Greetings, and welcome to the TransAct Technologies 1st quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce our host, Ryan Gardella, Investor Relations. Thank you, sir. You may begin. Thank you, Kyle. Good afternoon, and welcome to TransAct Technologies first quarter 2023 earnings call. Today we'll be discussing the results announced in our press release issued after market close. Joining us from the company is CEO John Dillon and President and CFO Steve DeMartino. Today's call will include a discussion of the company's key operating strategies, the progress on these initiatives, and the details on our first quarter financial results. We will then open the call to participants for questions. As a reminder, this conference call contains statements about future events and expectations which are forward-looking in nature. Statements on this call may be deemed as forward-looking. Actual results may differ materially. For a full list of risks inherent to the business and the company, please refer to the company's SEC filings, including its reports on Forms 10-K and 10-Q. TransAct undertakes no obligation to revise or update any forward-looking statements or to reflect events or circumstances that occur after the call. Today's call and webcast will include non-GAAP financial measures within the meaning of the SEC Regulation G. When required, reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release as well as on the website. With that, I'd like to turn the call over to John. John? Thanks, Ryan. This is John Dillon. It's good afternoon to all of you, and thanks for joining us today. This is my first earnings call as Chief Executive at TransAct, and for those of you who don't know me, again, my name's John Dillon. Before becoming the CEO here, I've been on the board for about a decade, so I know something about the company. You can look me up on LinkedIn, but I've been a tech individual for a long time, places like Oracle, Salesforce, Hyperion Solutions, and the like. I feel like I can bring a fair amount of guidance and experience to the job. I've only been here for about a month, but I wanna share some of my first impressions with you and highlight some of the things that I think we're doing well and where we have some opportunity to do better. First of all, I feel confident that stating that TransAct has a great number of strengths and some fundamental goodness for a company of our size, and we're not big. I also would be remiss if I didn't thank Bart Shuldman for his dedication to TransAct. I mean, his ability to navigate three years of remarkably unprecedented business and logistics challenges, which we all know because of the virus, war in Europe, inflation, and potential recession. Without his leadership and through the lockdowns and COVID-related challenges, the company would not be nearly as well-positioned as it is today. For me, I just wanted to shout out a thank you to Bart Shuldman for everything he's done to get us where we are. First, let me say that we have a number of core competencies that I think differentiate us from our competition and that I believe we can leverage effectively to build competitive moats around some of our businesses. I mean, for example, the printing products and manufacturing processes and logistic capability are industry standard and have allowed us to, in the past two quarters, demonstrate we're capable of delivering product when others cannot and winning share in printing markets around the world. Frankly, it builds trust with our customers. I believe this is an advantage that we should lean into, I intend to double down on these strengths and go where we can win, in essence, penetrate customer opportunities and markets first with a winning strategy. Usually, if you're smart, you lead with your long suit, and we can do that. Second, the BOHA platform is differentiated. It's a well-designed product, and with our recent relaunch of the BOHA Terminal 2, I think the product strength only improves. Frankly, the need for technology solutions in the back of the house, where operational challenges are only increasing. Companies in the food service industry are dealing with food wastage, spillage, labor, and cost every day. I believe there's a challenge of the FDA-approved labeling only continuing to grow every day. Frankly, I think TransAct's ability to be the product that wins that market is real. I also believe that adjustments to our product positioning and sales strategies will result in positive changes to how customers and prospects see our BOHA! platform. I believe in the end, we can gain widespread adoption of these terminals in the food service establishments that we serve. In the short time since I've been the CEO, I've had a opportunity to move quickly to enact some early changes implemented relative to sales motion and go-to-market strategy, I believe this is an iterative process. These things aren't things that will have a massive impact immediately, I believe that we, all in all, can improve the GTM, the go-to-market strategy, relative to FST, food safety technology, food service technology, that we can increase the number of new terminals we sell. I believe we should treat that as the most important indicator where we have success and traction for BOHA. I'm already making moves to prioritize this objective. Third, and perhaps most importantly, our customers have learned to trust us and rely on TransAct and our products. The relationships we have are the lifeblood of any business, as you probably all know. Through our years of service and innovation and collaboration with our customers, we've built a very high degree of customer intimacy that any business would want and want to leverage to continue to grow the market opportunity ahead of them. These things are things that I believe that we can continue to evolve and improve with a focus on customer-centric approach, and I think that's gonna be a key to our long-term success and frankly, our differentiation. Finally, I'm getting to know and speak with members of the TransAct team. I knew many of them already from my service on the board, but I'm very impressed with the quality of the people that we have in the organization. Many of them are tenured and certainly very dedicated to success here at TransAct. The bench strength is good. Institutional knowledge across the company, from finance and accounting, led by Steve and Bill. Our sales organization, who's now led by Tracy, who we made the chief revenue officer recently to cover both FST and to cover gaming and casino. Our technology and design teams, led by Brent. I've got a solid team, and I'm delighted to work with these individuals, and I'm very confident that we can do what we need to get done. The foundation is here. I believe TransAct fundamentally is taking the right steps towards growing into a class-leading enterprise. I've got some highlights. I'll walk through them from our two key vertical markets, FST and casino and gaming, before a brief conversation about guidance. I'm gonna hand it off to Steve for some more detailed analysis. We'll do some Q&A. Relative to FST, food service technology, total FST revenue for the quarter was up about 60% to $3.5 million, led predominantly by an increase in the number of terminals sold to new logos, as well as higher shipments of our AccuDate 9700. As previously mentioned, the new terminal growth remains the most important element of our FST business. I intend to focus on that metric. While we are encouraged by the 553 new terminals we added in the quarter, we're making, as I mentioned already, changes to our sales strategy to enhance the quarterly run rate. The changes will take some time. It's all iterative, as I already mentioned, and I will provide more detail around what we're doing in the coming quarters and what we expect to yield from the efforts. We ended the quarter with 12,733 terminals in the marketplace. Year-over-year, from 10,127, from the Q1 of 2022. That's a 26% year-over-year increase. That's good, but it's not as good as it should be. Next, on the casino and gaming market, we saw all-time high quarterly record revenues of $15.8 million, up nearly 250% year-over-year and almost 50% sequentially, which was our previous high in the past, so this quarter is the highest revenue bookings for casino and gaming in the history, as far as I know. Strength across broad, both domestic and international sales. Triple-digit% gains as industry-leading printers continue to pick up market share. As was mentioned last quarter, we remain the beneficiary of a competitor's inability to provide product to the market, and our stellar product production and design teams have been able to secure parts and products where the competition is not. While this is obviously a good result, we believe that there is a likelihood that we may see a more normalized competitive environment in the future. I mean, that really wouldn't surprise us. We thus feel it prudent to update our financial outlook ranges. For fiscal year 2023, we're now expecting between $71.5 million and $73.5 million in revenue and between $6.5 million and $7.5 million in adjusted EBITDA. While the strength of our first quarter results demonstrate the opportunity in the market for us, we believe the correct approach is to assume that the current market dynamics in the casino and gaming market may not continue. We're currently assuming a moderation in the casino and gaming sales in the back half of the year. Additionally, while we are making changes to our sales and go-to-market strategy in FST, it will take some time, as I've mentioned several times on this call, to see the results flow through and improve sales numbers. We are not assuming appreciable impact in the near term. From a profitability standpoint, we assume there will be a downward margin pressure from current levels due to slightly lower casino and gaming sales, which will flow through our results. While we're not seeing our main competitor currently in the market in the second quarter, we believe the ones we're making now are probably the most prudent, given that we have no really ability to project how a competitor is gonna move back into a marketplace where they've mostly been absent. Finally, as CEO of TransAct, I wanted to use the opportunity to communicate to you and the financial community what you'd expect from me. The most important objective I have here is to create value for all stakeholders. As a shareholder myself, our objectives are completely aligned, trust me. My success as a leader of TransAct's business will result and should result and deserves to result in success for all the stakeholders. In part, this will be achieved through transparency with you as shareholders and the financial community as a whole. You know, I sincerely welcome feedback, comments, criticism, and encourage any holder of our equity to reach out and let us know how we're doing or ways you would like to see us improve. I'm very sincere about that. I can do better with good questions. If I don't have an answer, I'll get them, and you can trust me on that. With that, those are my sort of formal comments here today, and I'd like to turn the call over to Steve DeMartino, our Chief Financial Officer. Thanks, John. Thanks everyone for joining us. Let's take a look at our first quarter 2023 results in more detail. Total net sales for the first quarter were $22.3 million, up 130% compared to $9.7 million in the year ago period. Sales from our food service technology market, or FST, for the first quarter were $3.5 million, up 62% compared to $2.1 million in the prior year period. These gains were driven by strength across the board, including record high quarterly software revenue and stronger hardware sales, with both BOHA! terminals sold to new logos and AccuDate 9700 units leading the way. We added 553 new paid terminals, ending the first quarter at 12,733 terminals versus 10,127 at the end of the year ago period. Our recurring FST sales, which includes software and service subscriptions, as well as consumable label sales for the first quarter 2023, were $2.3 million, up 49% compared to $1.6 million in the prior year period. Our ARPU for the first quarter of 2023 was $764, up 20% compared to $638 in the first quarter of 2022, but down sequentially from $806 in the fourth quarter. As a reminder, the downward pressure on ARPU is a result of additional terminals in the installed base, which are currently not generating any recurring revenue, which was slightly offset by an increase in recurring FST sales. However, as I mentioned last quarter, the good news is that we have a growing population of BOHA! terminals installed in the marketplace, giving us fertile ground to cross-sell other BOHA! software applications to these customers. Our casino and gaming sales reached a quarterly record high of $15.8 million, up 232% from the first quarter of 2022, and up 44% sequentially from the fourth quarter of 2022. We continue to see strength across the board in the casino and gaming business, with our domestic sales up 315% and international sales up 115% year-over-year. While these excellent results continue to be driven by a competitor's inability to supply their customers with product, as John spoke to earlier, we can't assume these trends will hold for the entire year. Though we have yet to see evidence materialize, we believe it is likely that our main competitor will reenter the market in the back half of the year, which would affect our results. However, we also believe a certain amount of our new market share gain will be sticky, resulting in a new go-forward run rate once the competitive dynamics normalize. POS automation sales for the first quarter of 2023 were $1.8 million, up 38% from $1.3 million in the prior year period. This was a result of higher Ithaca 9000 sales compared to a COVID-impacted Q1 2022, largely from a price increase we instituted in mid-2022 in response to supply shortages. As expected, sales were down significantly sequentially as our largest QSR customer completed a major initiative in 2022. As a result, we expect POS sales to continue to be lower throughout 2023 compared to 2022. Moving on to TransAct Services Group, or TSG. For the first quarter, TSG sales were down 20% year-over-year to $1.2 million. This decrease was largely due to lower sales of spare parts for our legacy lottery printers, which we do expect to recover somewhat during the remainder of 2023. Moving down the income statement. Our first quarter 2023 gross margin was 55% as compared to 26.4% in the prior year quarter. The significant margin gain resulted from higher sales volume, improved mix of higher margin casino and gaming printer sales, and the effect from two rounds of price increases we instituted during 2022. Looking forward, we expect gross margin to be under modest downward pressure as we move through the remainder of the year as we begin to experience the anticipated impact from the change in competitive dynamics in the casino and gaming market. Our operating expenses for the first quarter increased 3% to $8.4 million, up from $8.2 million in the first quarter of 2022. Breaking this down a bit. Our engineering and R&D expenses for the first quarter were flat at $2.3 million. Selling and marketing expenses were also relatively flat, increasing 3% to $2.8 million for the first quarter as we return to more normalized levels of travel, marketing, and trade shows compared to the still COVID-impacted first quarter of 2022. Lastly, our G&A expenses increased 7% to $3.4 million for the first quarter. This increase was largely attributable to an across the board salary increase for all employees, the hiring of additional back office staff, and depreciation related to our new ERP system that we implemented in the second quarter last year. We generated operating income of $3.8 million or 17.1% on net sales in the first quarter of 2023 compared to operating loss of $5.6 million in the prior year period. On the bottom line, we recorded net income of $3.1 million or $0.31 per diluted share compared to a net loss of $4.4 million or a loss of $0.44 per diluted share in the year ago period. Our adjusted EBITDA for the quarter improved to $4.5 million compared to an adjusted EBITDA loss of $5.1 million for the first quarter last year. As John stated, we've updated our adjusted EBITDA guidance for 2023 to $6.5 million-$7.5 million, which is up from our previous expectation of $5.2 million-$5.4 million. We believe that this outlook is the most prudent approach to our guidance, considering the expected normalization of the casino and gaming market in the back half of the year, which would negatively impact both our sales and gross margin compared to the first quarter of 2023. Lastly, I'd like to mention our cash position. We finished the quarter with $6.4 million of cash on hand and $2.25 million of outstanding borrowings under our $10 million revolving credit facility with Siena Lending. Within the framework of our current guidance, we expect to be cash flow positive for 2023, and believe our current cash on hand and available borrowings under the Siena facility position us well to execute our current growth roadmap without any immediate additional funding needs. With that operator, I think we can open up the call to questions. Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from George Sutton with Craig-Hallum. Please go ahead. Thank you. Great results. John, welcome to the call. Thank you. I'm curious if you could talk about the casino printer business from the following context. We were adding lines much of last year to try to keep up with demand. Can you just give us an update of where we are there? Are we working off of a backlog? Is there any way to characterize this on a book-to-bill kind of basis? I think I can answer that. I think we're in pretty good shape, but I think some of the specifics, I think I'd like to ask Steve to speak to. Sure. We have a very healthy sales backlog for casino gaming printers. On the inventory side, we're actually good. We actually were able to, for the first time, ship all the orders that we had scheduled for the first quarter. In other words, there, we had no pushout of orders from Q one to Q two. We were able to deliver everything that was scheduled. We're in a good position. We're still have a low inventory position, but we're building that back now in the second quarter. Gotcha. John, you had mentioned BOHA!, the second version of BOHA!. Can you talk about changes and improvements that have been made to that? I understand there were certain pushbacks from potential customers. Have we addressed those pushbacks with the second version? I think the answer is yes. We've got a pretty good relationship with a number of clients that want a terminal that does X and Y and Z, and we've been listening to them. This new Terminal 2 is sort of like all of the enhancements that we would have wanted to make. The screen is better, the printer is faster, the power supply is built in. You can get it one ways. You can get it with a tablet that you can walk around with and detach, but this screen and its bezel are built in. You kind of put all of it together, and it's just all the way around a better terminal. It's faster, it's more performant, the screen is brighter. I mean, it's sort of a whole bunch of those things all combined. I've taken a close look at it. The other thing that you wouldn't see is that we've standardized sort of the underlying chipset underneath the core product. We're unifying that across our other products so that we only have sort of one common underlying underpinning design that we can use for other terminals or even our terminals that we use in the gaming and casino industry. You know, fundamentally, the reason people want these things is so that they can save labor and they can comply with FDA, you know, labeling requirements. They can do date coding. They can print grab and go labels and the like. We do that really, really, really well. I think we nailed it. We're gonna show it at the NRA conference coming up on the 21st of May, and we've got a couple of other trade shows that we're gonna be making the rounds with. Candidly, it really wasn't not so much the terminal, but I'm really encouraged by some changes we've made in the sales organization, some training we're giving to the people. The reality is, it's almost like a client can't afford not to implement a back-of-house automation system. We think the labeling component of that is probably the leading requirement that those things are gonna need. However, the terminal itself can run pretty much any software that you want it to run. Given that it's all in one place, it's connected to the internet, and it's secure, you put all that stuff together and it's a pretty good piece of equipment to have in the back of the house. Great. One last question for me. Can you talk about there's a large convenience store customer that you've referred to in the past and a large franchisor that's coming in the back half of this year? Are there any updates on those two opportunities? Not specifically. I would say that the large convenience store is purchasing equipment again. They took a break for other reasons. It had nothing to do with us, and they're kind of back on track. As for the large franchisee, there's no news, and that's good. They like what we're doing and, you know, sort of stay tuned. All right. Thank you very much. Our next question comes from Jeff Martin with ROTH MKM. Please go ahead. Thanks. Good afternoon, John and Steve. John, I wanted to jump in on the changes in go-to-market strategy, specifically with BOHA!. Are there other kind of low-hanging fruit, you know, characteristics that go with that strategy? I know you know, emphasized this is not an immediate results type of situation. Maybe give us a framework of when you expect some momentum to start to build there. Well, the outcome is hard to predict with any certainty. You know, this is a classic, let's get the go-to-market strategy right. What kind of salespeople do we have? How are they trained? What kind of leads funnel do we have? Are we doing account-based marketing? How do we reach the clients? What's the conversion rates? We're basically putting in what I believe is sort of industry best practices across the board. We've made some reorganization in the sales force. We've got some training planned. We're also doing more selective targeting. You know, if you think about it, there's an awful lot of businesses, we estimate maybe five million, that we could sell a BOHA! Terminal to, but some of them have three stores, some of them have five stores, some of them have one, and then there's people that have 1,000. We're trying to focus the sales organization. You know, we've always been willing to take a call from almost anybody. Some of the things that we're doing are intended to focus the resources that we do have, create success where we know we can get it, and then double down on that. I believe that we have the ability. It's kind of interesting, if you think about it. A franchisor is very, very different than somebody who owns the stores. Restaurants in general are still getting back on their feet. A lot of what we're doing is focusing. It's sort of territory triage. I could kind of go on and talk about it probably for a half an hour. From a career standpoint, I've done a ton of this stuff. None of it's rocket science. As you know, we've had a number of individuals heading up the sales organization, and we now have Tracy, who's a veteran of the company, and I'm spending a lot of time with her as Chief Revenue Officer. In short, we're sort of retooling the sales organization, retargeting them, building, if you will, better incentive plans for them, focusing on them where we have a, an unfair competitive advantage to win, and working on lead gen and lead conversion. In short, I guess I'd say we're putting all that together, and I think we're gonna come out with a refreshed, most of it's already done, but a refreshed, you know, go-to-market program, which I think is gonna yield better results than we've been getting in the past. Okay, great. My other question is around, you know, the BOHA! Two terminal relative to the initial BOHA! terminal. Is your sense that, you know, the initial version, you know, kept customers from purchasing it for, you know, the reasons that, you know, are different about the upgrades to the BOHA! Two terminal? Trying to get a sense of, you know, is this terminal gonna open the door essentially to, you know, starting to close some larger, you know, restaurant chains or restaurant groups? Yeah, great question. Well, look, I mean, this has been an iterative process with the terminals as well. You know, we started out just with a basic labeling printer. Today, the software in there for labeling is very sophisticated. There's a lot of things we can do. The BOHA! Terminal, by the way, and I hate to talk about features, but I think this one's kind of cool. You can have two different rolls of paper in there. You could have down to 1 inch or 1 and a quarter inches all the way up to three inches. We do 300 DPI printing, so you can put a heck of a lot more information on a small piece of paper. I think the answer is yes and no. I don't think there was anything deficient in the earlier versions. Here's what I would say, especially for large organizations, this is sort of a request for the client to change the way they operate the back of the house. I mean, we've got people with, you know, grease pencils, writing things on sticky notes and putting them on packages of mayonnaise and potato salad and stuff like that. You know, from a sales standpoint, I think it's a relatively long sales cycle, and it's gonna be lumpy, especially for the large clients, because we're asking them to do a bit of a lift and shift in the back office. A lot of the clients, and I haven't been on enough sales calls yet, but the anecdotes that I hear, this is kind of a situation where customers don't say no, they say not now. One of the things relative to the prior question that was asked was about the go to market. One of the things that we are implementing is a nurture track, because we want to make sure that people who've expressed interest, we want to make sure that we keep them warm so that when they are ready, you know, when we touch base with them, they go, "Okay, now is the time." You know, for franchisees, you can imagine that in some situations, the franchise might approve a technology, but then they, the franchisor waits for the franchises themselves to buy an approved piece of technology. In some other cases, the headquarters basically rolls out a new system across the board, especially for something like grab and go, where they implement a new go-to-market strategy themselves, and they need the FDA labeling that we can provide. You know, I think it's kind of a combination of all those things, better terminal, better sales approach, better nurturing, better customer targeting. The bottom line is the terminal works, and it works really well. We've been demonstrating it, kind of under nondisclosure for a while, and we've gotten tremendously positive feedback. Great. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one. Our next question comes from Mitchell Sacks with Grand Slam Asset Management. Please go ahead. Hi, guys. Great, great quarter, obviously. Question has to do with, you know, sort of historical. You've got some number of 9700s out there across, you know, the restaurant and convenience store space. Can you give us a sense of how many units are out there and what the opportunity is to go back to those customers to upgrade them to the newer terminal and obviously to get them hopefully doing some more recurring revenue? Well, that's a great opportunity for an upgrade for a couple of reasons. One, you know, the BOHA! Terminal 2 can do a lot more than the 9700. Two, eventually the printers all need to be replaced. You know, we look forward to kind of replacement business in which, of course, generates revenue. We have a lot of 9700s out there. Steve won't tell me the exact answer because he's afraid I'm gonna share it with you all. You know, it's tens of- It's in the tens of thousands. It's in the tens of thousands. More than 110. Okay. If that- And so- So we've got- Is it safe to assume you guys are approaching those customers to try to get them to upgrade? If so, when you're doing that, what's the biggest pushback on doing it now versus, like you say, not now? Well, the answer to the first part of the question is yes, we're approaching them. Frankly, some of these clients are the ones that we're getting really good feedback from, you know? What you wanna do is build a product that the customer wants. We're not getting any particular pushback. I mean, we just haven't had the terminal ready. We do now, and I think that we're just beginning, you know, the sales process both for new clients and then the replacement clients. The only pushback, frankly, is the AccuDate 9700's a pretty good workhorse. If it's performing adequately, we're gonna get the business eventually, but, you know, they might not feel compelled to go out and rip out, you know, 1,000 terminals at a time or 200. We think the replacement's gonna happen, you know, sort of more evenly throughout, you know, the growth trajectory of the BOHA! Terminal 2, as opposed to all of a sudden, every 9700's gonna be replaced, you know, in a matter of three-six months. Mm-hmm. Okay, thanks a lot. There are no further questions at this time. I would like to turn the floor back over to John Dillon, Chief Executive Officer, for closing comments. Well, again, thanks a lot for joining today. I am very sincere in my request for feedback, comments, input. If there's stuff you think we ought to be doing that we're not, or if you like some of the stuff, I love those kind of calls. I'm open to suggestions and ideas from all of you. Back to my original statement, is I intend to be more and more transparent. I think that's something that the investors deserve. As I get more comfortable with the, with the data and the information, I intend to share more and more of it. To the extent that I can speak freely about the company and our progress, I'm happy to do that. With that, I will say goodbye and thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.