GGRAsia – TransAct slips to 1Q loss, cites Covid-19 as factor

TransAct slips to 1Q loss, cites Covid-19 as factor

May 08, 2020 Newsdesk Latest News, Top of the deck, World

Casino and food safety equipment supplier TransAct Technologies Inc slipped to a US$992,000 loss in the first quarter this year. That compared to US$746,000 in net income a year earlier.

The net loss per share was US$0.13, based on 7.5-million diluted weighted-average common shares outstanding. Net income for the comparable 2019 period was US$0.10 per share, based on 7.6 million diluted weighted-average common shares outstanding.

The group’s first-quarter earnings before interest, taxation, depreciation and amortisation (EBITDA) on an absolute and adjusted basis were also negative.

“Unfortunately, Covid-19 is still causing massive disruptions across the world with widespread closures, and we expect this to continue to negatively impact our casino and gaming business as well as most restaurant and food service locations for the foreseeable future,” Bart Shuldman, chairman and chief executive of TransAct, was quoted as saying in the quarterly filing.

Total net sales for the group in the three months to March 31 were US$10.2 million, down 11.3 percent compared to nearly US$11.6 million for the first quarter of 2019.

Sales for casino and gaming products were US$4.9 million in the latest reporting period, down 10.1 percent from the nearly US$5.5 million achieved in first-quarter 2019.

Food service technology sales were up 11.3 percent, at nearly US$1.4 million, versus US$1.2 million in the prior-year quarter.

The group’s core business has been casino player rewards and player tracking software; and ticket printers for electronic gaming machines. More recently it has been developing sales of its food inventory monitoring and food safety tracking system known as Boha.

“We are pleased with the upward trajectory of our food service technology revenues prior to the industry disruptions,” noted Mr Shuldman in his remarks.

Group adjusted EBITDA was negative by US$1.0 million for the latest reporting period, versus the nearly US$1.3 million positive adjusted EBITDA in first-quarter 2019.

TransAct’s first-quarter gross profit was US$4.9 million, resulting in gross margin of 48.0 percent, compared to gross profit of nearly US$6.1 million in the first three months of 2019, which had resulted in a 52.7 percent gross margin, it said.

The group had in late March announced cost-saving measures, including “furloughing approximately 10 percent” of its workforce. On March 16, TransAct had announced a new revolving credit facility of up to US$10 million, subject to availability determined by a “borrowing base” calculation.

On May 5, the company said it had received a US$2.2-million loan under the United States’ federal government Paycheck Protection Program to meet its staff payroll obligations and to support ongoing operations.