Thanks, Chris. Good afternoon, and welcome to TransAct Technologies Second 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, Steven DeMartino. Today's call will include a discussion of the company's key operating strategies, progress on those initiatives and details on our second 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 Forms 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 the call. Today's 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 measures calculated and presented in accordance with GAAP can be found in today's press release as well as on the company website. And with that, I'd like to turn the call over to John.

Thank you, Ryan. Good afternoon, everyone, and thanks for joining today. Last time, I had a chance to present to you all, I was only about a month into the job as CEO for TransAct. And now 127 days, I counted them up and I've had at least a little bit more of an opportunity to roll up my sleeves and dig into some of the work in earnest. So I'm happy with the progress we've made and I'm going to share some of that with you today. At a high level, the results came in as expected and discussed on the last call. Net sales came in at $19.9 million. Year-over-year, the increase was approximately 58% but it was a sequential decline of approximately 11% from the first quarter as we expected. And we've all tried to work hard setting the stage for success in the back half of the year and, more importantly, on into '24 and beyond. Last quarter, I talked about the fundamental goodness I found here at TransAct and as well as some of the parts of the business that were going to require some action to allow us to take advantage of the opportunities up ahead in the market. I can say that we've revamped the parts of the business where that needed to be done. And we've added some internal processes where there was none before. We have moved some personnel around. We've let a few go. We've added a few. I like the progress we've made and I feel that we're fully ready to add some much-needed momentum for the business. The reality is that our sales teams, processes, and go-to-market strategies required a pretty significant overhaul. And I'm really happy to say that the first phase of that is largely complete. I also feel confident that we now have the right people in the right places and we can now turn our attention to the other parts of the equation, predominantly focusing on execution. While change takes time and shifting behaviors and habits in any business can be a long game, I'm pretty confident that we're now moving in the right direction. Let me go over some of the results from our two markets. First, on our food service technology or FST market, FST revenue was $3.9 million, up about 14% year-over-year. This was led primarily by higher shipments of our AccuDate 9700 product and increased label sales. We also added 743 net new BOHA! Terminals in the quarter, bringing the total number of our online terminals in the market up to 13,476 as of the end of the quarter, June 30, 2023. So that's up from 10,941 in the prior period a year ago. And honestly, I know we can improve on these numbers and that's one of the focuses that's pretty key for me. Our FST sales team is rebuilt and is refocused on the number one priority, which is selling as many of these new units as possible in the marketplace. We have implemented the personnel changes I mentioned where needed, and we're out there every day pitching both the new and existing clients on this freshly launched BOHA! Terminal 2. We've also made some excellent progress revamping the sales motions and GTM strategy. And while this is an iterative process that will continue to take time, we've already been seeing promising beginnings of momentum and some preorders of the new terminal from some of our existing customers. As I mentioned, after digging in a bit, I found a lot of room for improvement in this GTM and its execution. While they were far from optimal, the good news is that these things are relatively all easily fixable. It's not rocket science. We just have to do it and that's why it took moving around a few people and creating a little bit of focus where one was needed. However, given the long sales cycle, it will still take time for the good work to manifest results. Further, as I discussed last quarter, we are very happy with the BOHA! Terminal 2. The product turned out bigger, faster, brighter, more capable, and frankly, just a lot better than the original. We're also happy with the positive reception we've gotten from those customers and clients who have trialed it so far. We believe that there's a large opportunity within the existing installed customer base who are looking to upgrade from our older AccuDate 9700 product and to some extent, our earlier original BOHA! Terminal as well. As a reminder, the BOHA! sales cycle is long, and it's complex, but it pays dividends. When the headquarters grants us a green light to engage with their franchisees, this typically is the case with most established franchises. Once they say, yes, it's okay, we've authorized it, we've approved it, then that gives us an opportunity to go out to the individual franchisees and introduce them to the unit, and it's a key opportunity for upsell and uptake. We are well on the way to getting some of those approvals at some of our key accounts, and we're optimistic that the approvals will begin to yield results towards the back end of this year and into 2024. Next, on the casino and gaming side. We saw total casino and gaming revenue of $12.2 million, up 87% year-over-year but down 23% sequentially from the all-time high we saw in the first quarter. There are two main reasons for that sequential decline: first, as we predicted on our last call, we saw the first signs of our major competitor reentering the market, and they made some deliveries of their product last quarter, not a lot, but some. Second, the order rate and backlog additions to our books are certainly slowing, which we believe is a result of the slot OEMs building a large inventory position of printers in the first half of 2023. As supply chain tensions eased, manufacturers are no longer placing orders 6 to 9 months out, as we had previously seen. We were certainly at the right place at the right time with the ability to capitalize on this influx of pent-up demand during the market recovery. We believe this benefit will extend beyond the short-term spike in sales and profitability that was created earlier this year. We're not resting on our laurels. We have increased our casino and gaming sales staff and are actively reaching out to our new customers in an effort to retain as much of the market share gain as possible. A portion of those new customers will certainly become long-term buyers for our printers. However, we also expect to reduce pricing a little bit on these products to ensure that we remain competitive in the marketplace. The prize here is a new baseline sales level as a result of the permanent increase in market share. We believe we are well positioned to capture that demand going forward. At this stage, we estimate that our go-forward net sales run rate in the market should be about 15% to 20% higher than our pre-COVID historical average. We expect this new run rate to be fully reflected in the fourth quarter of this year and into 2024. Further, we hope to see some benefit from our newest casino and gaming printer, called the EPIC 888, which we believe will help us retain some of these new customers. We expect to launch this towards the end of the year. That launch, et cetera, will happen publicly at some point, but it's a really nice-looking unit and we expect it to be a nice boost to some of our gaming and casino customers. Finally, I wanted to discuss our outlook for the rest of 2023 and provide some color on how we are seeing the business progress. As I discussed, we are seeing the downward trajectory of casino and gaming that we did expect and spoke about last quarter, while we're taking strong action to retain as much of that business as possible. The reality is the return of our competitors as well as price reductions will continue to impact both our net sales and profitability on adjusted EBITDA. As such, we believe the most prudent approach to our guidance is to maintain our current net sales guidance of $71.5 million to $73.5 million and raise our adjusted EBITDA guidance to a range of $8 million to $8.5 million for the full year 2023. These ranges take into account all of the points I have mentioned today. There's still work to be done here at TransAct, but I'm pleased with our results for the quarter and believe the company is now moving in the right direction as a whole. I believe the pieces are in place across the company from a personnel perspective, but again, the impact does take time. Our rebuilt FST sales team and newly reinforced casino and gaming sales team are now in the best position to capitalize on the opportunities in front of us. Our sales cycles, particularly for FST, take time, but the feedback we're getting early on is very encouraging for preorders on the BOHA! Terminal 2. As expected, our competitive environment in casino and gaming began to normalize in the quarter, with printer sales beginning to decelerate as OEMs stopped stockpiling. We are hard at work to nurture these new customer relationships to retain as much of that share as possible. That's pretty much it. And now I'd like to turn the call over to Steve for a more detailed review of the numbers.

Thanks, John. Thanks, everyone, for joining us this afternoon. Let's turn to our second quarter 2023 results in more detail. As John mentioned, total net sales for the second quarter were $19.9 million, which was up 58% compared to the $12.6 million we reported a year ago. Sales from our food service technology market or FST for the second quarter were $3.9 million, which was up 13% sequentially and also up 14% compared to $3.4 million in the prior year period. The increase was largely due to higher shipments of labels in our AccuDate 9700 product as well as record high BOHA! software subscription revenue. As John mentioned, we added 743 terminals in the second quarter, which gave us 13,476 in the market at the end of the quarter. While we're encouraged by the sequential increase in our FST sales, our sales initiatives will take time to implement and then flow through to our bottom line results. So we believe this number may continue to be lumpy for a while. Our recurring FST sales, which include software and service subscriptions as well as consumable label sales for the second quarter were $2.5 million, which was up 14% compared to $2.2 million in the prior year period. Our ARPU for the second quarter of '23 was $782, which was down 9% compared to $861 in the same quarter last year, but up sequentially by 3% compared to $761 in the first quarter. As a reminder, we're currently selling some BOHA! Terminals with no recurring revenue attached to them to start. While this presents an opportunity to sell recurring elements in the future, for now, they represent a drag on our ARPU. Our casino and gaming sales were $12.2 million, which was up 87% from the second quarter of '22, but down sequentially 23% from the first quarter record high of $15.8 million. As John mentioned, this is due to a combination of the gradual reentry of our major competitor into the market, as well as OEMs working down high levels of printer inventory they stockpiled during the supply crisis that's now eased. Despite these factors, we continue to see strength in our domestic sales, which were up 141% year-over-year. POS automation sales for the second quarter increased by 63% from the prior year to $1.9 million. This was the result of higher Ithaca 9000 sales compared to this time last year when sales were limited due to supply chain issues that restricted our product availability. We expect sales in this market to return to more normalized levels as competitors ramp up production and we lower prices to remain competitive. Moving to TransAct Services Group or TSG, sales for the second quarter were up 30% year-over-year to $1.9 million. This increase was largely due to higher sales of spare parts and service for our legacy lottery printers. Though we had a strong second quarter, sales of legacy lottery printer spare parts can be sporadic, difficult to predict, and can vary significantly from quarter to quarter. Moving down the income statement, our second quarter gross margin was 54.5%, down slightly from a record high of 55% in the prior year quarter, but up from 43% in the prior year period. This comes as a result of higher overall sales volume, improved mix of higher margin casino and gaming printer sales, and the effect of two rounds of price increases we instituted during '22 to account for increased production and shipping costs at the time. However, as John mentioned, we expect to see some modest deleveraging of our gross margin due to expected price reductions across certain products, particularly in casino and gaming. As a result, looking forward to the second half of '23, we expect our gross margin to return to a level closer to our historical pre-COVID average. Our total operating expenses for the second quarter increased 15% to $9.6 million. Excluding a severance charge, which I'll talk about in a bit, our operating expenses decreased 3%. Breaking this down a bit, our engineering and R&D expenses for the second quarter increased 15% to $2.5 million. The increase was largely due to higher incentive compensation as well as additional software quality resources and increased outside testing fees. Our selling and marketing expenses decreased 19% to $2.7 million year-over-year, largely due to reduced trade show expenses and BOHA! market studies conducted in the first half of '22 that we did not repeat in '23. Lastly, our G&A expenses increased 52% to $4.4 million for the second quarter. This increase was largely due to a one-time severance charge of $1.5 million related to the resignation of our former CEO in April. Excluding this charge, G&A expenses would have been relatively flat at approximately $3 million, up only 2% year-over-year. We generated operating income of $1.2 million in the second quarter of '23 compared to an operating loss of $3 million in the prior year period. Our results last year were negatively impacted by lower sales volume associated with the COVID-related supply chain issues. On the bottom line, we recorded net income of $765,000 or $0.08 per diluted share compared to a net loss of $2.4 million or $0.24 loss per diluted share in the year-ago period. Excluding the $1.5 million severance charge I just discussed, our EPS would have been $0.22 for the current quarter. Our adjusted EBITDA for the quarter improved to $3.2 million compared to an adjusted EBITDA loss of $2.5 million in the second quarter last year. As John mentioned, for '23, we now expect to generate total adjusted EBITDA of between $8 million and $8.5 million. And lastly, on the balance sheet, we finished the quarter with $10.8 million in cash and $2.25 million of debt outstanding on our credit facility with Siena Lending. And with that, operator, I think we'd like to open up the call for questions.

Your first question comes from Jeff Martin, Roth MKM.

Hope you're doing well. John, I wanted to dig in a little bit more on what's changed with the go-to-market, how quickly that starts to produce changes in behavior and then ultimately, improved sales results?

Yes. There's a lot of stuff that you can do relative to marketing automation to use that as a strategy. You go out and you try to find somebody that's interested in your product ultimately and you've got to work it all the way to the point where you close a deal. Then, frankly, you've got to treat that customer well. I call that from A to A, from awareness to advocacy. We just really had a disconnect, in my opinion, between marketing and sales. The market opportunity is big, but we didn't really have our arms around it. So we've implemented a number of GTM metrics related to funnel management, everything from awareness to nurture track to marketing qualified leads to sales-qualified leads, and ultimately turning over conversation-ready opportunities to the sales team. You can't take a salesperson and say, well, there are a lot of potential customers out there, go get them, and have them making all the cold calls while you're still doing trade shows and getting a bunch of people to scan badges. We are putting a process in place that manages that, looks at the yield at every step and then figures out whether it's getting better or worse, what works, what doesn't work, and how we can improve where it's not working. A couple of other things are, I'm gradually implementing some metrics that I think for those of you familiar with companies that deliver services: you're going to see us reporting on attrition, expansion, net retention even customer acquisition costs, and a lot of things that you find in most of the modern SaaS companies. We're creating awareness in the team around all that, and we're finding some of the marketing initiatives we've undertaken don't yield the best results. Some of them are very expensive, while others are easier to do and yield better results with better conversion yields. A lot of the focus has been on that. We've got a great product and there's an untapped market opportunity, and that's where we're putting a lot of the business process focus in place. It's underway, I've got a great Chief Revenue Officer. She's been with us for quite a while, and she knows all about the company. She's a take-no-prisoners kind of manager, in a good way, and she expects the sales team to produce. We've made some personnel changes and moved people around. One of our focuses is account retention and continued market share penetration into the gaming and casino space where it's a more steady eddy kind of business, but we've picked up a fair amount of extra market share in the last year. That’s also a key area.

Great. And then one more if I could. In terms of FST markets, where they stand, are large restaurant groups looking to deploy further technology at this time? Or are we still in an environment where inflation costs related to input and labor are still affecting their decision-making? And could you touch on the convenience store and grocery market in terms of the major end markets for FST in terms of receptiveness in this environment?

I think the restaurant space is still somewhat on its heels. Prices are up. Most of them are focused on the front of the house right now. That's a more immediate payback kind of thing. I just read the toast print and it looks good — they've done a really good job, in my opinion. We see that market opportunity coming back, and we're engaged. In the quick-service restaurants, some of the large chains are very good candidates for us. I will mention that one of the large ones is buying again from us. They kind of slowed down while they were revamping some of their stores. We're having good conversations with some of the other large groups. But in terms of fine dining and those sorts of opportunities, where there might be 20, 30, 40, or 50 stores, we're focused now predominantly on larger chains and larger restaurant operators because the effort to sell there is about the same as it is if we're trying to get someone with 30 stores. If we get a green light from some of those franchises, I think you're going to see an uptick in business throughout those organizations. We are also focusing on Grab and Go grocery stores and easier sales right now. Everybody is still consuming food and we assist with compliance, reducing food waste, and lessening labor costs, ensuring people don’t make errors. The economics and ROI on the product are actually really excellent. We're targeting the places with the greatest opportunity, based on a market review we've done recently.

Your next question comes from George Sutton at Craig-Hallum.

John, just a follow-up on something you just mentioned. You talked about ROI being excellent for the BOHA! Terminals. I've not seen anything published or really discussed relative to ROI. So how do you actually communicate that?

Verbally, unfortunately, that's an area we're improving from a marketing standpoint. We've got a great product technically, and we're very proud of it. We have great engineers. But feeds and speeds don't sell. Managers buy because of the business value it adds. One thing I found is that our brochures discuss bright screens, 300 dpi printing, and reliability, and while those aspects are important, operational managers want to apply the product to business problems. I'm working to incorporate the business value dimension into our go-to-market strategy from sales to prospecting to proof of concept and ROI discussions. The terminals easily pay for themselves within a few months, but we've not marketed ourselves that way. That's something you're going to see be at the forefront moving forward.

Great. You mentioned that with the BOHA! 2, you've got an ability to go after some of your existing terminals out there. Can you just give us a sense of AccuDate, how many there are in the market that you view as opportunistic? And can you provide a relevant number for the BOHA! 1 as well?

Yes, George. We're mainly talking about our first generation, the 9700, and there are tens of thousands of those out there.

The difference between those two is that the 9700 is a stand-alone unit. It works great, very reliable, good little workhorse, but it's not online or connected. My opinion is that the BOHA! Terminal can serve as a back-of-house platform. You could run any software you wanted to. The connectivity of the BOHA! Terminal 2 offers significant advantages for large organizations with multiple stores. It enables them to upload stats, manage different menus across locations, and much more. There's a big difference between having interconnectivity with the BOHA! Terminal 2 versus the older 9700. We’re excited and believe we'll gain a lot of upgrades with the new product. The challenge is that our products are so reliable. I appreciate that on one hand, but on the other hand, we face no planned obsolescence. We've got printers that have been working hard for over ten years. We're just waiting for customers to call us and say they need another one. The upgrade to the BOHA! Terminal is important for organizations wanting to leverage technology for competitive advantage.

Got you. And then the final question relative to the printer side. When the supply chain normalized and you were able to start shipping, you built significant production capacity, added lines, etc. Can you just give us an update on your plans for production capacity moving forward?

We've got pretty good production capacity, utilizing contract manufacturing, which offers us elasticity. In that regard, we're in good shape. We're considering adding a fourth line potentially in a different country, although we haven't made a decision yet. While almost all of our manufacturing has moved out of China, there's still a little production left there. However, we are looking at possible manufacturing opportunities in the Americas. As I mentioned, we retained a 10% to 15% increase in market share, particularly in the gaming and casino printing business. I give our team enormous credit for their work during the recovery from the pandemic when most companies struggled with shipping and product availability.

There are no further questions at this time. Please proceed.

So let me wrap this up here. Bottom line, I think we put together a solid quarter. We're doing a lot of the right work to put the company on the right track. I mentioned that we've retooled the FST go-to-market strategy; manufacturing is in good shape. We're watching expenses and optimizing our spend on marketing and sales. The new BOHA! Terminal 2 looks like a winner. I'm not done figuring out everything we need to do regarding ultimate strategy, tactics, and the like. I'm 127 days in here, but we're formulating our thoughts and plans moving forward. You'll likely see us discuss strategy issues, initiatives, and more either later this quarter or early in Q4 after our earnings announcement. We want to ensure stakeholders understand the upcoming opportunities, trade-offs, and best courses of action. That's still a work in progress, and I hope everyone will stay tuned for updates.

Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.