TransAct Technologies Incorporated reports 69.0% Net Income growth in 2018 and almost no change in EBITDA Margin of 14.2%
03/06/2019 • About TransAct Technologies Incorporated (
$TACT) • By InTwits
TransAct Technologies Incorporated reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- TransAct Technologies Incorporated has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's in pair with industry average of 20.0%
- CAPEX is quite volatile: $1m in 2018, $1m in 2017, $1m in 2016, $1m in 2015, $1m in 2014
- The company has highly profitable business model: ROIC is 27.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
TransAct Technologies Incorporated's Revenue decreased on 3.1%. Revenue decline showed acceleration in 18Q4 - it was 10.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.72 pp from -0.47% to 0.26% in 2018. EBITDA Margin stuck to a growing trend at 2.1 pp per annum in 2014-2018.
Gross Margin increased slightly on 1.6 pp from 47.3% to 49.0% in 2018. Gross Margin stuck to a growing trend at 2.2 pp per annum in 2014-2018. SG&A as a % of Revenue increased slightly on 0.62 pp from 27.6% to 28.2% in 2018. During 2014-2018 SG&A as a % of Revenue bottomed in 2016 at 24.8% and was growing since that time.
Net Income margin increased on 4.2 pp from 5.7% to 9.9% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 TransAct Technologies Incorporated had CAPEX/Revenue of 2.7%. The company's CAPEX/Revenue increased slightly on 1.1 pp from 1.6% in 2015 to 2.7% in 2018. It's average level of CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at high and attractive ROIC (27.5%) and ROE (20.3%). ROIC decreased on 3.1 pp from 30.7% to 27.5% in 2018. ROE increased on 7.4 pp from 12.8% to 20.3% in 2018. ROIC followed a growing trend at 5.5 pp per annum in the last 5 years.
Leverage (Debt)
The company has no debt. Cash dropped on 14.8%.
Valuation and dividends
TransAct Technologies Incorporated's trades at EV/EBITDA 7.2x and P/E 11.1x.
Management team
Bart C Shuldman is a TransAct Technologies Incorporated's CEO. Bart C Shuldman is a founder and has spent 18 years with the company. Steven A Demartino is a TransAct Technologies Incorporated's CFO. Steven A Demartino has spent 15 years at the company.
Financial and operational results
FY ended 12/31/2018
TransAct Technologies Incorporated ($TACT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 53.108 | 59.676 | 57.235 | 56.311 | 54.587 | -3.1% |
| Gross Profit | 21.711 | 24.978 | 23.799 | 26.662 | 26.743 | 0.3% |
| SG&A | 15.676 | 15.173 | 14.174 | 15.545 | 15.408 | -0.9% |
| EBITDA | 3.178 | 5.894 | 6.531 | 7.895 | 7.756 | -1.8% |
| Net Income | -2.421 | 3.092 | 3.617 | 3.211 | 5.426 | 69.0% |
Balance Sheet
|
|---|
| Cash | 3.131 | 4.473 | 2.503 | 5.507 | 4.691 | -14.8% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.660 | 0.959 | 0.608 | 0.985 | 1.473 | 49.5% |
Ratios
|
|---|
| Revenue growth | -11.7% | 12.4% | -4.1% | -1.6% | -3.1% | |
| EBITDA growth | | 85.5% | 10.8% | 20.9% | -1.8% | |
|
|---|
| Gross Margin | 40.9% | 41.9% | 41.6% | 47.3% | 49.0% | 1.6% |
| EBITDA Margin | 6.0% | 9.9% | 11.4% | 14.0% | 14.2% | 0.2% |
| SG&A, % of revenue | 29.5% | 25.4% | 24.8% | 27.6% | 28.2% | 0.6% |
| Net Income Margin | -4.6% | 5.2% | 6.3% | 5.7% | 9.9% | 4.2% |
| CAPEX, % of revenue | 1.2% | 1.6% | 1.1% | 1.7% | 2.7% | 0.9% |
|
|---|
| ROIC | 6.0% | 18.5% | 23.9% | 30.7% | 27.5% | -3.1% |
| ROE | -8.4% | 12.1% | 14.5% | 12.8% | 20.3% | 7.4% |
| Net Debt/EBITDA | -1.0x | -0.8x | -0.4x | -0.7x | -0.6x | 0.1x |
TransAct Technologies Incorporated ($TACT) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 12 | 15 | 16 | 12 | | -12.5% | 8.5% | 2.0% | -10.9% |
| EBITDA | 1 | 2 | 3 | 1 | | -37.7% | 17.7% | 21.6% | -22.4% |
| Net Income | 1 | 1 | 3 | 1 | | -27.9% | 39.6% | 42.0% | |
Balance Sheet
|
|---|
| Cash | 5 | 4 | 4 | 5 | | 92.2% | -23.0% | 7.7% | -14.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 47.9% | 47.4% | 50.5% | 50.1% | | 4.3% | 0.1% | 2.1% | -0.1% |
| EBITDA Margin | 8.8% | 12.7% | 21.9% | 11.3% | | -3.6% | 1.0% | 3.5% | -1.7% |
| Net Income Margin | 5.6% | 8.2% | 16.3% | 8.2% | | -1.2% | 1.8% | 4.6% | 11.3% |
Peers in Technology Hardware, Storage &
Below you can find TransAct Technologies Incorporated benchmarking vs. other companies in Technology Hardware, Storage & industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Crossroads Systems Inc ($CRSS) | | -90.6% | -35.5% | -89.5% | 39,959.5% |
| Immersion Corporation ($IMMR) | | 19.8% | -9.9% | -38.7% | 217.0% |
| Veritec Inc ($VRTC) | | -42.2% | -28.0% | -52.2% | 53.1% |
| Boxlight Corporation ($BOXL) | | -88.5% | 503.2% | 26.4% | 47.0% |
| Pure Storage, Inc. ($PSTG) | | 308.2% | 152.4% | 67.9% | 38.6% |
| |
|---|
| Median (30 companies) | -16.9% | -3.3% | -5.0% | 2.1% | 5.6% |
|---|
| TransAct Technologies Incorporated ($TACT) | | 12.4% | -4.1% | -1.6% | -3.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 99.1% | 99.3% | 99.7% | 99.4% | 99.8% |
| Pure Storage, Inc. ($PSTG) | 43.5% | 55.5% | 61.9% | 65.9% | 65.5% |
| NetApp, Inc. ($NTAP) | 62.0% | 62.6% | 60.8% | 61.3% | 62.7% |
| Avid Technology, Inc. ($AVID) | 61.4% | 60.9% | 65.0% | 57.8% | 57.9% |
| Datasea Inc ($DTSS) | | | | 39.3% | 54.4% |
| |
|---|
| Median (29 companies) | 35.6% | 35.0% | 38.5% | 38.9% | 38.3% |
|---|
| TransAct Technologies Incorporated ($TACT) | 40.9% | 41.9% | 41.6% | 47.3% | 49.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 12.3% | 9.0% | -25.1% | -127.0% | 48.6% |
| Apple Inc. ($AAPL) | 33.1% | 35.3% | 32.7% | 31.2% | 30.8% |
| Western Digital Corporation ($WDC) | 20.1% | 18.7% | 12.5% | 21.4% | 27.5% |
| NetApp, Inc. ($NTAP) | 16.9% | 16.7% | 11.3% | 15.4% | 22.9% |
| Seagate Technology PLC ($STX) | 19.3% | 21.1% | 11.3% | 16.7% | 20.0% |
| |
|---|
| Median (29 companies) | 8.6% | 6.2% | 3.8% | 3.5% | 7.9% |
|---|
| TransAct Technologies Incorporated ($TACT) | 6.0% | 9.9% | 11.4% | 14.0% | 14.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hewlett Packard Enterprise Company ($HPE) | 6.6% | 6.4% | 10.8% | 10.9% | 9.6% |
| Pure Storage, Inc. ($PSTG) | 28.7% | 24.2% | 8.9% | 10.4% | 6.3% |
| 3D Systems Corporation ($DDD) | 3.5% | 3.4% | 2.6% | 4.8% | 5.9% |
| Apple Inc. ($AAPL) | 5.2% | 4.8% | 5.9% | 5.4% | 5.0% |
| Western Digital Corporation ($WDC) | 4.2% | 4.2% | 4.5% | 3.0% | 4.0% |
| |
|---|
| Median (29 companies) | 2.7% | 3.0% | 2.0% | 1.9% | 2.2% |
|---|
| TransAct Technologies Incorporated ($TACT) | 1.2% | 1.6% | 1.1% | 1.7% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Avid Technology, Inc. ($AVID) | | | | | 252.4% |
| Ionix Technology Inc ($IINX) | | | | 23.9% | 204.5% |
| Immersion Corporation ($IMMR) | 7.6% | 5.8% | -21.5% | -138.9% | 96.8% |
| HP Inc. ($HPQ) | 8.0% | 8.7% | 15.8% | 60.8% | 72.9% |
| NetApp, Inc. ($NTAP) | 12.5% | 14.8% | 7.3% | 14.0% | 28.1% |
| |
|---|
| Median (37 companies) | 5.9% | 5.0% | -2.6% | 0.2% | 2.2% |
|---|
| TransAct Technologies Incorporated ($TACT) | 6.0% | 18.5% | 23.9% | 30.7% | 27.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CPI Card Group Inc. ($PMTS) | 3.4x | 3.5x | 5.8x | | 12.4x |
| NCR Corporation ($NCR) | 4.9x | 6.6x | 2.7x | 2.3x | 5.2x |
| Avid Technology, Inc. ($AVID) | -0.7x | 3.1x | 1.7x | 5.6x | 4.8x |
| Xerox Corporation ($XRX) | 3.5x | 3.5x | 3.1x | 3.0x | 3.0x |
| Electronics for Imaging, Inc. ($EFII) | -0.2x | 1.4x | 1.3x | 1.6x | 1.7x |
| |
|---|
| Median (19 companies) | -0.2x | 0.6x | 0.4x | 0.5x | 1.1x |
|---|
| TransAct Technologies Incorporated ($TACT) | -1.0x | -0.8x | -0.4x | -0.7x | -0.6x |
