TransAct Technologies rporated(US:TACT)2023-05-13 22:08Financial Data and Key Metrics Changes - Adjusted EBITDA for the quarter improved to $4.5 million compared to an adjusted EBITDA loss of $5.1 million for the first quarter last year [1] - Total net sales for the first quarter were $22.3 million, up 130% compared to $9.7 million in the year-ago period [29] - Operating income was $3.8 million or 17.1% of net sales in the first quarter of '23 compared to an operating loss of $5.6 million in the prior-year period [45] - Net income recorded was $3.1 million or $0.31 per diluted share compared to a net loss of $4.4 million or a loss of $0.44 per diluted share in the year-ago period [45] Business Line Data and Key Metrics Changes - Sales from the food service technology market (FST) for the first quarter were $3.5 million, up 62% compared to $2.1 million in the prior year period [29] - Casino and gaming sales reached a quarterly record high of $15.8 million, up 232% from the first quarter of '22 [43] - TransAct Services Group (TSG) sales were down 20% year over year to $1.2 million, largely due to lower sales of spare parts for legacy lottery printers [44] - Recurring FST sales were $2.3 million, up 49% compared to $1.6 million in the prior year period [66] Market Data and Key Metrics Changes - Domestic casino gaming sales were up 315% and international sales up 115% year over year [43] - The company ended the quarter with 12,733 terminals in the marketplace, a 26% year-over-year increase from 10,127 [26] - RPU for the first quarter of '23 was $764, up 20% compared to $638 in the first quarter of '22 [66] Company Strategy and Development Direction - The company is focusing on enhancing its go-to-market strategy, particularly for the BOHA! platform, with an emphasis on training and sales organization improvements [24][37] - The company aims to leverage its core competencies to build competitive advantages in the market [11] - Adjustments to product positioning and sales strategies are expected to result in positive changes in customer perception and adoption of the BOHA! platform [37] Management's Comments on Operating Environment and Future Outlook - Management anticipates a normalization of the casino and gaming market in the back half of the year, which may negatively impact sales and gross margin [1] - The company expects to see a moderation in casino and gaming sales in the latter half of the year [27] - Management believes that while competitive dynamics may change, a portion of the market share gained will be sticky [30] Other Important Information - The company finished the quarter with $6.4 million of cash on hand and $2.25 million of outstanding borrowings under its revolving credit facility [69] - Operating expenses for the first quarter increased 3% to $8.4 million, reflecting a return to more normalized levels of travel and marketing [31] Q&A Session Summary Question: Update on casino printer business and backlog - Management confirmed they are in a good position and have delivered all scheduled orders for the first quarter [47] Question: Changes and improvements in BOHA! Terminal 2 - The new terminal features enhancements such as a better screen and faster performance, with positive feedback from demonstrations [48][81] Question: Approach to large convenience store customer and franchisor - Management indicated that the large convenience store is purchasing equipment again and that the franchisor is satisfied with the company's progress [75] Question: Strategy for upgrading existing customers to BOHA! Terminal 2 - Management noted that while the 9700 terminals are performing well, they are actively approaching customers for upgrades [90][91]