TransAct Technologies rporated(US:TACT)2023-03-09 03:29Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $18 million, up 61% from $11.1 million in the prior year period, and for the full year, total revenue grew by almost 48% to just over $58 million, the highest since 2015 [19][28] - Gross margin for Q4 was 45.8%, compared to 38.7% in the prior year, and full year gross margin was 42%, up from 39.1% in 2021 [20][57] - Operating expenses for Q4 increased 12% to $7.7 million, while for the full year, they were $32.1 million, up 30% from 2021 [20][57] - The company recorded a net income of $260,000 in Q4 2022, compared to a net loss of $823,000 in the prior year, and for the full year, a net loss of $5.9 million compared to a loss of $4 million in 2021 [57] Business Line Data and Key Metrics Changes - Casino and gaming market revenue for Q4 was nearly $11 million, up 123% year-over-year, and for the full year, it increased approximately 96% to $30 million [19][36] - FST (Food Service Technology) sales for Q4 were $3.1 million, down 13% from the prior year, and for the full year, FST sales were $12.4 million, down 2% [28][57] - Recurring FST revenue for Q4 was $2.4 million, up 14% year-over-year, and for the full year, it was $8.7 million, up 18% [55] Market Data and Key Metrics Changes - International sales in the casino and gaming sector were up 108% year-over-year, while domestic sales increased by 131% [55] - The company is experiencing strong demand in the SMB market, having closed deals with at least two SMB restaurant chains in Q1 [26] Company Strategy and Development Direction - The company is focusing on maintaining relationships with customers and managing expectations due to high demand and supply chain challenges [2] - There is a strategic emphasis on the labeling solutions in the restaurant industry, targeting labor and food cost savings [8][78] - The company plans to increase production capacity with the addition of a fourth production line to meet ongoing demand [11][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of the casino and gaming market, projecting growth for 2023 [53] - The company anticipates total revenues for 2023 to be between $70 million and $72 million, with adjusted EBITDA expected between $5.2 million and $5.4 million [35][57] - Management acknowledged the challenges posed by inflation and labor shortages in the restaurant sector but remains optimistic about the potential for growth [8][78] Other Important Information - The company has successfully navigated supply chain issues and is now focusing on ramping up production to meet demand [43][72] - The company is also seeing increased interest in its TSG (TransAct Services Group) sales, which are expected to grow in 2023 due to demand for spare parts [56] Q&A Session Summary Question: Insights on guidance for 2023 - Management provided guidance for 2023, indicating confidence based on current visibility and backlog levels [68][72] Question: Update on large QSR customer rollout - Management clarified that they are working with large C-stores and have seen new orders come in, indicating a positive trend [60] Question: Component supply challenges - Management noted that while some supply issues remain, they have largely overcome the major challenges faced previously [61] Question: Confidence in providing guidance - Management attributed their confidence to improved visibility and strong demand from casino customers, who are placing orders well in advance [72][77]