☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
06-1456680
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
One Hamden Center, 2319 Whitney Avenue, Suite 3B, Hamden, CT
|
|
06518
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
(203) 859-6800
|
(Registrant's Telephone Number, Including Area Code)
|
Large accelerated filer
☐
|
Accelerated filer
☐
|
Non-accelerated filer
☐
(Do not check if a smaller reporting company)
|
Smaller reporting company
☒
|
Emerging growth company
☐
|
PART I - Financial Information:
|
Page
|
|
|
|
|
Item 1
|
Financial Statements (unaudited)
|
|
|
|
|
|
Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016
|
3
|
|
|
|
|
Condensed Consolidated Statements of Income for the three and six months ended June 30, 2017 and 2016
|
4
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2017 and 2016
|
5
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016
|
6
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements
|
7
|
|
|
|
Item 2
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
11
|
|
|
|
Item 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
21
|
|
|
|
Item 4
|
Controls and Procedures
|
22
|
|
|
|
PART II - Other Information:
|
|
|
|
|
|
Item 1
|
Legal Proceedings
|
22
|
|
|
|
Item 1A
|
Risk Factors
|
22
|
|
|
|
Item 2
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
23
|
|
|
|
Item 3
|
Default Upon Senior Securities
|
23
|
|
|
|
Item 4
|
Mine Safety Disclosures
|
23
|
|
|
|
Item 5
|
Other Information
|
23
|
|
|
|
Item 6
|
Exhibits
|
23
|
|
|
|
SIGNATURES
|
24
|
Item 1. |
FINANCIAL STATEMENTS
|
|
June 30,
2017
|
December 31,
2016
|
||||||
Assets:
|
(In thousands, except share data)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
4,877
|
$
|
2,503
|
||||
Accounts receivable, net
|
7,404
|
10,585
|
||||||
Inventories, net
|
9,521
|
9,707
|
||||||
Prepaid income taxes
|
210
|
-
|
||||||
Other current assets
|
674
|
372
|
||||||
Total current assets
|
22,686
|
23,167
|
||||||
|
||||||||
Fixed assets, net of accumulated depreciation of $19,404 and $19,215, respectively
|
2,262
|
2,241
|
||||||
Goodwill
|
2,621
|
2,621
|
||||||
Deferred tax assets
|
3,484
|
3,432
|
||||||
Intangible assets, net of accumulated amortization of $3,281, and $3,122, respectively
|
386
|
545
|
||||||
Other assets
|
35
|
36
|
||||||
|
8,788
|
8,875
|
||||||
Total assets
|
$
|
31,474
|
$
|
32,042
|
||||
|
||||||||
Liabilities and Shareholders' Equity:
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
3,421
|
$
|
4,894
|
||||
Accrued liabilities
|
2,380
|
2,394
|
||||||
Income taxes payable
|
-
|
19
|
||||||
Deferred revenue
|
215
|
117
|
||||||
Total current liabilities
|
6,016
|
7,424
|
||||||
|
||||||||
Deferred revenue, net of current portion
|
74
|
67
|
||||||
Deferred rent, net of current portion
|
190
|
178
|
||||||
Other liabilities
|
254
|
264
|
||||||
|
518
|
509
|
||||||
Total liabilities
|
6,534
|
7,933
|
||||||
|
||||||||
Shareholders' equity:
|
||||||||
Common stock, $0.01 par value, 20,000,000 shares authorized; 11,215,894 and 11,185,331 shares issued, respectively; 7,363,927 and 7,333,364 shares outstanding, respectively
|
112
|
112
|
||||||
Additional paid-in capital
|
29,996
|
29,701
|
||||||
Retained earnings
|
24,686
|
24,157
|
||||||
Accumulated other comprehensive loss, net of tax
|
(102
|
)
|
(109
|
)
|
||||
Treasury stock, at cost, 3,851,967 shares
|
(29,752
|
)
|
(29,752
|
)
|
||||
Total shareholders' equity
|
24,940
|
24,109
|
||||||
Total liabilities and shareholders' equity
|
$
|
31,474
|
$
|
32,042
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
|
(In thousands, except per share data)
|
|||||||||||||||
|
||||||||||||||||
Net sales
|
$
|
13,596
|
$
|
14,801
|
$
|
27,593
|
$
|
29,158
|
||||||||
Cost of sales
|
7,166
|
8,818
|
15,070
|
17,290
|
||||||||||||
|
||||||||||||||||
Gross profit
|
6,430
|
5,983
|
12,523
|
11,868
|
||||||||||||
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Engineering, design and product development
|
1,020
|
1,089
|
2,013
|
2,325
|
||||||||||||
Selling and marketing
|
2,034
|
1,859
|
3,706
|
3,652
|
||||||||||||
General and administrative
|
2,070
|
1,935
|
4,082
|
3,852
|
||||||||||||
|
5,124
|
4,883
|
9,801
|
9,829
|
||||||||||||
|
||||||||||||||||
Operating income
|
1,306
|
1,100
|
2,722
|
2,039
|
||||||||||||
Interest and other income (expense):
|
||||||||||||||||
Interest, net
|
(8
|
)
|
(7
|
)
|
(16
|
)
|
(11
|
)
|
||||||||
Other, net
|
(2
|
)
|
15
|
(8
|
)
|
16
|
||||||||||
|
(10
|
)
|
8
|
(24
|
)
|
5
|
||||||||||
|
||||||||||||||||
Income before income taxes
|
1,296
|
1,108
|
2,698
|
2,044
|
||||||||||||
Income tax provision
|
429
|
355
|
888
|
666
|
||||||||||||
Net income
|
$
|
867
|
$
|
753
|
$
|
1,810
|
$
|
1,378
|
||||||||
|
||||||||||||||||
Net income per common share:
|
||||||||||||||||
Basic
|
$
|
0.12
|
$
|
0.10
|
$
|
0.24
|
$
|
0.18
|
||||||||
Diluted
|
$
|
0.12
|
$
|
0.10
|
$
|
0.24
|
$
|
0.18
|
||||||||
|
||||||||||||||||
Shares used in per-share calculation:
|
||||||||||||||||
Basic
|
7,408
|
7,689
|
7,402
|
7,761
|
||||||||||||
Diluted
|
7,514
|
7,743
|
7,469
|
7,813
|
||||||||||||
|
||||||||||||||||
Dividends declared and paid per common share:
|
$
|
0.09
|
$
|
0.08
|
$
|
0.17
|
$
|
0.16
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
|
||||||||||||||||
Net income
|
$
|
867
|
$
|
753
|
$
|
1,810
|
$
|
1,378
|
||||||||
Foreign currency translation adjustment, net of tax
|
5
|
(14
|
)
|
7
|
(18
|
)
|
||||||||||
Comprehensive income
|
$
|
872
|
$
|
739
|
$
|
1,817
|
$
|
1,360
|
|
Six Months Ended June 30,
|
|||||||
|
2017
|
2016
|
||||||
|
(In thousands)
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
1,810
|
$
|
1,378
|
||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
Share-based compensation expense
|
296
|
305
|
||||||
Depreciation and amortization
|
602
|
643
|
||||||
Deferred income tax provision
|
(56
|
)
|
170
|
|||||
Gain on the sale of fixed assets
|
-
|
(5
|
)
|
|||||
Foreign currency transaction losses (gains)
|
9
|
(12
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
3,184
|
(3,203
|
)
|
|||||
Inventories
|
189
|
2,273
|
||||||
Prepaid income taxes
|
(209
|
)
|
(205
|
)
|
||||
Other current and long term assets
|
(299
|
)
|
(45
|
)
|
||||
Accounts payable
|
(1,527
|
)
|
1,871
|
|||||
Accrued liabilities and other liabilities
|
(28
|
)
|
(1,272
|
)
|
||||
Net cash provided by operating activities
|
3,971
|
1,898
|
||||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(409
|
)
|
(330
|
)
|
||||
Proceeds from sale of fixed assets
|
-
|
8
|
||||||
Net cash used in investing activities
|
(409
|
)
|
(322
|
)
|
||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Payment of dividends on common stock
|
(1,250
|
)
|
(1,232
|
)
|
||||
Purchases of common stock for treasury
|
-
|
(2,273
|
)
|
|||||
Proceeds from stock option exercises
|
85
|
23
|
||||||
Withholding taxes paid on stock issuances
|
(18
|
)
|
-
|
|||||
Net cash used in financing activities
|
(1,183
|
)
|
(3,482
|
)
|
||||
|
||||||||
Effect of exchange rate changes on cash and cash equivalents
|
(5
|
)
|
(12
|
)
|
||||
|
||||||||
Increase (decrease) in cash and cash equivalents
|
2,374
|
(1,918
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
2,503
|
4,473
|
||||||
Cash and cash equivalents, end of period
|
$
|
4,877
|
$
|
2,555
|
||||
|
||||||||
Supplemental schedule of non-cash investing activities:
|
||||||||
Capital expenditures included in accounts payable
|
$
|
165
|
$
|
86
|
|
June 30,
2017
|
December 31,
2016
|
||||||
|
(In thousands)
|
|||||||
|
||||||||
Raw materials and purchased component parts
|
$
|
7,010
|
$
|
6,298
|
||||
Work-in-process
|
7
|
8
|
||||||
Finished goods
|
2,504
|
3,401
|
||||||
|
$
|
9,521
|
$
|
9,707
|
|
Six Months Ended June 30,
|
|||||||
|
2017
|
2016
|
||||||
|
(In thousands)
|
|||||||
|
||||||||
Balance, beginning of period
|
$
|
267
|
$
|
277
|
||||
Warranties issued
|
105
|
131
|
||||||
Warranty settlements
|
(123
|
)
|
(136
|
)
|
||||
Balance, end of period
|
$
|
249
|
$
|
272
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
|
(In thousands, except per share data)
|
|||||||||||||||
|
||||||||||||||||
Net income
|
$
|
867
|
$
|
753
|
$
|
1,810
|
$
|
1,378
|
||||||||
Shares:
|
||||||||||||||||
Basic: Weighted average common shares outstanding
|
7,408
|
7,689
|
7,402
|
7,761
|
||||||||||||
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method
|
106
|
54
|
67
|
52
|
||||||||||||
Diluted: Weighted average common and common equivalent shares outstanding
|
7,514
|
7,743
|
7,469
|
7,813
|
||||||||||||
Net income per common share:
|
||||||||||||||||
Basic
|
$
|
0.12
|
$
|
0.10
|
$
|
0.24
|
$
|
0.18
|
||||||||
Diluted
|
$
|
0.12
|
$
|
0.10
|
$
|
0.24
|
$
|
0.18
|
Balance at December 31, 2016
|
$
|
24,109
|
||
Net income
|
1,810
|
|||
Share-based compensation expense
|
296
|
|||
Issuance of shares from exercise of stock options
|
85
|
|||
Foreign currency translation adjustment
|
7
|
|||
Relinquishment of fully vested deferred stock units
|
(18
|
)
|
||
Reversal of deferred tax asset in connection with stock options forfeited
|
(99
|
)
|
||
Dividends declared and paid on common stock
|
(1,250
|
)
|
||
Balance at June 30, 2017
|
$
|
24,940
|
|
Three months ended
|
Three months ended
|
Change
|
|||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||
Restaurant solutions
|
$
|
1,021
|
7.5
|
%
|
$
|
1,715
|
11.6
|
%
|
$
|
(694
|
)
|
(40.5
|
%)
|
|||||||||||
POS automation and banking
|
2,048
|
15.1
|
%
|
3,203
|
21.6
|
%
|
(1,155
|
)
|
(36.1
|
%)
|
||||||||||||||
Casino and gaming
|
3,985
|
29.3
|
%
|
5,154
|
34.9
|
%
|
(1,169
|
)
|
(22.7
|
%)
|
||||||||||||||
Lottery
|
2,787
|
20.5
|
%
|
2,150
|
14.5
|
%
|
637
|
29.6
|
%
|
|||||||||||||||
Printrex
|
282
|
2.1
|
%
|
176
|
1.2
|
%
|
106
|
60.2
|
%
|
|||||||||||||||
TSG
|
3,473
|
25.5
|
%
|
2,403
|
16.2
|
%
|
1,070
|
44.5
|
%
|
|||||||||||||||
|
$
|
13,596
|
100.0
|
%
|
$
|
14,801
|
100.0
|
%
|
$
|
(1,205
|
)
|
(8.1
|
%)
|
|||||||||||
|
||||||||||||||||||||||||
International *
|
$
|
1,060
|
7.8
|
%
|
$
|
3,497
|
23.6
|
%
|
$
|
(2,437
|
)
|
(69.7
|
%)
|
* |
International sales do not include sales of printers and terminals made to domestic distributors or other domestic customers who may in turn ship those printers and terminals to international destinations.
|
|
Three months ended
|
Three months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
941
|
92.2
|
%
|
$
|
1,562
|
91.1
|
%
|
$
|
(621
|
)
|
(39.8
|
%)
|
|||||||||||||
International
|
80
|
7.8
|
%
|
153
|
8.9
|
%
|
(73
|
)
|
(47.7
|
%)
|
||||||||||||||||
|
$
|
1,021
|
100.0
|
%
|
$
|
1,715
|
100.0
|
%
|
$
|
(694
|
)
|
(40.5
|
%)
|
|
Three months ended
|
Three months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
2,037
|
99.5
|
%
|
$
|
2,893
|
90.3
|
%
|
$
|
(856
|
)
|
(29.6
|
%)
|
|||||||||||||
International
|
11
|
0.5
|
%
|
310
|
9.7
|
%
|
(299
|
)
|
(96.5
|
%)
|
||||||||||||||||
|
$
|
2,048
|
100.0
|
%
|
$
|
3,203
|
100.0
|
%
|
$
|
(1,155
|
)
|
(36.1
|
%)
|
|
Three months ended
|
Three months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
3,194
|
80.2
|
%
|
$
|
2,530
|
49.1
|
%
|
$
|
664
|
26.2
|
%
|
||||||||||||||
International
|
791
|
19.8
|
%
|
2,624
|
50.9
|
%
|
(1,833
|
)
|
(69.9
|
%)
|
||||||||||||||||
|
$
|
3,985
|
100.0
|
%
|
$
|
5,154
|
100.0
|
%
|
$
|
(1,169
|
)
|
(22.7
|
%)
|
|
Three months ended
|
Three months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
2,786
|
100.0
|
%
|
$
|
1,989
|
92.5
|
%
|
$
|
797
|
40.1
|
%
|
||||||||||||||
International
|
1
|
0.0
|
%
|
161
|
7.5
|
%
|
(160
|
)
|
(99.4
|
%)
|
||||||||||||||||
|
$
|
2,787
|
100.0
|
%
|
$
|
2,150
|
100.0
|
%
|
$
|
637
|
29.6
|
%
|
|
Three months ended
|
Three months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
236
|
83.7
|
%
|
$
|
126
|
71.6
|
%
|
$
|
110
|
87.3
|
%
|
||||||||||||||
International
|
46
|
16.3
|
%
|
50
|
28.4
|
%
|
(4
|
)
|
(8.0
|
%)
|
||||||||||||||||
|
$
|
282
|
100.0
|
%
|
$
|
176
|
100.0
|
%
|
$
|
106
|
60.2
|
%
|
|
Three months ended
|
Three months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
3,342
|
96.2
|
%
|
$
|
2,204
|
91.7
|
%
|
$
|
1,138
|
51.6
|
%
|
||||||||||||||
International
|
131
|
3.8
|
%
|
199
|
8.3
|
%
|
(68
|
)
|
(34.2
|
%)
|
||||||||||||||||
|
$
|
3,473
|
100.0
|
%
|
$
|
2,403
|
100.0
|
%
|
$
|
1,070
|
44.5
|
%
|
Three months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
6,430
|
$
|
5,983
|
7.5%
|
|
47.3%
|
|
40.4%
|
|
Three months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
1,020
|
$
|
1,089
|
(6.3%)
|
|
7.5%
|
|
7.4%
|
|
Three months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
2,034
|
$
|
1,859
|
9.4%
|
|
15.0%
|
|
12.6%
|
|
Three months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
2,070
|
$
|
1,935
|
7.0
|
%
|
15.2
|
%
|
13.1
|
%
|
Three months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
1,306
|
$
|
1,100
|
18.7%
|
|
9.6%
|
|
7.4%
|
|
|
Six months ended
|
Six months ended
|
Change
|
|||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||
Restaurant solutions
|
$
|
1,548
|
5.6
|
%
|
$
|
2,537
|
8.7
|
%
|
$
|
(989
|
)
|
(39.0
|
%)
|
|||||||||||
POS automation and banking
|
4,506
|
16.3
|
%
|
5,518
|
18.9
|
%
|
(1,012
|
)
|
(18.3
|
%)
|
||||||||||||||
Casino and gaming
|
9,102
|
33.0
|
%
|
10,592
|
36.4
|
%
|
(1,490
|
)
|
(14.1
|
%)
|
||||||||||||||
Lottery
|
5,768
|
20.9
|
%
|
5,085
|
17.4
|
%
|
683
|
13.4
|
%
|
|||||||||||||||
Printrex
|
460
|
1.7
|
%
|
331
|
1.1
|
%
|
129
|
39.0
|
%
|
|||||||||||||||
TSG
|
6,209
|
22.5
|
%
|
5,095
|
17.5
|
%
|
1,114
|
21.9
|
%
|
|||||||||||||||
|
$
|
27,593
|
100.0
|
%
|
$
|
29,158
|
100.0
|
%
|
$
|
(1,565
|
)
|
(5.4
|
%)
|
|||||||||||
|
||||||||||||||||||||||||
International *
|
$
|
4,546
|
16.5
|
%
|
$
|
6,028
|
20.7
|
%
|
$
|
(1,482
|
)
|
(24.6
|
%)
|
* |
International sales do not include sales of printers and terminals made to domestic distributors or other domestic customers who may in turn ship those printers and terminals to international destinations.
|
|
Six months ended
|
Six months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
1,414
|
91.3
|
%
|
$
|
2,293
|
90.4
|
%
|
$
|
(879
|
)
|
(38.3
|
%)
|
|||||||||||||
International
|
134
|
8.7
|
%
|
244
|
9.6
|
%
|
(110
|
)
|
(45.1
|
%)
|
||||||||||||||||
|
$
|
1,548
|
100.0
|
%
|
$
|
2,537
|
100.0
|
%
|
$
|
(989
|
)
|
(39.0
|
%)
|
|
Six months ended
|
Six months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
4,453
|
98.8
|
%
|
$
|
5,080
|
92.1
|
%
|
$
|
(627
|
)
|
(12.3
|
%)
|
|||||||||||||
International
|
53
|
1.2
|
%
|
438
|
7.9
|
%
|
(385
|
)
|
(87.9
|
%)
|
||||||||||||||||
|
$
|
4,506
|
100.0
|
%
|
$
|
5,518
|
100.0
|
%
|
$
|
(1,012
|
)
|
(18.3
|
%)
|
|
Six months ended
|
Six months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
6,279
|
69.0
|
%
|
$
|
5,833
|
55.1
|
%
|
$
|
446
|
7.6
|
%
|
||||||||||||||
International
|
2,823
|
31.0
|
%
|
4,759
|
44.9
|
%
|
(1,936
|
)
|
(40.7
|
%)
|
||||||||||||||||
|
$
|
9,102
|
100.0
|
%
|
$
|
10,592
|
100.0
|
%
|
$
|
(1,490
|
)
|
(14.1
|
%)
|
|
Six months ended
|
Six months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
4,600
|
79.8
|
%
|
$
|
4,924
|
96.8
|
%
|
$
|
(324
|
)
|
(6.6
|
%)
|
|||||||||||||
International
|
1,168
|
20.2
|
%
|
161
|
3.2
|
%
|
1,007
|
625.5
|
%
|
|||||||||||||||||
|
$
|
5,768
|
100.0
|
%
|
$
|
5,085
|
100.0
|
%
|
$
|
683
|
13.4
|
%
|
|
Six months ended
|
Six months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
370
|
80.4
|
%
|
$
|
262
|
79.2
|
%
|
$
|
108
|
41.2
|
%
|
||||||||||||||
International
|
90
|
19.6
|
%
|
69
|
20.8
|
%
|
21
|
30.4
|
%
|
|||||||||||||||||
|
$
|
460
|
100.0
|
%
|
$
|
331
|
100.0
|
%
|
$
|
129
|
39.0
|
%
|
|
Six months ended
|
Six months ended
|
Change
|
|||||||||||||||||||||||
|
June 30, 2017
|
June 30, 2016
|
$ |
|
%
|
|||||||||||||||||||||
Domestic
|
$
|
5,931
|
95.5
|
%
|
$
|
4,738
|
93.0
|
%
|
$
|
1,193
|
25.2
|
%
|
||||||||||||||
International
|
278
|
4.5
|
%
|
357
|
7.0
|
%
|
(79
|
)
|
(22.1
|
%)
|
||||||||||||||||
|
$
|
6,209
|
100.0
|
%
|
$
|
5,095
|
100.0
|
%
|
$
|
1,114
|
21.9
|
%
|
Six months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
12,523
|
$
|
11,868
|
5.5%
|
|
45.4%
|
|
40.7%
|
|
Six months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
2,013
|
$
|
2,325
|
(13.4%)
|
|
7.3%
|
|
8.0%
|
|
Six months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
3,706
|
$
|
3,652
|
1.5%
|
|
13.4%
|
|
12.5%
|
|
Six months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
4,082
|
$
|
3,852
|
6.0%
|
|
14.8%
|
|
13.2%
|
|
Six months ended
June 30,
|
Percent
|
Percent of
|
Percent of
|
||||||||||||||||
2017
|
2016
|
Change
|
Total Sales – 2017
|
Total Sales - 2016
|
|||||||||||||||
$
|
2,722
|
$
|
2,039
|
33.5%
|
|
9.9%
|
|
7.0%
|
|
● |
We reported net income of $1,810,000.
|
● |
We recorded depreciation, amortization, and share-based compensation expense of $898,000.
|
● |
Accounts receivable decreased $3,184,000, or 30%, due to the collection of receivables related to sales made in the fourth quarter of 2016.
|
● |
Inventories decreased $189,000, or 2%, due to the sell through of inventory on hand at the end of 2016 largely offset by increased purchases of inventory in 2017 to support anticipated sales of our restaurant solutions terminals.
|
● |
Prepaid income taxes increased $210,000 due to the timing of estimated income tax payments made in the first half of 2017.
|
●
●
|
Other current assets and long-term assets increased $299,000, or 73%, due largely to advance payments made in the first quarter of 2017 for annual ERP software maintenance expense and prepaid engineering expenses related to the development of our restaurant solutions terminals.
Accounts payable decreased $1,527,000, or 31%, due primarily to increased inventory purchases towards the end of the fourth quarter of 2016 and subsequently paid in the first half of 2017.
|
● |
We reported net income of $1,378,000.
|
● |
We recorded depreciation, amortization, and share-based compensation expense of $948,000
.
|
● |
Accounts receivable increased $3,203,000, or 45%, due to the increase and timing of sales during the second quarter of 2016.
|
● |
Inventories decreased $2,273,000, or 20%, due to the sell through of inventory on hand during 2016.
|
● |
Accounts payable increased $1,871,000, or 71% due primarily to increased inventory purchases towards the end of second quarter 2016.
|
● |
Accrued liabilities and other liabilities decreased $1,272,000 due primarily to the payment of 2015 annual bonuses in March 2016.
|
Financial Covenant
|
Requirement/Restriction
|
Calculation at June 30, 2017
|
Operating cash flow / Total debt service
|
Minimum of 1.25 times
|
70.78
|
Funded Debt / EBITDA
|
Maximum of 3.0 times
|
0
|
Item 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4. |
CONTROLS AND PROCEDURES
|
Item 1. |
LEGAL PROCEEDINGS
|
Item 1A. |
RISK FACTORS
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Approximate Dollar Value of Shares that May Yet Be Purchased under the Stock Repurchase Program
|
||||||||||||
April 1, 2017 – April 30, 2017
|
-
|
$
|
-
|
-
|
$
|
1,429,000
|
||||||||||
May 1, 2017 - May 31, 2017
|
-
|
-
|
-
|
$
|
1,429,000
|
|||||||||||
June 1, 2017 - June 30, 2017
|
-
|
-
|
-
|
$
|
1,429,000
|
|||||||||||
Total
|
-
|
$
|
-
|
-
|
Item 3. |
DEFAULTS UPON SENIOR SECURITIES
|
Item 4. |
MINE SAFETY DISCLOSURES
|
Item 5. |
OTHER INFORMATION
|
Exhibit 10.1
|
Amendment to 2014 Equity Incentive Plan approved by Shareholders on May 22, 2017.
|
|
Exhibit 31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Exhibit 31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Exhibit 32.1
|
Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
TRANSACT TECHNOLOGIES INCORPORATED
|
|
(Registrant)
|
|
|
|
By: /s/ Steven A. DeMartino
|
August 9, 2017
|
Steven A. DeMartino
|
|
President, Chief Financial Officer, Treasurer and Secretary
|
|
(Principal Financial and Accounting Officer)
|
Exhibit
|
|
|
10.1
|
Amendment to 2014 Equity Incentive Plan approved by Shareholders on May 22, 2017.
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
1.
|
DEFINED TERMS
|
2.
|
PURPOSE
|
3.
|
ADMINISTRATION
|
4.
|
LIMITS ON AWARDS UNDER THE PLAN
|
5.
|
ELIGIBILITY AND PARTICIPATION
|
6.
|
RULES APPLICABLE TO AWARDS
|
(a)
|
All Awards
|
(A)
|
Immediately upon the cessation of the Participant's Employment and except as provided in (B) and (C) below, each Stock Option and SAR that is then held by the Participant or by the Participant's permitted transferees, if any, will cease to be exercisable and will terminate, and all other Awards that are then held by the Participant or by the Participant's permitted transferees, if any, to the extent not already vested will be forfeited.
|
(B)
|
Subject to (C) and (D) below, all Stock Options and SARs held by the Participant or the Participant's permitted transferees, if any, immediately prior to the cessation of the Participant's Employment, to the extent then exercisable, will remain exercisable for the lesser of (i) a period of three months or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.
|
(C)
|
All Stock Options and SARs held by a Participant or the Participant's permitted transferees, if any, immediately prior to the Participant's death or voluntary resignation from active employment at or after age 55, to the extent then exercisable, will remain exercisable for the lesser of (i) the one year period ending with the first anniversary of the Participant's death or voluntary resignation from active employment at or after age 55 or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.
|
(D)
|
All Stock Options and SARs (whether or not exercisable) held by a Participant or the Participant's permitted transferees, if any, immediately prior to the cessation of the Participant's Employment will immediately terminate upon such cessation of Employment if the Administrator determines that such cessation of Employment has resulted for reasons or in circumstances that cast such discredit on the Participant as to justify immediate termination of the Award.
|
(b)
|
Stock Options and SARs
|
7.
|
EFFECT OF CERTAIN TRANSACTIONS
|
8.
|
LEGAL CONDITIONS ON DELIVERY OF STOCK
|
9.
|
AMENDMENT AND TERMINATION
|
10.
|
OTHER COMPENSATION ARRANGEMENTS
|
11.
|
WAIVER OF JURY TRIAL
|
12.
|
LIMITATION OF LIABILITY
|
13.
|
ESTABLISHMENT OF SUB-PLANS
|
14.
|
GOVERNING LAW
|
1. |
I have reviewed this quarterly report on Form 10-Q of TransAct Technologies Incorporated;
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this periodic report is being prepared;
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Bart C. Shuldman
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Bart C. Shuldman
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Chairman and Chief Executive Officer
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1. |
I have reviewed this quarterly report on Form 10-Q of TransAct Technologies Incorporated;
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this periodic report is being prepared;
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Steven A. DeMartino
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Steven A. DeMartino
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President, Chief Financial Officer, Treasurer and Secretary
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Bart C. Shuldman
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Bart C. Shuldman
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Chairman and Chief Executive Officer
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/s/ Steven A. DeMartino
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Steven A. DeMartino
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President, Chief Financial Officer, Treasurer and Secretary
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