The fourth-quarter casino and gaming equipment sales segment of TransAct Technologies Inc was hit by “high levels of printer inventory” among original equipment manufacturers (OEMs) that use the company’s products in their units, said TransAct’s chief executive, John Dillon (pictured).
He stated: “On the casino and gaming side, we reported US$4.2 million [in sales] for the quarter, which is down an enormous 62 percent year-over-year.”
His colleague Steve DeMartino, TransAct’s chief financial officer, added: “That was largely due to OEMs working down high levels of printer inventory that they stockpiled during the supply crisis earlier in 2023: that’s now eased.”
He added: “For the full year 2023, casino and gaming sales were US$41.2 million, which was up 37 percent year-over-year.”
According to Mr Dillon, OEMs were “in a panic” amid the supply crisis, with fears it could extend for a long period of time: “They couldn’t ship machines without our units. And so they would do anything they could to get them and to stockpile some of them for the future to make sure they didn’t have additional shortages. This dynamic continues to be the main reason for the sequential slowdown in the quarter.”
The executives were speaking on the group’s Tuesday call to discuss its earnings for the three months to December 31. TransAct reported fourth-quarter net sales of just under US$13.3 million, down 26.1 percent from the prior-year period.
Mr Dillon noted: “We expect this current [first] quarter… to be the peak of this oversupply effect, with orders picking up as we move forward throughout the year.”
The CEO added: “We continue to estimate that our go-forward annual net sales run rate in the casino and gaming market should be about 15 percent to 20 percent higher than the historical pre-Covid averages and believe that this will be the case for 2024 as a whole, with sales numbers improving sequentially quarter-to-quarter.”
Mr Dillon also said the group had “reorganised” its sales force for its food-inventory safety product BOHA!
He stated TransAct’s food service technology segment “was a major focus in our reorganisation… and we believe that we now have the right pieces in the right places, as we’re now focusing on selling our efforts to the top thousand organisations in the U.S. and their related operations abroad to sell BOHA!”
Fourth-quarter sales in that field rose 54.4 percent year-on-year, to just above US$4.7 million.
