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, 1997
[ ] 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.
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(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)
22 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, 1997 were $7,252,035.
The aggregate market value of the voting and non-voting stock held by
non-affiliates of the registrant at July 7, 1997 was $643,676.
The number of shares outstanding of the registrant's common stock at
July 7, 1997 was 6,123,235.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information from Transact International Inc.'s (i) Proxy Statement
for the Annual Meeting of Stockholders to be held on October 8, 1997 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).
Transitional Small Business Disclosure Format. YES NO X
--- ---
<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. 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.
(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. In 1997 three customers accounted for 32% (United Parcel Service),
29% (U.S. Government) and 18% (Agricultural and Processed Food Products Export
Development Authority ["Apeda"]), respectively, of net sales. 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.
Sales to the U.S. Government were $2,099,000 in 1997, $1,990,000 in
1996, and $1,913,000 in 1995. All of the Company's operations are in the
United States. Export sales to the Far East accounted for 20%, 16%, and 19%,
of net sales in 1997, 1996 and 1995, 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. Transact terminal equipment systems have been installed in more than
60 locations. Terminal equipment accounted for approximately 67% of Transact's
net sales in 1997.
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. No ramp equipment was sold in
1997.
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 32% of Transact's net sales in 1997.
2
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS -- CONTINUED
PRINCIPAL PRODUCTS AND SERVICES -- CONTINUED
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. These services have enabled Transact to gain access to
customers at the planning stage for future systems projects. During 1997 the
consulting and engineering services accounted for less than 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, 1997 are 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 55% of its cost of sales in 1997. The Company obtains bids from
qualified bidders and determines who will be awarded 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
large number of sources. The Company has not experienced any unusual
difficulties in obtaining the raw materials necessary to manufacture its
products.
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, Transact 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 the Company
agree on the final termination settlement. As of April 30, 1997 the Company's
backlog with the U.S. Air Force was approximately $200,000. 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.
3
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ITEM 1. DESCRIPTION OF BUSINESS -- CONTINUED
BACKLOG
The Company's sales order backlog was $3.1 million as of April 30,
1997. This compares to $5.8 million as of May 3, 1996 and $3.5 million as of
April 30, 1995. All of these orders are supported by signed contracts. The
Company expects to complete and invoice all of its April 30, 1997 sales order
backlog prior to April 30, 1998.
Transact booked approximately $5,700,000 of orders in 1997. This
compares to approximately $8,900,000 of orders booked in 1996 and $7,900,000 of
orders booked in 1995.
COMPETITION
Transact's primary competitors in terminal equipment systems are
three German firms and the U.S. subsidiary of one of these German firms, all of
which are greater in size and financial resources than Transact. 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 technological advances result in frequent
changes to designs and concepts. 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. Transact's 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 7 herein entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations."
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.
4
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TRANSACT INTERNATIONAL INC.
ITEM 1. DESCRIPTION OF BUSINESS -- CONTINUED
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 in the next two years to have, any material effect upon the
capital expenditures, earnings or competitive position of the Company.
EMPLOYEES
The Company has approximately 15 employees as of April 30, 1997.
GOVERNMENTAL APPROVAL/REGULATIONS
The Company is not required to obtain, and is not awaiting, any
governmental approval for the manufacture and sale of any of its products. The
Company does not believe that any existing or probable governmental regulations
have or will have any material effect on the Company.
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 3,312 square
foot facility leased by the Company. The
lease expires September 30, 1999.
Somerville, Tennessee - Manufacturing 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 1997.
5
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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 7, 1997 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 were obtained through the Internet by accessing America On
Line and retrieving historical stock price quotes from the Prophet Information
Service, Inc. ([email protected]) database. Such quotations 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.
1997 1996
---------------- ----------------
High Low High Low
---- ---- ---- ----
1st Quarter $.28 $.06 $.18 $.13
2nd Quarter $.22 $.06 $.25 $.16
3rd Quarter $.25 $.06 $.22 $.13
4th Quarter $.34 $.09 $.13 $.13
ITEM 6. FIVE YEAR FINANCIAL SUMMARY
Year ended April 30,
--------------------------------------------
1997 1996 1995 1994 1993
--------------------------------------------
(In thousands of dollars, except per share)
SUMMARY OF OPERATIONS :
Net sales $7,252 $7,208 $8,086 $9,199 $5,766
Net (loss) income $(209) $ (791) $ (230) $ 450 $ 338
Net (loss) income per
common share $(.03) $ (.13) $ (.04) $ .07 $ .06
Cash dividends declared None None None None None
BALANCE SHEET DATA :
Total assets $1,400 $2,178 $2,602 $2,693 $2,608
Long-term debt including
current maturities $ 47 $ 82 $ 185 $ 313 $ ---
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.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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.
6
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS -- CONTINUED
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 29%, 28% and 24% of net
sales in 1997, 1996 and 1995, respectively. United Parcel Service, a domestic
commercial customer accounted for 32% of 1997 sales and Apeda, a customer in
India, accounted for 18% of 1997 sales. Federal Express Corporation, a
domestic commercial customer, accounted for 21% of 1995's sales. Export
sales to the Far East accounted for 20%, 16% and 19% of net sales in 1997,
1996 and 1995, respectively. It is anticipated that sales to the Far East
will continue to constitute a significant portion of the Company's sales in
years to come. However, sales to the U.S. Air Force for the next one to three
years is anticipated to be greatly reduced because of a decrease in spending
by the U.S. Air Force for air cargo handling equipment.
Sales by product type for each of the three years ended April 30,
1997 were approximately as follows:
1997 1996 1995
------------------------------------------------
Project Revenue $4.8 million $6.1 million $4.3 million
Transfer Balls and
Spare Parts 2.4 million 1.0 million 3.6 million
Other .1 million .1 million .1 million
------------------------------------------------
Total $7.3 million $7.2 million $8.0 million
================================================
Project revenue in 1996 included approximately $1.3 million of
mobile equipment while 1995 and 1997 each has less than $.3 million of mobile
equipment revenues. Large orders for transfer balls were shipped in 1997 and
1995.
7
<PAGE>
RESULTS OF OPERATIONS (CONTINUED)
GROSS PROFIT
Gross profits were 14% in 1997, 9% in 1996 and 17% in 1995. The
increase in 1997 is because of the increased sales of transfer balls, which
have higher gross profit margins than project revenues, and the absence of
the large cost overruns incurred in 1996 described in the following sentence.
The decrease in 1996 was due to cost overruns on the approximate $1.3 million
of ramp equipment sold in 1996 on the American Airlines project, and the
generally lower margins in 1996 compared to 1995 due to competitive conditions.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses decreased 16% in 1997 from 1996
and 11% in 1996 from 1995. In 1997 the decrease was primarily due to reduced
officers compensation costs resulting from the retiring of one officer. In
1996, the reduction was primarily due to reduced travel expenses and employee
benefits, including in 1996, the elimination of the Company's discretionary
contribution to the 401(k) plan that was accrued at April 30, 1995. The
Company has taken steps to reduce costs, including a shorter work week and
salary reductions for certain employees and officers as a result of operating
conditions.
SALES BACKLOG
The Company's sales order backlog was $3.1 million as of April 30,
1997. This compares to $5.8 million as of May 3, 1996 and $3.5 million as
of April 30, 1995. All of these orders are supported by signed contracts.
The Company expects to complete and invoice all of its April 30, 1997 sales
order backlog prior to April 30, 1998.
LIQUIDITY AND CAPITAL RESOURCES
In 1997 the working capital deficiency increased $187,003 resulting
primarily from the net loss for the year. The Company is in default of its
agreement with its bank and therefore the entire bank loan payable at April
30, 1997 of $131,250 is due on demand. The Company is continuing to pay the
bank the monthly principal installments of $6,250. The Company will be
discussing a continuation of these monthly payments with the bank. However,
there is no assurance that the bank will agree to postpone demanding payment
of the loan. 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
1998.
The Company is presently seeking additional orders and is exploring
the sale or license of certain or all 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 arranging a satisfactory payment schedule
with its bank or in attaining additional profitable orders or in selling or
licensing any product lines. Therefore, 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.
8
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ITEM 8. 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, 1997 and 1996 15
Statements of Operations--Years ended
April 30, 1997, 1996 and 1995 16
Statements of Cash Flows--Years ended
April 30, 1997, 1996 and 1995 17
Notes to Financial Statements 18
(2) FINANCIAL STATEMENT SCHEDULE
Schedule II -- Valuation and Qualifying Accounts 24
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 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
9
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 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, 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 1997 Annual Meeting of Stockholders.
ITEM 11. 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 1997 Annual Meeting of Stockholders.
ITEM 12. 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 1997
Annual Meeting of Stockholders.
ITEM 13. 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 1997 Annual Meeting of Stockholders.
10
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ITEM 14. 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
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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.
/s/ Bruno S. Frassetto
Date: July 21, 1997 By:------------------------------------
Bruno S. Frassetto
President and Principal Financial
and Accounting Officer
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 21, 1997 /s/ Frank B. Carder
---------------------------------------
Frank B. Carder
Director, Chairman of the Board
Date: July 21, 1997 /s/ Bruno S. Frassetto
---------------------------------------
Bruno S. Frassetto
Director, President
Date: July 21, 1997 /s/ John E. McConnaughy, Jr.
---------------------------------------
John E. McConnaughy, Jr.
Director
Date: July 21, 1997 /s/ Randall W. Sweeney
---------------------------------------
Randall W. Sweeney
Director
13
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Transact International Inc.
Darien, Connecticut
We have audited the accompanying balance sheets of Transact International
Inc. (the "Company") as of April 30, 1997 and 1996, and the related statements
of operations, and cash flows for each of the three years in the period ended
April 30, 1997. Our audits also included the financial statement schedule
listed in the index at Item 8. 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, 1997 and 1996, and the results of its operations and its cash flows for
each of the three years in the period ended April 30, 1997 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 $396,528 and $439,110,
respectively, at April 30, 1997 and has incurred losses for each of the
three years in the period ended April 30, 1997. 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/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Stamford, Connecticut
July 11, 1997
14
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Transact International Inc.
BALANCE SHEETS
April 30,
-----------------------
1997 1996
---------- ----------
ASSETS
CURRENT ASSETS
Cash $ 85,370 $ 287,986
Accounts receivable, net of allowance
for doubtful accounts of $43,000 and
$92,000, respectively 459,265 1,021,320
Inventories 311,969 406,750
Costs and estimated earnings in excess of
billings on incomplete contracts 483,180 329,063
Prepaid expenses and other current assets 17,952 68,263
---------- ----------
TOTAL CURRENT ASSETS 1,357,736 2,113,382
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, AT COST 292,575 277,727
Less accumulated depreciation 252,293 215,648
---------- ----------
40,282 62,079
OTHER ASSETS 2,300 2,300
---------- ----------
$1,400,318 $2,177,761
---------- ----------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Bank borrowings $ 131,250 $ 150,000
Accounts payable 1,160,394 1,555,119
Accrued expenses 361,583 368,311
Current portion of long-term debt 47,319 82,352
Billings in excess of costs and
estimated earnings on incomplete
contracts 96,300 209,707
---------- ----------
TOTAL CURRENT LIABILITIES 1,796,846 2,365,489
---------- ----------
STOCKHOLDERS' DEFICIENCY
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 (6,444,189) (6,235,389)
---------- ----------
TOTAL STOCKHOLDERS' DEFICIENCY (396,528) (187,728)
---------- ----------
$1,400,318 $2,177,761
---------- ----------
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
TRANSACT INTERNATIONAL INC.
STATEMENTS OF OPERATIONS
Year Ended April 30,
--------------------------------------
1997 1996 1995
---------- ---------- ----------
NET SALES $7,252,035 $7,208,015 $8,085,947
COSTS AND EXPENSES
Cost of sales 6,238,196 6,570,860 6,715,517
Selling and administrative 1,192,975 1,425,911 1,604,646
---------- ---------- ----------
7,431,171 7,996,771 8,320,163
---------- ---------- ----------
LOSS FROM OPERATIONS (179,136) (788,756) (234,216)
---------- ---------- ----------
OTHER (EXPENSE) INCOME
Interest expense (39,210) (19,271) (23,161)
Other income 9,546 16,983 27,588
---------- ---------- ----------
(29,664) (2,288) 4,427
---------- ---------- ----------
NET LOSS $ (208,800) $ (791,044) $ (229,789)
---------- ---------- ----------
NET LOSS PER SHARE OF COMMON STOCK $ (.03) $ (.13) $ (.04)
========== ========== ==========
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
TRANSACT INTERNATIONAL INC.
STATEMENTS OF CASH FLOWS
Year Ended April 30,
--------------------------------------
1997 1996 1995
---------- ---------- ----------
OPERATING ACTIVITIES
Net loss $ (208,800) $ (791,044) $ (229,789)
Adjustments to reconcile net
loss to cash (used in) provided
by operating activities :
Depreciation of property, plant
and equipment 36,645 40,794 37,421
Increase in allowance for
accounts receivable 16,175 52,000 10,000
Common stock issued for services --- --- 3,000
Changes in assets and liabilities:
Accounts receivable 545,880 736,120 (550,191)
Inventories 94,781 (81,322) (108,984)
Prepaid expenses and other
current assets 2,159 970 10,004
Costs and estimated earnings
in excess of billings on
incomplete contracts - net (267,524) (636,963) 1,355,369
Other assets --- (300) ---
Accounts payable and accrued
expenses (401,453) 762,655 (172,639)
---------- ---------- ----------
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES (182,137) 82,910 354,191
---------- ---------- ----------
INVESTING ACTIVITIES
Capital expenditures (14,848) (40,647) (43,892)
Repayment of note receivable 48,152 57,328 52,986
---------- ---------- ----------
NET CASH PROVIDED BY INVESTING
ACTIVITIES 33,304 16,681 9,094
---------- ---------- ----------
FINANCING ACTIVITIES
Proceeds from bank borrowings --- 150,000 ---
Repayment of bank borrowings (18,750) --- (100,000)
Repayment of debt (35,033) (102,555) (127,868)
---------- ---------- ----------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (53,783) 47,445 (227,868)
---------- ---------- ----------
NET (DECREASE) INCREASE IN CASH (202,616) 147,036 135,417
CASH, BEGINNING OF YEAR 287,986 140,950 5,533
---------- ---------- ----------
CASH, END OF YEAR $ 85,370 $ 287,986 $ 140,950
---------- ---------- ----------
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 19,210 $ 19,271 $ 25,315
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 dependent upon its ability to arrange a satisfactory payment
schedule with its bank and to return to profitability and/or sell or license
certain or all 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 $396,528 and $439,110, respectively, at April 30, 1997 and
has incurred losses for each of the three years in the period ended April
30, 1997. The Company's loss for the year ended April 30, 1997 violates
the financial covenants of the loan agreement with its bank and therefore
the $131,250 bank debt is payable on demand of the bank. The Company
continues to pay monthly principal payments to the bank of $6,250 and
intends to discuss a continuation of this arrangement with the bank.
The Company is presently seeking additional orders and is exploring the
sale or license of certain or all 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 arranging a satisfactory payment
schedule with its bank or in attaining additional profitable orders or
in selling or licensing any 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.
ACCOUNTS RECEIVABLE:
Accounts receivable include amounts currently due from customers.
At April 30, 1997 and 1996, accounts receivable included $10,000 due from an
officer/stockholder. The $10,000 is to be repaid in fiscal 1998.
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.
18
<PAGE>
Transact International Inc.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 1997 and
1996, and 6,093,810 in 1995). 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.
CONCENTRATION OF CREDIT:
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 29% in 1997, 28% in 1996, and 24% in 1995 of net
sales. United Parcel Service, a domestic commercial customer, and Apeda, a
customer located in India, accounted for 32% and 18%, respectively, of 1997
net sales. TianDa Airport Support Ltd, a foreign commercial customer,
accounted for 16% in 1996 and 12% of net sales in 1995. American Airlines,
a domestic commercial customer, accounted for 13% in 1996 of net sales.
Federal Express Corporation, a domestic commercial customer, accounted for
21% of net sales in 1995. 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,
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 bank loan bears interest at 1% over the bank's
prime lending rate and therefore approximates fair value.
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.
19
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
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,
1997 and 1996 are as follows:
1997 1996
---------- ----------
Costs incurred on incomplete
contracts $7,738,592 $7,866,907
Estimated earnings 1,436,815 1,360,422
---------- ----------
9,175,407 9,227,329
Less : billings to date 8,788,527 9,107,973
---------- ----------
$ 386,880 $ 119,356
========== ==========
The Company expects to complete the projects in process at April 30,
1997 within one year.
NOTE 4 -- PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at April 30, 1997 and 1996 consists of:
1997 1996
---------- ----------
Machinery and equipment $ 55,708 $ 55,708
Furniture and fixtures 236,867 222,019
---------- ----------
$ 292,575 $ 277,727
========== ==========
NOTE 5 -- DEBT
In January 1997, the Company converted its $150,000 short-term bank
note payable to a term loan payable, to the same bank, in twenty-four equal
monthly principal installments of $6,250 commencing February 15, 1997. The
term loan bears interest at 1% over the bank's prime lending rate (the bank's
prime lending rate was 8 1/2 % at April 30, 1997) and is collateralized by
all of the Company's assets. The financial covenants of the term loan were
violated because of the Company's loss for the year ended April 30, 1997.
Since April 30, 1997, the Company has continued to pay the monthly principal
installments of $6,250. The Company will be discussing a continuation of
these monthly payments with the bank. However there is no assurance that
the bank will agree to postpone demanding payment of the loan. Therefore
the entire $131,250 payable to the bank at April 30, 1997 has been classified
as a current liability in the accompanying 1997 balance sheet.
On June 4, 1997, a stockholder of the Company loaned the Company
$100,000 payable October 31, 1997 with interest at 8% per annum.
20
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 5 -- DEBT (Continued)
At April 30, 1997, the current portion of long-term debt includes
$8,662 related to a 1994 litigation settlement and $38,657 payable to the
U.S. Air Force. The amount due applicable to the litigation settlement
results from the Company's guarantee of certain obligations of a former
subsidiary. The amount due the U.S. Air Force relates to an overpayment
by the Air Force on a contract in 1993. This liability bears interest as
fixed by the secretary of the Treasury, pursuant to Public Law 95-563. The
interest rate at April 30, 1997 was 6.375%.
NOTE 6 -- ACCRUED EXPENSES
Accrued expenses at April 30, 1997 and 1996 consists of:
1997 1996
-------- --------
Compensation, vacation and severance $ 79,443 $144,278
Contract retainage 67,486 35,846
Retirement plans 70,405 70,000
Directors' fees 57,700 54,800
Other 86,549 63,387
-------- --------
$361,583 $368,311
======== ========
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, 1997:
1998 $115,159
1999 112,125
2000 76,459
2001 24,058
Rent expense was $141,437 in 1997, $176,037 in 1996 and $176,382
in 1995.
NOTE 8 -- STOCKHOLDERS' 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 loss during the three
years ended April 30, 1997 was the only other change in Stockholders' 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.
21
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 8 -- STOCKHOLDERS' EQUITY AND STOCK OPTIONS (Continued)
There has been no change to the options outstanding and exercisable
during the past three years. At April 30, 1997, 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 was effective for the Company beginning May
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
(loss) and earnings (loss) per share.
The salary of one officer was deferred for future payment by $70,000
in 1996 as a result of the Company's operating conditions. Of this amount,
$60,000 was waived by this officer in 1997. In addition, the salary of one
officer was reduced by $45,000 in 1997 and salaries of two officers were
reduced by $65,000 and $130,000 in 1996 and 1995, respectively, as a result
of operating conditions.
NOTE 9 -- 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. Prior to freezing the Money Purchase Plan, (see
paragraph below) the Company was required to contribute an amount equal to
3% of the employee's compensation. The Company accrued for the year ended
April 30, 1995, a matching discretionary contribution of 50% of the
employees 401(k) contributions, with a cap of 3% of the employees
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 to discontinue such
matching until business conditions improve. As a result, pension expense
was $0 in 1997, ($17,269) in 1996 and $75,911 in 1995.
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.
NOTE 10 -- BUSINESS SEGMENT INFORMATION
The Company operates in one business segment, the sale, design,
manufacture and installation of air cargo materials handling systems and
equipment.
22
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 10 -- BUSINESS SEGMENT INFORMATION (Continued)
Sales to the U.S. Government were $2,099,000 in 1997, $1,990,000 in
1996, and $1,913,000 in 1995. All of the Company's operations are in the
United States. Export sales to the Far East accounted for 20%, 16%, and
19% of net sales in 1997, 1996 and 1995, respectively.
NOTE 11 -- INCOME TAXES
There is no benefit for income taxes in 1997, 1996 or 1995 as the
tax losses generated in those years cannot be carried back to offset income
in prior years.
The tax effects of temporary differences giving rise to the
Company's deferred tax assets are as follows:
APRIL 30,
-------------------------
1997 1996
---------- ----------
Net operating loss carryforward $2,347,000 $2,263,000
Investment tax credit carryforward 28,000 104,000
Other reserves and liabilities 112,000 128,000
---------- ----------
2,487,000 2,495,000
Valuation allowance 2,487,000 2,495,000
---------- ----------
$ -- $ --
========== ==========
Due to the Company's cumulative losses, management does not consider
that enough support to overcome the "more likely than not" criteria existing 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, 1997, the Company has operating loss carryovers and
investment tax credit carryforwards for tax return purposes of approximately
$6,300,000 and $28,000 respectively, expiring in 1998 through 2011.
NOTE 12 -- OTHER DATA
The Company paid $780,465 and $148,702 during 1997 and 1996,
respectively, to a subcontractor that is owned by a stockholder of the
Company for the manufacturing of equipment for certain projects. This
subcontractor has issued letters of credit on behalf of the Company in
connection with two projects being performed by the Company.
NOTE 13 -- ADOPTION OF NEW ACCOUNTING STANDARD
The Company will adopt the provisions of the Statement of Financial
Accounting Standard No. 128 "Earnings Per Share" in fiscal 1998. The standard
specifies the computation, presentation and disclosure requirements for
earnings per share. As required by the standard, the Company will restate
all prior period earnings (loss) per share data presented. The adoption of
this new standard is not expected to have a material effect on the Company's
financial statements.
23
<PAGE>
TRANSACT INTERNATIONAL INC.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
Years Ended April 30, 1997, 1996, and 1995
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
ADDITIONS
(1) (2)
Charged to
Balance at Charged to Other Balance at
Beginning Costs and Accounts-- Deductions-- End
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE OF PERIOD
<S> <C> <C> <C> <C> <C>
Allowance for
doubtful accounts:
Year ended
April 30, 1997 $92,000 $16,175 $65,175(a) $43,000
Year ended
April 30, 1996 $40,000 $52,000 $92,000
Year ended
April 30, 1995 $30,000 $10,000 $40,000
(a) Accounts receivable written-off against allowance for doubtful accounts.
</TABLE>
24
<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 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.
25
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> APR-30-1997
<CASH> 85
<SECURITIES> 0
<RECEIVABLES> 502
<ALLOWANCES> 43
<INVENTORY> 312
<CURRENT-ASSETS> 1,358
<PP&E> 292
<DEPRECIATION> 252
<TOTAL-ASSETS> 1,400
<CURRENT-LIABILITIES> 1,797
<BONDS> 0
0
0
<COMMON> 852
<OTHER-SE> (1,249)
<TOTAL-LIABILITY-AND-EQUITY> 1,400
<SALES> 7,252
<TOTAL-REVENUES> 7,252
<CGS> 6,238
<TOTAL-COSTS> 6,238
<OTHER-EXPENSES> 1,168
<LOSS-PROVISION> 16
<INTEREST-EXPENSE> 39
<INCOME-PRETAX> (209)
<INCOME-TAX> 0
<INCOME-CONTINUING> (209)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (209)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
