TransAct to cut costs, trade shows due to Covid-19
Casino technology supplier TransAct Technologies Inc said in a Tuesday press release it was “furloughing approximately 10 percent” of its workforce as part of the group’s response to the negative economic impact of the Covid-19 pandemic. It also said it would cut trade show spending where possible.
These and other moves were in order to “reduce overhead and operating expenses by approximately US$1.75 million”of the firm’s estimated first-quarter 2020 quarterly run-rate, said TransAct.
“In response to the novel coronavirus (Covid-19) pandemic we have postponed any further increases in spending and have implemented a number of cost reduction initiatives,” noted the firm.
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.
Other steps for savings announced on Tuesday were: a 10 percent reduction of cash-retainer fees for all non-employee directors; eliminating all discretionary spending such as trade shows, marketing and promotional activities, travel expenses, training, etc., “wherever possible”.
On March 16, the group had announced it had negotiated what it termed an “asset-based” credit facility of up to US$10 million. It said on Tuesday: “This access to capital provides enhanced liquidity and flexibility for these unprecedented times.”
Casino markets across Asia Pacific and North America have recently reported either total shutdowns of casino business, or much-reduced revenue amid travel restrictions and health checks on consumers arriving at venues due to the global disease alert.
TransAct did not define in its announcement the meaning of “furlough” regarding certain workers. But a Covid-19-related fact sheet from the United States Department of Labor – in the nation where TransAct has its headquarters – puts furloughs in the same basket as “reductions in pay and/or hours worked, as businesses and state and local governments adjust to economic challenges”.
According to TransAct’s 2019 annual report – filed to Nasdaq on March 16 – as of December 31 the firm and its subsidiaries employed 134 people, all of whom were full-time.
But the group noted in its Tuesday release that it had already hired in January and February some extra people. It didn’t say how many.
“We are taking meaningful action to mitigate the impact of the novel coronavirus (Covid-19) on our financial condition and successfully navigate the uncertainty ahead,” said Bart Shuldman, chairman and chief executive, in prepared remarks in the release.
He added the firm was “confident” of the “strategic value” its Boha product would provide to the food service industry and looked forward to “executing on our strategy”.
TransAct’s original 2020 plan called for increased operating expenses to support its food service technology effort. That had included a proposal to hire more people after February, as well as planned increases in “product development and other additional marketing initiatives”.
On March 10 the group said it had swung to a loss in the fourth quarter of 2019, and that full-year profit had fallen by nearly 91 percent.
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