Good day, ladies and gentlemen and welcome to the TransAct Technologies First Quarter 2015 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder this call may be recorded. I would now like to introduce your host for today's conference Jim Leahy of JCIR. Sir, please go ahead.

Thank you, Valarie. Good afternoon and welcome to TransAct Technologies 2015 first quarter conference call. Joining us today from the Company are Chairman and CEO, Bart Shuldman; and President and CFO, Steve DeMartino. Today’s call will include a discussion of the Company’s key operating strategies, progress against these initiatives and details on the 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 and 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 Form 10-K and 10-Q. TransAct undertakes no obligations to revise or update any forward-looking statements 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 SEC Regulation G. When required, a 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 on the Company’s website. At this time, I would like to turn the call over to Bart Shuldman. Bart?

Thank you, Jim, welcome to everybody joining us on this afternoon's call and webcast. This afternoon we reported a 19% year-over-year increase in our first quarter revenue to $16.2 million, adjusted EBITDA of $2.5 million, GAAP diluted EPS of $0.02 and very happy to report adjusted diluted EPS of $0.16. Steve will review the financial results in detail in a few moments, but let me start by saying I am extremely pleased with the results for the first quarter of 2015, which include strong sales in our lottery market, a healthy quarterly sequential increase in our casino and gaming revenues and the benefit of a very robust growth in sales in our food safety terminal. You know just back a few months ago during our 2014 fourth quarter investor conference call I emphasized that TransAct will be laser focused on sales execution this year. We added invested time and capital into diversifying our business over the last several years and as a result we entered some exciting new market opportunities and as I said, we were done with the heavy lifting. With our focus going forward on revenue growth, while also looking at reducing our costs as we sought to grow both the top line and just as important our bottom line even more. I have to say we accomplished just that in the first quarter of 2015. The first quarter results particularly the progress achieved with our sales of our food safety terminals are a good indication that we are determined to achieve our primary goal for the year. With the product development work that went through into transforming TransAct through the creation of several new high value products for new markets completed, and with any distraction for what had been a lengthy legal process and our disagreement with…

Thanks Bart. Good afternoon everyone. 2015 first quarter net sales were $16.2 million, up 19% compared to $13.6 million in the year ago quarter. As Bart pointed out earlier, Q1 benefited from strong lottery printer sales and higher sales of our food safety terminals as well as the quarterly sequential improvement in casino and gaming sales. Looking at our sales by market for the first quarter, casino and gaming sales declined approximately $1 million or 15% to $5.6 million year-over-year primarily due to lower domestic sales of casino printers to our OEMs. However casino and gaming sales increased 12% on a quarterly sequential basis from Q4 last year which we believe is encouraging as we started out last year with a solid Q1 performance before sales really trailed off in the subsequent three quarters. Lottery sales were up five-fold to $4 million from last year’s Q1 sales of $800,000 as GTECH took significantly more than the minimum required quantities. We expect lottery sales to again be very strong in Q2 although likely not as strong as Q1 before moving towards a more normalized level of sales in the second half of 2015. Food safety, POS and banking sales were $2.2 million in the first quarter 2015, an increase of $0.5 million year-over-year. Sales for the 2015 first quarter reflects an over 300% increase in sales of our food safety terminals compared to the prior year which was partially offset by lower sales of lower margin banking and POS printers. With the growing traction we’re gaining from some well-known restaurant brands for our food safety terminals, we expect to see continued positive sales trends throughout the balance of 2015. Total revenue for our Printrex branded printers was approximately $700,000 compared to $1 million in the year ago quarter as our sales…

Thanks, Steve. Before opening the call to your questions, I want to emphasize that the transformation at TransAct in my view is now on full year. In 2015 we are focus on executing on our sales initiatives. We’re excited about our opportunities for the year ahead and look forward to a year of execution and improving year-over-year results. With that let’s open up the call to your questions. Operator?

[Operator Instructions] Our first question comes from the line of Phil Bernard with Eilers Research. Your line is now open. Please go ahead.

How are you Bart? First I want to say congratulations to you and your team on a successful quarter, well done.

Yeah, thanks Phil.

No worries, no worries. First question about, I guess I will just go through some of your verticals. In the casino market, I was wondering if you expect to recover in line with market trends below or above.

We’re seeing some really good sales right now. Our second quarter is actually tracking ahead of our first quarter. So we think we’ve not only grown market share, but we’re doing quite well in the marketplace. It's really up to the analyst to tell us what you think the industry is doing, what kind of slot machine sales are out there, but we are seeing not only the gaming casino printers. The outlook being very strong right now but also seeing a lot of traction for Epicentral software system. So whether it's an industry thing or a TransAct thing, we came out of the first quarter strong and we are in the second quarter actually stronger.

Okay, good news for your guys. And moving on to food and safety, it sounds like a lot of that came from a significant contract with McDonalds which may be finishing up. I’m curious as to what that relationship is with McDonalds if you're able to provide any more color and then following up with that, are you recording any other large accounts at the movement?

Yeah so food safety was really not McDonalds. The first quarter was McDonalds light for better word. It's all the work that we’ve done over the last two years to go work with the other restaurant companies not everyone in the market, but a lot of them and the first quarter was really everything but McDonalds. I mean we sell to McDonalds every day. But if you look at the incremental sales that we got in the first quarter, it was clearly not McDonalds. It was a host of restaurants that have decided to use our technology for the back of the restaurant. One in particular is rolling out a couple thousand, but the success that we had in the first quarter was across many different restaurant companies.

Okay, great. My apologies for the confusion on my end.

Yeah, yeah, look, for us look for the last couple of years we’ve been trying to focus to shareholders it takes a while to go into a restaurant company and work with their operations people, their food safety people to change the way that they do their food safety practice. There is no doubt that these restaurants do hand written labels, they have a book, they have labels and there is no doubt that it's not successful for them. Its costly, it causes waste of food, it causes waste of time. But it takes time to get it the restaurant companies to agree, okay we're going to change and like we said when McDonalds, McDonalds took about two years until we were done and they were starting to buy. So all that work we did over to last two years is now coming through its sales. We literally see terminal sales everyday now. We see the bookings almost every day and this is everything but McDonalds.

Got it. So you guys are fighting more our cake procedures and it's just takes a lot to build that relationship to convince them otherwise, okay.

Its like any business, like somebody going into your business and saying they got a better computer system and they probably would be right. And how quickly would your business change over, you want to test it, you want to try it out, you want to make sure the cost inline, you want to make sure everybody’s had a chance to look at it. So it's like any business. When you come in with new technology they want to do their thing first, get ready for, we got to make the menu. We got to make sure the menus are right, how they run the restaurants, the menus meet the way that they run their operations. So it just takes times and it's like any business that’s going to put a new technology, it just takes that time for them to get comfortable with it, test it, trial it and then roll it out.

Okay. Great, great. And moving from there on to questions more about the operating structure in your margins you mentioned that on you are on your way to eking out about a million in annualized operating efficiencies. Do you intend for that to come a lot from R&D now that you’re kind of at the end of this development cycle. Is that going to be balanced on the negative side by increases in sales and marketing as you’re focused on your sales efforts?

No, the operating structure, if you see the cost savings in the first quarter, pretty significant and we're probably going to run Steve you and agree it's probably going to run…

We're going to end up somewhere between $1 million and $1.5 million of savings on the year. Most of it is coming through in the operating expense line, but some of it is actually coming upstairs in the margin.

And on the selling and marketing expenses, as you know we hired a new Senior Executive. He is in those numbers. So we don't expect any negative impact from sales and marketing expenses to impact our cost savings. That was built into our model. so like when we hired our new sales executive, we had built in his cost with the model that after his cost came in, we would still reduce expenses by $1 million and we're running over that right now and I think Steve and I agree today, it's going to run between $1 million and $1.5 million for the year.

Got it, got it. More good news. That's it for me, thanks guys.

Okay. Welcome.

Our next question comes from Jeff Burstein with Concept Capital. Your line is open. Please go ahead.

Hi, good evening. Just wanted to get an update on GTECH and where that contract stands?

Yes, so thanks for asking. We've had a 20-year relationship with GTECH and we've extended the contract with them. They had to go through a pretty big acquisition as everybody knows. We're very close with GTECH. We're having a fabulous year with them. We're actually working on a new project with them for the second half of the year, which actually might improve our even outlook for the second half of the year with them. We'll have more to say, but we're such close friends with them that we just look forward to the future with them and look, they've been through a major acquisition. So we're set with them. We're in good position and like I said, we've even got some upside to our second half even with the good first half that we're having.

So that contract still has some decent time period to run?

It's going to run throughout. We're not going to get into specifics. Like I said, they've got some things to do that they needed to get done and look we sell them -- we have a $0.5 million, over $0.5 million printers in the market with them. We've got a great relationship with probably our closest customer and we'll have more to say as things develop. Like I said, we're in a wonderful position. We're having a great year with them. Second half of the year can even be better than we think because of some projects that could be coming in. We'll have more to say as things develop, but like I said, we're very comfortable with where we are with them and I don't think they would say the same thing with us.

Right. Thank you.

Thank you. And I am showing no further questions. I would like to turn the call back to Bart Shuldman for any further remarks.

Well, thank you everybody for joining us on today's call. A couple things, our Annual Meeting will be here at 10 AM in Hamden Connecticut on Thursday, May 14. You're welcome to come and say hello and we'll give you some product demonstrations. Also next week if anybody is in Chicago the week, starting a week from Saturday is the National Restaurant Association Show. We'll be there. We've got some good announcements coming and anybody that's ending up in Macau right after that will be at the Macau G2E Gaming Show. With that, I thank everybody for your support. I thank our shareholders. I thank our employees and we'll talk to you on our second quarter conference call in a couple of months. Thanks for joining us tonight.

Ladies and gentleman, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone, have a great day.