TransAct Technologies rporated(US:TACT)2024-11-12 21:40Financial Performance - Net sales for the three months ended September 30, 2024, were $10,867 thousand, a decrease of 36.5% compared to $17,190 thousand for the same period in 2023[8]. - Gross profit for the nine months ended September 30, 2024, was $16,961 thousand, down 47.1% from $32,029 thousand in the same period of 2023[8]. - Operating loss for the three months ended September 30, 2024, was $(837) thousand, compared to an operating income of $1,191 thousand for the same period in 2023[8]. - Net loss for the nine months ended September 30, 2024, was $(1,906) thousand, a significant decline from a net income of $4,810 thousand in the same period of 2023[9]. - Basic net loss per common share for the three months ended September 30, 2024, was $(0.06), compared to earnings of $0.09 per share for the same period in 2023[8]. - The company reported a comprehensive loss of $(504) thousand for the three months ended September 30, 2024, compared to a comprehensive income of $871 thousand for the same period in 2023[9]. - Operating loss for Q3 2024 was $(837) thousand, a decrease of $2.0 million, or 170%, compared to an operating income of $1.191 million in Q3 2023, driven by a 37% decline in sales[83]. - The company reported a net loss of $(551) thousand for the three months ended September 30, 2024, compared to a net income of $906 thousand in the same period last year[9]. - Gross profit for Q3 2024 was $5.227 million, a 41.4% decrease from $8.916 million in Q3 2023, with gross margin declining to 48.1%[79]. Sales and Market Trends - Revenue from the casino and gaming segment for the three months ended September 30, 2024, is $4,534,000, down from $9,019,000 in 2023, a decrease of approximately 49.7%[27]. - Total net sales for the nine months ended September 30, 2024, were $33.153 million, compared to $59.366 million for the same period in 2023, representing a decrease of approximately 44%[28]. - Net sales for Q3 2024 decreased by $6.3 million, or 37%, compared to Q3 2023, with a significant decline in the casino and gaming market by 49.7%[64]. - Printer, terminal, and other hardware unit sales volume decreased by 38% to approximately 21,000 units, primarily due to a 50% decrease in the casino and gaming market[65]. - International sales for Q3 2024 decreased by $1.8 million, or 44%, primarily due to lower sales in the casino and gaming market[66]. - Domestic casino and gaming product sales decreased by $17.3 million, or 65%, for the first nine months of 2024 compared to the same period in 2023, primarily due to high inventory levels among customers and a slowdown in orders[96]. - International casino and gaming product sales fell by $4.1 million, or 39%, in the first nine months of 2024, reflecting similar inventory issues and reduced demand[97]. - The company experienced a slowdown in demand in the casino and gaming market due to customers reducing orders until their inventory normalizes[16]. - The primary competitor in the casino and gaming market has resumed product supply, leading to downward pricing pressure[16]. Cost Management and Savings Initiatives - The company expects to achieve approximately $3 million in annualized savings from cost reduction initiatives initiated in Q3 2023[17]. - An additional cost reduction initiative in Q2 2024 is expected to yield approximately $2 million in annualized savings[18]. - Engineering, design, and product development expenses decreased by 34.6% in Q3 2024, reflecting cost reduction initiatives[80]. - Selling and marketing expenses decreased by $517 thousand, or 22%, in Q3 2024 compared to Q3 2023, primarily due to cost reduction initiatives[81]. - General and administrative expenses decreased by $275 thousand, or 10%, in Q3 2024 compared to Q3 2023, attributed to lower bad debt and incentive compensation expenses[82]. Liquidity and Financial Position - Cash and cash equivalents at the end of the period were $11,343 thousand, a decrease from $11,605 thousand at the end of the same period in 2023[11]. - The company believes it has sufficient liquidity to fund current obligations and capital spending for at least the next 12 months[19]. - The company had $2.3 million of outstanding borrowings under the Siena Credit Facility as of September 30, 2024, with a net borrowing capacity of $4.2 million[36]. - The Siena Credit Facility was extended to March 13, 2025, allowing for continued access to a revolving credit line of up to $10.0 million[120]. - The company maintained compliance with the excess availability covenant of at least $750 thousand under the Siena Credit Facility since July 31, 2021[118]. - The company continues to monitor cash generation and evaluate alternative funding sources as necessary[121]. Inventory and Contract Liabilities - Total inventories as of September 30, 2024, were $16.851 million, a slight decrease from $17.759 million as of December 31, 2023[33]. - As of September 30, 2024, total net contract liabilities were $(1.002) million, down from $(1.178) million as of December 31, 2023[31]. - The company recognized revenue of $0.9 million related to contract liabilities for the nine months ended September 30, 2024[30]. - Remaining performance obligations amounted to $3.0 million as of September 30, 2024, with expected revenue recognition of $2.7 million within the next 12 months[32]. Tax and Lease Information - The effective tax rate for the third quarter of 2024 was (21.2%), with an income tax benefit of $148 thousand, compared to an expense of $169 thousand at a rate of 15.7% in the third quarter of 2023[49]. - Operating lease expense for the nine months ended September 30, 2024, was $759 thousand, compared to $742 thousand for the same period in 2023[45]. - The weighted average remaining lease term as of September 30, 2024, was 1.5 years, with a weighted average discount rate of 7.5%[47]. - The total undiscounted lease payments decreased from $1.720 million as of December 31, 2023, to $1.514 million as of September 30, 2024[48].