Q2 2021 TransAct Technologies Inc Earnings Call
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Good day, ladies and gents menu of currently on hold for the transact Technologies' second quarter 2021 earnings call. We are currently of assembling today's audience and plan to be underway. Shortly we appreciate your patience. Please remain on the line.
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Yeah.
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Good day and welcome to the transact technologies second quarter 2021earnings call. Today's conference is being recorded and at this time I'd like to turn the conference of 2 Ryan Gardella. Please go ahead Sir.
Thank you good afternoon, and welcome to transact Technologies' second quarter 2021 earnings call today, we'll be discussing the results announced in our press release issued after market close joining us from the company are chairman and CEO, Bart Sheldon and President and CFO, Steve Demartino. Today's call will include a discussion of the company's key operating.
<unk> progress of these initiatives and details of the second quarter financial results. We will then open the call. The participants for questions. As a reminder, this conference call contains statements about future events of the expectations, which are forward looking and nature statements on this call may be deemed as forward looking at actual results may differ materially for the full list of risks inherent to the business of the company.
Please refer to the company's SEC filings, including its reports on form 10-K, 10-Q, and transact undertakes no obligation to revise or update any forward looking statements to reflect the 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 a reconciliation of all non-GAAP financial measure.
For the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in today's press release as well as on the company's website and.
And with that I'd like to turn the call over to Bart.
Thank you Ryan and thank you to everyone joining us joining us on the call today.
Before I jump and some details I wanted to take the quick moment to recognize the lights and contributions of Thomas R. Schwarz.
Tom was the best and a huge contributor and loved here at transact.
He was an incredible mentor to me and he is sort of is sorely missed.
We are forever grateful to the contributions he made to the company Godspeed, Tom I, Miss our talks and your steady insights and perspectives and I Miss you every day.
Now onto our second quarter 2021 results Wow.
Our second quarter results continued to build and our early success in 2021 as transact is perfectly positioned to capitalize on the domestic reopening.
The Americas foodservice operators and restaurants are facing the incredible challenges from ingredient and ingredient inflation. The food safety concerns to of major labor shortage are both up platform provides the solution to these pain points and we are seeing more operators choose us quarter after quarter.
As demonstrated by our positive results and the second quarter of 2021.
From originally doing outbound calls during the height of the pandemic to now receiving and answering inbound calls the reopening of the U S economy is having a very positive effect on our FSP market.
Our foodservice technology market experienced a record quarter with our highest ever revenue of $3.1 million up 155% from the second quarter last year.
We added 933 paid terminals and the second quarter of 2021 for a total of 7942 and the market.
Importantly, we also crossed the $2 million, Mark and FSD recurring revenue with $2.1 million and the quarter, which is also a new record for transact.
Growth and FSP recurring revenue came in at a strong 214% increase over the second quarter, 2020 and is 71% increase over the first quarter of this year.
We continue to expect strong results from our industry, leading bolthouse solutions and are confident and our positioning as virus related headwinds continued to subside domestically.
As Steve will discuss in detail later, our preliminary second quarter total net revenue was $9.3 million and we recorded an EBITDA loss of $2.5 million and and adjusted EBITDA loss of $2.1 million.
Let's now discuss results by market, starting with our foodservice technology or FSD market.
As I just mentioned, we experienced a record quarter with $3.1 million and revenue, which was up 155% over the prior year period.
Our recurring FSP revenue, which include software subscription labels and service was also a record at $2.1 million or $8.4 million on an annualized basis.
Previously, we had guided to $5.5 million to $6 million and recurring revenue by the end of 2021 for the whole year.
As a result of our continued success and both expanding our pool as well as adding new terminals to our base. We are raising our guidance will be $7 million and the in recurring FSP revenue for all of 2021, which also includes the $1.2 million, we did in the previous quarter.
Speaking of <unk>, we experienced the very positive uplift, mostly due to increased usage and are currently installed terminal base.
And the first quarter, our newly adjusted <unk> was $875 and I'm pleased to announce that this quarter. It grew to 1179.
I will let Steve discuss the calculations and more detail.
And as I have mentioned on previous calls hardware sales and the number of paid terminals and the market are the lifeblood of a recurring revenue stream and as we increase the number of the terminals and the market our recurring revenue will grow exponentially are.
Our second quarter numbers in this regard with very solid resulting in an additional 933 paid terminals being added to our base, bringing the total to 7942.
As a reminder, we are currently guiding to between 10000.11000 and bay terminals in the market by the end of 2021.
And as our paid terminal base expands our recurring revenue will also grow fuelling consistent results and a predictable stream of FSD revenue.
In addition, as I have said many times I expected, our ARPA numbers to increase once the U S economy opened and it did.
Last quarter I called out labels as being able to drive an increase and the FSP recurring revenue as volume of transactions return to our customers' businesses. This quarter I am pleased to announce that our label sales were up 273% year over year.
As I have as also mentioned we have a strong relationship with the convenience store chain 711, and they continue to order more terminals to be installed and the stores as they focus on expanding their fresh food initiatives.
And each store require of some construction changes to add fresh food capabilities and includes the installation of the Bolthouse terminal.
While we will not be providing a quarterly update on the penetration we will remind you that the terminal install opportunity for 2021 is about 2000 terminals and the total remaining 711 and opportunity includes more than 7000 additional stores.
In addition, however, our other convenience store customers are now expanding adding more stores and therefore purchasing more bolt our terminals from us.
Very positive.
I also wanted to touch and our small medium business or SMB Foodservice technology initiative that we highlighted in the press release in July.
To address this large and growing opportunity we have created a dedicated inside sales teams of targets small chains and individual operators between rising inflation and pressing labor shortage. This market is in dire need of our bolthouse solutions to help manage these ever increasing costs and we have seen some early <unk>.
Access with 16, new SMB accounts ordering 69, new terminals and.
And the second quarter.
Additionally, due to the nature of small businesses. These purchasing decisions of typically made quickly and we're seeing a much shorter sales cycle here then in the enterprise space.
With our significant marketing effort underway, which we started in April after we launched <unk> at the Apple event, the amount of new SMB business opportunities and the FSP market has grown exponentially.
Finally, I want to provide and update on our FSD pipeline. As a reminder, we only include qualified leads and our pipeline and expect to see our pipeline number of shift as we convert opportunities into wins and remove them from the pipeline calculation, but also add the new.
As we remove the wins out of our pipeline and Ed and the additional new prospects our sales pipeline for the U S market now stands at over $150 million.
This is calculated over a 3 year period for a prospect that as almost every contract to date has been 3 years.
In addition, apple related customers represents over 50% of that $150 million.
The Apple sales team continues to bring new opportunities into our pipeline and I could not be happier with our relationship.
Now quickly moving onto our casino and gaming business revenue in the quarter was $3.5 million up 155% year over year and up 21% sequentially.
With this was largely due to the return of our domestic sales of our international market continues to show signs of recovery as well and we accept and we expect that business the track upwards for the remainder of the year.
And the U S. Many states of fully reopened and are allowing venues to return to 100% capacity, which is beginning to drive investment on the gaming floors.
We believe there is significant pent up demand and both the casino and guest side of the equation.
We cannot be more thrilled to see the positive momentum here and as our sales improved and is highly profitable market. We also expect to see a corresponding rise and our gross margin.
We are well positioned to capitalize and the return to normalcy and leisure activities in the casino and gaming market.
With that Steve will review, our second quarter 2021 results after which I will make some final remarks before opening the call up for questions Steve.
Thanks Mark.
Let's turn to our second quarter results and detailed them.
Total net sales were $9.3 million up 76% from $5.3 million and the second quarter of 2020.
As a reminder, we experienced the highest level of impact from Covid during the second quarter of last year.
Sales from our foodservice technology market of RFS T. We're up 155% to a record $3.1 million from $1.2 million and the second quarter of last year.
The FSD hardware sales increased 85% to $1 million from 545000, and a year ago period and as previously mentioned by Park. We ended the second quarter of 'twenty, 1 with 7942 pay terminals and the market, which was an increase of 933 units during the quarter.
Our recurring FSC sales, which include software and service subscriptions as well as consumable label sales came in at a quarterly record $2.1 million, which was up 214% from the 669000, we reported in the year ago period.
As Bart mentioned, our recurring revenue is a function of how many peak terminals we haven't.
We have and service and transactional volume of our customers and as those numbers continue to trend upwards. So all of our label sales and our other recurring revenue.
As we mentioned last quarter given that we are in the early stages of building our installed base of terminals and our <unk> will likely fluctuate quarter to quarter based on the size of individuals' software label and service orders and the timing of terminal shipped.
In addition, with the terminal shifts towards the end of the quarter, we don't get the full effect of the recurring revenue from the terminal while still having the factor that terminal into the <unk> calculation.
These linked quarter deploy terminals have an impact on our numbers.
With this in mind, we're adjusting the way, we calculate our <unk> going forward to remove the effect of terminals deployed late in the quarter.
So now we annualize the current quarters recurring revenue and then divide that number by the number of paid terminals and the service at the end of the previous quarter.
Using this new method or <unk> for the second quarter 'twenty, 1 was $1179, which was up nicely from 847, and the first quarter of 'twenty 1.
Casino and gaming sales were $3.5 million and increase of 155% from the second quarter of 2020.
We're seeing the pace of domestic sales increase and quickly and recovering to near pre COVID-19 levels. This quarter, which accounted for sales of $2.4 million, which was up 151% from the prior year quarter.
Meanwhile, we're seeing a more muted recovery internationally with sales of $1 million of 164% from 390 and the prior quarter.
We continue to expect these numbers to trend upwards as the year progresses.
Give us automation sales were up 161% to $1.3 million from 481000 and the prior year period.
The increase was due to substantially higher sales of our Ithaca 9000 per to Mcdonald's as their sales recovered from the Covid impacted the low point of the second quarter of last year.
Moving on to the <unk> revenues were 112000.
Up from just 8000 in the year ago period, as the price of oil rises and the oil and gas drilling activities of our customers are beginning to resume.
But we continue to deemphasize <unk> sales, we still expect to receive additional orders from our legacy customers as the industry recovers from the impact of Covid.
Finally, transact services group or PSG sales were flat at $1.4 million from the year ago period.
Sales of paper rules for our legacy Pos printers were higher due to recovering transactional volume of our customers, but were offset by lower sales of aftermarket products for our legacy printers, including spare parts for a lot of repairs and service contracts on our legacy banking printers.
And of our sales remained flat we are no longer focusing on the products and this market and expect our TSP revenue to decline over time.
Moving down the income statement, our second quarter gross margin was 35, 7% compared to 43, 3% from the prior year period.
Our gross margin and the period was negatively impacted by higher terminal sales.
As a reminder, we decided to reduce our margin on both the hardware products to accelerate the growth of our installed base of terminals to drive more lucrative FSD recurring revenue such as software subscriptions and service and labels.
This was partially offset by 76% higher overall sales volume, including higher casino and gaming printer sales.
As well as increasing our recurring FSD revenue, which has a significantly higher margins and our hardware sales.
You should see a favorable impact on gross margin over the longer term as more lucrative recurring revenue growth to become a larger percentage of our overall sales.
Total operating expenses for the second quarter of 'twenty, 1 of our $6.1 million and increase of $1.1 million or 21% from the prior year period.
This increase was the result of higher engineered expenses due to additional hiring and outside development expenses to support our <unk> efforts as well as increased selling and marketing expenses due to the return of travel expenses and hiring new sales staff.
Our G&A expenses also increased due to higher recruitment and share based compensation expenses.
Keep in mind, our second quarter of last year represented of low point and our operational spending due to COVID-19.
As we move through 'twenty, 1 we expect to incur higher expenses as trade shows and travel return and we expand our marketing efforts and the ramp up the build out of our team to support both of them.
The further breakdown of our operating expenses of the second quarter, our engineering costs were up 32% to $1.8 million of selling and marketing expenses were up 25% to $1.7 million and our G&A expenses were up 12% to $2.5 million.
We incurred an operating loss of $2.7 million from the second quarter of 'twenty, 1 or 'twenty, 95% of net sales compared to the operating loss of $2.7 million or 51, 8 percentage of net sales for the second quarter of 2020.
And on the bottom line, we recorded a net loss of $2.1 million or 24 per share and the second quarter of 'twenty, 1 which compares to a net loss of $1.9 million were <unk> 25 per share in the year ago period.
Adjusted EBITDA for the second quarter 'twenty, 1 was a negative $2.1 million, which compares to the negative $2.3 million and a year ago period.
And finally, turning to the balance sheet, we ended June with $8 million and cash and $2.2 million and long term debt, which was all from the PPP loan.
And so the good news regarding the PPP loan and early July we were notified by the SBA that our PPP loan was formerly forgiven.
And with this in mind, we expect our long term debt to return to zero for the third quarter of 'twenty 1.
And with that I'd like to turn the call back to Bart for some closing remarks, yes. Thanks, Steve as you can see we're very excited about the second quarter and what lies ahead of US at this point operator, I would like to turn the call to questions and answers. Thank you.
Thank you if you'd like to ask a question. Please signal by pressing star 1 on your telephone keypad and sorry.
And the speaker phone. Please make sure your mute function is turned off to allow the signal chocolate line.
And then that the star 1 to ask a question, we'll pause just for a moment to allow everyone the opportunity.
And it takes signal for a question. Thank you.
We'll now take the first question from Chris Howe Barrington Research. Please go ahead.
Good afternoon, Barton and Steven that was a fantastic quarter.
Thanks, Craig and Chris.
Hey.
So you went through the the change to the <unk> calculation.
We think about the incremental terminal growth.
We saw in the quarter of over 900 terminals added.
And the terminals come in at the end of the quarter, how should we think about the timing and the quarter.
Okay.
The biggest issue we face Chris we do get orders all through all through the quarter and we do get some orders and the in the third month of the quarter. The bigger issue is we shipped some terminals to just 2.
And kind of like of distributor some of our customers who put the systems in.
And that might have to put some other hardware and or something like that.
And as the middle person, so we shipped to that middle person. They stage the equipment and then shipped to the restaurant and so even if we ship the terminal and May it might not get deployed to July and we see that because every terminal that goes online they have to log in with the credentials and we have to accept it and.
And our back end system.
So it's not just the fact that they're shipping all the way through the quarter is some of them take a month. The 2 just to get out there and the market as the stage them at a distributor and that happens.
With the couple of our customers.
So it's just to be more realistic to what we're seeing as of <unk>. We.
And we decided to take the noise of the income.
Current quarter out of the equation and then divided into the yearly by projecting the yearly.
And of FSP recurring revenue.
Over time of couple of years from now when we get that many terminals out there and we've got that much FSP it might not matter.
But even a thousand terminals can change the calculation and summit a fair amount of them already are just being deployed as we begin the following quarter.
That's great color. Thanks Bart.
I don't want to do.
Discount some of your comments or overlook some of these the.
The label growth of 273% year over years.
Great and.
Can you talk more about this label opportunity as the reopening gets further down the road.
And some of your other comments you mentioned other convenient stores expanding their store count bulk of the seem like great.
Great opportunities for growth and the upcoming quarters.
Yes, So let me tell you what's going on with label so clearly.
The country has opened up so.
There are more transactions more transactions mean more food more food means more labels.
So our label volume is clearly clearly rising as the volume of transactions rise I mean the.
And if you just follow what's going on and restaurants today.
They are all talking about higher revenues and all of that so and the more fluid that gets prepared the more food safety labeling they need with our convenience store customers, meaning that if there's more people going out theres more fresh food, they're selling but some of the other things that are happening Chris is some of our customers are.
And basically, especially on the grab and go.
They're asking us to put together of label, that's very custom that'll have the colors and their logo on the label.
And that's a nice that's a nice business for us it's good high margin business.
So we're seeing some of that also as customers are coming out of this pandemic.
They're trying to brand the brand more and they're asking us to actually craft, a more but actually it's a more expensive label for them with colors and the logo on it.
They also tend to be longer labels, because they wrap around the packaging and as you know we have a pretty good size Sushi company that we won and they are now and full mode of using the terminal and all of the 11 hundreds of stores that they have and they are expanding also and we're actually producing the label for them the <unk>.
<unk> around almost call it 60% of the package.
And so with them on board and now.
More people going out and them selling more sushi our label sales continue to rise in regards to the C stores, we are seeing our existing customers.
Add more stores so they are owed.
<unk> additional stores around the country as they open up more stores they need the terminal.
So we are seeing incremental business from our existing C stores.
No.
Chris the way to kind of look at our business right now is.
We've got this very nice convenience store business, that's going to continue to grow 711 is going to continue to put more product out there. We've actually got some new convenience stores that we're bidding right now and that kind of just going and its adding more revenue its adding more terminals and its adding more recurring revenue which re.
Really interesting to us, though now so on the other side of the business is the restaurant business, which really did not exist and the pandemic and let's be honest.
We went through a very rough time for about 14, 15 months Theyre well that's changed dramatically.
And.
Almost all of our big opportunities of restaurant companies now.
And that has just started since may and that's been wonderful.
SMB business closed 16 deals and a couple of months.
We're doing a lot of advertising those that have followed national restaurant news.
And some of the other news that are out there where advertising a lot more than we ever have.
Our hit rate is up by like 15 X.
And very interesting because we can track the calls coming in and we can track what AD where they came from.
And so that business has become quite exciting right now.
That's great.
Certainly with the restaurant optics improving.
As we look forward as well as your existing penetration within the C store channel.
The terminal target is 10002 of 11000.
To give.
Boundary, but certainly there's plenty of upside for the business and plenty of opportunity.
We'll just see how it plays out.
For the remainder of the year.
Thank you Chris.
Thank you Couldnt agree with you more.
Once again as a reminder to ask a question. Please.
Please press star 1.
From that type of the next question from Jeff Martin Roth Capital Partners. Please go ahead.
Thanks, and good afternoon and burden, Steve how are you.
Good Jeff how are you.
Well thanks.
And my condolences to you on the passing of Thomas Schwarz.
Yeah, Yeah missed them.
Thanks.
Mark could you expand on the pipeline update a bit.
Believe last quarter on earnings call, you mentioned, 30% of the.
Prospects and the pipeline were and demonstration mode or further along.
Is there and updated figure to that and then with the $150 million and the pipeline and I assume that is roughly equivalent to $50 million of revenue a year. If it if it's over 3 years and.
Kind of back into a potential terminal count if you use 500 per terminal and that is roughly 33000 terminals is that the right way.
The way to think about it.
<unk> thousand $500 I'm not sure.
Not sure I understood. The question regards to the $500 what was the $500.
The <unk>.
Alright, Sam I mean the.
The annual here are another yes, it's going to be.
Interestingly the pipeline, yes, it's going to be interesting look we had originally projected.
<unk> thousand $500 for $200 and recurring revenue for terminal I mean, clearly we watch the dropped significantly because of the pandemic now we're seeing it up at around 1100.11, 47%.
As we close more restaurant deals.
That number is going to be much more predictable because it's going to be probably 80% software, 20% label, where our convenience store. It's just the opposite.
So I'm interested to seeing how we get to the close of summit way of some very large opportunities.
And that are in trial, we have a bunch of over the next couple of weeks that go into the trial that go into evaluation and then we got to get into the negotiations and see where we end up.
I think we're comfortable in the $1200 per terminal range right now.
We are opening up the country and we want to make sure that with the Delta out there that it doesn't slow things down again.
Free pleased to see the 11% and 47 number of much closer to what we thought.
And a lot of these calculations were done during the trial. So it's not like we pulled the number out of the air we actually saw how much either labelled business day, we're using what how much software. They are using the nice thing about the restaurant industry as they buy the package right. They buy all of our op and we know exactly what that's going to sell for and what the recurring revenue will be from that.
<unk>.
And the additional will be on the food safety side or if they can do any.
Grab and go what the additional label revenue will be.
But.
You're in the ballpark of terminals Jeff.
<unk>.
You're definitely in the ballpark of the type of volume that we're looking at.
So I'm not uncomfortable with your question and agreeing to it.
Okay. That's helpful. Thanks, and then.
What would you consider of successful conversion rate of pipeline.
Moving over.
If we got tears.
<unk> would you consider 40% of success would you consider.
And much higher than that.
And that's very early and it's difficult to say, but.
My gut would say a lot of these larger restaurant organizations, if they can get the labor savings and the efficiencies out of that potentially.
Potentially that conversion rates should be well over 50% and I'm just curious what your.
Yes, I would be.
Look here's what's going on and the market right.
We just found out that if a restaurant wants to take of loan at which most of them and do banks are starting to ask them for they've added a clause for food safety.
So thats become very apparent to banks.
At the cost of having to add so much new people. So many new people to the restaurant that food safety is becoming a concern to the bank and we smack at that directly with our food with our labeling program, our temperature taking program and actually our temperature monitoring program.
Right. So in the RFP and that just came to our attention from a restaurant company that theyre, having to sign something in regards to the food safety in their bank loans.
There is no doubt that labor is the big issue and it's not just getting the people back in its you are talking about the back of the restaurant, it's not sexy. It's hard it's dirty how do you attract people and there is very little technology back. There every restaurant company that we've worked with to date and we have a lot more of that.
And we're going be trialing over the next couple of weeks have said that the employees are much happier to using the technology right, they're not going to book and opening it up and trying to figure out what the food temperature needs to be and and fooling around.
Round with with paper and the rest there given technology to use so.
Look there's no doubt that restaurants are facing significant headwinds and that's why that's why our phones are ringing 1 of the things that we're able to track. Some people are contacting us by phone and of course, and our ads you can E mail us. So people will say hey, do you do this do this because we need that.
And we track that and you can just see what people are asking is hey, I've got a problem I've got to get my food safety under control Hey, I've got a labor issue can you help me on temperature, taking and temperature, taking being a big thing right now.
We could see it and the E mails that we're getting we see the questions or the or why they want to contact us.
I would be extremely disappointed if it was that even if it was at 50% of.
And if we're good at what we do and we've got the full package.
Deals are the only 1 with the full package out there with an enterprise system with a single portal, we actually have.
Our hardware is made just for the marketplace.
We're very happy with Apple's efforts and the restaurant industry I don't know if you've followed it but square just announced that they're going to use the iPad.
With the Pos terminal.
And they're being very successful in getting the ipads out there that makes our solution almost inexpensive right on the hardware side, because if they already have the iPad. They can use our workstation and it just connects wirelessly. So they can print labels.
So I would be very disappointed if it was as low as 50%.
Truthfully I have a couple of more real quick if I could get any indication from from 711 with respect of Speedway and now that that transaction is closed.
And whether or not they intend to rollout.
And so hot to the speedway locations as well.
Not yet not that we can talk about that yet.
Okay, Okay, and then with respect to the sales and marketing initiatives Youre going to continue the step that up over the balance of the year, where are we at in terms of.
And to build out additional sales resources and support resources, and what kind of what kind.
The timeline should we.
Look for.
And for that build out.
Yes so.
Clearly on the implementation side on our Onboarding team.
I think we've reached critical mass and regards to what our people can do so we are adding 1 or 2 people they are.
We're expanding our sales force our contract food business looks great.
And we're getting a lot of inquiries and if you think about of schools of denim reopened universities are going to reopen so contract food.
Managers are starting to call in and that's 1 new add location that we put our ads, which was food management magazine.
Everything is on line by the way so it's not a magazine, it's and online thing.
So we're we're going to be adding a couple of more sales people and a couple of.
Onboarding people the other thing that we're looking at Jeff is adding and executive that's just in charge of what we call customer success, we want our sales team to handover to of customer success team.
Once the customers onboard and starting to rollout so our salespeople can focus on new orders, we actually have a group doing that we just don't want it.
We need somebody just to run that because of starting to get much bigger.
And following up on label of odors and.
Sign ups re signing up for our.
Software and all of that so you'll see us ramp up our spend this quarter.
And.
Mostly on on the Onboarding side and sales and so more salespeople.
I think I don't think its shocking to say that when may started and got into June the reopening of America I think shocked almost every industry.
Just came back from Vegas, I happened to spend the weekend there after being there for a board meeting and it's packed and the.
Some of the best casinos are having a hard time with service and getting enough people to work getting people on board has been tough.
I think restaurants are running quickly to figure out how to handle this labor shortage how to deal with some of these new bank covenants. They are being asked and the rush of new opportunities.
And how quickly it came out was a little shocking to us how quickly they approached us so we.
We have the bandwidth now, but we're going to have to add more no doubt.
Okay.
And then a lot of your inventory has been purchased some time ago, there was no inventory issues.
Heading into the how do you feel with respect of Baja related inventory today, and when might be stepped up additional price.
Our inventory level is low Jeff it's lower than what it normally would be we've been dealing with all of the supply issues that you've probably read about and the news. The other larger companies are experiencing we just were able to solve them.
So we're good I think we're good through Q3, I think beyond Q3, we could run into the potential issues.
But we're in good shape through through Q3, I mean, we're dealing with the same chip shortages and everybody else is dealing with and all the same shortages and all electronics and sensors and those sorts of things we've been able to manage our way through really well actually I'm really proud of the operations team all of you being able to deal with it. So we're doing good and not to say that we couldnt have any issues going forward, but right.
Now we're in good shape.
Great. Thanks for taking my question.
Thanks, Jeff.
Once again to ask a question please press star 1.
Yes.
This is a no further questions at this time.
I'd like to turn the call back to you for any closing or additional remarks.
Yes. Thank you operator, and thank you everybody for attending the call today for those that.
Can travel and all of that we've got a couple of Tradeshows coming up hopefully they stay open.
<unk> is going to be and Las Vegas, the first week of October right.
Right around the first week of October and we also have the convenience store show coming up so if anybody wants to attend and say low to us some of our people will be there.
We thank you again for.
And your investment and transact and we will talk to you and the next conference call. Thank you very much.
That concludes today's call. Thank you for your participation you may now disconnect.