GGRAsia – TransAct 1Q revenue down as gaming sales drag earnings

TransAct 1Q revenue down as gaming sales drag earnings

May 08, 2024 Newsdesk Latest News, Top of the deck, World

TransAct Technologies Inc, a supplier of slot machine printers, casino-player management software and food-safety management technology, reported first-quarter net sales of just under US$10.7 million, down 52.0 percent from the prior-year period. Judged sequentially, sales fell by 19.4 percent.

The decline in sales was “largely a result of the expected market dynamics and normalising demand” for the group’s casino and gaming printers, the firm said in a Tuesday announcement

Sales in the casino and gaming segment stood at nearly US$5.7 million in the three months to March 31, a decline of 64.0 percent from a year ago. But sales in the gaming segment rose by 35.9 percent quarter-on-quarter, according to Tuesday’s announcement.

First-quarter sales in the group’s food service technology decreased by 4.6 percent year-on-year, to US$3.3 million. Such sales went down 30.0 percent sequentially.

TransAct’s net loss for the first quarter of 2024 was US$1.0 million, compared with a net income of US$3.1 million a year earlier. The company posted a net loss of US$62,000 for the final quarter of 2023.

The firm reported negative adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) to the tune of US$701,000 for the January to March period, compared with a positive figure of US$4.5 million in the prior-year period. TransAct had posted adjusted EBITDA of US$587,000 for the fourth quarter of 2023.

John Dillon, TransAct’s chief executive, was quoted in the announcement as saying that the company had “continued confidence” in its “core product offerings” and its “ability to win new customers in new deployment” opportunities for the its food-inventory safety product BOHA!

He added: “We are optimistic about the future of TransAct as an agile, transaction validation platform providing tailored solutions to our customers and believe there is significant opportunity in both the near and long-term to target new use cases with our existing products and to enter new markets further down the road.”

TransAct’s management had said previously that the group was negatively impacted by “high levels of printer inventory” among original equipment manufacturers (OEMs) that use the company’s products in their units. That was those OEMs were “working down high levels of printer inventory that they stockpiled during the supply crisis earlier in 2023,” the executives said in March.

In Tuesday’s filing, TransAct said it expected to record in 2024 total net sales of between US$45 million and US$50 million, with total adjusted EBITDA “to be between negative US$2.5 million and negative US$3.5 million”. That compares with an earlier forecast of up to US$58 million in sales this year, and for adjusted EBITDA “to be approximately breakeven”.

For full-year 2023, TransAct reported net income of US$4.7 million, on sales that rose 24.9 percent year-on-year, to US$72.6 million. Sales in the casino and gaming segment stood at US$41.2 million last year, up 37.2 percent from 2022.