Q3 2021 TransAct Technologies Inc Earnings Call
[music].
Good day and welcome to the transact technologies third quarter 2021 Conference call. Today's conference is being recorded at this time I'd like to turn the conference over to Mr. Ryan Cardella. Please go ahead Sir.
Thank you good afternoon, and welcome to transact Technologies' third quarter twice with one earnings call today, we'll be discussing the results announced in our press release issued after market close joining us today from the company are chairman and CEO, Bart Feldman, President and CFO, Steve Demartino. Today's call will include a discussion of the Companys key operating strategies progress on these initiatives and details on the third quarter.
Actual 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 and actual results may differ materially for a 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 and 10-Q.
Transact undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances that occur. After this call todays call and webcast will include non-GAAP financial measures within the meaning of SEC regulation G. When required reconciliation of all non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in today's press release as well as in the company.
Web site.
I'll turn the call over to Bart.
Thank you Ryan and that was very quick.
Thank you Ryan and thank you to everyone joining us on the call today.
Our third quarter results marked an important point in our business as we posted our highest net sales numbers since the fourth quarter of 2019.
This was accomplished through a combination of sustained momentum in bolthouse, and foodservice technology market as a whole as well as a major rebound in our casino and gaming market, which I will elaborate on shortly.
As Steve will discuss in detail later, our preliminary third quarter total net revenue was $10 6 million, representing a 46% gain year over year and as just mentioned our highest numbers since the fourth quarter of 2019. We also recorded net income of $910000 and it is.
Adjusted EBITDA loss of $1 2 million will now lets discuss some of the results in our key markets first up is our foodservice technology or FSP market.
Our total FSP revenue had another all time high in the quarter up 40% year over year to $3 3 million.
Our FSC recurring revenue, which includes software subscriptions labels and service also showed strength with our second consecutive quarter of at least $2 million in recurring revenue and represents a 28% increase from the year prior period.
As of important note in September.
Recorded our highest revenue month for FSP software and label sales as the Delta variant started to subside.
Those sales started to accelerate in September and both software and label sales have continued to expand in October.
Year to date, we have now generated $5 3 million in FSD recurring revenue versus our versus our guidance of at least $7 million for the full year of 2021.
Barring anything outside of our control.
Easily achieve the $7 million number that we provided.
As our terminal base expands this leads to higher FSD recurring revenue, which we expect to be accretive to our gross margin in 2022 and beyond.
Moving onto our terminal base, we added an additional 870 <unk> terminals in the third quarter for a total of 8749 in the market.
That represents an additional 3061 paid terminals in the marketplace. So far in 2021.
As I have mentioned I am pretty I am previous calls hardware sales and the number of paid terminals in the market are the lifeblood of a recurring revenue stream as we increase the number of terminals in the marketplace. Our recurring revenue will grow exponentially.
Building, a predictable stream of FSP revenue.
While we have many existing projects and new opportunities underway. We are unfortunately encountered countering some unforeseen headwinds in our new terminal installations due to the dire situation labor due to the dire labor situations in the hospitality market and products shortages, especially with restaurants and convenience stores.
<unk>.
We're hearing from several prospective and existing Baja customers as they simply do not have personnel available right now to work on new technology installations as they work to improve their supply chain situation and their labor shortage issues.
I'd like to emphasize that this does not mean these opportunities are disappearing, but the timing of these potential deals has simply been pushed out.
As a result, this labor food shortage issue has created a modest headwind in the timing of adoption of our technology and we are now expecting our installed based terminal base for 2021 to be at the low end of our previous guidance of 10 to 11000.
However, we believe these issues and challenges provide a huge opportunity for the recognition of the importance of our bolthouse system and its ability to provide labor hour savings and efficiencies in the back of house in restaurants, and with convenience stores fresh food programs.
So when the labor and food shortage situation's begins to improve we are well positioned to capitalize on this opportunity as our technology is already being evaluated with Baja workstations and terminals underway or about to begin let.
Let me tell you our phones continue to ring and we continue to add new prospects for future potential business.
Next I wanted to provide you with an update on our <unk> for.
For the third quarter 2021 R. R.
<unk> fell slightly sequentially to $1016 per terminal versus 1179 in the second quarter of 2021.
What part of the reason for the decline was due to the impact of the Delta variant early in the quarter as I. Previously said, we had our best month ever in September for <unk> for our <unk> recurring revenue and it has continued into October.
As I've mentioned previously during our Investor calls, we have a strong relationship with the convenience store chain 711, and they continue to order more terminals to be installed in their stores as they focus on expanding their fresh food initiatives.
Each store requires some construction changes to add fresh food capabilities and includes the installation of the Bolthouse terminal while.
While we will not be providing a quarterly update on the penetration of the 711 stores. We will remind you that the terminal install opportunity for this year is about 2000 total terminals and the remaining amount of terminals for us the ship is about 7000.
I am very encouraged by the many opportunities in our FSC pipeline. Despite the labor food shortage issues in the market and continue to be impressed with our relationship with Apple as we both work to win in the restaurant market.
Now, let's move on to our casino and gaming business.
Revenue in the quarter was $4 million up a fully 100% year over year and 16% sequentially.
The continued strength in our casino business has been fueled largely by momentum in the domestic casino floor spending.
We're seeing a very solid return to slot machine and edt's growth onto the casino floors across the country as pent up demand finally has an outlet to be realized.
We expect the casino and gaming industry to continue to ramp up spending through the remainder of 2021 and well into 2022.
Finally, I wanted to talk specifically about some of the challenges almost every business faces today.
First I'm sure everyone is aware that we have a major shortage of workers that is affecting a number of industries, but perhaps not as badly as the service industry, and especially restaurants and convenience stores.
As I said this is creating a headwind to the timing of some <unk> deals due to the inability to assign resources to train and asset that capability on our platform as I mentioned earlier.
Second we have seen widespread supply chain issues affecting primarily technology manufacturing and unfortunately, we have not been immune to these.
While our <unk> terminals and workstations have not been affected by these problems are 9700 foodservice terminal, primarily for Mcdonalds, which falls under FSP revenue and our epic 950, <unk> and <unk>.
<unk> edge gaming printers, as well as our ethicon 9000, Pos printers have.
We are working diligently to ensure the impact of these delays is minimized by every method possible, including buying parts on the spot market, which usually means paying more for these parts.
These higher material costs combined with the current elevated shipping prices could have a short term downward effect on the margin of our hardware sales. However, we have taken steps to mitigate these cost increases including raising our prices.
We are working hard to be able to ship every order we received but we could run out of product, especially if the market continues to rapidly expand for our technology and products.
I would like to end this discussion by saying if we must push any order into 2022, we do not believe we will lose any of these sales remember any competitor of ours is facing the same issues and we believe we entered this new parts shortage phase, which much with much more inventory than most of our competitors.
Before I turn the call to Steve to give you details about our financial performance I'd like to take the time to thank the employees at transact for all they did during the one of the most difficult times in the country's history, but also in their lives also.
Two industries devastated by Covid, 19, pandemic, where restaurants casinos. So much one on inside of transact and just want to thank every employee for all you did to get us through these difficulties.
Not only did these wonderful employees the dedicated dedicated to transact, but we also work together to get our offices open. So we could get back to meetings and discussions in the office and off the video.
Our offices are now opened 100% of our employees are vaccinated and it's great to see the interaction between the teams once again.
I cannot thank the transact employees more you are wonderful.
And with that I'd like to turn the call over to Steve to go over our results in detail Steve.
Thanks Bart.
Let's turn to our third quarter results in detail now.
Total net sales were $10 6 million, which was up 46% from $7 3 million in the third quarter of 2020.
Sales from our foodservice technology market or FSP or up to $3 3 million, a 40% increase from $2 3 million in the third quarter of 2020.
FSD hardware sales increased 64% to $1 3 million from 771000, a year ago.
We added 870 <unk> terminals during the quarter and we finished with a totaled 8749 in the market.
Our recurring FSD sales, which include software and service subscriptions as well as consumable label sales were $2 million, which was up 28% from the $1 6 million reported in the prior year period.
As Bart mentioned, our recurring revenue is a function of how many paid terminals we have in service and as those numbers continue to climb so too will our label sales other recurring revenue.
As we mentioned last quarter given that we are in the early stages of building our installed base of terminals or <unk> will likely fluctuate quarter to quarter based on the size of individual software label and service orders and the timing of terminal shipped.
As a reminder, we changed how we calculate our approved to reduce the noise around the number we now calculate our approved by Annualizing the quarters recurring revenue and then dividing that number by the number of paid terminals in service at the end of the prior quarter.
Using this method or <unk> for the third quarter 'twenty, one was $1016, which was down from 1179 in the second quarter of 'twenty one.
Our casino and gaming sales were $4 million up 100% from the third quarter 2020, and up 16% sequentially.
We're continuing to see improvement towards our pre pandemic level of quarterly sales for the casino gaming market with particular strength in the domestic market that was up 71% from the third quarter last year.
Our international Casino and gaming sales also improved to $1 4 million, which was which was more than tripling the sales compared to the COVID-19 effect in the third quarter of 2020.
We expect this recovery to continue as the pandemic related slowdown begins to subside.
Tos automation sales were up 60% to $1 2 million from the prior year period.
The increase was mainly attributable to higher sales of our Ithaca 9000 printer to Mcdonald's as sales recover from pandemic depressed levels.
Turning to <unk> sales revenues were $160000, which was up 50% from the third quarter of last year.
So we continue to deemphasize <unk> sales you still continue to fulfill orders from our legacy customers as the industry recovers from the impact of COVID-19.
Content onto transact services group or <unk>.
Overall, <unk> sales were down $122000 or 6% to $2 million.
This was due mostly to lower sales of legacy Pos paper and service contracts that are legacy banking printers keeping.
Keep in mind, we're no longer focusing on the products in this market and expect our TSP revenues to decline over time.
Turning to our gross margin our third quarter gross margin was 46% as compared to 45, 9% in the prior year period.
Gross margin this quarter was impacted by lower margin on sales of bolthouse terminals as well as higher material and shipping costs, resulting from the worldwide supply disruptions and shortages caused by the pandemic.
This was partially offset by 46% higher overall sales volume, including significantly higher casino and gaming printer sales, which are at higher Mark which are our higher margin products as well as higher FSD recurring revenue.
As a reminder, we decided to reduce our margins on both hardware products and accelerate the growth of our installed base of terminals to drive more lucrative FSD recurring revenues such as software subscription service and labels.
You should see a favorable impact on gross margin over the longer term as recurring revenue grows to become a larger percentage of our overall sales.
As we move down the income statement operating expenses for the third quarter increased $1 1 million or 23% to $5 9 million when compared to the third quarter of last year.
Our engineering expenses were up due to the hiring of additional software developers and expenses incurred for continued Paul how software development projects pay to our third party development firm.
Our selling and marketing expenses also rose as we hired new sales and marketing staff increased marketing programs to promote and support Baja and incurred higher sales commissions and travel expenses, our sales and travel both began to return to more normalized levels.
As a reminder, Q3 last year reflected lower COVID-19 impacted levels of spending in 2021 marks a spending ramp that began in the third quarter and will continue into Q4 and into next year.
To further break down our operating expenses for the third quarter, our engineering expenses were up 30% to $1 9 million, our selling and marketing expenses were up 51% to $1 9 million and our G&A expenses were essentially flat up less than 1% to $2 1 million.
We incurred an operating loss of $1 6 million or 15, 1% of net sales in the third quarter 'twenty, one which compares to an operating loss of $1 5 million or 23% net sales in the third quarter 2020.
So I don't normally speak about our other income line item during the third quarter of 'twenty, one or $2 $2 million PPP loan from the SBA under the cares Act was formerly forgiven.
As a result, we eliminated this outstanding debt from our balance sheet and recognized a $2 $2 million gain as other income in the quarter.
On the bottom line, we recorded net income of $910000 or <unk> <unk> per diluted share in the third quarter 'twenty, one compared to a net loss of 867000 or 11 in the year ago period.
After removing the $2 $2 million gain from the forgiveness of the PPP loan we incurred an adjusted net loss during the third quarter of 21 of $1 3 million or <unk> 13 per diluted share.
Adjusted EBITDA for the third quarter of 'twenty, one after removing the effect of the PPP loan forgiveness was a negative $1 2 million, which compares to negative 869000 in the year ago period.
And one final item I'd like to mention we enhanced our liquidity position during the third quarter by completing our second capital raise in August.
Through an underwritten public offering we sold approximately 842000 shares of our common stock generating net proceeds of approximately $11 3 million after deducting all underwriting and other related expenses.
As a result, we ended the third quarter of 'twenty, one with a solid balance sheet, including $18 7 million in cash and no debt outstanding.
At this point I would like to turn the call back over to Barry for closing remarks.
Yes, Thanks, Steve.
Nicely done operator at this time, we'll open up the call to questions.
Yes.
Thank you.
I'd like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment, but again that is star one if you'd like to ask a question. We will take our first question from George Sutton with Craig Hallum. Please go ahead.
Thank you Bart I wondered if you could.
Quantify the labor issues relative to the install side and then on the other side of that talk about the impact and demand that youre seeing because of those supply issues from your customers.
So on the installation side clearly we have one.
One big customer that's installing terminals every quarter.
And they face the issue of part shortages in.
Other than shortages in construction delays and all that so.
We're all just.
Working through that we still think we will ship 2000 terminals this year to them.
I think the biggest thing George is.
What.
We're hearing from two groups of customers.
The convenience store market is hot.
Right now because the fresh food program seems to be taking hold and.
When I look at the opportunities that we're working on right now we've got a lot of big opportunities in the convenience store market.
There.
If they haven't got into fresh food, yet, they're playing catch up and they need a labeling solution, but the interesting thing is that we're also looking at other software to help them as they rollout.
Our labeling solution so that market has become.
Ripe for.
New orders for us so it's been quite exciting in that side of the business and I think what really helped us George was being at Max and North American convenience store show because.
Customers potential customers could go look at our product and our customers product and there is a clear difference between us and the competitors. So it really held to it.
Solidify in our in our potential new customers minds that we've got the best technology out there with very encouraging also is the cause that we are receiving from restaurant companies.
Start the conversation off by saying look we're on hold for the next 90 days, we're working through labor issues, we're working through.
I mean, I don't know if you've heard some restaurants have run out of straws from restaurants have run out of coffee Cup covers.
Amazing stories.
But they've been told to get help for the back of the house and one CEO I talked to he said that's the most difficult part to hire is the back of the house. So if you think about it the waiters and waitresses are all making tips and all of that in the back of the house is not in fact, one restaurant company is adding align on their <unk>.
Jack for a tip for the back of the house and the restaurant company is going to match that tip dollar for dollar because of trying to recruit people for the back of the house.
The call is that we are getting is almost a panic.
In the panic way would just help how can you help us.
We're now looking at the back of the House, we now need to drive labor out we've now need to get more efficient.
And in fact, we have one customer that has given us.
You have a new product that we're starting to work on right now and one we just never thought of it because it's time consuming for this one kind of restaurant.
And it's a certain segment of the market.
So we're really encouraged George.
<unk>.
We came out of the pandemic with some very stiff headwinds because everybody was closed now we're coming out of it the casino market has taken off on us and it's great I just hope we can get all the printers, we can because the orders are just flowing in.
But we do feel the tailwind from both the convenience store market and the restaurant market because one is trying to get into fresh food and moving trying to get at very quickly and the other is in dire need for help on the under labor issues.
I don't think it's unknown to everybody that $15 an hour now.
Average if not the low end of the wage scale.
And so I'm very encouraged and I think it's given us a lot of momentum.
Might take a little longer to close these deals in that okay. You know what theres not much we can do about that but.
But the amount of deals that we're working on the amount of excitement inside that business is pretty exciting.
One other question if I could I know you have been going to market with Apple now and I wondered if you could just.
Either quantify the pipeline or just give us some perspective of what kind of success, you expect particularly on the restaurant side with Apple.
The good thing about Apple is if you look at our solution right. If you look at our workstation, we have to have a tablet.
No.
If you look at the total cost of our hardware solution.
The workstation itself, which is.
This device that is two printers and it's got all this communication.
We got both how Lincoln it where we communicate to the printers wirelessly and all of that we don't use Bluetooth, but then you need a tablet.
And with Apple going out and convincing restaurant companies across the board to start using the iPad what <unk>.
Happens to our solution George is we become cheap in a way because now the restaurant company has made a decision not because of our our technology because they want an iPad and every restaurant.
Two or three now that part of the cost side of the conversation with the customer goes away or you already have an iPad will now all you need is the workstation.
It's actually been extremely helpful for us and of course, where they have gone into restaurants and sold of course, the sharing that information with us I will say that I am finding them to be.
Very attentive and very interested in our success.
Now have a weekly call with them personally.
And we are really trying to align our efforts together.
Their vision of the marketplace is the iPad becomes the device for the front middle and back of the house and their partners, let's call it partners or their friends wherever they want to call. It.
Relative to say a second quarter average anything you can do to to help either either give gifts that give a quantify that would be helpful.
Yeah. So so let's talk about the third quarter. So clearly we saw an uptick in our software sales. So if you look at Q3 versus Q2, we have more software sales and that's b costs were penetrating the restaurant market remember, we haven't announced a big deal, but we're posing little deals every day.
40, restaurants, 30, restaurants, 20 restaurants, and there is a bigger amount of software in those deals than what we have in the convenience store market. So our software sales are rising.
And one thing we got to remember the third quarter of this year versus the third quarter of last year, we had that large one order that came through from one of our customers that was an overkill. So when even when we compare third quarter of this year the third quarter last year.
The third quarter last year had some extra label sales that should've never happened.
And so our sales actually this quarter. This third quarter was much higher than last year.
But what we are seeing is that.
What happened in July and August was what I think.
The country saw right you had adult a variant things started to slow down again as transaction slowdown.
Label sales slowdown because the amount of goods or the amount of grab and go with the amount of what they are.
Making goes down in September as we kind of saw the delta very and kind of slowdown things really started opening again, we saw our label sales grow and grow a lot and we saw that continue into October.
So we are encouraged by that but I would say, Steve I think you would agree with me. It was the software sales that really was the difference between Q2 and Q3 in regards to increase.
I think labels were up nicely too though.
Both up yet.
Okay, Great and then we had our best software quarter, we had our best software quarter ever in the third quarter.
Okay, Okay, and then relative to your commentary around component and supply chain.
<unk> did you feel any impact from that in Q3 or is this a discussion that's more relevant to keep for maybe the first part of next year.
I'll take it from the sales side, we ran out of product in Q3.
So in the gaming side, the gaming side, just kind of exploded on us and.
We couldn't take any more orders.
Oh.
I've never seen anything like it and if you think it's just electronics, it's not let me give you. An example, we use a light emitting sensors to watch paper move within our technology and our manufacturers to one of the largest manufacturers of sensors couldn't get the <unk> to glue the the glass housing or.
The sensor.
So it's not just electronic components.
Steve you want to talk about the shortages.
Yeah, I mean from a supply side, Jeff like Bart said, we had him during the quarter.
In some products, we completely depleted like the gaming product, we actually completely depleted down to nothing.
And we're continuing to having ROM call like rolling stock outs, when we might stock out of a product for a couple of weeks, while we wait for our part to come in and then we catch it back up.
So I guess the way look at where hand to mouth I think our group is do our operations group is doing a really good job.
Getting the parts in any way that we possibly can.
It's costing us a little bit more and we have to sometimes pay more for the parts and then typically we have to fly the parts in which cost more.
But we're doing okay. So far so good but it definitely is going to impact us in queue for.
Okay.
One last one of my work.
This is new word called Decommit.
And it's not like we didn't prepare for.
Place orders on our vendors so because we entered the year with a lot of inventory, but we everybody was talking about parts shortages. So we placed our orders and you could be expecting a shipment on October Tampa going to make this up but on October 9th agenda calls and says MD committing we're going to be a month late.
So this is a new word that that none of us have ever experienced before so where we really thought we weren't going to experience it that much this year.
It's this thing called Decommit, where we are now getting calls from vendors, saying, we're going to be a month later, we're going to be two weeks later.
And they don't tell you until the day you are expecting it to shift.
So <unk>.
Phenomenon that were that were living with.
In the gaming side. The good news is we came out with a new epic edge printer for the casino market and not all the slot manufacturers had moved over to it and we're trying to end of life. The 950. The good news is we had epic edges in stock because we had gone into production of the product. So it really help too mode.
<unk>, our slot machine manufacturers around the world to move over to the edge.
So our goal is to end of life now the 950.
At the <unk> gaming show, we actually had a sign up that said epic edge in stock.
To kind of force the casinos to talk to the slot manufacturers to get them to integrate the epic edge.
You have another thing that's kind of it's actually funny, it's kind of kind of good and bad as our competitors stopped out before we did because we had such a large inventory position. So we got it I think we stole a bunch of market share probably and pass Indian gaming just because we have we have product in stock.
So that also kind of exasperated are shortage issue, because we were selling more than we normally would because of that too.
Okay, Great and then barked care to take a stab at at.
A range of while at terminal installed that.
You could foresee for 2022.
Greg It's funny, Jeff I've been working on that for the last couple of hours guys figured you'd ask that question. So.
I was adding up all the opportunities and it's in five digits.
I won't give you a number but it's over 10000 terminals that we're working on and on.
It's just that.
The thing I can't.
It's.
What we can commit too is when will the customer be ready.
They're very motivated they've got this labor issue they want to work on the back of the house, we've got new convenience stores that want to do fresh food I think those will close I think there we've got a better shot at because that's a revenue that can drive more revenue for the convenience stores.
It's the restaurants, that's hard too.
Hard to quantify when they will close we're working on some big deals and the rollout is what's what they're looking at and saying Okay. How can we do the rollout and we don't even have enough. We have some restaurants that are closing.
At five o'clock.
Because they can't they have nobody to work at night.
So it's hard to handicap that Jeff, but I can tell you that our our opportunities as in the five digits.
The next day or.
Look forward to getting more more of an update as we get into 2022. Thanks for your time.
Thank you and once again, that's star one if you'd like to ask a question will hear next from Chris How Hollywood Barrington Research.
Hi, Barkhurst, Hi, Steve Good afternoon, Hey, Chris.
Okay currently.
Hey.
You've talked about it a little bit, but I wanted to ask the question, perhaps in a different way.
With the challenges that essentially everyone has seen at different ends of the supply chain.
Causing things to get pushed out can you maybe talk about how this environment.
Has made the sales process simpler in that it's highlighted the.
The need in the back of the house more so than ever and perhaps your pipeline of opportunities.
Accelerating faster than you head perhaps ever anticipated.
Go into the later part of this recovery.
There's no doubt Chris.
I think in the restaurants that I've personally talked to now.
Talk to our salespeople almost every day.
We're just chatting about what we're hearing.
In the old days, you just hired another body right, Okay I need to take temperature. This new food that we're making $8 an hour just put a body there and and now it's $15 an hour. The now warm during college education in full medical and all that so now our bodies expensive I think it's.
Look I think the last two years through the pandemic. The talk was the front of the house right. It was online ordering it was delivery. It was the only way for restaurants to stay open and companies like although did great.
With working with restaurants that they didn't have delivery or online ordering they were closed.
I think the next two or three years, the stories can be technology and the technology for the back of the house I think the only way to get out of this labor issue, especially the back of the house, where that you've got a lot of labor.
It's very difficult to hire talk to any Z over restaurant company they'll tell you the back of the restaurants. The challenge is just hard to hire literally there's somebody putting a new line on a bill for the back of the house staff to tip them. So they can try and drive more.
Income to the back of the house people I think the next two three years is easily the story of technology for the back of the house and this is.
It's driven the market to open up now we've just got to get through the next couple of months or a month or two.
Today, you heard some good news some government person writing came out and said I think the supply chain is getting better I think Fedex and you said that there's going to be stuff on the shelves for Christmas and all that I think we're all waiting to see it.
But I think once we get through that I think I think it's just going to be a great time for our company.
And anybody else, that's trying to get technologies into the restaurants I think that's what the story is going to be.
Yeah, and that kind of leads me to my.
Follow up question, that's very helpful by the way.
As we move from these larger opportunities to the SMB market can you talk about the SNB market.
Now that performed in the quarter.
And as we think about the SMB market in the context of the overall business given the shorter cycle of this business.
Could it.
In the long run be of more reliable predictable stream of revenue for transit.
Yeah for Great question, Chris while we had a higher we add add another salesperson.
We are seeing that market pick up.
We're doing a fair amount of marketing as we Steve talked to everybody about the spending that we're doing we're about to kick off another major marketing program and what happens is you get somebody that's got 20 restaurants that facing the same issue that a larger corporation is is is facing.
But they can move a lot quicker and that's what we're seeing so we're seeing the SMB business move a lot quicker and that's what's picked up you look at how many terminals, we installed and all that.
Outside of our existing customers that are adding a lot of that a lot of that new business was all SMB.
So we have added will probably add another person.
We're going to we're about to kick off a major marketing program again.
Just yesterday my marketing manager called and we got two new leads just from some marketing that we're doing and how we're positioning our marketing and some of our investors are seeing it because you sent me an E Mail say I saw this and convenience store I saw this one.
National restaurant news.
Our ads and all that and it's resonating we're trying to really focus in on the issue of labor on food safety, which is a major issue.
Resonating, but clearly the smaller people can act and react a lot quicker and we're seeing that.
That's great. Thanks for taking my questions I appreciate the time you.
You got it and yes. Thank you.
Thank you and once again, that's star one if you'd like to ask a question.
And it appears that we have no further questions in the queue I'd like to turn the conference back over to management for any additional or closing remarks.
We will fantastic well, we thank you for your support we thank our shareholders fewer support we're working hard.
To be honest I have never seen business like this.
Park shortages and labor shortages all hit at the same time inflation.
Like I said, we are dealing with some of this by raising prices. So we are not absorbing all the cost increases.
So that's that's and I think that'll hold.
But I've never seen a world like this and I look forward to getting to the end of this I thought we saw enough when the pandemic hit and that we're coming out of it and seeing on this side.
But but as Chris just talked about I think it's an exciting time for the company because all of these issues is highlighting to restaurants convenience stores food service providers.
Chios companies that are selling food in grocery stores and all that that driving cost savings labor efficiency productivity is going to be the way the future and that's what we do for a living so I do think that the next couple of years it'd be pretty exciting for us I do think our employees what they had to go through and I am sure everybody's.
Firms had to go through this but I do think the transact employees. They just did a fantastic job rolled back together or Las Vegas office, it's very exciting time here, it's great to see everybody working together again.
We did we are 100% Vaccinators, who were able to open up a 100%. So look I think our shareholders fewer support I look forward to continuing our conversation with you and look forward looking out a couple of years and seeing the success of what we've been able to create so look forward to talking to you and.
After we get to the new year.
Happy Thanksgiving and if I don't talk to you have a happy new year. Thanks.
Thank you that does conclude today's conference me. Thank you all for your participation you may now disconnect.
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