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Huge Quarter For TransAct Technologies Only The Beginning Of Corporate Transformation

Spencer Ross profile picture
Spencer Ross


  • Strategic transition in large addressable market.
  • Virtual monopoly in 'back of the office' solution for the restaurant industry in nascent stages.
  • Gross margin up significantly leading to near doubling or doubling of operating income, net income and EBITDA.

Stellar Quarterly Results... Just the Beginning

TransAct Technologies (NASDAQ:TACT) is a maker of specialty technology-based printer solutions for the casino/gaming, lottery and restaurant industries. With its stellar Q3 results just released , TACT has now tipped its hat that the company's decision to laser focus on 'back-of the-office' technology solutions for the restaurant industry is just beginning to demonstrate significant traction.

Specifically, the company delivered record quarterly results on both a q/q and sequential basis and which represents the company's best showing as far back as I could find. Gross margin was up 800 basis points q/q to 48.4% leading to a more than doubling of operating income to 2.6 M from 1.2M and EPS doubling to 0.24 from 0.12, well ahead of the analyst estimate of 0.12. In addition, the earnings number was easily the company's largest earnings surprise.

The Focus, The Driver Ad The Tip Of The Iceberg

In the Q3 release, CEO Bar Shuldman described the strategic focus that has been in the works:

TransAct has been focused over the past several quarters on creating a new restaurant solutions market that would provide much needed technology for the back of the restaurant. Leveraging our engineering and manufacturing skills, we developed a full suite of AccuDate terminals, including the AccuDate XL, AccuDate PRO and AccuDate 9700. In addition, we built out an internal direct sales force for our restaurant solutions offerings while maintaining our solid position in the casino and gaming and lottery markets.

'Technology for the back of the restaurant' means utilizing the cloud and automation to run all the things in your restaurant that you'd rather not have to think about which cuts costs and increases profitability. Here are a list of some of the things its newest offering, the AccuDate XL can do:

  • Tasks & Checklists

This article was written by

Spencer Ross profile picture
I am long term investor who previously served as a lead Portfolio Manager at Galilee Partners where specializing in a broad-base of US equities employing a proprietary, research-based model to capture significant mispricings through the emergence of powerful company or sector specific catalysts.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in TACT over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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