Breaking Down TransAct Technologies Incorporated (TACT) Financial Health: Key Insights for Investors

Are you keeping a close watch on TransAct Technologies Incorporated (TACT) and wondering about its financial stability? Did you know that in 2024, the company's net sales reached $43.4 million, a 40% decrease compared to the $72.6 million in 2023? While FST recurring revenue saw a slight dip of 3%, landing at $10.8 million, the full-year operating loss amounted to $(3.6) million. Curious to understand what these figures mean for investors and the future direction of TransAct? Keep reading to explore a detailed breakdown of the company's financial health and key insights for strategic decision-making.

TransAct Technologies Incorporated (TACT) Revenue Analysis

Analyzing TransAct Technologies Incorporated (TACT)'s revenue streams involves understanding where the company generates its income, how these sources have changed over time, and the relative importance of each segment.

Here's a breakdown:

• Primary Revenue Sources: TransAct Technologies primarily generates revenue through the sale of transaction-based printers, related supplies, and software solutions. These products cater to various industries, including casino and gaming, food service, and point-of-sale (POS) markets.
• Year-over-Year Revenue Growth: Monitoring the year-over-year revenue growth rate provides insights into the company's performance and market position. Examining historical trends reveals periods of growth, stability, or decline, offering a perspective on the company's ability to adapt to changing market conditions. For example, in 2023, TransAct Technologies reported total net revenues of $64.4 million, an increase of $10.8 million, or 20.2%, compared to $53.6 million in 2022. The increase was primarily due to higher revenues from the casino and gaming and food service technology markets.
• Contribution of Business Segments: TransAct Technologies operates through different business segments, each contributing uniquely to the overall revenue. Analyzing the contribution of each segment helps understand where the company's strengths lie and where there might be opportunities for improvement.

A closer look at the 2023 results shows a detailed breakdown of revenue sources:

• Casino and Gaming: Revenue from this sector increased by $7.8 million to $23.8 million in 2023, compared to $16.0 million in 2022.
• Food Service Technology: Revenues increased by $3.4 million to $28.4 million in 2023, compared to $25.0 million in 2022.
• POS Automation: Revenues decreased by $0.3 million to $7.5 million in 2023, compared to $7.8 million in 2022.
• Supplies: Revenues remained consistent at $4.7 million in both 2023 and 2022.

The following table summarizes the revenue distribution across different markets for TransAct Technologies in 2023 and 2022:

Analyzing significant changes in revenue streams involves identifying factors that contribute to fluctuations. These could include new product launches, shifts in market demand, changes in pricing strategies, or the impact of external economic factors. For instance, the increase in casino and gaming revenue in 2023 could be attributed to the expansion of gaming markets or the introduction of innovative printing solutions tailored to this industry.

For further insights into the investor profile of TransAct Technologies Incorporated, you might find this resource helpful: Exploring TransAct Technologies Incorporated (TACT) Investor Profile: Who’s Buying and Why?

TransAct Technologies Incorporated (TACT) Profitability Metrics

Analyzing TransAct Technologies Incorporated's (TACT) profitability involves examining several key financial metrics. These metrics provide insights into the company's ability to generate profit from its revenue and manage its operational costs. Below is an overview of the company's profitability based on the 2024 fiscal year.

Gross Profit Margin

For the full year 2024, TACT reported a gross profit of $21.5 million, which translates to a gross profit margin of 49.5%. This is a decrease compared to 2023, when the gross profit was $38.4 million with a gross margin of 52.9%. The reduction in gross margin was attributed to lower sales volumes and competitive pricing pressures.

• 2024 Gross Profit: $21.5 million (Gross Margin: 49.5%)
• 2023 Gross Profit: $38.4 million (Gross Margin: 52.9%)

Operating Profit Margin

TransAct Technologies experienced an operating loss for the full year 2024, reporting a loss of $(3.6) million. This contrasts with an operating income of $5.7 million in 2023. The operating loss reflects challenges in managing operating expenses relative to sales revenue.

• 2024 Operating Income: $(3.6) million
• 2023 Operating Income: $5.7 million

Net Profit Margin

The company's net loss for the full year 2024 was $(9.9) million, or $(0.99) per diluted share. This includes a $7.3 million non-cash charge related to a full valuation allowance on deferred tax assets. In comparison, the net income for 2023 was $4.7 million, or $0.47 per diluted share.

• 2024 Net Income: $(9.9) million ($(0.99) per share)
• 2023 Net Income: $4.7 million ($0.47 per share)

EBITDA and Adjusted EBITDA

TACT's EBITDA for the full year 2024 was negative $(2.7) million, a significant decrease from the positive $7.6 million in 2023. The adjusted EBITDA was negative $(1.5) million for 2024, compared to a positive $10.0 million in 2023.

• 2024 EBITDA: $(2.7) million
• 2023 EBITDA: $7.6 million
• 2024 Adjusted EBITDA: $(1.5) million
• 2023 Adjusted EBITDA: $10.0 million

Additional Key Financial Data

Below is a table summarizing key financial data for TransAct Technologies Incorporated:

In summary, TransAct Technologies faced significant challenges in 2024, with declines in net sales, gross profit, operating income, and net income compared to the previous year. The company is implementing strategic measures to address these challenges, including focusing on growing its Food Service Technology (FST) segment and managing costs.

Read more about TransAct Technologies Incorporated (TACT) financial health: Breaking Down TransAct Technologies Incorporated (TACT) Financial Health: Key Insights for Investors

TransAct Technologies Incorporated (TACT) Debt vs. Equity Structure

Understanding how TransAct Technologies Incorporated (TACT) finances its growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity to fund its operations.

As of the fiscal year 2024, a detailed breakdown of TransAct Technologies Incorporated (TACT)'s debt structure is essential to gauge its financial risk and stability. While precise figures for 2024 are not available, examining the trends and data from previous years can provide valuable insights.

Typically, an overview includes:

• Short-term debt: Obligations due within one year.
• Long-term debt: Obligations extending beyond one year.

Analyzing these components helps determine the company's ability to meet its immediate and future financial obligations. For instance, high levels of short-term debt relative to liquid assets might indicate liquidity concerns. Conversely, a manageable level of long-term debt can signify confidence in future earnings potential.

The debt-to-equity ratio is a critical metric for assessing a company's financial leverage. It indicates the proportion of debt and equity used to finance the company's assets. The debt-to-equity ratio is calculated as total liabilities divided by total equity. A higher ratio indicates that a company has used more debt to finance its assets, which could pose a higher risk to investors if the company's earnings decline. A lower ratio suggests a more conservative approach.

Industry standards vary, but generally, a debt-to-equity ratio below 1.0 is considered healthy, indicating that the company has more equity than debt. However, what is considered an acceptable ratio can differ significantly based on the industry. Capital-intensive industries, such as manufacturing or telecommunications, often have higher debt-to-equity ratios compared to service-oriented or technology companies.

Recent activities such as debt issuances, credit ratings, or refinancing provide insights into TransAct Technologies Incorporated (TACT)’s financial strategy and health. For example:

• New Debt Issuances: Indicate the company's need for capital and investor confidence.
• Credit Ratings: Provided by agencies like Standard & Poor's, Moody's, and Fitch, reflect the creditworthiness of the company.
• Refinancing Activities: Can lower interest rates or extend the maturity of debt, improving cash flow.

Balancing debt and equity is crucial for sustainable growth. Debt financing can provide capital without diluting ownership, but it comes with fixed interest payments and the risk of default. Equity financing, on the other hand, does not require fixed payments but dilutes ownership and can impact earnings per share.

TransAct Technologies Incorporated (TACT) must strategically manage its capital structure to optimize financial flexibility and minimize risk. This involves considering factors such as interest rates, market conditions, and the company's growth prospects.

TransAct Technologies Incorporated (TACT) Liquidity and Solvency

Assessing TransAct Technologies Incorporated's (TACT) liquidity and solvency involves analyzing key financial ratios and statements. These metrics provide insights into the company's ability to meet its short-term obligations and long-term financial stability. You can explore more about the company's values at Mission Statement, Vision, & Core Values of TransAct Technologies Incorporated (TACT).

Here's an overview:

Liquidity Positions:

• Current Ratio: For the year 2024, TACT's current ratio is 2.98. This ratio indicates the company's ability to cover its short-term liabilities with its short-term assets.
• Quick Ratio: The quick ratio for 2024 is 1.72. The quick ratio is a refinement of the current ratio that excludes inventories, the least liquid current assets.

Analysis of Working Capital Trends:

• Working Capital: TACT's working capital is reported as $25.48 million.

Cash Flow Statements Overview:

• Operating Cash Flow: In the last 12 months, the operating cash flow was $1.86 million.
• Capital Expenditures: Capital expenditures amounted to -$322,000.
• Free Cash Flow: The free cash flow was $1.54 million.
• Cash and cash equivalents: Increased to $14.4 million as of December 31, 2024, from $12.3 million at the end of 2023.

Additional Data:

Potential Liquidity Concerns or Strengths:

TransAct Technologies extended its credit facility with Siena Lending Group LLC, pushing the maturity date to March 31, 2027, and increasing the minimum borrowing requirement to $3.0 million.

TransAct Technologies Incorporated (TACT) Valuation Analysis

Determining whether TransAct Technologies Incorporated (TACT) is overvalued or undervalued requires a comprehensive look at several key financial metrics and market indicators.

Here's an analysis based on available data:

• Price-to-Earnings (P/E) Ratio: As of April 2025, TACT's P/E ratio is negative at -3.5x compared to the industry average of 10.6x. A negative P/E ratio suggests the company is currently not profitable.
• Price-to-Book (P/B) Ratio: The P/B ratio for TACT is approximately 1.17. This indicates that the market values the company slightly higher than its book value.
• Enterprise Value-to-EBITDA (EV/EBITDA): TACT's EV/EBITDA ratio is -11.81x. A negative EV/EBITDA ratio can occur when a company has negative earnings before interest, taxes, depreciation, and amortization (EBITDA). This suggests potential operational challenges.

To provide a clearer picture, here's a table summarizing these valuation ratios:

Analyzing TransAct Technologies Incorporated (TACT)'s stock price trends and overall market performance provides additional insights into its valuation. Over the past year, the stock price has decreased by approximately 29.24%. The 52-week range shows a low of $3.32 and a high of $5.47. As of April 17, 2025, the stock was trading around $3.51.

Here’s a snapshot of TACT's stock performance metrics:

• 52-Week High: $5.47
• 52-Week Low: $3.32
• 1-Year Price Change: -29.24%

As of April 2025, TransAct Technologies Incorporated (TACT) does not offer a dividend. The last ex-dividend date was November 19, 2019, with a distribution of $0.09 per share.

Analyst consensus for TransAct Technologies Incorporated (TACT) stock valuation leans towards a 'Strong Buy.' The average price target from analysts is $6.75, with forecasts ranging from a low of $6.00 to a high of $7.50. This average price target represents a potential upside of approximately 92.09% from the current share price.

Dive deeper into TransAct Technologies Incorporated (TACT)'s core values: Mission Statement, Vision, & Core Values of TransAct Technologies Incorporated (TACT).

TransAct Technologies Incorporated (TACT) Risk Factors

TransAct Technologies Incorporated (TACT) faces a variety of risks that could significantly impact its financial health. These risks span internal operational challenges and external market forces. Understanding these factors is crucial for investors assessing the company's stability and growth potential. Here's an overview of key risks, drawing from recent filings and industry analysis.

Industry Competition: The competitive landscape in which TransAct operates is intense. This competition can pressure the company's profit margins and market share. Competitors may introduce new technologies or offer lower prices, requiring TransAct to innovate continuously and manage costs effectively. Failure to do so could adversely affect its financial performance.

Regulatory Changes: Changes in regulations, particularly those affecting the gaming, lottery, and restaurant industries—key markets for TransAct—can pose significant risks. Compliance with new regulations may require additional investment, and failure to comply could result in fines or operational restrictions. Monitoring and adapting to regulatory changes are essential for mitigating these risks.

Market Conditions: Economic downturns or shifts in consumer spending can impact TransAct's sales and profitability. For example, reduced consumer spending in the restaurant industry could decrease demand for TransAct's point-of-sale (POS) solutions. Similarly, changes in the gaming industry, such as the adoption of cashless gaming systems, could require TransAct to adapt its product offerings.

Operational Risks:

• Supply Chain Disruptions: Disruptions in the supply chain, whether due to geopolitical events, natural disasters, or other factors, can affect TransAct's ability to manufacture and deliver its products on time. These disruptions can lead to increased costs and reduced sales.
• Product Development and Innovation: TransAct must continually invest in research and development to stay ahead of the competition and meet evolving customer needs. Delays in product development or failure to innovate successfully can result in lost market share.
• Dependence on Key Customers: The company’s reliance on a few major customers could pose a risk. Losing one or more of these key accounts could significantly impact revenue. Diversifying the customer base is a strategy to mitigate this risk.

Financial Risks:

• Debt and Leverage: High levels of debt can increase TransAct's vulnerability to economic downturns and limit its financial flexibility. Monitoring debt levels and managing cash flow are critical.
• Foreign Exchange Risk: Fluctuations in exchange rates can affect TransAct's international sales and profitability. Hedging strategies may be necessary to mitigate this risk.

Strategic Risks:

• Acquisition Integration: If TransAct pursues acquisitions, integrating these acquisitions successfully is crucial. Integration challenges can lead to higher-than-expected costs and failure to achieve anticipated synergies.
• Technological Obsolescence: The rapid pace of technological change poses a risk of product obsolescence. TransAct must continually update its technology to remain competitive.

While specific mitigation strategies would be detailed in TransAct's filings, common strategies include:

• Diversifying product offerings
• Expanding into new markets
• Strengthening customer relationships
• Investing in research and development
• Implementing robust risk management practices

For further insights into TransAct Technologies Incorporated (TACT) financial health, you can read more here: Breaking Down TransAct Technologies Incorporated (TACT) Financial Health: Key Insights for Investors

TransAct Technologies Incorporated (TACT) Growth Opportunities

TransAct Technologies Incorporated (TACT) faces a dynamic future, with several factors poised to influence its growth trajectory. Key areas to consider include product innovation, strategic market expansion, and potential acquisitions.

Key Growth Drivers:

• Product Innovations: TransAct's ability to continuously innovate its product offerings, particularly in its core markets like casino and gaming, food service technology, and POS (Point of Sale) systems, will be crucial. This includes developing new software solutions, enhancing hardware capabilities, and integrating emerging technologies to meet evolving customer needs.
• Market Expansion: Identifying and penetrating new geographic markets or expanding its presence in existing markets represents a significant growth opportunity. This could involve targeting specific regions with tailored product offerings or leveraging partnerships to access new customer segments.
• Acquisitions: Strategic acquisitions of complementary businesses or technologies could accelerate TransAct's growth by expanding its product portfolio, enhancing its market position, or providing access to new capabilities.

While specific future revenue growth projections and earnings estimates are subject to market conditions and company performance, here's a general framework for evaluating potential growth:

Future Revenue Growth and Earnings Estimates:

• Analyzing historical revenue growth trends and identifying factors that have contributed to past successes and challenges.
• Evaluating the current market environment and assessing the potential impact of industry trends, competitive pressures, and macroeconomic factors on TransAct's future revenue.
• Considering the potential impact of new product launches, market expansion initiatives, and acquisitions on revenue growth.
• Estimating future earnings growth based on projected revenue growth, cost management strategies, and operating leverage.

To assess the company's strategic positioning and potential for future growth, one can consider the following points:

Strategic Initiatives and Partnerships:

• Establishing strategic alliances with technology providers, distributors, or other industry players to expand its reach and enhance its product offerings.
• Investing in research and development to drive product innovation and maintain a competitive edge.
• Implementing effective marketing and sales strategies to increase brand awareness and generate demand for its products.

A critical component of TransAct's potential lies in its competitive advantages. These advantages enable the company to stand out in the market and secure a strong position for future expansion. Here’s a look into what might set TransAct apart from its competition:

• Specialized Product Portfolio: A focus on niche markets, such as casino and gaming or food service, allows TransAct to develop specialized products tailored to specific customer needs.
• Strong Customer Relationships: Building and maintaining strong relationships with key customers can lead to repeat business and provide a competitive advantage.
• Technological Expertise: Possessing deep technological expertise in its core areas of focus enables TransAct to develop innovative and differentiated products.

For insights into the company's guiding principles, explore Mission Statement, Vision, & Core Values of TransAct Technologies Incorporated (TACT).