<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 27, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: to:
Commission file number: 0-21121
TRANSACT TECHNOLOGIES INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 06-1456680
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7 LASER LANE, WALLINGFORD, CT 06492
(Address of principal executive offices)
(Zip Code)
(203) 269-1198
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES |X| NO |_|
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING APRIL 30, 1999
- ----- --------------------------
<S> <C>
COMMON STOCK,
$.01 PAR VALUE 5,558,700
</TABLE>
<PAGE> 2
TRANSACT TECHNOLOGIES INCORPORATED
INDEX
PART I. Financial Information: Page No.
Item 1 Financial Statements
Consolidated condensed balance sheets as of March 27,
1999 and December 31, 1998 3
Consolidated condensed statements of operations for
the three months ended March 27, 1999 and March 28,
1998 4
Consolidated condensed statements of cash flows for
the three months ended March 27, 1999 and March 28,
1998 5
Notes to consolidated condensed financial statements 6
Item 2 Management's Discussion and Analysis of the Results
of Operations and Financial Condition 7
Item 3 Quantitative and Qualitative Disclosures about Market
Risk 11
PART II. Other Information:
Item 6 Exhibits and Reports on Form 8-K 11
Signatures 12
2
<PAGE> 3
TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 27, December 31,
(In thousands) 1999 1998
----------- ------------
ASSETS: (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 321 $ 546
Receivables, net 5,329 5,153
Inventories 8,115 8,744
Other current assets 1,623 1,651
-------- --------
Total current assets 15,388 16,094
-------- --------
Plant and equipment, net 5,636 5,664
Excess of cost over fair value of net assets acquired 1,857 1,900
Other assets 116 130
-------- --------
7,609 7,694
-------- --------
$ 22,997 $ 23,788
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Bank loans payable $ -- $ 725
Accounts payable 2,574 2,188
Accrued liabilities 2,676 3,074
-------- --------
Total current liabilities 5,250 5,987
-------- --------
Long term debt 5,800 5,075
Other liabilities 555 549
-------- --------
6,355 5,624
-------- --------
Shareholders' equity:
Common stock 55 56
Additional paid-in capital 5,535 5,763
Retained earnings 6,989 7,268
Unamortized restricted stock compensation (840) (903)
Loan receivable from officer (330) --
Accumulated other comprehensive income (17) (7)
-------- --------
Total shareholders' equity 11,392 12,177
-------- --------
$ 22,997 $ 23,788
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
3
<PAGE> 4
TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
MARCH 27, March 28,
(In thousands, except per share data) 1999 1998
--------- ---------
<S> <C> <C>
Net sales $ 9,201 $ 13,280
Cost of sales 6,773 9,534
------- --------
Gross profit 2,428 3,746
------- --------
Operating expenses:
Engineering, design and product development
costs 801 833
Selling and marketing expenses 859 773
General and administrative expenses 1,088 1,101
------- --------
2,748 2,707
------- --------
Operating income (loss) (320) 1,039
------- --------
Other income (expense):
Interest, net (90) (41)
Other, net 15 9
------- --------
(75) (32)
------- --------
Income (loss) before income taxes (395) 1,007
Income tax provision (benefit) (116) 373
------- --------
Net income (loss) $ (279) $ 634
======= ========
Net income (loss) per share:
Basic $ (0.05) $ 0.10
======= ========
Diluted (0.05) 0.10
======= ========
Weighted average common shares outstanding:
Basic 5,578 6,460
======= ========
Diluted 5,578 6,526
======= ========
</TABLE>
See notes to consolidated condensed financial statements.
4
<PAGE> 5
TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------
MARCH 27, March 28,
(In thousands) 1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (279) $ 634
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 560 499
Loss on disposal of equipment -- 2
Changes in operating assets and liabilities:
Receivables (176) (2,685)
Inventories 629 (88)
Other current assets 28 (18)
Other assets (7) (42)
Accounts payable 386 1,718
Accrued liabilities and other liabilities (392) (210)
------- -------
Net cash provided by (used in) operating activities 749 (190)
------- -------
Cash flows from investing activities:
Purchases of plant and equipment (405) (1,425)
Proceeds from sale of equipment -- 1
------- -------
Net cash used in investing activities (405) (1,424)
------- -------
Cash flows from financing activities:
Bank line of credit borrowings 2,000 5,000
Bank line of credit repayments (2,000) (300)
Purchases of treasury stock (229) (3,215)
Loan to officer (330) --
Proceeds from option exercises -- 2
------- -------
Net cash provided by (used in) financing activities (559) 1,487
------- -------
Effect of exchange rate changes on cash (10) 5
------- -------
Decrease in cash and cash equivalents (225) (122)
Cash and cash equivalents at beginning of period 546 391
------- -------
Cash and cash equivalents at end of period $ 321 $ 269
======= =======
</TABLE>
See notes to consolidated condensed financial statements.
5
<PAGE> 6
TRANSACT TECHNOLOGIES INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of TransAct Technologies Incorporated (the "Company"),
the accompanying unaudited consolidated condensed financial statements
contain all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly its financial position as of March 27, 1999,
and the results of its operations and cash flows for the three months ended
March 27, 1999 and March 28, 1998. The December 31, 1998 consolidated
condensed balance sheet has been derived from the Company's audited
financial statements at that date. These interim financial statements
should be read in conjunction with the audited financial statements for the
year ended December 31, 1998 included in the Company's Annual Report on
Form 10-K.
The financial position and results of operations of the Company's
foreign subsidiaries are measured using local currency as the functional
currency. Assets and liabilities of such subsidiaries have been translated
at end of period exchange rates, and related revenues and expenses have
been translated at weighted average exchange rates. Transaction gains and
losses are included in other income.
The results of operations for the three months ended March 27, 1999
and March 28, 1998 are not necessarily indicative of the results to be
expected for the full year.
2. Earnings per share
Basic earnings per common share for the three months ended March 27,
1999 and March 28, 1998 were based on the weighted average number of shares
outstanding during the period. Diluted earnings per share for the same
periods were based on the weighted average number of shares after
consideration of any dilutive effect of stock options and warrants.
3. Inventories:
The components of inventory are:
<TABLE>
<CAPTION>
March 27, December 31,
(In thousands) 1999 1998
--------- ------------
<S> <C> <C>
Raw materials and component parts $6,918 $7,754
Work-in-process 550 495
Finished goods 647 495
------ ------
$8,115 $8,744
====== ======
</TABLE>
4. Commitments and contingencies
The Company has a long-term purchase agreement with Okidata, Division
of Oki America, Inc., for certain printer components. Under the terms of
the agreement, the Company receives favorable pricing for volume purchases
over the life of the contract. In the event anticipated purchase levels are
not achieved, the Company would be subject to retroactive price increases
on previous purchases. Management currently anticipates achieving purchase
levels sufficient to maintain the favorable prices.
5. Significant transactions
During the quarter ended March 27, 1999, the Company purchased an
additional 70,800 shares of its common stock on the open market for
approximately $229,000. Through March 27, 1999, the Company purchased
1,273,800 shares for approximately $9,651,000 (an average of approximately
$7.58 per share).
6
<PAGE> 7
5. Significant transactions (continued)
On February 23, 1999, with the Board of Directors' approval, the
Company provided a $330,000 loan to an officer of the Company. The loan
proceeds were used to purchase 104,000 shares of the Company's common stock
during January and February 1999. The loan is payable on February 23, 2004,
and is a full recourse obligation to the officer secured by 154,000 shares
(vested and nonvested) of the Company's common stock, which includes 50,000
shares of restricted stock. The loan bears interest at a rate equivalent to
the Company's average borrowing rate under the New Credit Facility with
Fleet Bank, and is payable annually. The principal amount of the loan has
been deducted from shareholders' equity.
6. Subsequent events
On May 7, 1999, the Company entered into a $10,000,000 revolving
credit facility (the "New Credit Facility") with Fleet National Bank
("Fleet"), expiring on May 31, 2001. The New Credit Facility replaced both
the existing $5,000,000 working capital facility and $10,000,000 revolving
credit facility (the "Credit Facility"), also with Fleet. The New Credit
Facility provides the Company with a $10,000,000 credit facility that may
be used to fund working capital. Borrowings under the New Credit Facility
bear interest on outstanding borrowings at Fleet's prime rate (7.75% at
March 27, 1999) and bear a commitment fee ranging from 0.25% to 0.625% on
any unused portion of the New Credit Facility. The New Credit Facility also
permits the Company to designate (1) a LIBOR rate on outstanding borrowings
with a margin ranging from 1.50 to 2.25 percentage points over the market
rate, depending on the Company meeting certain ratios, or (2) a one or
two-year fixed rate under a swap agreement. The New Credit Facility is
secured by a lien on substantially all the assets of the Company, imposes
certain financial covenants and restricts the payment of cash dividends and
the creation of liens.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements included in this report, including without limitation
statements in this Management's Discussion and Analysis of Financial Condition
and Results of Operations, which are not historical facts are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
forward-looking statements involve risks and uncertainties, including, but not
limited to, customer acceptance and market share gains, both domestically and
internationally, in the face of substantial competition from competitors that
have broader lines of products and greater financial resources; successful
product development; dependence on significant customers; dependence on third
parties for sales in Europe and Latin America; economic conditions in the United
States, Europe and Latin America; marketplace acceptance of new products; risks
associated with foreign operations; availability of third-party components at
reasonable prices; and the absence of price wars or other significant pricing
pressures affecting the Company's products in the United States or abroad.
Actual results may differ materially from those discussed in, or implied by, the
forward-looking statements.
IMPACT OF THE YEAR 2000 ISSUE.
General.
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
7
<PAGE> 8
Program.
The Company has begun a program to resolve its Year 2000 issue. This program
consists of four phases; assessment, remediation, testing and contingency
planning. The Company completed the assessment phase in December 1998 and is
currently in the remediation and testing phases. During the assessment phase,
the Company assessed its products, key financial and operating systems and other
systems for Year 2000 compliance. The assessment included identifying all
critical information management systems and other critical systems on which the
Company relies, testing Year 2000 compliance of such systems, and recommending
steps for replacing/making corrective fixes to non-compliant systems.
Additionally, as part of the assessment phase, the Company obtained compliance
verification from third party vendors supplying critical parts or services to
the Company in order to determine their plans to address their own Year 2000
issues.
Upon completion of the detailed assessment, the Company concluded that
substantially all its critical financial operating systems and other systems are
Year 2000 compliant. However, certain software and hardware components were
identified as noncompliant. The Company has established a plan to replace this
software and hardware by June 1999. Also, the Company believes that its products
will be unaffected by the Year 2000 Issue, as none of its products contain
embedded date information.
The testing phase of the program has been ongoing, and will continue to be
conducted as noncompliant software and hardware are replaced. The Company
estimates that the testing phase is approximately 95% completed as of March 27,
1999.
The Company has begun to develop a contingency plan to address third party
factors which are out of its control, and expects completion of this plan by
June 1999.
Costs.
The Company plans completion of all phases, including contingency planning, of
the Year 2000 program by June 1999. All costs associated with the Company's Year
2000 program are being expensed as incurred. The Company's total cost associated
with the Year 2000 program has not been, and based on results of its detailed
assessment, is not expected to be, material to the Company's business, financial
position, results of operations or cash flows. The estimated total cost of the
Year 2000 Program is approximately $25,000, which primarily includes the cost of
replacing/upgrading noncompliant software identified during the assessment phase
with compliant software. Costs incurred through March 27, 1999 have been de
minimus.
Risks.
The Company presently believes that with modifications to existing software and
conversions to new software, the Year 2000 Issue can be mitigated. However, the
Company may not timely identify and remediate all significant Year 2000 problems
and remedial efforts may involve significant time and expense. If such
modifications and conversions are not made, or are not completed timely, the
Year 2000 Issue could have a material impact on the results of operations,
financial position or cash flows of the Company.
The Company is currently identifying and analyzing the most reasonably likely
worst case scenarios for third party relationships affected by the Year 2000
Issue. These scenarios could include the inability of certain suppliers to
supply critical parts on a timely basis or the inability of customers to place
orders. Either of these scenarios, which is outside of the Company's control,
could result in a delay or an inability to ship product in the year 2000,
depending on the nature and severity of the problems. Furthermore, there can be
no assurance that any Year 2000 compliance problems of the Company or its
customers or suppliers will not have a material adverse effect on the results of
operations, financial position or cash flows of the Company.
The estimates and conclusions herein contain forward-looking statements and are
based on management's best estimates of future events. Risks to completing the
remaining portions of the program include the availability of outside resources,
the Company's ability to discover and correct potential Year 2000 problems which
could have an impact on the Company's operations and the ability of suppliers or
customers to bring their systems into Year 2000 compliance.
8
<PAGE> 9
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 27, 1999 COMPARED TO THREE MONTHS ENDED MARCH 28, 1998
NET SALES. Net sales into each of the Company's four vertical markets for the
current and prior year's quarter were as follows:
<TABLE>
<CAPTION>
Three months ended Three months ended
(In thousands, except %) March 27, 1999 March 28, 1998
--------------------- -----------------------
<S> <C> <C> <C> <C>
Point of sale $4,832 52.5% $ 7,813 58.8%
Gaming and lottery 2,194 23.8 4,188 31.6
Kiosk 928 10.1 451 3.4
Financial services 1,247 13.6 828 6.2
--------------------- -----------------------
$9,201 100.0% $13,280 100.0%
===================== =======================
</TABLE>
Net sales for the first quarter of 1999 decreased $4,079,000, or 31%, to
$9,201,000 from $13,280,000 in the prior year's first quarter, due to decreased
shipments into the point of sale ("POS") and gaming and lottery markets,
somewhat offset by increased sales into the kiosk and financial services
markets.
Point of sale: Sales of the Company's POS printers decreased approximately
$2,981,000, or 38%. International POS printer shipments decreased approximately
$1,590,000 due largely to the absence of printer shipments to the British Post
Office project. Shipments for this project totaled approximately $1,600,000 in
the first quarter of 1998. The Company does not anticipate making any printer
shipments related to this project during 1999, however, printer shipments are
expected to resume in the first quarter of 2000. Domestic POS printer sales
decreased $1,391,000 due primarily to specific domestic sales in the first
quarter of 1998 related to several large POS printer installations that did not
repeat in the first quarter of 1999.
Gaming and lottery: Sales of the Company's gaming and lottery printers decreased
approximately $1,994,000, or 48%, from the first quarter a year ago. The overall
decrease primarily reflects a decrease of approximately $3,700,000 in shipments
of the Company's on-line lottery printers and spare parts to one customer. The
Company does not anticipate making any further on-line lottery printer
shipments, other than spares, to this customer until 2000. The decrease in sales
of printers for on-line lottery terminals was partially offset by an increase of
approximately $1,800,000 in shipments of printers for use in video lottery
terminals, including increased printer shipments for use in South Carolina's
video poker industry. During the first quarter of 1998, shipments of these
printers were significantly lower due to uncertainty in South Carolina's video
poker industry concerning the industry's continued future in the state.
Kiosk: Kiosk printer sales increased $477,000, or 106%, to $928,000 from
$451,000 in the prior year's quarter primarily due to resumed shipments of
approximately $600,000 of the Company's thermal kiosk printers for use in a
Canadian government application. No shipments of these printers were made in the
first quarter of 1998. The increase in shipments of thermal kiosk printers was
partially offset by a decrease in shipments of other kiosk printers to various
customers in the first quarter of 1998 that did not repeat in the first quarter
of 1999.
Financial services: Sales of the Company's printers into the financial services
market increased approximately $419,000, or 51%, primarily due to (1) shipments
of printers to a new customer for use in a bank teller application and, to a
lesser extent, (2) increased shipments to one customer of printers used in
automated teller machines.
GROSS PROFIT. Gross profit decreased $1,318000, or 35%, to $2,428,000 from
$3,746,000 in the prior year's quarter due primarily to lower volume of sales.
The gross margin declined to 26.4% from 28.2% largely due to lower sales volume
at the Company's Wallingford, Connecticut facility. The Company expects its
gross margin for the remainder of 1999 to be relatively consistent with that of
the most recent quarter.
9
<PAGE> 10
ENGINEERING AND PRODUCT DEVELOPMENT. Engineering, design and product development
expenses decreased $32,000, or 4%, to $801,000 from $833,000 in the first
quarter of 1998. This decrease is primarily due to a reduction in engineering
staff resulting from the downsizing and reorganization of the Company's
manufacturing facility in Wallingford, Connecticut, somewhat offset by increased
product development and design expenses, primarily for new products in the POS
markets, including expenses related to the development of printers utilizing
inkjet printing technology. Engineering and product development expense
increased as a percentage of net sales to 8.7% from 6.3%, due to lower sales
volume in the first quarter of 1999 compared to 1998.
SELLING AND MARKETING. Selling and marketing expenses increased $86,000, or 11%,
to $859,000 from $773,000 in the quarter ended March 28, 1998, and increased as
a percentage of net sales to 9.3% from 5.8%. Such expenses increased due to
increased sales commission resulting from an increase in sales eligible for
commissions in the first quarter of 1999 compared to 1998, and additional
marketing staff related to the establishment of a corporate marketing department
in the second half of 1998.
GENERAL AND ADMINISTRATIVE. General and administrative expenses decreased
slightly by $13,000, or 1%, to $1,088,000 from $1,101,000 in the comparable
prior year's quarter. General and administrative expenses increased as a
percentage of net sales to 11.8% from 8.3%, due to lower volume of sales in the
first quarter of 1999 compared to 1998.
OPERATING INCOME (LOSS). The Company incurred an operating loss of $320,000 in
the first quarter of 1999 compared to operating income of $1,039,000 in the
first quarter of the prior year. The operating loss resulted primarily from
significantly lower sales volume in the first quarter of 1999, and to a lesser
extent, increased selling and marketing expenses.
INTEREST. The Company incurred net interest expense of $90,000, compared to
$41,000 in the first quarter of 1998, due to increased outstanding borrowings on
the Company's line of credit during the first quarter of 1999. See "Liquidity
and Capital Resources" below.
INCOME TAXES. As a result of the Company's operating loss, the Company recorded
an income tax benefit of $116,000 for the quarter ended March 27, 1999. The
effective tax rate for the comparable prior year's quarter was 37.0%.
NET INCOME. The Company incurred a net loss during the first quarter of 1999 of
$279,000, or $0.05 per share (basic and diluted) compared to net income of
$634,000, or $0.10 per share (basic and diluted) for the first quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company generated cash from operations of $749,000 during the three months
ended March 27, 1999, compared to cash used in operations of $190,000 during the
three months ended March 28, 1998. The Company's working capital declined to
$9,038,000 at March 27, 1999 from $10,107,000 at December 31, 1998. The current
ratio also slightly declined to 2.42 at March 27, 1999 from 2.69 at December 31,
1998.
During 1997 and 1998, the Board of Directors authorized the repurchase of up to
1.5 million shares of the Company's common stock (the "Stock Buyback Program").
As of December 31, 1998, the Company had acquired 1,203,000 shares of its common
stock for $9,421,000. During the first quarter of 1999, the Company repurchased
an additional 70,800 shares of its common stock for $230,000. Since the Company
began the stock repurchase program in December 1997, it has repurchased
1,273,800 shares for $9,651,000 (an average cost of $7.58 per share) under the
Stock Buyback Program. Further repurchases of the Company's common stock will
depend upon future cash flow of the Company and stock market conditions.
The Company had in place a $15,000,000 revolving credit facility (the "Credit
Facility") with Fleet National Bank ("Fleet"). The Credit Facility provided the
Company with a $5,000,000 revolving working capital facility, and a $10,000,000
revolving credit facility to be used for activities such as acquisitions and
repurchases of the Company's common stock. Borrowings under the $10,000,000
revolving credit facility could have been, at the Company's election, converted
to a four-year term loan commencing on June 30, 1999, the expiration date of the
Credit Facility. Any term loan borrowings would have matured on June 30, 2003.
Borrowings under the Credit Facility
10
<PAGE> 11
bore interest at Fleet's prime rate (7.75% at March 27, 1999) and bore a
commitment fee ranging from 0.25% to 0.50% on any unused portion of the Credit
Facility (0.375% at March 27, 1999).
On May 7, 1999, the Company replaced the Credit Facility with a new two-year
$10,000,000 revolving credit facility (the "New Credit Facility") with Fleet,
expiring May 31, 2001. The New Credit Facility provides the Company with a
$10,000,000 credit facility that may be used to fund working capital. Borrowings
under the New Credit Facility bear interest at Fleet's prime rate and bear a
commitment fee ranging from 0.25% to 0.625% on any unused portion of the New
Credit Facility. The New Credit Facility also permits the Company to designate
(1) a LIBOR rate on outstanding borrowings with a margin ranging from 1.50 to
2.25 percentage points over the market rate, depending on the Company meeting
certain ratios, or (2) a one or two-year fixed rate under a swap agreement. The
New Credit Facility is secured by a lien on substantially all the assets of the
Company, imposes certain financial covenants and restricts the payment of cash
dividends and the creation of liens.
At December 31, 1998, the Company had outstanding borrowings of $5,800,000 under
the Credit Facility. In accordance with the Company's intent to convert the
outstanding borrowings to a four-year term loan at the expiration of the Credit
Facility, $5,075,000 ($5,800,000, less the current maturity of $725,000) had
been classified as long-term debt at December 31, 1998.
During the first quarter of 1999, the Company borrowed and repaid $2,000,000,
leaving outstanding borrowings unchanged at $5,800,000 from December 31, 1998.
In accordance with the New Credit Facility, these borrowings have been
classified at long-term debt as of March 27, 1999.
The Company's capital expenditures were approximately $405,000 and $1,425,000
for the three months ended March 27, 1999 and March 28, 1998, respectively.
These expenditures primarily included new product tooling, computer equipment,
and factory machinery and equipment. The Company's total capital expenditures
for fiscal 1999 are expected to be approximately $3,000,000, a majority for new
product tooling.
The Company believes that cash flows generated from operations and borrowings
available under the New Credit Facility, as necessary, will provide sufficient
resources to meet the Company's working capital needs, finance its capital
expenditures, and meet its liquidity requirements through December 31, 1999.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits filed herein
Exhibit 11 Computation of earnings per share
Exhibit 27 Financial Data Schedule
b. Reports on Form 8-K
On February 18, 1999, the Company filed a report on Form 8-K
to report under Item 5, "Other Events", and Item 7, "Financial
Statements and Exhibits", an amended and restated Stockholder
Rights Plan.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANSACT TECHNOLOGIES INCORPORATED
(Registrant)
May 10, 1999 /s/ Richard L. Cote
-------------------
Richard L. Cote
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
(Principal Financial Officer)
/s/ Steven A. DeMartino
-----------------------
Steven A. DeMartino
Corporate Controller
(Principal Accounting Officer)
12
<PAGE> 13
TRANSACT TECHNOLOGIES INCORPORATED
Exhibit 11
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------
MARCH 27, March 28,
(In thousands, except per share data) 1999 1998
--------- ---------
<S> <C> <C>
Net income (loss) $ (279) $ 634
======= ======
Shares:
Basic - Weighted average common shares
outstanding 5,578 6,460
Dilutive effect of outstanding options and
warrants as determined by the treasury
stock method -- 66
------- ------
Dilutive - Weighted average common and
common equivalent shares outstanding 5,578 6,526
======= ======
Net income (loss) per common and common
equivalent share:
Basic $ (0.05) $ 0.10
======= ======
Diluted $ (0.05) $ 0.10
======= ======
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-27-1999
<CASH> 321
<SECURITIES> 0
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0
0
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</TABLE>
