating expenses decreased, significantly reducing the operating loss Net Sales by Market (in thousands) | Market | Q1 2025 Sales | Q1 2024 Sales | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Food service technology (FST) | $4,908 | $3,300 | $1,608 | 48.7% | | POS automation | $618 | $651 | $(33) | (5.1%) | | Casino and gaming | $6,719 | $5,696 | $1,023 | 18.0% | | TransAct Services Group (TSG) | $808 | $1,040 | $(232) | (22.3%) | | **Total Net Sales** | **$13,053** | **$10,687** | **$2,366** | **22.1%** | - FST sales growth was driven by a **152% increase** in hardware sales, primarily BOHA! Terminal 2 units to a large convenience store, an international QSR, and a new sushi customer, offsetting the loss of a significant customer who contributed approximately **$300 thousand** in revenue in Q1 2024[73](index=73&type=chunk)[74](index=74&type=chunk) - Domestic casino and gaming sales rose **49%** as major customers resumed normal ordering after depleting excess inventory built up during the supply chain crisis, with a new OEM customer for charitable gaming also contributing to sales[79](index=79&type=chunk) - Gross margin decreased by **390 basis points** to **48.7%** in Q1 2025, largely due to a higher mix of BOHA! hardware sales which have lower margins than casino and gaming products[82](index=82&type=chunk) - Operating expenses decreased by **$551 thousand (8%)** year-over-year, reflecting the impact of cost reduction initiatives started in late 2023 and Q2 2024[87](index=87&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and equivalents decreased to **$14.2 million** in Q1 2025, with improved operating cash flow, and the company maintains a **$3.0 million** credit facility, believing resources are sufficient for future liquidity needs - Cash used in operating activities improved significantly to **$161 thousand** in Q1 2025 from **$1.5 million** in Q1 2024, primarily due to a **$2.5 million** increase in accounts receivable offset by a **$1.8 million** decrease in inventories[92](index=92&type=chunk)[98](index=98&type=chunk) - As of March 31, 2025, the company had **$3.0 million** in outstanding borrowings under its Siena Credit Facility at an interest rate of **9.25%**, with an additional **$3.3 million** of net borrowing capacity available[100](index=100&type=chunk) - The company expects more normalized sales in the casino and gaming market in 2025 after customers worked through excess inventory in 2024, and management believes existing resources are sufficient for the next twelve months despite uncertainties from tariffs and economic conditions[94](index=94&type=chunk)[95](index=95&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is a smaller reporting company and is not required to provide information for this item - As a smaller reporting company defined in Item 10(f)(1) of Regulation S-K, TransAct is not required to provide information under this item[101](index=101&type=chunk) [Controls and Procedures](index=26&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[102](index=102&type=chunk) - No change in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting[103](index=103&type=chunk) [Part II - Other Information](index=26&type=section&id=PART%20II%20-%20Other%20Information) [Legal Proceedings](index=26&type=section&id=Item%201%20Legal%20Proceedings) As of March 31, 2025, the company is not aware of any material pending legal proceedings or any material legal proceedings contemplated by government authorities - The company is unaware of any material pending legal proceedings as of March 31, 2025[104](index=104&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A%20Risk%20Factors) The company faces material risks from its dependence on a single Thai manufacturer, exacerbated by new U.S. tariffs on goods from Thailand, potentially increasing costs and disrupting supply - The company is dependent on a single contract manufacturer in Thailand for the assembly of substantially all its printers and terminals, creating significant concentration risk[106](index=106&type=chunk)[107](index=107&type=chunk) - On April 2, 2025, the U.S. government imposed a **10% tariff** on goods imported from Thailand, effective April 5, 2025, with a potential **36% reciprocal tariff** announced but subsequently suspended until July 2025[108](index=108&type=chunk) - These tariffs and potential trade policy changes could lead to additional costs, pricing pressures, and supply chain disruptions that the company may not be able to fully mitigate by raising prices or changing its supply chain[108](index=108&type=chunk)[109](index=109&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) None reported for the period - None[111](index=111&type=chunk) [Other Information](index=27&type=section&id=Item%205%20Other%20Information) During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" during the first quarter of 2025[113](index=113&type=chunk) [Exhibits](index=28&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act and Inline XBRL data files

Financial Performance - TransAct Technologies Incorporated (TACT) reported break-even quarterly earnings per share, compared to a Zacks Consensus Estimate of a loss of $0.10, marking an earnings surprise of 100% [1] - The company posted revenues of $13.05 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 19.21%, compared to year-ago revenues of $10.69 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance - TransAct Technologies shares have lost about 17.1% since the beginning of the year, while the S&P 500 has declined by only 0.6% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is -$0.08 on $11.65 million in revenues, and -$0.26 on $48 million in revenues for the current fiscal year [7] - The outlook for the industry, specifically the Computer - Peripheral Equipment sector, is currently in the bottom 15% of the Zacks industries, which may impact the stock's performance [8]

Financial Data and Key Metrics Changes - Total net sales for Q1 2025 were $13.1 million, up 28% sequentially and 22% year over year from $10.7 million [19] - Gross margin for Q1 was 48.7%, down from 52.6% in the prior year period, primarily due to a higher mix of lower-margin FST hardware sales [22] - Positive net income of $19,000 was reported, compared to a net loss of $1 million in the prior year [25] Business Line Data and Key Metrics Changes - FST revenue increased to $4.9 million, up 14% sequentially and 49% year over year from $3.3 million [19] - Casino and gaming sales were $6.7 million, up 41% sequentially and 18% year over year, reflecting market recovery and new OEM wins [21] - POS automation sales declined 5% year over year to $618,000 due to a competitive environment [21] Market Data and Key Metrics Changes - The FST business saw total revenue of $14.9 million, a 49% increase year over year, driven by hardware sales [6] - The casino and gaming market showed notable strength with a revenue increase of 18% year over year [13] Company Strategy and Development Direction - The company is focusing on a "land and expand" strategy, securing initial deployments and then growing its footprint over time [11] - A strategic review process has been suspended due to macroeconomic uncertainties, with a focus on incremental growth and disciplined spending [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in the FST and casino sectors, with a strong pipeline and positive customer feedback [6][15] - The company maintains a full-year revenue guidance of $47 million to $52 million, with adjusted EBITDA expected to range from breakeven to negative $1.5 million [17] Other Important Information - The company has a solid balance sheet with cash and cash equivalents of $14.2 million and a debt balance of $3 million [26] - The BOHA! Terminal is being adopted across various industries, including healthcare, showcasing its versatility [12] Q&A Session Summary Question: Can you provide an update on the FST pipeline and conversion progress? - Management reported stable conversion rates and highlighted traction in the grab-and-go market and food service management [29][30] Question: What inning are you in regarding fulfilling the 40,000 legacy units for QSR? - Management indicated they are in the early stages of this process, with positive uptake and global sales permissions [38][39] Question: Any considerations for the revenue guidance range of $47 million to $52 million? - Management noted that revenue recognition can be lumpy, but they expect continued year-over-year improvement [40][41]

Financial Data and Key Metrics Changes - Total net sales for Q1 2025 were $13,100,000, up 28% sequentially and 22% year over year compared to $10,700,000 in the prior year period [17] - Gross margin for Q1 was 48.7%, down from 52.6% in the prior year period, primarily due to a higher mix of FST hardware sales [20] - Positive net income of $19,000 was recorded, compared to a net loss of $1,000,000 in the year-ago period [23] - Adjusted EBITDA reached $544,000, up from negative $701,000 in the prior year period [24] Business Line Data and Key Metrics Changes - Food Service Technology (FST) revenue increased to $14,900,000, up 49% year over year, driven largely by hardware sales [6] - Casino and gaming revenue was $6,700,000, up 18% year over year and 41% sequentially, reflecting market demand recovery [12] - POS automation sales declined 5% year over year to $618,000 due to a strong competitive environment [19] - TransAct Services Group (TSG) sales decreased 22% year over year to $808,000, largely due to strong demand for legacy spare parts in the prior year [20] Market Data and Key Metrics Changes - The convenience store market showed strong adoption of the BOHA! Terminal 2, with a major upgrade order from a leading national chain [10] - The healthcare sector is emerging as a new growth avenue, with contracts secured for nutritional labeling and compliance in hospital kitchens [11] Company Strategy and Development Direction - The company is focusing on a "land and expand" strategy, securing initial deployments and then growing its footprint over time [10] - A strategic review process has been suspended due to macroeconomic uncertainties, with a focus on incremental growth and disciplined spending [14] - The company maintains a full-year revenue guidance of $47,000,000 to $52,000,000, with adjusted EBITDA expected to range from breakeven to negative $1,500,000 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the casino and gaming business, with no systemic challenges anticipated in the midterm [14] - The company is optimistic about continued growth in the FST business, particularly in the grab-and-go market and food service management [28] - Management highlighted the importance of refining metrics related to customer acquisition and sales conversion processes [32] Other Important Information - The company has a strong balance sheet with cash and cash equivalents of $14,200,000 and a debt balance of $3,000,000 [24] - The company is monitoring tariff exposure and its impact on product costs, with BOHA! Terminals currently exempt from tariffs [21] Q&A Session Summary Question: Can you provide an update on the FST pipeline and conversion progress? - Management reported stable conversion rates and highlighted traction in the grab-and-go market and food service management [27][28] Question: What inning are you in regarding fulfilling the 40,000 legacy units for QSR? - Management indicated they are in the early stages of fulfilling this opportunity, with positive uptake and global selling permissions [36][37] Question: Any considerations for the revenue guidance range of $47,000,000 to $52,000,000? - Management noted that while the business is lumpy, they expect continued year-over-year improvement [39]

[CEO Commentary and Key Achievements](index=1&type=section&id=CEO%20Commentary%20and%20Key%20Achievements) The CEO highlighted a record quarter for BOHA! terminal sales, which drove a 49% year-over-year increase in Food Service Technology (FST) revenue, achieving positive net income and adjusted EBITDA through operational discipline and successful go-to-market strategies - Achieved an all-time quarterly high with the sale of over **2,350 BOHA! terminal units**[1](index=1&type=chunk)[2](index=2&type=chunk) - Total Food Service Technology (FST) revenue increased by **49% year-over-year**[1](index=1&type=chunk)[2](index=2&type=chunk) - Casino and gaming sales grew **18% year-over-year** and **41% sequentially**, reaching **$6.7 million**[1](index=1&type=chunk)[2](index=2&type=chunk) - Secured significant new business, including a **1,400 BOHA! unit upgrade** for a major convenience store chain and a new contract with a national healthcare food service provider[2](index=2&type=chunk) [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) The company reported a 22% year-over-year increase in net sales to $13.1 million, driven by strong performance in both FST and gaming segments, while gross margin decreased to 48.7% from 52.6% in the prior year's quarter, successfully reversing a prior-year net loss to achieve a net income of $19 thousand and showing significant improvement in operating loss and Adjusted EBITDA Q1 2025 vs Q1 2024 Financial Performance | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $13.1 million | $10.7 million | +22% YoY | | FST Recurring Revenue | $2.7 million | $2.4 million | +10% YoY | | Gross Profit | $6.4 million | $5.6 million | +14.3% YoY | | Gross Margin | 48.7% | 52.6% | -3.9 p.p. | | Operating Loss | $(15) thousand | $(1.3) million | Significant Improvement | | Net Income (Loss) | $19 thousand | $(1.0) million | Significant Improvement | | Diluted EPS | $0.00 | $(0.10) | Significant Improvement | | Adjusted EBITDA | $544 thousand | $(701) thousand | Significant Improvement | [2025 Financial Outlook](index=2&type=section&id=2025%20Financial%20Outlook) The company provided its financial guidance for the full year 2025, projecting net sales to be between $47 million and $52 million, with Adjusted EBITDA expected to range from breakeven to a loss of $1.5 million, presented on a non-GAAP basis due to the unavailability of a reconciliation to the comparable GAAP measure without unreasonable effort Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Net Sales | $47 million - $52 million | | Adjusted EBITDA | $0 (breakeven) - $(1.5) million | - The outlook for non-GAAP adjusted EBITDA is not reconciled to GAAP measures due to uncertainties related to future adjustments[4](index=4&type=chunk) [Strategic Business Review](index=2&type=section&id=Strategic%20Business%20Review) The Board of Directors has decided to suspend the company's strategic review process, influenced by increasing macroeconomic uncertainty and positive business momentum in both the FST and Casino segments, now prioritizing incremental organic growth initiatives while remaining open to resuming the process if conditions improve - The strategic review process has been suspended due to macroeconomic uncertainty and strong business momentum[5](index=5&type=chunk) - The company's new focus will be on incremental organic growth and prudent investments[5](index=5&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the preliminary and unaudited condensed consolidated financial statements for the quarter ended March 31, 2025, including the statement of operations, a breakdown of sales by market, the balance sheet, and a reconciliation of net income to non-GAAP measures such as EBITDA and Adjusted EBITDA [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 vs Q1 2024 Income Statement (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $13,053 | $10,687 | | Gross profit | $6,359 | $5,624 | | Operating loss | $(15) | $(1,301) | | Net income (loss) | $19 | $(1,036) | | Diluted EPS | $0.00 | $(0.10) | [Supplemental Information – Sales by Market](index=5&type=section&id=SUPPLEMENTAL%20INFORMATION%20%E2%80%93%20SALES%20BY%20MARKET) Q1 2025 vs Q1 2024 Sales by Market (in thousands) | Market | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Food service technology | $4,908 | $3,300 | | Casino and gaming | $6,719 | $5,696 | | POS automation | $618 | $651 | | TransAct services group | $808 | $1,040 | | **Total net sales** | **$13,053** | **$10,687** | [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $14,178 | $14,394 | | Total Assets | $44,164 | $44,034 | | Total Liabilities | $13,223 | $13,401 | | Total Shareholders' Equity | $30,941 | $30,633 | [Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA](index=7&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20(LOSS)%20TO%20EBITDAAND%20ADJUSTED%20EBITDA) Non-GAAP Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $19 | $(1,036) | | EBITDA | $221 | $(966) | | Adjusted EBITDA | $544 | $(701) | [Other Information](index=2&type=section&id=Other%20Information) This section provides logistical details for the Q1 2025 conference call, definitions for the non-GAAP financial measures used (EBITDA and Adjusted EBITDA), a cautionary note that the reported financial data is preliminary and subject to change, and a standard forward-looking statements disclaimer outlining potential business risks - The company hosted a conference call and webcast on May 13, 2025, to discuss the preliminary results[6](index=6&type=chunk) - The report uses non-GAAP measures like EBITDA and Adjusted EBITDA, which management believes are helpful for assessing core operations by excluding certain non-cash or non-recurring items[8](index=8&type=chunk)[11](index=11&type=chunk) - The financial information presented is preliminary and inherently uncertain, subject to change as the company finalizes its results[14](index=14&type=chunk) - The report contains forward-looking statements that are subject to numerous risks and uncertainties, including economic conditions, supply chain issues, and competition[16](index=16&type=chunk)