UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the fiscal year ended April 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period from _____________ to _____________
COMMISSION FILE NUMBER 0-8422
-----------------------------
TRANSACT INTERNATIONAL INC.
----------------------------------------------
(Name of small business issuer in its charter)
CONNECTICUT 06-0732124
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
20 THORNDAL CIRCLE, DARIEN, CONNECTICUT 06820
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (203) 656-0777
--------------
Securities registered under Section 12(b) of the Exchange Act:
NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, NO PAR VALUE
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
---- ----
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained to the best of issuer's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment of this Form 10-KSB. ( )
Revenues for the fiscal year ended April 30, 1996 were $7,208,015
The aggregate market value of the voting stock held by non-affiliates of
the registrant at July 12, 1996 was $212,842.
The number of shares outstanding of the registrant's common stock at July
12, 1996 was 6,123,235.
Transitional Small Business Disclosure Format. YES NO X
---- ----
DOCUMENTS INCORPORATED BY REFERENCE
Certain information from Transact International Inc.'s Proxy Statement
for the Annual Meeting of Stockholders to be held on October 9, 1996 is
incorporated by reference into Part III of this Form 10-KSB (a definitive
proxy statement will be filed with the Securities and Exchange Commission
within 120 days after the end of the fiscal year covered by this Form 10-KSB).
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(A) GENERAL DEVELOPMENT OF BUSINESS
-------------------------------
Transact International Inc. (formerly Gram Industries Inc.), a
Connecticut corporation ("TRANSACT" or the "COMPANY"), was incorporated in
1958. On October 15, 1980, Transact International Inc. ("TII") was merged
with and into the Company pursuant to a statutory merger (the "MERGER"),
whereby the issued and outstanding shares of the common stock, $10.00 par
value per share, of TII (the "TII STOCK") were converted into an aggregate of
3,768,340 shares of the Company's common stock, no par value (the "COMMON
STOCK"), and the issued and outstanding options to acquire shares of TII Stock
were converted into options to acquire an aggregate of 90,243 shares of the
Common Stock. As a result of the Merger, effective control of the Company was
acquired by the former shareholders of TII.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS AND EXPORT SALES
--------------------------------------------------------------
The Company operates in one business segment, the sale, design,
manufacture and installation of air cargo materials handling systems and
equipment. The air cargo handling systems and equipment operate in air cargo
terminals to facilitate the storage and movement of the unitized loads and
containers in which air cargo is shipped. Transact also renders consulting
and engineering services related to such systems and equipment.
In 1996 three customers accounted for 28% (U.S. Government), 16%
(TianDa Airport Support Ltd.) and 13% (American Airlines), respectively, of
net sales. In 1995, three customers accounted for 24% (U.S. Government), 21%
(Federal Express Corporation) and 12% (TianDa Airport Support Ltd.),
respectively, of net sales. In 1994, two customers accounted for 55% (U.S.
Government) and 19% (Federal Express Corporation), respectively, of net sales.
Sales to the U.S. Government were $1,990,000 in 1996, $1,913,000 in
1995, and $5,065,000 in 1994. All of the Company's operations are in the
United States. Export sales to the Far East accounted for 16%, 19%, and 12%
of net sales in 1996, 1995 and 1994, respectively.
(C) NARRATIVE DESCRIPTION OF BUSINESS
---------------------------------
PRINCIPAL PRODUCTS AND SERVICES
-------------------------------
Transact has developed various components comprising a basic cargo
handling system. This system consists of items of specialized equipment that
may be customized to a customer's requirements. These items of equipment may
be purchased separately and are categorized by the location of their use into
two basic groups: terminal equipment and ramp equipment. The majority of
sales are direct to the end user; however, occasionally the Company sells to a
general contractor who has a contract with the end user.
Terminal equipment includes truck dock lifts, transfer vehicles,
elevating transfer vehicles, decks, and storage racks which are installed in a
cargo terminal and are used to receive and store cargo containers and to
retrieve such containers and position them for loading on aircraft by ramp
equipment. As of April 30,1996, Transact terminal equipment systems have been
completely installed in more than 57 locations. Terminal equipment accounted
for approximately 66% of Transact's net sales in 1996.
2
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS -- CONTINUED
Ramp equipment is completely mobile and accepts cargo containers at
the ramp area adjacent to the cargo terminal, transports such containers to
the aircraft and loads them into the aircraft by means of conveyance devices.
Ramp equipment includes transporters and loaders. Ramp equipment accounted
for approximately 19% of Transact net sales in 1996.
Transfer balls are used in decks to facilitate the manual movement of
air cargo containers. Spare parts are sold as replacement parts for ramp
equipment and terminal equipment. Transfer balls and spare parts accounted
for approximately 14% of Transact net sales in 1996.
Transact also provides consulting and engineering services to assist
customers in planning, designing and adapting cargo handling systems and in
selecting equipment items based upon their particular requirements.
Generally, no more than two Transact employees are engaged in rendering these
services at any point in time. Although not a significant revenue producer,
these services have enabled Transact to gain access to customers at the
planning stage for future systems projects. During 1996 the consulting and
engineering services accounted for approximately 1% of Transact's net sales.
SIGNIFICANT CUSTOMERS/PRINCIPAL MARKETS
---------------------------------------
The Company produces air cargo handling systems and equipment for
airlines, air express and freight companies, airport authorities and the U.S.
Air Force. Sales of air cargo handling systems are comprised of several large
contracts. Therefore, it is not unusual for a few customers to account for a
significant percentage of revenues. Sales to major customers for the three
years ended April 30, 1996 is outlined in Item 1 (b) herein. The loss of any
of these customers, if not replaced with another customer, could have a
material adverse effect on the Company.
RAW MATERIALS AND SUBCONTRACTORS
--------------------------------
During 1993, the Company closed its Memphis, Tennessee manufacturing
facility. The Company is renting a smaller facility in Somerville, Tennessee
and is subcontracting a significant portion of the production of its equipment
to selected manufacturers within the industry. The Company subcontracted
approximately 71% of its cost of sales in 1996. The Company obtains bids from
qualified bidders and determines who will get the subcontract based both on
price and technical ability. Transact's review of potential subcontractors
and the monitoring of their quality control standards minimizes the
subcontracting risk. The materials required are generally available from a
wide number of sources. The Company has not experienced any unusual
difficulties in obtaining the necessary raw materials.
CONTRACTING RISKS
-----------------
Most contracts for the sale of Transact air cargo handling systems
and equipment are the result of competitive bidding. If accepted, the bid
price, which is effective to a certain date and for certain equipment, becomes
the fixed contract price, and is generally not subject to price renegotiations
unless the customer either accepts the bid after its expiration date or
changes the scope of the project by requiring additional or different
equipment. In preparing its bid price, Transact normally includes a margin
for estimated supplier price and subcontractor cost increases; however,
Transact's margins, and accordingly its estimated gross profit, may be
adversely impacted by increases in costs which exceed those anticipated or
provided for in its bid. Transact faces an additional risk of non-payment
from a contractor when, on rare occasions, it operates as a subcontractor.
Specifically, Transact risks delay in payment due to the incomplete or faulty
performance of the contractor. Standard provisions in contracts with the U.S.
Government allow termination at the Government's option provided the
Government and
3
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS -- CONTINUED
the Company agree on the final termination settlement. As of April 30, 1996
approximately 40% of the Company's backlog was with the U.S. Air Force.
Transact's fabrication contracts may contain substantial per diem penalty
clauses for delays in completion resulting from the actions of Transact or of
its subcontractors. Transact, however, has incurred no substantial liability
resulting from either the non-payment by general contractors or from the
penalty clauses.
BACKLOG
-------
The Company's sales order backlog was $5.8 million as of May 3, 1996.
This compares to $3.5 million as of April 30, 1995 and $3.6 million as of
April 30, 1994. Approximately 40% of the May 3, 1996 sales order backlog is
with the U.S. Government. All of these orders are supported by signed
contracts. The Company expects to complete and invoice all of its May 3, 1996
sales order backlog prior to April 30, 1997.
Transact booked approximately $8,900,000 of orders in 1996. This
compares to approximately $7,900,000 of orders booked in 1995 and $6,500,000
of orders booked in 1994.
COMPETITION
-----------
There is no significant domestic competition in the area of terminal
equipment systems. Transact's primary competitors in this area are three
German firms of greater size and financial resources. Therefore, the
relationship of the United States dollar to the German Deutsche Mark affects
Transact's competitive position in obtaining new contracts. In the area of
ramp equipment, there are numerous domestic and international competitors,
some larger, some smaller than Transact. Transact competes primarily in the
area of product and systems design, technological change and price. In the
area of transfer balls there are a few domestic and international competitors,
some larger, some smaller than Transact. Transact competes primarily in the
area of product design and price.
PATENTS AND WARRANTIES
----------------------
Transact systems and equipment are not covered by patents. The
industry is one in which rapid technology advances result in frequent changes
to designs and concepts previously developed. These frequent changes provide
Transact's principal protection against competition from unauthorized use of
its designs and concepts.
Transact warrants the design, workmanship and material of its
terminal and ramp equipment for one year. Transact includes in its bid the
warranty work which it estimates will be required by each systems contract.
SEASONALITY
-----------
The demand for Transact systems and equipment is not subject to
seasonal change. Its sales volume, however, is directly affected by capital
expenditure budgets of the U.S. Government, the air cargo industry and the
overnight package delivery segment of such industry.
WORKING CAPITAL
---------------
For information relating to working capital, see Liquidity and
Capital Resources included in Item 6 herein entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations".
4
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS -- CONTINUED
RESEARCH AND DEVELOPMENT
------------------------
The cost of Company sponsored research and development was not
material in the last three years. Major research and development is
undertaken in connection with specific contracts for cargo handling systems
or equipment. The majority of the cost of research and development is
incorporated into the contract price. This practice enables the Company to
utilize the results of research and development conducted for, and paid for
by, specific customers in the overall improvement and updating of its
equipment.
ENVIRONMENTAL MATTERS AND REGULATIONS
-------------------------------------
Capital expenditures by the Company for environmental control in the
current year were not material, and the Company does not anticipate that such
expenditures will become material in the next two years. Compliance by the
Company with existing environmental laws and regulations has not had, and is
not anticipated to have, any material effect upon the capital expenditures,
earnings or competitive position of the Company in the next two years.
EMPLOYEES
---------
The Company has approximately 15 employees as of April 30, 1996.
ITEM 2. PROPERTIES
The Company does not own or invest in any real estate or office
facilities. The principal leased facilities of the Company are as follows:
Darien, Connecticut - Office space including the Company
headquarters located in a 4,725 square
foot facility leased by the Company. The
lease expires August 31, 1996.
Somerville, Tennessee - Manufacturing, warehousing and office space
located in a 8,350 square foot facility
leased by the Company. The lease expires
September 30, 2000.
Management believes that all properties are in satisfactory condition
and are adequate for existing and projected operations.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending or contemplated legal proceedings to
which the Company is a party or by which the Company or any of its property is
subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
last quarter of 1996.
5
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's stock is currently traded on the OTC Bulletin Board.
As of July 12, 1996 there were 6,123,235 shares of Common Stock outstanding,
held by approximately 2,100 stockholders of record. The over-the-counter
stock quotations below reflect inter-dealer prices without retail mark-up or
mark-down or commissions and may not necessarily represent actual
transactions. The Company has not paid dividends on its common stock during
the two most recent years and does not anticipate that any dividends will be
paid in the near future.
1996 1995
----------------- ------------------
BID PRICE BID PRICE
----------------- ------------------
High Low High Low
-------- ------ -------- -------
1st Quarter $ .18 $ .13 $ .30 $ .22
2nd Quarter $ .25 $ .16 $ .30 $ .10
3rd Quarter $ .22 $ .13 $ .21 $ .03
4th Quarter $ .13 $ .13 $ .25 $ .09
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
FIVE YEAR FINANCIAL SUMMARY
YEAR ENDED APRIL 30,
-------------------------------------------
1996 1995 1994 1993 1992
-------------------------------------------
(In thousands of dollars, except per share)
SUMMARY OF OPERATIONS :
Net sales $7,208 $ 8,086 $9,199 $5,766 $ 11,576
Net income (loss) $(791) $ (230) $ 450 $ 338 $(2,082)
Net income (loss)
per common share $(.13) $ (.04) $ .07 $ .06 $ (.34)
Cash dividends declared NONE None None None None
BALANCE SHEET DATA :
Total assets $2,178 $2,602 $2,693 $2,608 $ 3,396
Long-term debt including
current maturities $ 82 $ 185 $ 313 $ --- $ 6
Notes:
1. Results for 1994 include a charge of $212,500 for settlement of
litigation and a credit of $150,000 for the reversal of an
allowance for the collection of a note receivable.
2. Results for 1993 include a restructuring credit of $370,819,
which resulted from the gain on the sale of the Company's Memphis
facility.
3. Results for 1992 include a provision for future expenses of
$650,000 for the estimated cost associated with the disposal of
Memphis's inventory and severance pay.
6
<PAGE>
GENERAL DISCUSSION
Transact operates in one business segment which includes the design,
installation, manufacture and service of products and systems for handling air
cargo. These products and systems are sold to airlines, air express and
freight companies, airport authorities and the U.S. Air Force.
The Company subcontracts a significant portion of the production of
its systems and equipment to selected manufacturers within the industry
thereby shifting the risk of cost overruns associated with the manufacturing
process from the Company to the subcontractor and reducing the financial
impact of changes in workload. In addition, in many instances the payment
terms of the prime contract are passed on to the subcontractor. As a result,
the contract is, in effect, financed by the subcontractor and not the Company.
The Company's sales contracts are primarily the result of competitive
bids at fixed prices for specified equipment. At the time of bidding, the
Company provides for estimated cost increases for materials and subcontractors
based upon its past experience with similar contracts. However, increases in
costs which exceed those anticipated or provided in its bid adversely effect
gross profit.
The Company's present principal competitors for terminal projects are
German-based companies and in one case a U.S. subsidiary of a German based
company. Therefore, the relationship of the U.S. dollar to the German Mark
affects the Company's competitive position in obtaining new contracts. The
Company's principal competitors for ramp equipment and transfer balls are U.S.
businesses.
RESULTS OF OPERATIONS
SALES
Sales of air cargo handling systems are comprised of several large
contracts. Therefore it is not unusual for a few customers to account for a
significant percentage of net sales. The U.S. Air Force has been a
significant customer for the last three years, accounting for 28%, 24% and 55%
of net sales in 1996, 1995 and 1994, respectively. Federal Express
Corporation, a domestic commercial customer accounted for 21% in 1995 and 19%
of net sales in 1994. Export sales to the Far East accounted for 16%, 19%
and 12% of net sales in 1996, 1995 and 1994, respectively. It is anticipated
that sales to the U.S. Air Force and to the Far East will continue to
constitute a significant portion of the Company's sales in years to come.
Sales declined $.8 million in 1996, and $1.1 million in 1995 from
each of their respective prior year(s), after increasing significantly in 1994
from the depressed levels of 1993. In 1996, 1995 and 1994 sales included
approximately $2.0 million, $1.9 million and $5.1 million, respectively with
the U.S. Government and $1.1 million, $3.7 million and $2.7 million,
respectively in transfer balls and spare parts to various customers. The 1994
sales to the U.S. Government includes the substantial completion of a major
project at Norfolk Naval Air Station in Virginia. In 1995 a large order from
Federal Express Corporation for transfer balls was shipped.
7
<PAGE>
RESULTS OF OPERATIONS (CONTINUED)
GROSS PROFIT
Gross profits were 9% in 1996, 17% in 1995 and 25% for 1994. The
average gross profit reported for the five years from 1991 to 1996 was 16%.
The decrease in 1996 is due to cost overruns on the approximate $1.3 million
of ramp equipment sold in 1996 and on the American Airlines project
and the generally lower margins due to competitive conditions. The decrease
in 1995 gross profit is principally due to lower margins on the installation
of equipment at Travis Air Force Base in California and the quantity discount
in the selling price of transfer balls to Federal Express Corporation.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses decreased 11% in 1996 from 1995
and 10% in 1995 from 1994. In 1996 the reduction was primarily due to reduced
travel expenses and employee benefits including in 1996 the reversal of the
Company's discretionary contribution to the 401(K) that was accrued at April
30, 1995. During 1995 the Company took steps to reduce costs, including a
shorter work week and salary reductions for certain employees including in
1995 the salaries of two officers were reduced by approximately $130,000 as a
result of operating conditions. As a result, selling and administrative
expenses decreased compared to its preceding year. During 1994 most employees
worked full weeks at full salary.
OTHER INCOME (EXPENSE)
Other income and expense in 1994 includes a charge of $212,500 for
the settlement of litigation. The Company reached a settlement in connection
with litigation against the Company as guarantor of certain obligations of a
former subsidiary. The Company agreed to pay $212,500 over two years to the
plaintiff. In addition, other income (expense) in 1994 includes a credit of
$150,000 for the reversal of an allowance for the collection of a note
receivable.
SALES BACKLOG
The Company's sales order backlog was $5.8 million as of May 3, 1996.
This compares to $3.5 million as of April 30, 1995 and $3.6 million as of
April 30, 1994. Approximately 40% of the May 3, 1996 sales order backlog is
with the U.S. Government. All of these orders are supported by signed
contracts. The Company expects to complete and invoice all of its May 3, 1996
sales order backlog prior to April 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
In 1996 working capital decreased approximately $805,000 from 1995
resulting primarily from the net loss for the year. The Company has a $250,000
discretionary line of credit with a bank which it utilizes to finance short-
term cash requirements. $150,000 is outstanding at April 30, 1996 on the line
of credit which is due on demand and expires August 31, 1996. The Company
intends to seek to renew this line of credit. However, because of the
Company's losses for the last two years and its stockholders' deficiency at
April 30, 1996 there is no assurance that the Company will be successful in
renewing or replacing this line of credit at August 31, 1996. It is the
Company's practice to have its subcontractors subject to the same payment
terms as the Company has with its customer. Thus portions of the Company's
sales contracts are financed by its subcontractor and not the Company. The
Company does not anticipate any material capital expenditures for 1997.
8
<PAGE>
RESULTS OF OPERATIONS (CONTINUED)
The Company's ability to continue in business is dependent upon its
ability to return to profitability and/or the sale of certain product lines.
The Company believes that its backlog at May 3, 1996 of $5.8 million is
sufficiently profitable for the Company to meet its obligations at a minimum
through October 31, 1996, including paying its $150,000 bank borrowings. The
Company is seeking additional revenue and profits from additional projects and
the sale of ramp equipment and/or transfer balls to ensure its viability for
the long term. In addition management is exploring the sale or license of
certain product lines. While the future viability of the Company is uncertain
management is encouraged that the Company's products and services continue to
be in demand. However there is no assurance that the Company will be able to
meet its obligations during the next year.
INFLATION
In management's opinion, the impact of inflation for the three most
recent years is not significant to the financial statements as reported.
ITEM 7. FINANCIAL STATEMENTS
The following financial statements and financial statement schedule
of the Company, together with the report of independent auditors are included
herein:
(1) FINANCIAL STATEMENTS
--------------------
PAGE
----
Independent Auditors' Report 14
Balance Sheets--April 30, 1996 and 1995 15
Statements of Operations--Years ended
April 30, 1996, 1995 and 1994 16
Statements of Cash Flows--Years ended
April 30, 1996, 1995 and 1994 17
Notes to Financial Statements 18
(2) FINANCIAL STATEMENT SCHEDULE
----------------------------
Schedule II -- Valuation and Qualifying Accounts 23
All other schedules for which provision is made in applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and, therefore, have been
omitted.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
9
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH 16(a) OF THE EXCHANGE ACT
The Company's directors and officers, the principal occupation or
employment of each such person and the name and principal business of any
organization by which such person is employed, other than the Company, are as
follows: Frank B. Carder, Director and Chairman of the Board of the Company,
Bruno S. Frassetto, Director, President and Chief Executive Officer of the
Company, Axel Coelln, Director and Executive Vice President of the Company,
John E. McConnaughy, Jr., Director of the Company and Randall W. Sweeney,
Director of the Company and President of R. W. Sweeney & Associates, Inc., a
consulting firm for government contractors. Additional information required
by this item is incorporated by reference herein to the section entitled
"Information Concerning Directors, Executive Officers, Promoters and Control
Persons" contained in the Company's Proxy Statement related to its 1996 Annual
Meeting of Stockholders.
ITEM 10. EXECUTIVE COMPENSATION
The Company hereby incorporates by reference herein the information
with respect to executive compensation which is contained in the section
entitled "Executive Compensation" set forth in the Company's Proxy Statement
related to its 1996 Annual Meeting of Stockholders.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company hereby incorporates by reference herein the information
with respect to security ownership of certain beneficial owners and management
from the section entitled "Security Ownership of Certain Beneficial Owners and
Management" set forth in the Company's Proxy Statement related to its 1996
Annual Meeting of Stockholders.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company hereby incorporates by reference herein the information
with respect to certain relationships and related transactions which is
contained in the section entitled "Other Information Concerning Directors and
Executive Officers" set forth in the Company's Proxy Statement related to its
1996 Annual Meeting of Stockholders.
10
<PAGE>
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) (3) The exhibits filed with this report pursuant to Item 601
of Regulation S-B are as follows:
3(i) Amended and Restated Certificate of Incorporation of
Transact International Inc. (10/19/83). This exhibit is
incorporated by reference to Exhibits 3.1 and 3.2 to the
Company's Annual Report on Form 10-K for the fiscal year
ended April 30, 1987 Commission File No. 0-8422 (the "1987
10-K").
3(ii) The By-Laws of Transact International Inc. (formerly Gram
Industries Inc.). This exhibit is incorporated by
reference to Exhibit 3.3 to the 1987 10-K.
10.1 The 1978 Employee's Stock Option Plan. This exhibit is
incorporated by reference to Exhibit 10.1 to the 1987 10-K.
10.2 Transact International Inc. 401(k) Profit Sharing Plan.
This exhibit is incorporated by reference to Exhibit 3.1 to
the Company's Annual Report on Form 10-K for the fiscal
year ended April 30, 1992 Commission File No. 0-8422 (the
"1992 10-K").
10.3 Transact International Inc. Money Purchase Pension Plan.
This exhibit is incorporated by reference to Exhibit 10.3
to the 1992 10-K.
10.4 Transact Employment Agreement, dated as of August 1, 1991
between Transact International Inc. and Frank B. Carder.
This exhibit is incorporated by reference to Exhibit 10.4
to the Company's Annual Report on Form 10-KSB for the
fiscal year ended April 30, 1995, Commission File No. 0-
8422 (the "1995 10-KSB").
10.5 Transact Employment Agreement, dated as of August 1, 1991
between Transact International Inc. and Bruno S. Frassetto.
This exhibit is incorporated by reference to Exhibit 10.5
to the Company's 1995 10-KSB.
10.6 Transact Employment Agreement, dated as of June 24, 1991
between Transact International Inc. and Axel Coelln. This
exhibit is incorporated by reference to Exhibit 10.6 to the
Company's 1995 10-KSB.
27. Financial Data Schedule.
(b) No reports on Form 8-K were filed during the fourth quarter of
the Company's most recent year.
11
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
TRANSACT INTERNATIONAL INC.
Date: July 22, 1996 By: /s/ BRUNO S. FRASSETTO
--------------------------------
Bruno S. Frassetto
President
12
<PAGE>
In accordance with the Securities Exchange Act of 1934, this Report
on Form 10-KSB has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated:
Date: July 22, 1996 /s/ FRANK B. CARDER
-------------------------------------
Frank B. Carder
Director, Chairman of the Board
Date: July 22, 1996 /s/ BRUNO FRASSETTO
-------------------------------------
Bruno S. Frassetto
Director, President
Date: July 22, 1996 /s/ AXEL COELLN
-------------------------------------
Axel Coelln
Director, Executive Vice President
(Principal Financial and Accounting
Officer)
Date: July 22, 1996
-------------------------------------
John E. McConnaughy, Jr.
Director
Date: July 22, 1996 /s/ RANDALL W. SWEENEY
-------------------------------------
Randall W. Sweeney
Director
13
<PAGE>
In accordance with the Securities Exchange Act of 1934, this Report
on Form 10-KSB has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated:
Date: July 22, 1996
-------------------------------------
Frank B. Carder
Director, Chairman of the Board
Date: July 22, 1996
-------------------------------------
Bruno S. Frassetto
Director, President
Date: July 22, 1996
-------------------------------------
Axel Coelln
Director, Executive Vice President
(Principal Financial and Accounting
Officer)
Date: July 22, 1996 /s/ JOHN E. MCCONNAUGHY, JR.
-------------------------------------
John E. McConnaughy, Jr.
Director
Date: July 22, 1996
-------------------------------------
Randall W. Sweeney
Director
13a
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Transact International Inc.
Darien, Connecticut
We have audited the accompanying consolidated balance sheets of Transact
International Inc. (the "Company") as of April 30, 1996 and 1995, and the
related statements of operations, and cash flows for each of the three years
in the period ended April 30, 1996. Our audits also included the financial
statement schedule listed in the index at Item 7. These financial statements
and financial statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Transact International Inc. as of April
30, 1996 and 1995, and the results of its operations and its cash flows for
each of the three years in the period ended April 30, 1996 in conformity with
generally accepted accounting principles. Also, in our opinion, such
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
The accompanying financial statements have been prepared assuming that
Transact International Inc. will continue as a going concern. As discussed in
Note 1 to the Financial Statements, the Company has a stockholders' deficiency
and working capital deficiency of $187,728 and $252,107, respectively, at
April 30, 1996 and has incurred losses for each of the two years in the period
ended April 30, 1996. These items raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note 1. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ DELOTTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Stamford, Connecticut
July 12, 1996
14
<PAGE>
TRANSACT INTERNATIONAL INC.
BALANCE SHEETS
APRIL 30,
------------------------
1996 1995
---------- ----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 287,986 $ 140,950
Accounts receivable, net of
allowance for doubtful
accounts of $92,000 and $40,000,
respectively 1,021,320 1,809,440
Inventories 406,750 325,428
Costs and estimated earnings in excess
of billings on incomplete contracts 329,063 135,710
Prepaid expenses and other current assets 68,263 90,873
---------- ----------
TOTAL CURRENT ASSETS 2,113,382 2,502,401
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, AT COST 277,727 282,715
Less accumulated depreciation 215,648 (220,489)
---------- ----------
62,079 62,226
OTHER ASSETS 2,300 37,688
---------- ----------
$2,177,761 $2,602,315
========== ==========
LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 150,000 $ ---
Accounts payable 1,555,119 649,894
Accrued expenses 368,311 510,881
Current portion of long-term debt 82,352 135,137
Billings in excess of costs and
estimated earnings on
incomplete contracts 209,707 653,317
---------- ----------
TOTAL CURRENT LIABILITIES 2,365,489 1,949,229
LONG-TERM DEBT --- 49,770
---------- ----------
TOTAL LIABILITIES 2,365,489 1,998,999
---------- ----------
STOCKHOLDERS' (DEFICIENCY) EQUITY
Preferred stock, no par value,
authorized 2,000,000 shares,
none issued --- ---
Common stock, no par value, authorized
12,000,000 shares, issued 6,201,735
shares 852,541 852,541
Additional paid-in capital 5,224,726 5,224,726
Treasury stock, at cost : 78,500 shares (29,606) (29,606)
Deficit (6,235,389) (5,444,345)
---------- ----------
TOTAL STOCKHOLDERS'
(DEFICIENCY) EQUITY (187,728) 603,316
---------- ----------
$2,177,761 $2,602,315
========== ==========
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
TRANSACT INTERNATIONAL INC.
STATEMENTS OF OPERATIONS
YEAR ENDED APRIL 30,
---------------------------------------
1996 1995 1994
----------- ---------- ----------
NET SALES $ 7,208,015 $8,085,947 $9,198,959
----------- ---------- ----------
COSTS AND EXPENSES
Cost of sales 6,570,860 6,715,517 6,919,473
Selling and administrative 1,425,911 1,604,646 1,777,258
----------- ---------- ----------
7,996,771 8,320,163 8,696,731
----------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS (788,756) (234,216) 502,228
----------- ---------- ----------
OTHER INCOME (EXPENSE)
Interest expense (19,271) (23,161) (9,261)
Other income (expense) 16,983 27,588 (42,688)
----------- ---------- ----------
(2,288) 4,427 (51,949)
----------- ---------- ----------
NET INCOME (LOSS) $(791,044) $(229,789) $ 450,279
----------- ---------- ----------
NET INCOME (LOSS) PER SHARE OF
COMMON STOCK $ (.13) $ (.04) $ .07
=========== ========== ==========
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
TRANSACT INTERNATIONAL INC.
STATEMENTS OF CASH FLOWS
YEAR ENDED APRIL 30,
---------------------------------------
1996 1995 1994
----------- ---------- ----------
OPERATING ACTIVITIES:
Net income (loss) $ (791,044) $ (229,789) $ 450,279
Adjustments to reconcile net
income (loss) to cash from
operations :
Depreciation of property,
plant and equipment 40,794 37,421 35,798
Amortization and write-off
of intangibles --- --- 14,968
Loss on sale of property, plant
and equipment --- --- 3,986
Increase (decrease) in allowance
for note and accounts receivable 52,000 10,000 (170,000)
Cost of litigation settlement --- --- 212,500
Common stock issued for services --- 3,000 ---
Changes in assets and liabilities :
(Increase) decrease in accounts
receivable 736,120 (550,191) 93,487
(Increase) decrease in inventories (81,322) (108,984) 88,988
(Increase) decrease in other
current assets 970 10,004 (16,324)
(Increase) decrease in costs and
estimated earnings in excess of
billings on incomplete
contracts - net (636,963) 1,355,369 (336,135)
(Increase) in other assets (300) --- ---
Increase (decrease) in accounts
payable and accrued expenses 762,655 (172,639) (602,103)
----------- ---------- ----------
NET CASH PROVIDED BY (USED IN)
OPERATIONS 82,910 354,191 (224,556)
----------- ---------- ----------
INVESTING ACTIVITIES:
Capital expenditures (40,647) (43,892) (40,837)
Proceeds from the sale of property,
plant and equipment --- --- 6,600
equipment
Repayment of note receivable 57,328 52,986 80,340
----------- ---------- ----------
NET CASH PROVIDED BY INVESTING
ACTIVITIES 16,681 9,094 46,103
----------- ---------- ----------
FINANCING ACTIVITIES:
Proceeds from short-term borrowings 150,000 --- 100,000
Repayment of short-term borrowings --- (100,000) ---
Repayment of debt (102,555) (127,868) (52,058)
----------- ---------- ----------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 47,445 (227,868) 47,942
----------- ---------- ----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 147,036 135,417 (130,511)
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 140,950 5,533 136,044
----------- ---------- ----------
CASH AND CASH EQUIVALENTS, END
OF YEAR $ 287,987 $ 140,950 $ 5,533
=========== ========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 19,271 $ 25,315 $ 9,261
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- BASIS OF PRESENTATION
The accompanying financial statements have been prepared
assuming that Transact International Inc. (the "Company") will continue
as a going concern. The Company's ability to continue as a going concern
is uncertain based on the matters discussed below. The financial
statements do not include any adjustments relating to the recoverability
and classification of assets or the amounts of liabilities that might be
necessary should the Company be unable to continue as a going concern.
The Company's continuation as a going concern is dependant upon its
ability to return to profitability and/or sell certain product lines to
generate sufficient cash flow to meet its obligations on a timely basis.
The Company has a stockholders deficiency and working capital
deficiency of $187,728 and $252,107, respectively, at April 30, 1996 and
has incurred losses for each of the two years in the period ended April
30, 1996. In addition, the Company's bank line of credit expires on
August 31, 1996. However, the Company believes that its backlog at May
3, 1996 of $5.8 million is sufficiently profitable for the Company to
meet its obligations at a minimum through October 31, 1996 including
paying its $150,000 outstanding bank borrowings. The Company is
presently seeking additional orders and is exploring the sale of certain
product lines that would enable the Company to continue as a going
concern. However, there is no assurance that the Company will be
successful in attaining additional profitable orders or in selling
certain product lines.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION :
The Company utilizes the percentage of completion method of
accounting measured by the percentage of cost incurred to date to
estimated total cost of each contract to record income on incomplete
contracts. Whenever it is estimated that a loss will be incurred on a
contract, the entire amount of the estimated loss is recognized. All
other revenue is recorded upon shipment of the product or providing the
service.
INVENTORIES :
Inventories are stated at the lower of cost or market. Cost is
determined on a first in, first out basis. Inventories consist of raw
materials and manufacturing supplies.
PLANT AND EQUIPMENT :
Depreciation on plant and equipment is provided by the straight-
line method based on the estimated useful lives of the assets, ranging
from 3 to 20 years.
PER SHARE DATA :
Amounts per share have been computed using the weighted average
number of common shares outstanding during each year (6,123,235 in 1996,
6,093,810 in 1995 and 6,093,235 in 1994). No effect has been given to
shares issuable pursuant to outstanding options as their effect would be
anti-dilutive.
INCOME TAXES :
The Company's deferred tax provision is determined under the
liability method. Under this method, deferred tax assets and liabilities
are recognized based on differences between the financial statement
carrying amount and the tax basis of assets and liabilities using
presently enacted tax rates.
18
<PAGE>
CONCENTRATIONS OF CREDIT RISK :
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of trade receivables.
The Company's customers are concentrated in the aviation industry. The U.
S. Government accounted for 28% in 1996, 24% in 1995 and 55% in 1994 of
net sales. TianDa Airport Support Ltd, a foreign commercial customer,
accounted for 16% in 1996 and 12% in 1995 of net sales. American
Airlines, a domestic commercial customer, accounted for 13% in 1996 of
net sales. Federal Express Corporation, a domestic commercial customer
accounted for 21% in 1995 and 19% in 1994 of net sales. The Company
routinely assesses the financial strength of its customers and as a
consequence, believes that its trade accounts receivable credit risk
exposure is limited.
DISCLOSURE OF FAIR VALUE OF FINANCIAL INSTRUMENTS :
The carrying amounts reported in the balance sheets for cash and
cash equivalents, accounts receivable, accounts payable and accrued
expenses approximate their fair value because of the immediate or short-
term maturity of these financial instruments. The Company's line of
credit is short-term and bears interest at 1% over the bank's prime
lending rate and therefore approximates fair value.
ACCOUNTS RECEIVABLE :
Accounts receivable include amounts currently due from customers
and does not include any amounts billed but not paid by customers under
retainage provisions in contracts. At April 30, 1996 and 1995, accounts
receivable included $10,000 and $45,000 respectively due from an officer/
stockholder. The $10,000 balance is to be repaid in fiscal 1997.
MANAGEMENT ESTIMATES:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenue
and expenses during the reporting periods. Actual results could differ
from those estimates.
NOTE 3 -- COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON
INCOMPLETE CONTRACTS
The terms for billing contracts vary from contract to contract.
Billings are based on either a percentage of completion, costs incurred
or specific milestone payments. Costs and estimated earnings in excess
of billings on incomplete contracts (net asset and liability) as of April
30, 1996 and 1995 are as follows:
1996 1995
---------- -----------
Costs incurred on incomplete contracts $7,866,907 $ 9,709,696
Estimated earnings 1,360,422 2,400,885
---------- -----------
9,227,329 12,110,581
Less : billings to date 9,107,973 12,628,188
---------- -----------
$ 119,356 $ (517,607)
========== ===========
The Company expects to complete the projects in process at April
30, 1996 within one year.
19
<PAGE>
NOTE 4 -- PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at April 30, 1996 and 1995
consists of :
1996 1995
--------- ----------
Machinery and equipment $ 55,708 $ 22,408
Furniture and fixtures 222,019 260,307
--------- ----------
$ 277,727 $ 282,715
========= ==========
NOTE 5 -- SHORT-TERM BORROWINGS
The Company has a short-term discretionary line of credit of
$250,000 with a bank. This discretionary line of credit is due on demand
and expires August 31, 1996. As of April 30, 1996 there was $150,000
outstanding balance on the line of credit and $79,000 outstanding in
letters of credit as collateral for bids on prospective projects which
the Company does not believe will be drawn upon.
Borrowings under this agreement bear interest at 1% over the
bank's prime lending rate (9 1/4 % at April 30, 1996). The average
borrowings during fiscal 1996 was $92,760 at an interest rate of 9.6%
the Company's assets are pledged as collateral for these borrowings.
NOTE 6 -- ACCRUED EXPENSES
Accrued expenses at April 30, 1996 and 1995 consists of:
1996 1994
-------- --------
Compensation, vacation and severance $144,278 $109,965
Contract retainage 35,846 154,847
Retirement plans 70,000 90,000
Warranty 10,000 9,900
Other 108,187 146,169
-------- --------
$368,311 $510,881
======== ========
NOTE 7 -- LEASES
The Company leases certain facilities, furniture and automobiles
under noncancelable operating leases. the following is a schedule of the
future minimum rental commitments on such leases at April 30, 1996:
1997 $71,000
1998 thru 2000 (each year) 27,600
Rent expense was $176,037 in 1996, $176,382 in 1995 and $181,662 in
1994.
NOTE 8 -- LONG-TERM DEBT
At April 30, 1996, the current portion of long-term debt includes
$16,137 related to a litigation settlement (see Note 10 for further details)
and $66,215 payable to the U.S. Air Force. The $16,137 related to the
litigation settlement is to be paid in monthly installments with interest on
the unpaid balance at 9.5% per annum, with final payment in June, 1996.
The amount due the U.S. Air Force relates to an overpayment by the
Air Force on a contract in 1993. This liability is being paid monthly over
four years and bears interest as fixed by the Secretary of the Treasury,
pursuant to Public Law 95-563, with final payment in April 1997. The interest
rate at April 30, 1996 was 5.875%.
20
<PAGE>
NOTE 9 -- STOCKHOLDERS' (DEFICIENCY) EQUITY AND STOCK OPTIONS
In April 1995, the Company issued 30,000 shares of common stock to
its three outside directors as additional compensation ($3,000) for their
services as directors of the Company for 1995. Net income (loss) during the
three years ended April 30, 1996 was the only other change in Stockholders'
(Deficiency) Equity.
The Company's 1978 Employee's Incentive Stock Option Plan ("1978
Plan") provides that options may be granted to acquire a maximum of 100,000
shares of the Common Stock at not less than 85% of market price on the date of
grant.
There has been no change to the options outstanding and exercisable
during the past three years. At April 30, 1996, there were 22,000 options
outstanding and exercisable, with an option price of $1.50 per share. Options
become exercisable cumulatively at a rate of 33 1/3 % per year commencing two
years from the date of grant. There are 78,000 options subject to future
grant and all options expire 10 years from the date of grant.
In October 1995, the Financial Accounting Standards Board issued
Statement Of Financial Accounting Standards (SFAS) No. 123, "Accounting For
Stock-Based Compensation," which will be effective for the Company beginning
January 1, 1996. SFAS No. 123 requires expanded disclosures of stock-based
compensation arrangements with employees and encourages (but does not require)
compensation cost to be measured based on the fair value of the equity
instrument awarded. Companies are permitted, however, to continue to apply
APB Opinion No. 25, which recognizes compensation cost based on the intrinsic
value of the equity instrument awarded. The Company will continue to apply
APB Opinion No. 25 to its stock based compensation awards to employees and
will disclose the required pro forma effect on net income and earnings per
share.
The salary of one officer was deferred for future payment by $70,000
in 1996 as a result of the Company's cash flow conditions and salaries of two
officers were reduced by approximately $65,000 and $130,000 in 1996 and 1995,
respectively, as a result of operating conditions.
NOTE 10 -- LITIGATION
During 1994, the Company reached a settlement in connection with
litigation against the Company as guarantor of certain obligations of a former
subsidiary. The Company agreed to pay $212,500 over two years to the
plaintiff. This charge is included in other expenses in 1994.
NOTE 11 -- EMPLOYEE RETIREMENT PLANS
The Company has a 401(k) Profit Sharing Plan and a Money Purchase
Plan. Employee participation in the 401(k) Profit Sharing Plan is voluntary.
Under the provisions of the 401(k) Plan, employees may defer up to 19% of
their annual compensation. Under the provisions of the Money Purchase Plan,
the Company must contribute an amount equal to 3% of the employee's
compensation. For the year ended april 30, 1995 the Company accrued a matching
discretionary contribution of 50% of the employee's 401(k) contributions, with
a cap of 3% of the employee's compensation. However, in fiscal 1996, due to
the Company's losses, the Company decided not to contribute the discretionary
amount applicable to the 401(k), previously accrued at April 30, 1995 and
decided to discontinue such matching until business conditions improve. As a
result, pension expense was ($17,269) in 1996, $75,911 in 1995 and $68,516 in
1994.
Effective June 1, 1996, the Company froze its Money Purchase Plan.
This action eliminates any future liability of the Company in respect to the
Plan while the Plan is frozen. This action does not constitute an effective
termination of the Plan.
21
<PAGE>
NOTE 12 -- BUSINESS SEGMENT INFORMATION
The Company operates in one business segment, the sale, design,
manufacture and installation of air cargo materials handling systems and
equipment.
Sales to the U.S. Government were $1,990,000 in 1996, $1,913,000 in
1995, and $5,065,000 in 1994. All of the Company's operations are in the
United States. Export sales to the Far East accounted for 16%, 19%, and 12%
of net sales in 1996, 1995 and 1994, respectively.
NOTE 13 -- INCOME TAXES
There is no benefit for income taxes in 1996 or 1995 as the tax
losses generated in those years cannot be carried back to offset income in
prior years. There was no provision for income taxes in 1994, as the Company
utilized its available operating loss carryovers.
The tax effects of temporary differences giving rise to the Company's
deferred tax assets are as follows :
April 30,
--------------------------
1996 1995
---------- ----------
Net operating loss carryforward $2,263,000 $2,030,000
Investment tax credit carryforward 104,000 104,000
Other reserves and liabilities 128,000 117,000
---------- ----------
2,495,000 2,251,000
Valuation allowance 2,495,000 2,251,000
---------- ----------
$ -- $ --
========== ==========
Due to the Company's cumulative losses, management does not consider that
enough support to overcome the "more likely than not" criteria exists to
record a deferred tax asset. As a result, for financial reporting purposes,
deferred tax assets are reduced by a valuation allowance.
At April 30, 1996, the Company has operating loss carryovers and investment
tax credit carryforwards for tax return purposes of approximately $6,100,000
and $104,000 respectively, expiring in 1997 through 2010.
22
<PAGE>
TRANSACT INTERNATIONAL INC.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
Years Ended April 30, 1996, 1995, and 1994
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
------ ------ ------ ------ ------
ADDITIONS
-----------------------
(1) (2)
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS -- DEDUCTIONS-- OF PERIOD
----------- ---------- ---------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
Year ended April 30, 1996 $ 40,000 $ 52,000 $92,000
Year ended April 30, 1995 $ 30,000 $ 10,000 $40,000
Year ended April 30, 1994 $ 50,000 $ (20,000) $30,000
ALLOWANCE FOR UNCOLLECTABILITY ON NOTES RECEIVABLE:
Year ended April 30, 1996 $ -0- $ -0-
Year ended April 30, 1995 $ -0- $ -0-
Year ended April 30, 1994 $150,000 $(150,000)(a) $ -0-
</TABLE>
(a) This represents an allowance for uncollectability for a portion of the
balance of a note receivable in connection with the 1990 sale of the
Company's Contract Services Division. The allowance was established in
1992 and reversed in 1994.
23
<PAGE>
TRANSACT INTERNATIONAL INC.
FORM 10-KSB
EXHIBIT LIST
3(i) Amended and Restated Certificate of Incorporation of Transact
International Inc. (10/19/83). This exhibit is incorporated by
reference to Exhibits 3.1 and 3.2 to the Company's Annual Report on
Form 10-K for the fiscal year ended April 30, 1987 Commission File
No. 0-8422 (the "1987 10-K").
3(ii) The By-Laws of Transact International Inc. (formerly Gram Industries
Inc.). This exhibit is incorporated by reference to Exhibit 3.3 of
the 1987 10-K.
10.1 The 1978 Employee's Stock Option Plan. This exhibit is incorporated
by reference to Exhibit 10.1 to the 1987 10-K.
10.2 Transact International Inc. 401(k) Profit Sharing Plan. This
exhibit is incorporated by reference to Exhibit 3.1 to the Company's
Annual Report on Form 10-K for the fiscal year ended April 30, 1992
Commission File No. 0-8422 (the "1992 10-K").
10.3 Transact International Inc. Money Purchase Pension Plan. This
exhibit is incorporated by reference to Exhibit 10.3 to the 1992
10-K.
10.4 Transact Employment Agreement, dated as of August 1, 1991 between
Transact International Inc. and Frank B. Carder. This exhibit is
incorporated by reference to Exhibit 10.4 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended April 30, 1995,
Commission File No. 0-8422 (the "1995 10-KSB").
10.5 Transact Employment Agreement, dated as of August 1, 1991 between
Transact International Inc. and Bruno S. Frassetto. This exhibit
is incorporated by reference to Exhibit 10.5 to the Company's 1995
10-KSB.
10.6 Transact Employment Agreement, dated as of June 24, 1991 between
Transact International Inc. and Axel Coelln. This exhibit is
incorporated by reference to Exhibit 10.6 to the Company's 1995
10-KSB.
27. Financial Data Schedule.
24
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
<CASH> 288
<SECURITIES> 0
<RECEIVABLES> 1,113
<ALLOWANCES> 92
<INVENTORY> 406
<CURRENT-ASSETS> 2,113
<PP&E> 278
<DEPRECIATION> 216
<TOTAL-ASSETS> 2,178
<CURRENT-LIABILITIES> 2,365
<BONDS> 0
0
0
<COMMON> 853
<OTHER-SE> (1,041)
<TOTAL-LIABILITY-AND-EQUITY> 2,178
<SALES> 7,208
<TOTAL-REVENUES> 7,208
<CGS> 6,571
<TOTAL-COSTS> 6,571
<OTHER-EXPENSES> 1,374
<LOSS-PROVISION> 52
<INTEREST-EXPENSE> 19
<INCOME-PRETAX> (791)
<INCOME-TAX> 0
<INCOME-CONTINUING> (791)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (791)
<EPS-PRIMARY> (.13)
<EPS-DILUTED> (.13)
</TABLE>
