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TransAct Technologies Reports Fourth Quarter 2012 Results

TransAct Technologies Reports Fourth Quarter 2012 Results

HAMDEN, Conn., March 6, 2013 (GLOBE NEWSWIRE) -- TransAct Technologies
Incorporated (Nasdaq:TACT), a global leader in market-specific solutions,
including printers, terminals, software and other products for
transaction-based and other industries, today announced financial results for
the three months and full year ended December 31, 2012. Summary results for
the periods are as follows:

                                                
                 Three months ended December 31, Full year ended December 31,
                                     %                          %
(in $000s, except 2012       2011       Change    2012      2011      Change
EPS)
Net Sales         $19,616    $13,645    43.8%     $68,386   $65,969   3.7%
                                                                
As reported                                                      
(GAAP):
Operating income 2,870      866        231.4%    5,602     6,989     -19.8%
Net income       1,882      570        230.2%    3,621     4,676     -22.6%
Diluted earnings  $0.21      $0.06      250.0%    $0.40     $0.49     -18.4%
per share
                                                                
Adjusted                                                         
(non-GAAP):
Operating income 3,176      881        260.5%    7,553     7,332     3.0%
Net income       2,083      580        259.1%    4,885     4,905     -0.4%
Diluted earnings  $0.23      $0.06      283.3%    $0.54     $0.51     5.9%
per share

"Overall, it was a successful year for TransAct," said Bart C. Shuldman,
Chairman and Chief Executive Officer of TransAct Technologies. "We finalized a
major transition where we commenced manufacturing of higher value products for
our new oil and gas exploration market, as well as the new Ithaca 9700 for
food safety for restaurants and other food service venues around the
world.These products, along with our EPICENTRAL® Print System, present a
significant revenue opportunity for TransAct by combining software and
hardware to provide benefits to our customers while enabling us to market
higher margin technology.In addition, we returned almost $6.5 million to
shareholders through repurchases of our shares and our new quarterly dividend
program, highlighting our strong cash flow generation.We look forward to 2013
where we will continue to focus our efforts on our newly launched products, as
well as our EPICENTRAL® Print System software."

Mr. Shuldman continued, "Aided by a significant order for our lottery printers
from GTECH, we achieved a record fourth quarter in terms of diluted earnings
per share.For the fourth quarter of 2012, our worldwide casino and gaming
sales increased 5% from the prior-year period, led by solid double-digit
domestic growth.Lottery sales from GTECH were up 641% from the prior-year
period to $6.4 million as we completed a very large order in the fourth
quarter of 2012.Printrex printer sales for the fourth quarter of 2012 were
$1.1 million, down 16% from the prior-year period due to near-term over-supply
in the natural gas market.TransAct Services Group revenue decreased 15%
compared to the prior-year period, due primarily to lower consumable
sales.Food service, banking and POS printer sales increased 44% compared to
the prior-year period largely on higher POS sales as we rolled out printers
for a new application for McDonald's checkout counters.Lastly, our balance
sheet remains very healthy with $7.5 million in cash and no debt outstanding
as of December 31, 2012."

2013 Outlook

"After two very strong and near record years of lottery sales from GTECH, we
expect these sales to return to a more normalized level in 2013," commented
Mr. Shuldman."Even with this decline, we expect sales for 2013 to be
comparable to 2012, as we expect sales from our newly launched food safety and
Printrex color oil and gas products, as well as EPICENTRAL® software sales, to
offset lower lottery printer sales.The initial reaction to our product
introductions has been favorable and we expect to see the sales of these
products ramp up as we enter the second half of the year."

Fourth Quarter 2012 Results

Revenue for the fourth quarter of 2012 was $19.6 million, an increase of 44%
compared to $13.6 million in the prior-year period.Gross margin for the
fourth quarter of 2012 was 39.2%, compared to 41.6% in the prior-year quarter
due primarily to a less favorable sales mix.Operating expenses were $4.8
million, comparable with the prior-year period.Excluding non-GAAP
adjustments, operating expenses decreased by $0.3 million, or 6%, compared to
the prior-year period.The Company recorded GAAP net income of $1.9 million,
or $0.21 per diluted share, in the fourth quarter of 2012, compared to GAAP
net income of $0.6 million, or $0.06 per diluted share, in the prior-year
period.Excluding non-GAAP adjustments, the Company recorded adjusted net
income in the fourth quarter of 2012 of $2.1 million, or $0.23 per diluted
share.For a reconciliation of GAAP to non-GAAP measures, please review the
disclosures and tables included with this release.

Commenting on the financial results, Steven A. DeMartino, President and Chief
Financial Officer of TransAct Technologies said, "During the fourth quarter of
2012, we experienced notable gains in revenue without having to significantly
sacrifice gross margin, leading to strong net income and earnings per
share.We are also now beginning to see the benefits of the full integration
of Printrex into our operations which will enable us to realize cost savings
throughout 2013.During 2013, we plan to focus our efforts on our new
products, markets and recurring revenue opportunities and believe this will
lead to both gross and operating margin expansion during the year."

Full Year 2012 Results

Revenue for the full year ended December 31, 2012 was $68.4 million, an
increase of 4% compared to $66.0 million in the prior year. Gross margin for
the full year ended December 31, 2012 was 38.0%, an increase of approximately
70 basis points from 37.3% in the prior year due primarily to a favorable
sales mix.Operating expenses were $20.4 million, an increase of $2.7 million
from the prior year, driven mainly by $1.5 million of legal fees associated
with the lawsuit with Avery Dennison Corporation as well as a full year of
expenses related to the Printrex operations that the Company acquired in
August 2011. Excluding non-GAAP adjustments, operating expenses increased by
$1.1 million, or 7%, compared to the prior year.The Company recorded GAAP net
income of approximately $3.6 million, or $0.40 per diluted share, for the full
year ended December 31, 2012, compared to GAAP net income of approximately
$4.7 million, or $0.49 per diluted share, for the prior year.Excluding
non-GAAP adjustments mentioned above, the Company recorded adjusted net income
of approximately $4.9 million, or $0.54 per diluted share, for the full year
ended December 31, 2012, compared to adjusted net income of approximately $4.9
million, or $0.51 per diluted share in the prior year.

Liquidity and Capital Resources

As of December 31, 2012, the Company had approximately $7.5 million in cash
and cash equivalents, and no debt obligations outstanding under its $20
million revolving credit facility.During the fourth quarter of 2012, TransAct
repurchased 50,536 shares for approximately $0.4 million (average price of
$7.42 per share).For 2012, TransAct repurchased approximately 721,000 shares,
or 8% of the outstanding shares, for approximately $5.9 million. TransAct's
$15 million repurchase program allows the Company to repurchase up to $6.2
million in additional shares through May 2013.

Financial Presentation

The Company has provided adjusted non-GAAP financial measures because the
Company believes that these amounts are helpful to investors and others to
more accurately assess the ongoing nature of TransAct's core operations. The
adjusted non-GAAP measures exclude the effect in the applicable periods
presented of non-GAAP adjustments contained in the tables included with this
release.These items have been excluded from adjusted non-GAAP financial
measures as management does not believe that they are representative of
underlying trends in the Company's performance. Their exclusion provides
investors and others with additional information to more readily assess the
Company's operating results. The Company uses the non-GAAP financial measures
internally to focus management on the results of the Company's core business.
The presentation of this additional non-GAAP information is not considered
superior to or a substitute for the financial information prepared in
accordance with GAAP.

Investor Conference Call / Webcast Details

TransAct will review detailed fourth quarter 2012 results during a conference
call today at 5:00 PM EST. The conference call-in number is 888-438-5491. A
replay of the call will be available from 8:00 PM EST on Wednesday, March 6
through midnight EDT on Wednesday, March 13 by telephone at 877-870-5176;
passcode 3697147.Investors can also access the conference call via a live
webcast on the Company's Web site at http://www.transact-tech.com.A replay of
the call will be archived on that Web site for one week.

About TransAct Technologies Incorporated

TransAct Technologies Incorporated (Nasdaq:TACT) is a leader in developing and
manufacturing market-specific solutions, including printers, terminals,
software and other products for transaction-based and other industries. These
industries include casino, gaming, lottery, banking,point-of-sale, food
safety, hospitality, oil and gas, and medical and mobile.Each individual
market has distinct, critical requirements for printing and the transaction is
not complete until the receipt and/or ticket is produced.TransAct printers
and products are designed from the ground up based on market specific
requirements and are sold under the Ithaca®, Epic, EPICENTRAL® and Printrex®
product brands.TransAct distributes its printers through OEMs, value-added
resellers, selected distributors, and direct to end-users.TransAct has over
2.4 million printers installed around the world.TransAct is also committed to
providing world-class printer service, spare parts, accessories and printing
supplies to its growing worldwide installed base of printers.Through its
TransAct Services Group, TransAct provides a complete range of supplies and
consumables items used in the printing and scanning activities of customers in
the hospitality, banking, retail, gaming, government and oil and gas
exploration markets.Through its webstore, http://www.transactsupplies.com,
and a direct selling team, TransAct addresses the on-line demand for these
products.TransAct is headquartered in Hamden, CT.For more information,
please visit http://www.transact-tech.com or call 203.859.6800.

The TransAct Technologies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=10061

Forward-Looking Statements

Certain statements in this press release include forward-looking statements.
Forward-looking statements generally can be identified by the use of
forward-looking terminology, such as "may," "will," "expect," "intend,"
"estimate," "anticipate," "believe" or "continue" or the negative thereof or
other similar words. All forward-looking statements involve risks and
uncertainties, including, but are not limited to, customer acceptance and
market share gains, both domestically and internationally, in the face of
substantial competition from competitors that have broader lines of products
and greater financial resources; introduction of new products into the
marketplace by competitors; successful product development; dependence on
significant customers; dependence on significant vendors; dependence on
contract manufacturers for the assembly of a large portion of our products in
China; the ability to protect intellectual property; the ability to recruit
and retain quality employees as the Company grows; dependence on third parties
for sales outside the United States, including Australia, New Zealand, Europe,
Latin America and Asia; economic and political conditions in the United
States, Australia, New Zealand, Europe, Latin America and Asia; marketplace
acceptance of new products; risks associated with foreign operations;
availability of third-party components at reasonable prices; price wars or
other significant pricing pressures affecting the Company's products in the
United States or abroad;risks associated with potential future acquisitions;
the outcome of the lawsuit between TransAct and Avery Dennison Corporation;
and other risk factors detailed from time to time in TransAct's reports filed
with the Securities and Exchange Commission. Actual results may differ
materially from those discussed in, or implied by, the forward-looking
statements. The forward-looking statements speak only as of the date of this
release and the Company assumes no duty to update them to reflect new,
changing or unanticipated events or circumstances.


TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
                                                                  
                                          Three Months Ended Year Ended
(In thousands, except per share            December 31,       December 31,
amounts)
                                          2012      2011     2012    2011
Net sales                                  $19,616   $13,645  $68,386 $65,969
Cost of sales                              11,933    7,964    42,404  41,343
Gross profit                               7,683     5,681    25,982  24,626
                                                                  
Operating expenses:                                                
Engineering, design and product            987       986      4,239   3,418
development
Selling and marketing                      1,791     1,772    6,637   6,402
General and administrative                 2,011     2,057    7,833   7,633
Legal fees associated with                 26        --       1,533   --
lawsuit
Business consolidation and                 (2)       --       138     184
restructuring
                                          4,813     4,815    20,380  17,637
Operating income                           2,870     866      5,602   6,989
                                                                  
Other income (expense):                                            
Interest, net                              (1)       --       6       18
Other, net                                 (2)       1        (23)    1
                                          (3)       1        (17)    19
                                                                  
Income before income taxes                 2,867     867      5,585   7,008
Income tax provision                       985       297      1,964   2,332
Net income                                 $1,882    $570     3,621   $4,676
                                                                  
Net income per common share:                                       
Basic                                      $0.21     $0.06    $0.40   $0.50
Diluted                                    $0.21     $0.06    $0.40   $0.49
                                                                  
Shares used in per share                                           
calculation:
Basic                                      8,800     9,466    9,032   9,443
Diluted                                    8,887     9,569    9,121   9,603
                                                                  
SUPPLEMENTAL INFORMATION – SALES BY SALES UNIT:
                                                                  
                                 Three months ended  Year ended       
                                 December 31,        December 31,     
                                 2012      2011      2012     2011    
Food service, banking and         $2,643    $1,837    $9,484   $9,943  
point-of-sale
Casino and gaming                6,506     6,193     29,129   24,955  
Lottery                          6,422     867       11,634   14,933  
Printrex                          1,051     1,246     4,673    1,710   
TransAct Services Group          2,994     3,502     13,466   14,428  
Total net sales                   $19,616   $13,645   $68,386  $65,969 


TRANSACT TECHNOLOGIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                    December 31, December 31,
(In thousands)                                       2012         2011
Assets:                                                          
Current assets:                                                  
Cash and cash equivalents                            $7,537       $6,863
Accounts receivable, net                             15,927       9,583
Inventories                                          10,321       14,151
Prepaid income taxes                                 --           446
Deferred tax assets                                  1,443        1,636
Other current assets                                 471          375
Total current assets                                 35,699       33,054
                                                                
Fixed assets, net                                    3,302        3,358
Goodwill                                             2,621        2,518
Deferred tax assets                                  1,172        890
Intangible assets, net                               2,328        2,861
Other assets                                         106          59
                                                    9,529        9,686
Total assets                                         $45,228      $42,740
                                                                
Liabilities and Shareholders' Equity:                            
Current liabilities:                                             
Accounts payable                                     $6,422       $3,019
Accrued liabilities                                  2,927        2,632
Income taxes payable                                 629          40
Accrued contingent consideration                     136          --
Deferred revenue                                     93           141
Total current liabilities                            10,207       5,832
                                                                
Deferred revenue, net of current portion             168          224
Deferred rent, net of current portion                308          357
Accrued acquisition consideration, net of current    824          680
portion
Other liabilities                                    352          334
                                                    1,652        1,595
Total liabilities                                    11,859       7,427
                                                                
Shareholders' equity:                                            
Common stock                                         109          108
Additional paid-in capital                           25,940       25,058
Retained earnings                                    24,708       21,613
Accumulated other comprehensive loss, net of tax     (55)         (71)
Treasury stock, at cost                              (17,333)     (11,395)
Total shareholders' equity                           33,369       35,313
Total liabilities and shareholders' equity           $45,228      $42,740


TRANSACT TECHNOLOGIES INCORPORATED
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, thousands of dollars, except percentages and per share amounts)
                           Three months ended
                           December 31, 2012
                                                               Adjusted
                           Reported       Adjustments^(1)        Non-GAAP
Operating expenses          $4,813         $(306)               $4,507
% of net sales              24.5%                                23.0%
                                                               
Operating income            2,870          306                    3,176
% of net sales              14.6%                                16.2%
                                                               
Income before income taxes  2,867          306                    3,173
Income tax provision        985            105                    1,090
Net income                  1,882          201                    2,083
Diluted net income per      $0.21          $0.02                  $0.23
share
                                                               
^(1)^ Adjustment includes (i) $280 of expense related to an adjustment to
accrued contingent consideration from the Printrex acquisition and (ii) $26 of
legal and other expenses related to the lawsuit with Avery Dennison
Corporation, tax effected using an effective tax rate of 34.4%.
                                                               
                           Three months ended
                           December 31, 2011
                                                               Adjusted
                           Reported       Adjustments ^(2)       Non-GAAP
Operating expenses          $4,815         $(15)                $4,800
% of net sales              35.3%                                35.2%
                                                               
Operating income            866            15                     881
% of net sales              6.3%                                 6.5%
                                                               
Income before income taxes  867            15                     882
Income tax provision        297            5                      302
Net income                  570            10                     580
Diluted net income per      $0.06          $0.00                  $0.06
share
                                                               
^(2)^ Adjustment includes transaction expenses of $15 associated with the
acquisition of Printrex Inc. during 2011 tax effected using an effective tax
rate of 34.3%.


TRANSACT TECHNOLOGIES INCORPORATED
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, thousands of dollars, except percentages and per share amounts)
                                                               
                         Year ended
                         December 31, 2012
                                                               Adjusted
                         Reported        Adjustments^(3)         Non-GAAP
Operating expenses        $20,380         $(1,951)              $18,429
% of net sales            29.8%                                  26.9%
                                                               
Operating income          5,602           1,951                   7,553
% of net sales            8.2%                                   11.0%
                                                               
Income before income      5,585           1,951                   7,536
taxes
Income tax provision      1,964           687                     2,651
Net income                3,621           1,264                   4,885
Diluted net income per    $0.40           $0.14                   $0.54
share
                                                               
                                                               
^(3)^ Adjustment includes (i) $280 of expense related to an adjustment to
accrued contingent consideration from the Printrex acquisition and (ii) $1,533
of legal and other expenses related to the lawsuit with Avery Dennison
Corporation and (iii) $138 of employee termination and moving expenses related
to the closing of the Printrex manufacturing facility in San Jose, CA.Such
adjustments were tax effected using an effective tax rate of 35.2%.
                                                               
                         Year ended
                         December 31, 2011
                                                               Adjusted
                         Reported        Adjustments ^(4)        Non-GAAP
Operating expenses        $17,637         $(343)                $ 17,294
% of net sales            26.7%                                  26.2%
                                                               
Operating income          6,989           343                     7,332
% of net sales            10.6%                                  11.1%
                                                               
Income before income      7,008           343                     7,351
taxes
Income tax provision      2,332           114                     2,446
Net income                4,676           229                     4,905
Diluted net income per    $0.49           $0.02                   $0.51
share
                                                               
^(4)^ Adjustment includes (i) $159 of transaction expenses associated with
the acquisition of Printrex Inc. during 2011 and (ii) $184 of employee
termination and other expenses related to the closing of a service facility in
New Britain, CT, tax effected using an effective tax rate of 33.3%.

CONTACT: TransAct Technologies Incorporated
         Steven DeMartino, President and Chief Financial Officer
         203-859-6810
        
         ICR Inc.
         William Schmitt
         203-682-8200

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