Slot machine printer specialist TransAct Technologies Inc reported a net loss of US$0.7 million, or US$0.08 per diluted share, in the fourth quarter of 2014, compared to net income of US$1.1 million, or US$0.13 per diluted share, in the prior-year period. The quarterly loss reflects lower sales of casino equipment and a jump in operating expenses, the company said on Thursday.
TransAct generated 2014 fourth quarter net sales of US$12.3 million compared with net sales of US$12.5 million a year earlier.
The firm said casino and gaming revenue was US$5.0 million for the period, down from US$5.7 million from a year ago, “reflecting lower sales of casino printers to original equipment manufacturers and lower domestic Epicentral revenue”.
“The 2013 fourth quarter also benefited from a large slot machine replacement undertaken by a multinational casino operator,” it added.
TransAct also supplies products to the food safety, banking, point-of-sale, hospitality, oil and gas, medical and mobile communications industries.
The quarterly results show that operating expenses for the final three months of 2014 were US$6.1 million compared to US$3.5 million in the year-ago quarter. The company recorded an operating loss of US$1.2 million for the final quarter of 2014, dipping from an operating income of US$1.5 million a year ago.
Excluding the impact from the employee termination expenses, lawsuit legal fees and an adjustment to accrued contingent consideration, TransAct said it generated adjusted operating income of US$0.4 million.
For full-year 2014, the company recorded a net loss of US$0.1 million, down from a US$4.9-million profit in the previous year. Net sales dropped by 11.6 percent year-on-year to US$53.1 million in 2014.
Bart Shuldman, chairman and chief executive of TransAct, said: “Fourth quarter results reflect the continued weakness in overall replacement unit sales for the casino and gaming industry on a global basis.
“However, TransAct’s business transformation towards new, higher-value products that address large and significantly untapped market opportunities is complete and our focus in fiscal 2015 is on sales execution,” Mr Shuldman added in a statement accompanying Thursday’s filing.
Transact’s CEO said the company “effected a significant reduction” in its overall cost structure in late 2014, cutting approximately US$1 million of expenses on an annualised basis.
“We believe this cost reduction action does not impair the company’s ability to maintain and even grow our strong worldwide market share of printer sales for the casino and gaming industry and we also remain committed to continue investing in the rollout of our newest products which offer high growth opportunities for TransAct,” he added.
In February, TransAct declared a quarterly cash dividend of US$0.08 per share. The dividend will be payable on March 13 to shareholders of record on February 20.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia