TransAct swings to US$440k loss in 3Q as casino and gaming sales fall 11pct

Nasdaq-listed TransAct Technologies Inc, a supplier of slot machine printers and casino-player management software, posted a net loss of US$440,000 for the three months to September 30, compared with a net profit of US$15,000 a year earlier. The company had recorded a net loss of US$50,000 in the preceding quarter. Casino and gaming sales fell 10.7 percent year-on-year to just under US$6.4 million, according to unaudited results issued on Thursday. Group-wide net sales rose 9.3 percent year-on-year to US$14.4 million, as sales in the food service technology segment increased 32.7 percent to US$6.4 million. John Dillon, TransAct’s chief executive, attributed the decline in casino and gaming sales to the cyclical nature of the business. “Casino and gaming softened in the quarter, consistent with the cyclicality that we have seen in the past, and we expect the softer demand environment to continue into the fourth quarter,” the CEO stated. “However, the fundamentals of this business are unchanged. It is a regulated market with high barriers to entry and a long-standing original equipment manufacturers customer base, and it remains a strong cash flow generator for the overall business,” he added. TransAct said on Thursday that its board was also evaluating a potential sale of the food service technology business, either separately or as part of a broader transaction. For now, however, the formal strategic review, announced in August, remains focused on the casino and gaming business, the company said. Management worked with financial adviser BofA Securities Inc during the quarter, and the company has set no public timetable for the review to be completed. TransAct posted a third-quarter operating loss of US$415,000, compared with operating income of US$14,000 a year earlier. Gross profit edged up to nearly US$6.7 million, while gross margin fell to 46.4 percent from 49.8 percent. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) declined 56.8 percent year-on-year to US$289,000. The figure excluded US$120,000 in shareholder advisory costs associated with shareholder activism, an adjustment the company began making in the third quarter. The company lowered the ceiling for its full-year forecasts on two metrics. It now expects 2026 net sales of US$55 million to US$56 million, compared with its previous range of US$55 million to US$57 million. It expects adjusted EBITDA of US$1.5 million to US$1.75 million, compared with US$1.5 million to US$2.0 million previously. In September, TransAct announced the debut of its EPIC TT+ tabletop ticket-in, ticket-out printer. The unit was designed for casino transaction points beyond the slot-machine floor, including cashier cages, player clubs and redemption areas.