TransAct Technologies
TACT
#10091
Rank
ยฃ25.32 M
Marketcap
ยฃ2.47
Share price
-0.61%
Change (1 day)
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Change (1 year)

TransAct Technologies - 10-Q quarterly report FY


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1
FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 25, 2000

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: to:
Commission file number: 0-21121

TRANSACT TECHNOLOGIES INCORPORATED
(Exact name of registrant as specified in its charter)

DELAWARE 06-1456680
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

7 LASER LANE, WALLINGFORD, CT 06492
(Address of principal executive offices)
(Zip Code)

(203) 269-1198
(Registrant's telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year, if changed since last
report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

YES |X| NO |_|

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

CLASS OUTSTANDING APRIL 28, 2000

COMMON STOCK, 5,578,725
$.01 PAR VALUE
2
TRANSACT TECHNOLOGIES INCORPORATED

INDEX

<TABLE>
<CAPTION>
PART I. Financial Information: Page No.
<S> <C>
Item 1 Financial Statements

Consolidated condensed balance sheets as of March 25, 2000 and December
31, 1999 3

Consolidated condensed statements of operations for the three months
ended March 25, 2000 and March 27, 1999 4

Consolidated condensed statements of cash flows for the three months
ended March 25, 2000 and March 27, 1999 5

Notes to consolidated condensed financial statements 6

Item 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations 7

Item 3 Quantitative and Qualitative Disclosures about Market Risk 11

PART II. Other Information:

Item 6 Exhibits and Reports on Form 8-K 11

Signatures 12
</TABLE>





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3
TRANSACT TECHNOLOGIES INCORPORATED

CONSOLIDATED CONDENSED BALANCE SHEETS


<TABLE>
<CAPTION>
MARCH 25, December 31,
(In thousands) 2000 1999
---------- --------
ASSETS: (UNAUDITED)
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 233 $ 279
Receivables, net 6,572 4,863
Inventories 11,209 10,257
Other current assets 1,550 1,540
-------- --------
Total current assets 19,564 16,939
-------- --------

Plant and equipment, net 6,907 6,705
Excess of cost over fair value of net assets acquired 1,834 1,886
Other assets 191 154
-------- --------
8,932 8,745
-------- --------
$ 28,496 $ 25,684
======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 3,727 $ 3,056
Accrued liabilities 2,788 2,789
-------- --------
Total current liabilities 6,515 5,845
-------- --------
Long term debt 9,500 7,100
Other liabilities 500 532
-------- --------
10,000 7,632
-------- --------

Shareholders' equity:
Common stock 56 56
Additional paid-in capital 5,682 5,656
Retained earnings 7,292 7,592
Unamortized restricted stock compensation (694) (747)
Loan receivable from officer (330) (330)
Accumulated other comprehensive loss (25) (20)
-------- --------
Total shareholders' equity 11,981 12,207
-------- --------
$ 28,496 $ 25,684
======== ========
</TABLE>




See notes to consolidated condensed financial statements.


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TRANSACT TECHNOLOGIES INCORPORATED

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------
MARCH 25, March 27,
(In thousands, except per share data) 2000 1999
-------- --------
<S> <C> <C>
Net sales $ 11,238 $ 9,201
Cost of sales 8,225 6,773
-------- --------

Gross profit 3,013 2,428
-------- --------
Operating expenses:
Engineering, design and product
development expenses 860 801
Selling and marketing expenses 1,255 859
General and administrative expenses 1,222 1,088
-------- --------
3,337 2,748
-------- --------

Operating loss (324) (320)
-------- --------
Other income (expense):
Interest, net (154) (90)
Other, net 17 15
-------- --------
(137) (75)
-------- --------

Loss before income taxes (461) (395)
Income tax benefit (161) (116)
-------- --------

Net loss $ (300) $ (279)
======== ========
Net loss per share:
Basic $ (0.05) $ (0.05)
======== ========
Diluted (0.05) (0.05)
======== ========

Weighted average common shares outstanding:

Basic 5,483 5,578
======== ========
Diluted 5,483 5,578
======== ========
</TABLE>




See notes to consolidated condensed financial statements.



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TRANSACT TECHNOLOGIES INCORPORATED

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(UNAUDITED)


<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------
MARCH 25, March 27,
(In thousands) 2000 1999
------- -------

Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $ (300) $ (279)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 599 560
Gain on disposal of equipment (4) --
Changes in operating assets and liabilities:
Receivables (1,709) (176)
Inventories (952) 629
Other current assets (10) 28
Other assets (58) (7)
Accounts payable 671 386
Accrued liabilities and other liabilities (33) (392)
------- -------
Net cash provided by (used in) operating activities (1,796) 749
------- -------

Cash flows from investing activities:
Purchases of plant and equipment (664) (405)
------- -------
Net cash used in investing activities (664) (405)
------- -------

Cash flows from financing activities:
Bank line of credit borrowings 6,900 2,000
Bank line of credit repayments (4,500) (2,000)
Purchases of treasury stock -- (229)
Loan to officer -- (330)
Proceeds from option exercises 19 --
------- -------
Net cash provided by (used in) financing activities 2,419 (559)
------- -------

Effect of exchange rate changes on cash (5) (10)
------- -------

Decrease in cash and cash equivalents (46) (225)
Cash and cash equivalents at beginning of period 279 546
------- -------
Cash and cash equivalents at end of period $ 233 $ 321
======= =======
</TABLE>



See notes to consolidated condensed financial statements.




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TRANSACT TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)


1. In the opinion of TransAct Technologies Incorporated (the
"Company"), the accompanying unaudited consolidated condensed financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly its financial position as of
March 25, 2000, and the results of its operations and cash flows for
the three months ended March 25, 2000 and March 27, 1999. The December
31, 1999 consolidated condensed balance sheet has been derived from the
Company's audited financial statements at that date. These interim
financial statements should be read in conjunction with the audited
financial statements for the year ended December 31, 1999 included in
the Company's Annual Report on Form 10-K.

The financial position and results of operations of the
Company's foreign subsidiaries are measured using local currency as the
functional currency. Assets and liabilities of such subsidiaries have
been translated at end of period exchange rates, and related revenues
and expenses have been translated at weighted average exchange rates.
Transaction gains and losses are included in other income.

The results of operations for the three months ended March 25,
2000 and March 27, 1999 are not necessarily indicative of the results
to be expected for the full year.

2. Earnings per share

Basic earnings per common share for the three months ended
March 25, 2000 and March 27, 1999 were based on the weighted average
number of shares outstanding during the period. Diluted earnings per
share for the same periods were based on the weighted average number of
shares after consideration of any dilutive effect of stock options and
warrants.

3. Inventories:

The components of inventory are:

<TABLE>
<CAPTION>
March 25, December 31,
(In thousands) 2000 1999
--------- -----------
<S> <C> <C>
Raw materials and component parts $ 10,632 $ 9,198
Work-in-process 400 542
Finished goods 177 517
--------- --------
$ 11,209 $ 10,257
========= ========
</TABLE>

4. Commitments and contingencies

The Company has a long-term purchase agreement with Okidata,
Division of Oki America, Inc., for certain printer components. Under
the terms of the agreement, the Company receives favorable pricing for
volume purchases over the life of the contract. In the event
anticipated purchase levels are not achieved, the Company would be
subject to retroactive price increases on previous purchases.
Management currently anticipates achieving purchase levels sufficient
to maintain the favorable prices.






6
7
TRANSACT TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

5. Significant transactions

On March 14, 2000, the Company entered into a new two-year
$13,000,000 revolving credit facility (the "New Credit Facility") with
Fleet, expiring on May 31, 2002. The New Credit Facility replaced the
existing $10,000,000 facility also with Fleet. The New Credit Facility
provides the Company with a $13,000,000 credit facility that may be
used to fund working capital. Borrowings under the New Credit facility
bear interest on outstanding borrowings at Fleet's prime rate plus a
margin ranging from zero to 0.75 percentage points and bear a
commitment fee ranging from 0.375% to 0.75% on any unused portion of
the New Credit Facility. The New Credit Facility also permits the
Company to designate a LIBOR rate on outstanding borrowings with a
margin ranging from 1.5 to 3.0 percentage points over the market rate,
depending on the Company meeting certain ratios. The New Credit
Facility is secured by a lien on substantially all the assets of the
Company, imposes certain financial covenants and restricts the creation
of liens.

6. Subsequent events

On April 7, 2000 the Company sold 4,000 shares of 7% Series B
Cumulative Convertible Redeemable Preferred Stock (the "Preferred
Stock") to Advance Capital Advisors, L.P. and its affiliate in
consideration of $1,000 per share (the "Stated Value"), for a total of
$4,000,000, less issuance costs. The Preferred Stock is convertible at
any time by the holders at a conversion price of $9.00 per common
share. In addition, the Company issued warrants pro-rata to the
Preferred Stock holders to purchase an aggregate of 44,444 shares of
the Company's common stock at an exercise price of $9.00 per common
share. The warrants are exercisable at any time until the April 7,
2005. The Preferred Stock is subject to mandatory conversion into
shares of the Company's common stock when such stock has traded at $35
per share or more for a 30 day period ending on or after April 7, 2003,
or for a 60 day period beginning on or after April 7, 2002. The
Preferred Stock is redeemable at the option of the holders on April 7,
2005 at $1,000 per share plus any unpaid dividends. On or after April
7, 2007, the Company has the right to require (1) redemption of the
Preferred Stock at $1,000 per share plus any unpaid dividends or (2)
conversion of the Preferred Stock at $9.00 per common share. Upon a
change of control, holders have the right to redeem the Preferred Stock
for 200% of the Stated Value plus any unpaid dividends. The holders of
the Preferred Stock are entitled to receive a cumulative annual
dividend of $70 per share, payable quarterly and have preference to any
other dividends, if any, paid by the Company.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Certain statements included in this report, including without limitation
statements in this Management's Discussion and Analysis of Financial Condition
and Results of Operations, which are not historical facts are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
forward-looking statements involve risks and uncertainties, including, but not
limited to, customer acceptance and market share gains, both domestically and
internationally, in the face of substantial competition from competitors that
have broader lines of products and greater financial resources; successful
product development; dependence on significant customers; dependence on third
parties for sales in Europe and Latin America; economic conditions in the United
States, Europe and Latin America; marketplace acceptance of new products; risks
associated with foreign operations; availability of third-party components at
reasonable prices; and the absence of price wars or other significant pricing
pressures affecting the Company's products in the United States or abroad.
Actual results may differ materially from those discussed in, or implied by, the
forward-looking statements.




7
8
YEAR 2000

The Company's program to address the Year 2000 issue consisted of the following
phases: assessment, remediation, testing and contingency planning. The Company's
program was initiated and executed to prevent major interruptions in the
business due to Year 2000 problems. As of December 31, 1999, all phases were
completed. The Company also completed its assessment of its Year 2000 risks
related to significant relationships with its critical third party suppliers and
customers. The total cost of the Year 2000 program was approximately $15,000,
primarily for the cost of replacing/upgrading noncompliant software.

Currently, the Company has not encountered any significant business
interruptions from the Year 2000 issue on its internal IT and non-IT systems.
The Company will continue to monitor its systems and vendors to ensure that
issues do not manifest themselves over the next few months. Although the Company
does not anticipate any future significant business interruptions, no assurance
can be given that such interruptions will not occur.



RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 25, 2000 COMPARED TO THREE MONTHS ENDED MARCH 27, 1999

NET SALES. Net sales by market for the current and prior year's quarter were as
follows:

<TABLE>
<CAPTION>
Three months ended Three months ended
(In thousands, except %) March 25, 2000 March 27, 1999
------------------------ ------------------------
<S> <C> <C> <C> <C>
Point of sale $ 5,833 51.9 % $4,832 52.5 %
Gaming and lottery 3,947 35.1 2,194 23.8
Other 1,458 13.0 2,175 23.7
------------- ---------- ----------- ------------

$ 11,238 100.0 % $9,201 100.0 %
============= ========== =========== ============
</TABLE>


Net sales for the first quarter of 2000 increased $2,037,000, or 22%, to
$11,238,000 from $9,201,000 in the prior year's first quarter, due to increased
shipments into the point of sale ("POS") and gaming and lottery markets,
somewhat offset by decreased sales into the Company's other markets.

Point of sale: Sales of the Company's POS printers increased approximately
$1,001,000, or 21%. International POS printer shipments increased approximately
$1,468,000 due largely to resumed printer shipments for the British Post Office
project. Shipments for this project totaled approximately $1,200,000 in the
first quarter of 2000. Domestic POS printer sales decreased $467,000 due
primarily to softness in demand from the Company's domestic distributors in the
first quarter of 2000.

Gaming and lottery: Sales of the Company's gaming and lottery printers increased
approximately $1,753,000, or 80%, from the first quarter a year ago. The overall
increase primarily reflects resumed printer shipments of the Company's on-line
lottery printers to GTECH. Shipments of these printers and spares totaled
approximately $3,100,000. The increase due to resumed shipments to GTECH was
largely offset by a decrease of approximately $1,300,000 in shipments of
printers for use in video lottery terminals, primarily for use in South
Carolina's video poker industry. In October 1999, the Supreme Court of South
Carolina upheld legislation to prohibit the use of video poker machines
beginning July 1, 2000. As a result, the Company does not expect any future
sales of its VLT printers in South Carolina. However, the Company is currently
pursuing opportunities to provide printers for use in video lottery and other
gaming machines outside of South Carolina, including newly legalized casinos in
California.

Other: Sales of the Company's printers into other markets decreased by $717,000,
or 33% to $1,458,000 from $2,175,000 in the prior year's quarter, due primarily
to lower sales of the Company's kiosk printers. The first quarter of 1999
included shipments of approximately $600,000 of the Company's thermal kiosk
printers for use in a Canadian government application. No shipments of these
printers were made in the first quarter of 2000.

GROSS PROFIT. Gross profit increased $585,000, or 24%, to $3,013,000 from
$2,428,000 in the prior year's quarter due primarily to higher volume of sales.
The gross margin also increased to 26.8% from 26.4%. Due to higher expected
sales volume, the Company expects its gross margin to improve slightly for the
remainder of 2000.




8
9
ENGINEERING AND PRODUCT DEVELOPMENT. Engineering, design and product development
expenses increased $59,000, or 7%, to $860,000 from $801,000 in the first
quarter of 1999. This decrease is primarily due to increased product development
and design expenses, primarily for development of printers utilizing inkjet
printing technology. Engineering and product development expense decreased as a
percentage of net sales to 7.6% from 8.7%, due largely to higher sales volume in
the first quarter of 2000 compared to 1999.

SELLING AND MARKETING. Selling and marketing expenses increased $396,000, or
46%, to $1,255,000 from $859,000 in the quarter ended March 27, 1999, and
increased as a percentage of net sales to 11.2% from 9.3%. Such expenses
increased primarily due to marketing and promotional activities incurred in the
first quarter of 2000 in preparation for the launch of the Company's new family
of printers utilizing inkjet printing technology and, to a lesser extent,
additional marketing staff.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased by
$134,000, or 12%, to $1,222,000 from $1,088,000 in the comparable prior year's
quarter. The increase primarily resulted from higher expenses related to the
Company's upgrade of its telecommunications system in late 1999 and an increase
in payroll related expenses. General and administrative expenses decreased as a
percentage of net sales to 10.9% from 11.8%, due to primarily to higher volume
of sales in the first quarter of 2000 compared to 1999.

OPERATING LOSS. The Company incurred an operating loss of $324,000 in the first
quarter of 2000 compared to $320,000 in the first quarter of the prior year.
Despite an increase in sales of approximately $2 million in the first quarter of
2000 compared to 1999, the Company experienced a net loss, as gross profit on
incremental sales was entirely offset by higher operating expenses (primarily
planned marketing and product development expenses related to the launch of the
Company's printers utilizing inkjet printing technology).

INTEREST. Net interest expense increased to $154,000 from $90,000 in the first
quarter of 1999 due to increased average outstanding borrowings on the Company's
line of credit and a higher average borrowing rate. See "Liquidity and Capital
Resources" below.

INCOME TAXES. As a result of the Company's operating loss, the Company recorded
an income tax benefit of $161,000 and $116,000 for the quarter ended March 25,
2000 and March 27, 1999, respectively.

NET LOSS. The Company incurred a net loss during the first quarter of 2000 of
$300,000, or $0.05 per share (basic and diluted) compared to a net loss of
$279,000, or $0.05 per share (basic and diluted) for the first quarter of 1999.


LIQUIDITY AND CAPITAL RESOURCES

The Company reported cash used in operations of $1,796,000 during the first
quarter of 2000 compared to cash generated from operations of $749,000 during
the first quarter of 1999. The Company's working capital increased to
$13,059,000 at March 25, 2000 from $11,094,000 at December 31, 1999. The current
ratio also increased to 3.00 at March 25, 2000 from 2.90 at December 31, 1999.
Both the increase in working capital and the current ratio were largely due to
(1) higher receivables at March 25, 2000 resulting from higher sales volume in
the first quarter of 2000 compared to the fourth quarter of 1999 and (2) higher
inventory levels in anticipation of higher sales volume and new product launches
for the remainder of 2000.

During 1997 and 1998, the Board of Directors authorized the repurchase of up to
1.5 million shares of the Company's common stock (the "Stock Buyback Program").
Since the Company began the Stock Buyback Program in December 1997, it has
repurchased 1,273,800 shares for $9,650,000 (an average cost of $7.58 per
share). No repurchases have been made since the first quarter of 1999. All
shares repurchased under the Stock Buyback Program were retired. Further
repurchases of the Company's common stock will depend upon future cash flow of
the Company and stock market conditions.





9
10
The Company had in place a two-year $10,000,000 revolving credit facility (the
"Credit Facility") with Fleet, expiring May 31, 2001. The Credit Facility
provided the Company with a $10,000,000 credit facility that may be used to fund
working capital. Borrowings under the Credit Facility bore interest at Fleet's
prime rate and bore a commitment fee ranging from 0.25% to 0.625% on any unused
portion of the Credit Facility. The Credit Facility also permitted the Company
to designate a LIBOR rate on outstanding borrowings with a margin ranging from
1.50 to 2.25 percentage points (the "Margin") over the market rate, depending on
the Company meeting certain ratios. Concurrent with the Credit Facility, the
Company entered into a swap agreement with Fleet under which the Company fixed
its interest rate at 5.63% plus the applicable Margin until May 31, 2001 on
$3,000,000 of outstanding borrowings under the Credit Facility. The Credit
Facility was secured by a lien on substantially all the assets of the Company,
imposed certain financial covenants and restricted the payment of dividends and
the creation of liens. The Company had $7,100,000 of outstanding borrowings
under this facility at December 31, 1999.

On March 14, 2000, the Company entered into a new two-year $13,000,000 revolving
credit facility (the "New Credit Facility") with Fleet, expiring on May 31,
2002. The New Credit Facility replaced the Credit Facility. The New Credit
Facility provides the Company with a $13,000,000 credit facility that may be
used to fund working capital. Borrowings under the New Credit facility bear
interest on outstanding borrowings at Fleet's prime rate plus a margin ranging
from zero to 0.75 percentage points and bears a commitment fee ranging from
0.375% to 0.75% on any unused portion of the New Credit Facility. The New Credit
Facility also permits the Company to designate a LIBOR rate on outstanding
borrowings with a margin ranging from 1.5 to 3.0 percentage points over the
market rate, depending on the Company meeting certain ratios. The New Credit
Facility is secured by a lien on substantially all the assets of the Company,
imposes certain financial covenants and restricts the payment of dividends and
the creation of liens. The Company had $9,500,000 of outstanding borrowings
under this facility at March 25, 2000.

On April 7, 2000 the Company sold 4,000 shares of 7% Series B Cumulative
Convertible Redeemable Preferred Stock (the "Preferred Stock") to Advance
Capital Advisors, L.P. and its affiliate in consideration of $1,000 per share
(the "Stated Value"), for a total of $4,000,000, less issuance costs. The
Preferred Stock is convertible at any time by the holders at a conversion price
of $9.00 per common share. In addition, the Company issued warrants pro-rata to
the Preferred Stock holders to purchase an aggregate of 44,444 shares of the
Company's common stock at an exercise price of $9.00 per common share. The
warrants are exercisable at any time until the April 7, 2005. The Preferred
Stock is subject to mandatory conversion into shares of the Company's common
stock when such stock has traded at $35 per share or more for a 30 day period
ending on or after April 7, 2003, or for a 60 day period beginning on or after
April 7, 2002. The Preferred Stock is redeemable at the option of the holders on
April 7, 2005 at $1,000 per share plus any unpaid dividends. On or after April
7, 2007, the Company has the right to require (1) redemption of the Preferred
Stock at $1,000 per share plus any unpaid dividends or (2) conversion of the
Preferred Stock at $9.00 per common share. Upon a change of control, holders
have the right to redeem the Preferred Stock for 200% of the Stated Value plus
any unpaid dividends. The holders of the Preferred Stock are entitled to receive
a cumulative annual dividend of $70 per share, payable quarterly and have
preference to any other dividends, if any, paid by the Company.

The Company's capital expenditures were approximately $664,000 and $405,000 for
the three months ended March 25, 2000 and March 27, 1999, respectively. These
expenditures primarily included new product tooling. The Company's total capital
expenditures for 2000 are expected to be approximately $3,900,000, a majority
for new product tooling.

The Company believes that cash flows generated from operations, net cash
proceeds from the issuance of Preferred Stock and borrowings available under the
New Credit Facility, as necessary, will provide sufficient resources to meet the
Company's working capital needs, finance its capital expenditures, and meet its
liquidity requirements through December 31, 2000.






10
11
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

INTEREST RATE RISK

The Company's exposure to market risk for changes in interest rates
relates primarily to borrowings under the Company's New Credit Facility with
Fleet Bank. These borrowings bear interest at variable rates and the fair value
of this indebtedness is not significantly affected by changes in market interest
rates. The Company entered into a swap agreement with Fleet to fix its interest
rate on $3 million of borrowings at 5.63% plus a margin as determined under the
Company's current credit facility through May 2001. An effective increase or
decrease of 10% in the current effective interest rates under the New Credit
Facility would not have a material effect on the Company's results of operations
or cash flow.

FOREIGN CURRENCY EXCHANGE RISK

A substantial portion of the Company's sales are denominated in U.S.
dollars and, as a result, the Company has relatively little exposure to foreign
currency exchange risk with respect to sales made. This exposure may change over
time as business practices evolve and could have a material adverse impact on
our financial results in the future. The Company does not use forward exchange
contracts to hedge exposures denominated in foreign currencies or any other
derivative financial instruments for trading or speculative purposes. The effect
of an immediate 10% change in exchange rates would not have a material impact on
the Company's future results of operations or cash flow.



PART II. OTHER INFORMATION


ITEM 6. Exhibits and Reports on Form 8-K

a. Exhibits filed herein

Exhibit 3.1(c) Certificate of Designation of
the Series B Preferred Stock.

Exhibit 10.25 Amended and Restated Credit
Agreement dated as of March
14, 2000 by and among
TransAct Technologies
Incorporated and Fleet
National Bank.

Exhibit 10.26 Preferred Stock Purchase
dated as of March 20, 2000
between TransAct Technologies
Incorporated and Advance
Capital Partners, L.P. and
affiliate.

Exhibit 11.1 Computation of earnings per share

Exhibit 27.1 Financial Data Schedule


b. Reports on Form 8-K

The Company did not file any reports on Form 8-K
during the quarter covered by this report.



11
12
SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.





TRANSACT TECHNOLOGIES INCORPORATED

(Registrant)



May 8, 2000 /s/ Richard L. Cote
Richard L. Cote
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
(Principal Financial Officer)




/s/ Steven A. DeMartino
Steven A. DeMartino
Vice President and Corporate Controller
(Principal Accounting Officer)




12
13
EXHIBIT LIST

The following exhibits are filed herewith.

Exhibit

3.1(c) Certificate of Designation of the Series B Preferred
Stock.

10.25 Amended and Restated Credit Agreement dated as of
March 14, 2000 by and among TransAct Technologies
Incorporated and Fleet National Bank.

10.26 Preferred Stock Purchase Agreement and Certificate of
Designation dated as of March 20, 2000 between
TransAct Technologies Incorporated and Advance
Capital Partners, L.P. and affiliate.

11.1 Computation of earnings per share.

27.1 Financial Data Schedule.




13
14
TRANSACT TECHNOLOGIES INCORPORATED
Exhibit 11.1
Computation of Earnings Per Share
(Unaudited)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 25, MARCH 27,
(In thousands, except per share data) 2000 1999
--------------- ---------------
<S> <C> <C>
Net loss $ (300) $ (279)
=============== ===============
Shares:
Basic - Weighted average common shares
outstanding 5,483 5,578
Dilutive effect of outstanding options and
warrants as determined by the treasury
stock method -- --
--------------- ---------------
Dilutive - Weighted average common and
common equivalent shares outstanding 5,483 5,578
=============== ===============
Net loss per common and common equivalent share:
Basic $ (0.05) $ (0.05)
=============== ===============
Diluted $ (0.05) $ (0.05)
=============== ===============
</TABLE>