[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)

Strategic Initiatives - TransAct Technologies reported a focus on strategic review processes aimed at increasing stockholder value, with no specific outcomes guaranteed [19]. - The company launched the BOHA! Terminal 2 and the Epic TR80 in 2023, continuing its strategy of developing new products to enhance market penetration [42]. Product Development - The company launched the BOHA! Terminal 2 in May 2023, targeting enterprise customers with enhanced speed and print resolution, receiving orders in late 2023 [22]. - In Q4 2023, TransAct introduced the Epic TR80 casino and gaming printer, designed to expand its customer base in the gaming market [24]. - The BOHA! product suite generates recurring revenue through software subscriptions, label sales, and service contracts, with annual charges typically applied per application [22]. Manufacturing and Supply Chain - TransAct's printers and terminals are primarily manufactured in Thailand, with a small portion assembled in Ithaca, New York, to optimize performance and reliability [28]. - The company relies on third-party manufacturers for a significant portion of its production, which poses risks related to supply chain disruptions and component availability [29]. - The company emphasizes the importance of maintaining multiple sources for component parts to mitigate risks associated with supply shortages [29]. - The company’s strategy includes sourcing certain products overseas to lower costs, which may impact pricing competitiveness [42]. Market Position and Competition - The market for transaction-based and specialty printers is highly competitive, with significant competition from companies with greater financial resources [37]. - Sales to Light & Wonder represented 11% and 6% of total net sales for the years ended December 31, 2024 and 2023, respectively [36]. Technology and Innovation - The company holds 23 active U.S. patents and 39 active foreign patents, with additional applications pending, ensuring protection of proprietary technologies [31]. - Certain food service technology software is licensed from a third-party developer through 2031, indicating reliance on external partnerships for product development [38]. - The company’s printer products utilize thermal printing technologies and licensed software, making them vulnerable to technological advancements by competitors [43]. Regulatory and Operational Risks - The company faces regulatory scrutiny in the casino and gaming industries, which could materially affect operations if licenses are not obtained or maintained [44]. Workforce and Management - The company employs 108 full-time employees as of December 31, 2024, with no unionized workforce [48]. - The company has a diverse executive team with extensive experience in technology and finance, enhancing its operational capabilities [50][51][52][53][54]. Financial Reporting - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [219].

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $10.2 million, down 23% from $13.3 million in Q4 2023 [35] - Full year 2024 net sales were $43.4 million, a decrease of 40% compared to $72.6 million in 2023 [35] - Gross margin for Q4 2024 was 44.2%, down from 48% in the prior year [42] - Full year gross margin was 49.5%, compared to 52.9% in 2023 [42] - Net loss for Q4 2024 was $8 million, or $0.79 per diluted share, compared to a net loss of $62,000, or $0.01 per share in the year-ago period [55] - Full year net loss was $9.9 million, or $0.99 per diluted share, compared to net income of $4.7 million, or $0.47 per diluted share in 2023 [55] Business Line Data and Key Metrics Changes - Food Service Technology (FST) revenue for Q4 was $4.3 million, approximately flat sequentially but down 9% year-over-year [36] - Full year FST revenue was $16.1 million, down 1% from $16.3 million in 2023 [36] - Casino and gaming revenue for Q4 was $4.8 million, up 14% year-over-year [38] - Full year casino and gaming sales were $20.3 million, down 51% year-over-year [38] - POS automation sales for Q4 decreased 74% year-over-year to $411,000 [39] - TransAct Services Group (TSG) sales for Q4 were $759,000, down 73% from $2.8 million in the prior year [41] Market Data and Key Metrics Changes - The company noted a recovery in the casino and gaming market, with all major domestic OEM partners back in buying positions [19][70] - The international side of the casino and gaming market is expected to strengthen, with some OEMs still working through inventory but anticipated to return to buying in the latter half of 2025 [71] Company Strategy and Development Direction - The company is focused on maximizing shareholder value through a strategic review process initiated in Q4 2023 [26] - The management team is considering all options to enhance shareholder value, indicating a proactive approach to potential partnerships or strategic events [26][29] - The company aims to continue improving its go-to-market strategies and internal sales motions to drive growth [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum in terminal placements, expecting continued upward trends throughout 2025 [10] - The company anticipates total revenue for 2025 to be between $47 million and $52 million, with adjusted EBITDA expected to range from breakeven to a negative $2 million [30] - Management acknowledged the complexities of operating two distinct business lines and the challenges in evaluating their respective market opportunities [79] Other Important Information - The company completed the rollout of the Epic TR80 thermal roll printer, which is expected to fuel additional sales in the casino and gaming sector [20] - The company has a solid balance sheet, finishing the year with $14.4 million in cash, up from $2.1 million at the end of 2023 [57] - The credit facility was successfully renewed, providing sufficient liquidity for at least the next twelve months [58] Q&A Session Summary Question: Contribution of large QSR customer to terminal installations - Management indicated that the large QSR customer contributed a significant portion of terminal installations, but not more than half [63] Question: Outlook for 2025 and new client contributions - Management expects contributions from new clients and expansion with existing customers, including the large QSR [66] Question: Growth expectations for casino and gaming segment - Management confirmed expectations for growth in the casino and gaming segment in 2025, with all domestic OEMs back to buying [70] Question: Revenue impact from exiting C-store customer - Management disclosed that the exiting C-store customer represented about $3 to $4 million in annualized revenue, with half of that impacting 2024 [75] Question: Complexity of strategic review process - Management explained that the complexity arises from operating two different businesses and the need for detailed evaluations of each [79] Question: Market opportunity for Epic TR80 - Management highlighted the large and growing market potential for the Epic TR80, particularly in the sports betting sector [84]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $10.2 million, down 23% from $13.3 million in Q4 2023 [35] - Full year 2024 net sales were $43.4 million, a decrease of 40% compared to $72.6 million in 2023 [35] - Gross margin for Q4 2024 was 44.2%, down from 48% in the prior year [42] - Full year gross margin was 49.5%, compared to 52.9% in 2023 [42] - Net loss for Q4 2024 was $8 million or $0.79 per diluted share, compared to a net loss of $62,000 or $0.01 per share in the year-ago period [55] Business Line Data and Key Metrics Changes - Food Service Technology (FST) revenue for Q4 was $4.3 million, approximately flat sequentially but down 9% year-over-year [36] - FST recurring revenue for the year was $10.8 million, down about 3% compared to 2023 [37] - Casino and gaming revenue for Q4 was $4.8 million, up 14% year-over-year [38] - POS automation sales for Q4 decreased 74% year-over-year to $411,000 [39] - TransAct Services Group (TSG) sales for Q4 were $759,000, down 73% from the prior year [41] Market Data and Key Metrics Changes - The casino and gaming market is showing signs of recovery, with all major domestic OEM partners back in buying positions [19][70] - The international side of the casino and gaming market is expected to strengthen, with some OEMs still working through inventory [71] Company Strategy and Development Direction - The company is focused on maximizing shareholder value through a strategic review process initiated in Q4 2023 [26] - The management team is considering all options to enhance shareholder value, indicating a proactive approach to potential partnerships or strategic events [29] - The company aims to continue improving its go-to-market strategies and internal sales motions to drive growth [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum in terminal placements, expecting continued upward trends throughout 2025 [10] - The company anticipates total revenue for 2025 to be between $47 million and $52 million, with adjusted EBITDA expected to range from breakeven to a negative $2 million [30] - Management acknowledged the complexities of operating two distinct business lines and the challenges in evaluating their respective market opportunities [79] Other Important Information - The company completed the rollout of the Epic TR80 thermal roll printer, which is expected to fuel additional sales in the casino and gaming sector [20] - The company has a solid balance sheet, finishing the year with $14.4 million in cash, up from $2.1 million at the end of 2023 [57] Q&A Session Summary Question: How much of the FS terminal installations in the quarter were from the large QSR customer? - The large QSR customer contributed a decent chunk of the installations, but it was not more than half [63] Question: What is the outlook for the casino and gaming segment in 2025? - The company expects a stronger year in 2025 for both domestic and international markets [71] Question: What complexities are involved in the strategic review process? - The complexity arises from managing two different business lines and the need to evaluate their respective market opportunities [79]

Company Performance - TransAct Technologies Incorporated (TACT) reported a quarterly loss of $0.06 per share, better than the Zacks Consensus Estimate of a loss of $0.10, representing an earnings surprise of 40% [1] - The company posted revenues of $10.23 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 3.93%, and down from $13.27 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates four times but has topped consensus revenue estimates only once [2] Stock Outlook - TransAct Technologies shares have declined approximately 11.3% since the beginning of the year, compared to a decline of 4.8% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $11.28 million, and for the current fiscal year, it is -$0.17 on revenues of $47.95 million [7] - The estimate revisions trend for TransAct Technologies is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Computer - Peripheral Equipment industry, to which TransAct Technologies belongs, is currently in the top 35% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net sales for Q4 2024 were $10.2 million, down 6% sequentially and down 23% compared to $13.3 million in Q4 2023[3] - FST recurring revenue for Q4 2024 was $2.7 million, down 5% sequentially and 15% compared to $3.2 million in Q4 2023[3] - Gross profit for Q4 2024 was $4.5 million, resulting in a gross margin of 44.2%, compared to a gross profit of $6.4 million and a 48.0% gross margin in Q4 2023[3] - Full year 2024 net sales were $43.4 million, down 40% from $72.6 million in 2023[6] - Full year 2024 net loss was $(9.9) million, or $(0.99) per diluted share, compared to a net income of $4.7 million, or $0.47 per diluted share in 2023[6] - Adjusted EBITDA for Q4 2024 was negative $(705) thousand, compared to positive $587 thousand in Q4 2023[6] - The operating loss for Q4 2024 was $(1,050,000), compared to an operating loss of $(522,000) in Q4 2023[22] - Net loss for Q4 2024 was $(7,957,000), significantly higher than the net loss of $(62,000) in Q4 2023[22] - For the year ended December 31, 2024, the net loss was reported at $(9,863) million, compared to a net income of $4,748 million for 2023[31] - Adjusted EBITDA for the year ended December 31, 2023, was $9,968 million, while the adjusted EBITDA for 2024 was $(1,521) million[31] Assets and Liabilities - Total assets decreased to $44,034,000 as of December 31, 2024, down from $54,198,000 as of December 31, 2023[26] - Total liabilities decreased to $13,401,000 as of December 31, 2024, from $14,784,000 as of December 31, 2023[26] - The company reported a full valuation allowance on deferred tax assets amounting to $7,313,000 in Q4 2024[27] Future Outlook - The company expects full year 2025 net sales to be between $47 million and $52 million[6] - The company anticipates 2025 to be an inflection point with decreasing net losses as overall revenue returns to growth[2] - The strategic review process remains active, focusing on options to increase shareholder value[7] - The company plans to focus on developing new products and expanding its market presence despite current economic challenges[22] Operating Expenses - The company’s operating expenses for the year ended December 31, 2024, were $25,108,000, representing 57.9% of net sales[29] - Operating expenses for the year were $32,694 million, representing 45.0% of net sales, while adjusted operating expenses were $31,233 million, or 43.0% of net sales[30] - The company incurred a severance charge of $1,461 million related to the resignation of the former CEO, impacting the income tax expense by $(303) million[30] Income Tax and Other Income - The company experienced a significant increase in income tax expense from $1,155 million in 2023 to $6,295 million in 2024[31] - Interest and other income for the year was $197 million, with no adjustments made[30] Shareholder Returns - The company reported a basic net income per common share of $0.48 and a diluted net income per common share of $0.47 for the year ended December 31, 2023[30]