transAct moving jobs to Ithaca

CNY Business Journal (1996+), Apr 20, 2001 by Fitting, Beth

ITHACA - Connecticut-based TransAct Technologies Inc. is consolidating all its manufacturing in Ithaca. The shift will increase the local work force by 35 by the end of the year, says Lucy H. Staley, senior vice president and general manager of the Ithaca facility, while the company's Wallingford, Conn., plant will shut down, leaving 70 Connecticut employees out of work.

The company has announced it will keep its headquarters in Connecticut, though it is looking for new space.

TransAct designs, engineers, and manufactures thermal, impact, and inkjet transaction-based printers for the point-of-sale (POS), gaming and lottery, financial services, kiosk, and Internet markets. The company has supplied its products to such enterprises as Disney World and Subway. In addition to national sales, TransAct also sells globally, to Latin America, Mexico, and Canada as well as Western Europe. Staley says that it recently completed an order for 40,000 printers the British postal service.

The move to Ithaca was prompted "basically by a change in technology," says Richard L. Cote, executive vice president, chief financial officer, secretary, and treasurer. "The Wallingford plant was involved with making impact printers." These printers, says Cote, each take two to 10 hours to manufacture. "The technology has shifted to thermal and inkjet printers, which take under a hour to produce." Cote says that the company "re-evaluated the need for two plants, and our business analysis showed that, even with an enormous volume, we could make all our printers in one plant."

Cote adds that another reason for the move to Ithaca is that the Central New York plant has the company's engineering and service support and the "expertise in inkjet technology."

Bart C. Shuldman, chairman, CEO, and president, said in a recent news release that the company expects "this consolidation will provide approximately $4 million in annual cost savings starting in 2002."

According to Cote, the move will be complete by December. Seventy jobs will be terminated in Connecticut, including factory, engineering, and administrative and finance positions. He says that the terminated employees "will be offered good severance packages, so they won't be left out in the cold in December."

TransAct is leasing the Wallingford facility, so Cote says the company will sublease that facility and look for another location in Connecticut for its corporate headquarters, "near to where our corporate staff lives." Wallingford is midway between Hartford and New Haven.

TransAct was founded in October 1983 and went public in August 1996.

The company had $53.7 million in sales in 2000, for a one-year sales growth of 19.6 percent, and net loss that year of $0.3 million. Shuldman said, "Based on our outlook at this time [February], which we believe is appropriately conservative due to the uncertain economy, for 2001 we anticipate revenue in the range of $54 to $58 million, and a return to profitability, with earnings before restructuring charges of between 5 and 9 cents a share for the full 2001 calendar year." Total employment in Wallingford and Ithaca, as well as in a European office, was 205 in 2000, a 23.5-percent increase over the previous year's.

TransAct estimates that the nonrecurring costs associated with the consolidation, including severance pay, employee benefits, and other expenses, will be in the $3 to $3.5 million range and will be recognized during 2001.