Transcat Reports Strong Third Quarter Results on Service Gross Margin Expansion and Adjusted EBITDA Growth
- Service gross margin expanded by 250 basis points
- Consolidated adjusted EBITDA grew by 38.5%
- Service segment revenue grew by 15.4%
- Distribution segment sales increased by 10.4%
- None.
Insights
The reported expansion in service gross margin and distribution gross margin for Transcat, Inc. suggests a strong strategic position in the market. The increase in gross margins, particularly the 530 basis points in distribution, indicates an effective cost management strategy and a favorable sales mix, likely due to the high-margin rental business. The 38.5% growth in adjusted EBITDA with margin expansion is a robust indicator of operational efficiency and profitability, which is likely to attract investor attention.
From a market perspective, the successful integration of acquisitions such as TIC-MS, SteriQual and Axiom and the resulting cross-sell synergies, demonstrate Transcat's ability to enhance its service offerings and penetrate deeper into its target markets. The organic service revenue growth of 9.1% indicates healthy demand in the company's highly regulated end markets, which could signal resilience in the face of economic fluctuations.
The reported financials show a significant improvement in Transcat's profitability, with net income increasing by 109.1% and adjusted diluted earnings per share up by 60%. These figures surpass industry norms and reflect strong execution of the company's growth strategy. The operating cash flow of $26.9 million year-to-date is indicative of sound financial health and operational cash efficiency.
Investors will note the impact of strategic acquisitions on the company's earnings, which could suggest potential for future earnings growth as the company continues to leverage its existing infrastructure. The improved operating margins in both service and distribution segments highlight the company's ability to scale effectively while managing operational costs.
Transcat's financial performance, particularly the substantial growth in gross margins and EBITDA, reflects a positive economic impact on the company's operations. The ability to expand margins in a competitive environment indicates pricing power and operational leverage. Moreover, the strategic acquisitions and their quick accretion to the company's financials suggest an effective capital allocation strategy. This could imply a favorable macroeconomic environment for the industry or a specific competitive advantage for Transcat.
The company's focus on automation and process improvement as enablers for future margin expansion aligns with broader economic trends towards efficiency and productivity. The positive outlook, with expectations of high single to low double-digit organic service revenue growth, suggests confidence in the company's market position and its ability to navigate through different economic cycles.
-
Service gross margin expanded 250 basis points driven by
9.1% Service organic growth -
Distribution gross margin expands 530 basis points to
31.5% on strength of Rentals -
Consolidated adjusted EBITDA grew
38.5% with margins expanding 250 basis points -
Operating Cash Flow of
$26.9M
“We are extremely pleased with our third quarter results as Service gross margin expanded 250 basis points versus prior year driven by strong organic Service revenue growth and increased productivity throughout our network of labs. Adjusted EBITDA growth of
Mr. Rudow added, “The outstanding performance of recent acquisitions demonstrates we are excellent stewards of capital and can successfully identify, acquire, and integrate dynamic companies. The key differentiator of the Transcat acquisition strategy is the effectiveness of our integration processes that enables new acquisitions, such as the recent deal with Axiom, to very quickly be accretive to the overall company. In addition to strong returns, the acquisitions present compelling cross-sell synergies to drive organic calibration service growth and rental sales into these newly acquired customer bases. Acquisitions allow us to leverage our existing infrastructure, expand addressable markets, and widen the breadth of our service offerings.”
Third Quarter Fiscal 2024 Review (Results are compared with the third quarter of the fiscal year ended March 25, 2023 (“fiscal 2023”)) |
||||||||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
Change |
||||||
|
|
FY24 Q3 |
|
|
FY23 Q3 |
|
|
$'s |
|
|
% |
|||||
Service Revenue |
|
$ |
41,509 |
|
|
$ |
35,977 |
|
|
$ |
5,532 |
|
|
|
15.4 |
% |
Distribution Sales |
|
|
23,657 |
|
|
|
21,425 |
|
|
|
2,232 |
|
|
|
10.4 |
% |
Revenue |
|
$ |
65,166 |
|
|
$ |
57,402 |
|
|
$ |
7,764 |
|
|
|
13.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
$ |
20,936 |
|
|
$ |
16,400 |
|
|
$ |
4,536 |
|
|
|
27.7 |
% |
Gross Margin |
|
|
32.1 |
% |
|
|
28.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
4,294 |
|
|
$ |
3,163 |
|
|
$ |
1,131 |
|
|
|
35.8 |
% |
Operating Margin |
|
|
6.6 |
% |
|
|
5.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
3,348 |
|
|
$ |
1,601 |
|
|
$ |
1,747 |
|
|
|
109.1 |
% |
Net Margin |
|
|
5.1 |
% |
|
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA* |
|
$ |
9,120 |
|
|
$ |
6,585 |
|
|
$ |
2,535 |
|
|
|
38.5 |
% |
Adjusted EBITDA* Margin |
|
|
14.0 |
% |
|
|
11.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS |
|
$ |
0.38 |
|
|
$ |
0.21 |
|
|
$ |
0.17 |
|
|
|
81.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted EPS* |
|
$ |
0.56 |
|
|
$ |
0.35 |
|
|
$ |
0.21 |
|
|
|
60.0 |
% |
*See Note 1 on page 5 for a description of these non-GAAP financial measures and pages 10, 11 and 12 for the reconciliation tables. |
Consolidated revenue was
Service segment delivers strong third quarter results
Represents the accredited calibration, repair, inspection and laboratory instrument services business (
($ in thousand) |
|
|
|
|
|
|
|
|
|
Change |
||||||
|
|
FY24 Q3 |
|
|
FY23 Q3 |
|
|
$'s |
|
|
% |
|||||
Service Segment Revenue |
|
$ |
41,509 |
|
|
$ |
35,977 |
|
|
$ |
5,532 |
|
|
|
15.4 |
% |
Gross Profit |
|
$ |
13,494 |
|
|
$ |
10,793 |
|
|
$ |
2,701 |
|
|
|
25.0 |
% |
Gross Margin |
|
|
32.5 |
% |
|
|
30.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
2,966 |
|
|
$ |
1,836 |
|
|
$ |
1,130 |
|
|
|
61.5 |
% |
Operating Margin |
|
|
7.1 |
% |
|
|
5.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA* |
|
$ |
5,979 |
|
|
$ |
4,562 |
|
|
$ |
1,417 |
|
|
|
31.1 |
% |
Adjusted EBITDA* Margin |
|
|
14.4 |
% |
|
|
12.7 |
% |
|
|
|
|
|
|
|
|
*See Note 1 on page 5 for a description of this non-GAAP financial measure and pages 10 and 11 for the Adjusted EBITDA Reconciliation tables. |
Service segment revenue was
Distribution segment shows continued margin improvement
Represents the sale and rental of new and used professional grade handheld test, measurement and control instrumentation (
($ in thousands) |
|
|
|
|
|
|
|
|
|
Change |
||||||
|
|
FY24 Q3 |
|
|
FY23 Q3 |
|
|
$'s |
|
|
% |
|||||
Distribution Segment Sales |
|
$ |
23,657 |
|
|
$ |
21,425 |
|
|
$ |
2,232 |
|
|
|
10.4 |
% |
Gross Profit |
|
$ |
7,442 |
|
|
$ |
5,607 |
|
|
$ |
1,835 |
|
|
|
32.7 |
% |
Gross Margin |
|
|
31.5 |
% |
|
|
26.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
1,328 |
|
|
$ |
1,327 |
|
|
$ |
1 |
|
|
|
0.1 |
% |
Operating Margin |
|
|
5.6 |
% |
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA* |
|
$ |
3,141 |
|
|
$ |
2,023 |
|
|
$ |
1,118 |
|
|
|
55.3 |
% |
Adjusted EBITDA* Margin |
|
|
13.3 |
% |
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
*See Note 1 on page 5 for a description of this non-GAAP financial measure and pages 10 and 11 for the Adjusted EBITDA Reconciliation tables. |
Distribution sales were
Nine Month Review (Results are compared with the first nine months of fiscal 2023)
Total revenue was
Adjusted EBITDA was
Balance Sheet and Cash Flow Overview
On December 23, 2023, the Company had
Outlook
Mr. Rudow added concluded, “We are proud of our dedicated team, which has consistently delivered exceptional results through various economic cycles as can be seen over the past decade and a half of profitable growth. For the fiscal year, we expect organic Service revenue growth in the high-single digit to low double-digit range and gross margin expansion. Automation of our calibration processes and overall process improvement will be key enablers to future margin expansion. We believe the Service segment has substantial runway ahead for growth, both organically and through acquisition. Our robust and diverse acquisition pipeline enables strategic, accretive acquisitions that drive synergistic growth opportunities and will be a key component of our go-forward strategy. We believe our unique value proposition fostered by Nexa's Cost, Control and Optimization Services drives a sustainable competitive advantage in the highly regulated markets that we serve, particularly the Life Science, Aerospace, and Defense markets, along with a growing Rentals business. We have a long history of generating sustainable value for our shareholders and providing a dynamic, rewarding workplace for our team.”
Transcat expects its income tax rate to range between
Webcast and Conference Call
Transcat will host a conference call and webcast on Tuesday, January 30, 2024 at 11:00 a.m. ET. Management will review the financial and operating results for the third quarter, as well as the Company’s strategy and outlook. A question and answer session will follow the formal discussion. The review will be accompanied by a slide presentation, which will be available at www.transcat.com/investor-relations. The conference call can be accessed by calling (201) 689-8471. Alternatively, the webcast can be monitored at www.transcat.com/investor-relations.
A telephonic replay will be available from 2:00 p.m. ET on the day of the call through Tuesday, February 6, 2024. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13742041, access the webcast replay at www.transcat.com/investor-relations, where a transcript will be posted once available.
NOTE 1 – Non-GAAP Financial Measures
In addition to reporting net income, a
In addition to reporting Diluted Earnings Per Share, a GAAP measure, we present Adjusted Diluted Earnings Per Share (net income plus acquisition related amortization expense, acquisition related transaction expenses, acquisition related stock-based compensation, acquisition amortization of backlog and restructuring expense), which is a non-GAAP measure. Our management believes Adjusted Diluted Earnings Per Share is an important measure of our operating performance because it provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance. Adjusted Diluted Earnings Per Share is not a measure of financial performance under GAAP and is not calculated through the application of GAAP. As such, it should not be considered as a substitute or alternative for the GAAP measure of Diluted Earnings Per Share and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. Adjusted Diluted Earnings Per Share, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies. See page 12 for the Adjusted Diluted EPS Reconciliation table.
ABOUT TRANSCAT
Transcat, Inc. is a leading provider of accredited calibration, reliability, maintenance optimization, quality and compliance, validation, Computerized Maintenance Management System (CMMS), and pipette services. The Company is focused on providing best-in-class services and products to highly regulated industries, particularly the Life Science industry, which includes pharmaceutical, biotechnology, medical device, and other FDA-regulated businesses, as well as aerospace and defense, and energy and utilities. Transcat provides periodic on-site services, mobile calibration services, pickup and delivery, in-house services at its 27 Calibration Service Centers strategically located across
Transcat also operates as a leading value-added distributor that markets, sells and rents new and used national and proprietary brand instruments to customers primarily in
Transcat’s strategy is to leverage its strong brand and unique value proposition that includes its comprehensive instrument service capabilities, enterprise asset management, and leading distribution platform to drive organic sales growth. The Company will also look to expand its addressable calibration market through acquisitions and capability investments to further realize the inherent leverage of its business model. More information about Transcat can be found at: Transcat.com.
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact and thus are subject to risks, uncertainties and assumptions. Forward-looking statements are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “could,” “plans,” “aims” and other similar words. All statements addressing operating performance, events or developments that Transcat expects or anticipates will occur in the future, including but not limited to statements relating to anticipated revenue, profit margins, the commercialization of software projects, sales operations, capital expenditures, cash flows, operating income, growth strategy, segment growth, potential acquisitions, integration of acquired businesses, market position, customer preferences, outlook and changes in market conditions in the industries in which Transcat operates are forward-looking statements. Forward-looking statements should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties include those more fully described in Transcat’s Annual Report and Quarterly Reports filed with the Securities and Exchange Commission, including under the heading entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize or should any of the Company’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on the Company’s forward-looking statements, which speak only as of the date they are made. Except as required by law, the Company disclaims any obligation to update, correct or publicly announce any revisions to any of the forward-looking statements contained in this news release, whether as the result of new information, future events or otherwise.
FINANCIAL TABLES FOLLOW.
TRANSCAT, INC. CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Amounts) |
||||||||||||||||
|
|
(Unaudited) |
|
|
(Unaudited) |
|
||||||||||
|
|
Third Quarter Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
December 23, |
|
|
December 24, |
|
|
December 23, |
|
|
December 24, |
|
||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Revenue |
|
$ |
41,509 |
|
|
$ |
35,977 |
|
|
$ |
122,793 |
|
|
$ |
105,120 |
|
Distribution Sales |
|
|
23,657 |
|
|
|
21,425 |
|
|
|
65,775 |
|
|
|
63,382 |
|
Total Revenue |
|
|
65,166 |
|
|
|
57,402 |
|
|
|
188,568 |
|
|
|
168,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Service Revenue |
|
|
28,015 |
|
|
|
25,184 |
|
|
|
82,244 |
|
|
|
72,005 |
|
Cost of Distribution Sales |
|
|
16,215 |
|
|
|
15,818 |
|
|
|
46,553 |
|
|
|
47,292 |
|
Total Cost of Revenue |
|
|
44,230 |
|
|
|
41,002 |
|
|
|
128,797 |
|
|
|
119,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
20,936 |
|
|
|
16,400 |
|
|
|
59,771 |
|
|
|
49,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, Marketing and Warehouse Expenses |
|
|
7,519 |
|
|
|
6,595 |
|
|
|
20,844 |
|
|
|
18,315 |
|
General and Administrative Expenses |
|
|
9,123 |
|
|
|
6,642 |
|
|
|
28,350 |
|
|
|
20,497 |
|
Total Operating Expenses |
|
|
16,642 |
|
|
|
13,237 |
|
|
|
49,194 |
|
|
|
38,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
4,294 |
|
|
|
3,163 |
|
|
|
10,577 |
|
|
|
10,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense |
|
|
81 |
|
|
|
731 |
|
|
|
1,785 |
|
|
|
1,651 |
|
Interest Income |
|
|
(347 |
) |
|
|
(5 |
) |
|
|
(347 |
) |
|
|
(15 |
) |
Other Income/Expense |
|
|
289 |
|
|
|
313 |
|
|
|
304 |
|
|
|
96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
|
|
4,271 |
|
|
|
2,124 |
|
|
|
8,835 |
|
|
|
8,661 |
|
Provision for Income Taxes |
|
|
923 |
|
|
|
523 |
|
|
|
2,078 |
|
|
|
1,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
3,348 |
|
|
$ |
1,601 |
|
|
$ |
6,757 |
|
|
$ |
7,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share |
|
$ |
0.39 |
|
|
$ |
0.21 |
|
|
$ |
0.84 |
|
|
$ |
0.93 |
|
Average Shares Outstanding |
|
|
8,615 |
|
|
|
7,559 |
|
|
|
8,060 |
|
|
|
7,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share |
|
$ |
0.38 |
|
|
$ |
0.21 |
|
|
$ |
0.83 |
|
|
$ |
0.92 |
|
Average Shares Outstanding |
|
|
8,752 |
|
|
|
7,666 |
|
|
|
8,187 |
|
|
|
7,644 |
|
TRANSCAT, INC. CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts) |
||||||||
|
|
(Unaudited) |
|
|
(Audited) |
|
||
|
|
December 23, |
|
|
March 25, |
|
||
|
|
2023 |
|
|
2023 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
35,205 |
|
|
$ |
1,531 |
|
Accounts Receivable, less allowance for credit losses of |
|
|
43,307 |
|
|
|
44,698 |
|
Other Receivables |
|
|
819 |
|
|
|
506 |
|
Inventory, net |
|
|
16,178 |
|
|
|
16,929 |
|
Prepaid Expenses and Other Current Assets |
|
|
3,295 |
|
|
|
3,935 |
|
Total Current Assets |
|
|
98,804 |
|
|
|
67,599 |
|
Property and Equipment, net |
|
|
37,222 |
|
|
|
29,064 |
|
Goodwill |
|
|
105,700 |
|
|
|
69,360 |
|
Intangible Assets, net |
|
|
21,459 |
|
|
|
13,799 |
|
Right To Use Assets, net |
|
|
16,834 |
|
|
|
14,876 |
|
Other Assets |
|
|
1,055 |
|
|
|
1,051 |
|
Total Assets |
|
$ |
281,074 |
|
|
$ |
195,749 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts Payable |
|
$ |
11,355 |
|
|
$ |
15,869 |
|
Accrued Compensation and Other Current Liabilities |
|
|
15,683 |
|
|
|
10,201 |
|
Current Portion of Long-Term Debt |
|
|
2,316 |
|
|
|
2,248 |
|
Total Current Liabilities |
|
|
29,354 |
|
|
|
28,318 |
|
Long-Term Debt |
|
|
2,411 |
|
|
|
46,869 |
|
Deferred Tax Liabilities, net |
|
|
10,855 |
|
|
|
6,538 |
|
Lease Liabilities |
|
|
14,457 |
|
|
|
12,960 |
|
Other Liabilities |
|
|
5,527 |
|
|
|
1,434 |
|
Total Liabilities |
|
|
62,604 |
|
|
|
96,119 |
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity: |
|
|
|
|
|
|
|
|
Common Stock, par value |
|
|
4,414 |
|
|
|
3,781 |
|
Capital in Excess of Par Value |
|
|
140,382 |
|
|
|
27,886 |
|
Accumulated Other Comprehensive Loss |
|
|
(691 |
) |
|
|
(1,200 |
) |
Retained Earnings |
|
|
74,365 |
|
|
|
69,163 |
|
Total Shareholders' Equity |
|
|
218,470 |
|
|
|
99,630 |
|
Total Liabilities and Shareholders' Equity |
|
$ |
281,074 |
|
|
$ |
195,749 |
|
TRANSCAT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) |
||||||||
|
|
(Unaudited) |
||||||
|
|
Nine Months Ended |
||||||
|
|
December 23, |
|
|
December 24, |
|||
|
|
2023 |
|
|
2022 |
|||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net Income |
|
$ |
6,757 |
|
|
$ |
7,030 |
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
|
|
|
|
|
|
|
|
Net Loss on Disposal of Property and Equipment |
|
|
24 |
|
|
|
62 |
|
Deferred Income Taxes |
|
|
42 |
|
|
|
(52 |
) |
Depreciation and Amortization |
|
|
9,841 |
|
|
|
8,243 |
|
Provision for Accounts Receivable and Inventory Reserves |
|
|
379 |
|
|
|
174 |
|
Stock-Based Compensation Expense |
|
|
3,338 |
|
|
|
2,757 |
|
Changes in Assets and Liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
Accounts Receivable and Other Receivables |
|
|
3,819 |
|
|
|
1,850 |
|
Inventory |
|
|
3,208 |
|
|
|
(3,589 |
) |
Prepaid Expenses and Other Current Assets |
|
|
728 |
|
|
|
1,074 |
|
Accounts Payable |
|
|
(5,194 |
) |
|
|
(424 |
) |
Accrued Compensation and Other Current Liabilities |
|
|
3,947 |
|
|
|
(3,150 |
) |
Net Cash Provided by Operating Activities |
|
|
26,889 |
|
|
|
13,975 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Purchases of Property and Equipment |
|
|
(9,099 |
) |
|
|
(7,149 |
) |
Proceeds from Sale of Property and Equipment |
|
|
- |
|
|
|
10 |
|
Business Acquisitions, net of cash acquired |
|
|
(12,932 |
) |
|
|
(8,306 |
) |
Net Cash Used in Investing Activities |
|
|
(22,031 |
) |
|
|
(15,445 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
(Repayment of) Proceeds from Revolving Credit Facility, net |
|
|
(42,713 |
) |
|
|
2,286 |
|
Repayments of Term Loan |
|
|
(1,678 |
) |
|
|
(1,570 |
) |
Issuance of Common Stock, net of direct costs |
|
|
75,714 |
|
|
|
503 |
|
Repurchase of Common Stock |
|
|
(2,247 |
) |
|
|
(437 |
) |
Net Cash Provided by Financing Activities |
|
|
29,076 |
|
|
|
782 |
|
|
|
|
|
|
|
|
|
|
Effect of Exchange Rate Changes on Cash and cash equivalents |
|
|
(260 |
) |
|
|
885 |
|
|
|
|
|
|
|
|
|
|
Net Increase in Cash and cash equivalents |
|
|
33,674 |
|
|
|
197 |
|
Cash and cash equivalents at Beginning of Period |
|
|
1,531 |
|
|
|
1,396 |
|
Cash and cash equivalents at End of Period |
|
$ |
35,205 |
|
|
$ |
1,593 |
|
TRANSCAT, INC. Adjusted EBITDA Reconciliation Table (In thousands) (Unaudited) |
||||||||||||||||||||||
|
|
Fiscal 2024 |
|
|||||||||||||||||||
|
|
Q1 |
|
|
|
Q2 |
|
|
Q3 |
|
|
|
Q4 |
|
|
YTD |
|
|||||
Net Income |
|
$ |
2,949 |
|
|
|
$ |
460 |
|
|
$ |
3,348 |
|
|
|
|
|
|
|
$ |
6,757 |
|
+ Interest Expense |
|
|
814 |
|
|
|
|
890 |
|
|
|
(266 |
) |
|
|
|
|
|
|
|
1,438 |
|
+ Other Expense / (Income) |
|
|
64 |
|
|
|
|
(49 |
) |
|
|
289 |
|
|
|
|
|
|
|
|
304 |
|
+ Tax Provision |
|
|
813 |
|
|
|
|
342 |
|
|
|
923 |
|
|
|
|
|
|
|
|
2,078 |
|
Operating Income |
|
$ |
4,640 |
|
|
|
$ |
1,643 |
|
|
$ |
4,294 |
|
|
|
$ |
- |
|
|
$ |
10,577 |
|
+ Depreciation & Amortization |
|
|
2,790 |
|
|
|
|
3,269 |
|
|
|
3,783 |
|
|
|
|
|
|
|
|
9,842 |
|
+ Transaction Expense |
|
|
185 |
|
|
|
|
328 |
|
|
|
78 |
|
|
|
|
|
|
|
|
591 |
|
+ Acquisition Earn-Out Adjustment |
|
|
- |
|
|
|
|
2,800 |
|
|
|
87 |
|
|
|
|
|
|
|
|
2,887 |
|
+ Other (Expense) / Income |
|
|
(64 |
) |
|
|
|
49 |
|
|
|
(289 |
) |
|
|
|
|
|
|
|
(304 |
) |
+ Noncash Stock Compensation |
|
|
930 |
|
|
|
|
1,241 |
|
|
|
1,167 |
|
|
|
|
|
|
|
|
3,338 |
|
Adjusted EBITDA |
|
$ |
8,481 |
|
|
|
$ |
9,330 |
|
|
$ |
9,120 |
|
|
|
$ |
- |
|
|
$ |
26,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Breakdown |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Operating Income |
|
$ |
3,192 |
|
|
|
$ |
742 |
|
|
$ |
2,966 |
|
|
|
|
|
|
|
$ |
6,900 |
|
+ Depreciation & Amortization |
|
|
2,226 |
|
|
|
|
2,325 |
|
|
|
2,362 |
|
|
|
|
|
|
|
|
6,913 |
|
+ Transaction Expense |
|
|
185 |
|
|
|
|
76 |
|
|
|
30 |
|
|
|
|
|
|
|
|
291 |
|
+ Acquisition Earn-Out Adjustment |
|
|
- |
|
|
|
|
2,800 |
|
|
|
87 |
|
|
|
|
|
|
|
|
2,887 |
|
+ Other (Expense) / Income |
|
|
(47 |
) |
|
|
|
29 |
|
|
|
(203 |
) |
|
|
|
|
|
|
|
(221 |
) |
+ Noncash Stock Compensation |
|
|
676 |
|
|
|
|
826 |
|
|
|
737 |
|
|
|
|
|
|
|
|
2,239 |
|
Service Adjusted EBITDA |
|
$ |
6,232 |
|
|
|
$ |
6,798 |
|
|
$ |
5,979 |
|
|
|
$ |
- |
|
|
$ |
19,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution Operating Income |
|
$ |
1,448 |
|
|
|
$ |
901 |
|
|
$ |
1,328 |
|
|
|
|
|
|
|
$ |
3,677 |
|
+ Depreciation & Amortization |
|
|
564 |
|
|
|
|
944 |
|
|
|
1,421 |
|
|
|
|
|
|
|
|
2,929 |
|
+ Transaction Expense |
|
|
- |
|
|
|
|
252 |
|
|
|
48 |
|
|
|
|
|
|
|
|
300 |
|
+ Other (Expense) / Income |
|
|
(17 |
) |
|
|
|
20 |
|
|
|
(86 |
) |
|
|
|
|
|
|
|
(83 |
) |
+ Noncash Stock Compensation |
|
|
254 |
|
|
|
|
415 |
|
|
|
430 |
|
|
|
|
|
|
|
|
1,099 |
|
Distribution Adjusted EBITDA |
|
$ |
2,249 |
|
|
|
$ |
2,532 |
|
|
$ |
3,141 |
|
|
|
$ |
- |
|
|
$ |
7,922 |
|
TRANSCAT, INC. Adjusted EBITDA Reconciliation Table (In thousands) (Unaudited) |
||||||||||||||||||||
|
|
Fiscal 2023 |
|
|||||||||||||||||
|
|
Q1 |
|
|
Q2 |
|
|
Q3 |
|
|
Q4 |
|
|
YTD |
|
|||||
Net Income |
|
$ |
3,072 |
|
|
$ |
2,357 |
|
|
$ |
1,601 |
|
|
$ |
3,658 |
|
|
$ |
10,688 |
|
+ Interest Expense |
|
|
360 |
|
|
|
550 |
|
|
|
726 |
|
|
|
781 |
|
|
|
2,417 |
|
+ Other Expense / (Income) |
|
|
(204 |
) |
|
|
(13 |
) |
|
|
313 |
|
|
|
248 |
|
|
|
344 |
|
+ Tax Provision |
|
|
376 |
|
|
|
732 |
|
|
|
523 |
|
|
|
1,168 |
|
|
|
2,799 |
|
Operating Income |
|
$ |
3,604 |
|
|
$ |
3,626 |
|
|
$ |
3,163 |
|
|
$ |
5,855 |
|
|
$ |
16,248 |
|
+ Depreciation & Amortization |
|
|
2,641 |
|
|
|
2,778 |
|
|
|
2,824 |
|
|
|
2,712 |
|
|
|
10,955 |
|
+ Transaction Expense |
|
|
30 |
|
|
|
- |
|
|
|
96 |
|
|
|
59 |
|
|
|
185 |
|
+ Other (Expense) / Income |
|
|
204 |
|
|
|
13 |
|
|
|
(313 |
) |
|
|
(248 |
) |
|
|
(344 |
) |
+ Noncash Stock Compensation |
|
|
828 |
|
|
|
1,114 |
|
|
|
815 |
|
|
|
620 |
|
|
|
3,377 |
|
Adjusted EBITDA |
|
$ |
7,307 |
|
|
$ |
7,531 |
|
|
$ |
6,585 |
|
|
$ |
8,998 |
|
|
$ |
30,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Breakdown |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Operating Income |
|
$ |
2,532 |
|
|
$ |
2,507 |
|
|
$ |
1,836 |
|
|
$ |
4,547 |
|
|
$ |
11,422 |
|
+ Depreciation & Amortization |
|
|
2,139 |
|
|
|
2,246 |
|
|
|
2,268 |
|
|
|
2,147 |
|
|
|
8,800 |
|
+ Transaction Expense |
|
|
30 |
|
|
|
- |
|
|
|
96 |
|
|
|
59 |
|
|
|
185 |
|
+ Other (Expense) / Income |
|
|
134 |
|
|
|
3 |
|
|
|
(214 |
) |
|
|
(170 |
) |
|
|
(247 |
) |
+ Noncash Stock Compensation |
|
|
638 |
|
|
|
793 |
|
|
|
576 |
|
|
|
456 |
|
|
|
2,463 |
|
Service Adjusted EBITDA |
|
$ |
5,473 |
|
|
$ |
5,549 |
|
|
$ |
4,562 |
|
|
$ |
7,039 |
|
|
$ |
22,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution Operating Income |
|
$ |
1,072 |
|
|
$ |
1,119 |
|
|
$ |
1,327 |
|
|
$ |
1,308 |
|
|
$ |
4,826 |
|
+ Depreciation & Amortization |
|
|
502 |
|
|
|
532 |
|
|
|
556 |
|
|
|
565 |
|
|
|
2,155 |
|
+ Other (Expense) / Income |
|
|
70 |
|
|
|
10 |
|
|
|
(99 |
) |
|
|
(78 |
) |
|
|
(97 |
) |
+ Noncash Stock Compensation |
|
|
190 |
|
|
|
321 |
|
|
|
239 |
|
|
|
164 |
|
|
|
914 |
|
Distribution Adjusted EBITDA |
|
$ |
1,834 |
|
|
$ |
1,982 |
|
|
$ |
2,023 |
|
|
$ |
1,959 |
|
|
$ |
7,798 |
|
TRANSCAT, INC. Adjusted Diluted EPS Reconciliation Table (In Thousands, Except Per Share Amounts) (Unaudited) |
||||||||||||||||||||
|
|
Fiscal 2024 |
|
|||||||||||||||||
|
|
Q1 |
|
|
Q2 |
|
|
Q3 |
|
|
Q4 |
|
|
YTD |
|
|||||
Net Income |
|
$ |
2,949 |
|
|
$ |
460 |
|
|
$ |
3,348 |
|
|
|
|
|
|
$ |
6,757 |
|
+ Amortization of Intangible Assets |
|
|
1,093 |
|
|
|
1,416 |
|
|
|
1,674 |
|
|
|
|
|
|
|
4,183 |
|
+ Acquisition Amortization of Backlog |
|
|
- |
|
|
|
19 |
|
|
|
24 |
|
|
|
|
|
|
|
43 |
|
+ Acquisition Deal Costs |
|
|
367 |
|
|
|
602 |
|
|
|
430 |
|
|
|
|
|
|
|
1,399 |
|
+ Income Tax Effect at |
|
|
(365 |
) |
|
|
(509 |
) |
|
|
(532 |
) |
|
|
|
|
|
|
(1,406 |
) |
+ Acquisition Earn-Out Adjustment |
|
|
- |
|
|
|
2,800 |
|
|
|
- |
|
|
|
|
|
|
|
2,800 |
|
Adjusted Net Income |
|
$ |
4,044 |
|
|
$ |
4,788 |
|
|
$ |
4,944 |
|
|
$ |
- |
|
|
$ |
13,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Diluted Shares Outstanding |
|
|
7,762 |
|
|
|
7,948 |
|
|
|
8,752 |
|
|
|
|
|
|
|
8,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share |
|
$ |
0.38 |
|
|
$ |
0.06 |
|
|
$ |
0.38 |
|
|
$ |
- |
|
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share |
|
$ |
0.52 |
|
|
$ |
0.60 |
|
|
$ |
0.56 |
|
|
$ |
- |
|
|
$ |
1.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2023 |
|
|||||||||||||||||
|
|
Q1 |
|
|
Q2 |
|
|
Q3 |
|
|
Q4 |
|
|
YTD |
|
|||||
Net Income |
|
$ |
3,072 |
|
|
$ |
2,357 |
|
|
$ |
1,601 |
|
|
$ |
3,658 |
|
|
$ |
10,688 |
|
+ Amortization of Intangible Assets |
|
|
1,084 |
|
|
|
1,147 |
|
|
|
1,180 |
|
|
|
1,043 |
|
|
|
4,454 |
|
+ Acquisition Deal Costs |
|
|
299 |
|
|
|
239 |
|
|
|
254 |
|
|
|
226 |
|
|
|
1,018 |
|
+ Income Tax Effect at |
|
|
(346 |
) |
|
|
(346 |
) |
|
|
(359 |
) |
|
|
(317 |
) |
|
|
(1,368 |
) |
Adjusted Net Income |
|
$ |
4,109 |
|
|
$ |
3,397 |
|
|
$ |
2,676 |
|
|
$ |
4,610 |
|
|
$ |
14,792 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Diluted Shares Outstanding |
|
|
7,629 |
|
|
|
7,646 |
|
|
|
7,666 |
|
|
|
7,688 |
|
|
|
7,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share |
|
$ |
0.40 |
|
|
$ |
0.31 |
|
|
$ |
0.21 |
|
|
$ |
0.48 |
|
|
$ |
1.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share |
|
$ |
0.54 |
|
|
$ |
0.44 |
|
|
$ |
0.35 |
|
|
$ |
0.60 |
|
|
$ |
1.93 |
|
TRANSCAT, INC. Additional Information - Business Segment Data (Dollars in thousands) (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Change |
|
|||||
SERVICE |
|
FY 2024 Q3 |
|
|
FY 2023 Q3 |
|
|
$'s |
|
|
% |
|
||||
Service Revenue |
|
$ |
41,509 |
|
|
$ |
35,977 |
|
|
$ |
5,532 |
|
|
|
15.4 |
% |
Cost of Revenue |
|
|
28,015 |
|
|
|
25,184 |
|
|
|
2,831 |
|
|
|
11.2 |
% |
Gross Profit |
|
$ |
13,494 |
|
|
$ |
10,793 |
|
|
$ |
2,701 |
|
|
|
25.0 |
% |
Gross Margin |
|
|
32.5 |
% |
|
|
30.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, Marketing & Warehouse Expenses |
|
$ |
4,202 |
|
|
$ |
4,230 |
|
|
$ |
(28 |
) |
|
|
(0.7 |
)% |
General and Administrative Expenses |
|
|
6,326 |
|
|
|
4,727 |
|
|
|
1,599 |
|
|
|
33.8 |
% |
Operating Income |
|
$ |
2,966 |
|
|
$ |
1,836 |
|
|
$ |
1,130 |
|
|
|
61.5 |
% |
% of Revenue |
|
|
7.1 |
% |
|
|
5.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
|||||
DISTRIBUTION |
|
FY 2024 Q3 |
|
|
FY 2023 Q3 |
|
|
$'s |
|
|
% |
|
||||
Distribution Sales |
|
$ |
23,657 |
|
|
$ |
21,425 |
|
|
$ |
2,232 |
|
|
|
10.4 |
% |
Cost of Sales |
|
|
16,215 |
|
|
|
15,818 |
|
|
|
397 |
|
|
|
2.5 |
% |
Gross Profit |
|
$ |
7,442 |
|
|
$ |
5,607 |
|
|
$ |
1,835 |
|
|
|
32.7 |
% |
Gross Margin |
|
|
31.5 |
% |
|
|
26.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, Marketing & Warehouse Expenses |
|
$ |
3,317 |
|
|
$ |
2,365 |
|
|
$ |
952 |
|
|
|
40.3 |
% |
General and Administrative Expenses |
|
|
2,797 |
|
|
|
1,915 |
|
|
|
882 |
|
|
|
46.1 |
% |
Operating Income |
|
$ |
1,328 |
|
|
$ |
1,327 |
|
|
$ |
1 |
|
|
|
0.1 |
% |
% of Sales |
|
|
5.6 |
% |
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
|||||
TOTAL |
|
FY 2024 Q3 |
|
|
FY 2023 Q3 |
|
|
$'s |
|
|
% |
|
||||
Total Revenue |
|
$ |
65,166 |
|
|
$ |
57,402 |
|
|
$ |
7,764 |
|
|
|
13.5 |
% |
Total Cost of Revenue |
|
|
44,230 |
|
|
|
41,002 |
|
|
|
3,228 |
|
|
|
7.9 |
% |
Gross Profit |
|
$ |
20,936 |
|
|
$ |
16,400 |
|
|
$ |
4,536 |
|
|
|
27.7 |
% |
Gross Margin |
|
|
32.1 |
% |
|
|
28.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, Marketing & Warehouse Expenses |
|
$ |
7,519 |
|
|
$ |
6,595 |
|
|
$ |
924 |
|
|
|
14.0 |
% |
General and Administrative Expenses |
|
|
9,123 |
|
|
|
6,642 |
|
|
|
2,481 |
|
|
|
37.4 |
% |
Operating Income |
|
$ |
4,294 |
|
|
$ |
3,163 |
|
|
$ |
1,131 |
|
|
|
35.8 |
% |
% of Revenue |
|
|
6.6 |
% |
|
|
5.5 |
% |
|
|
|
|
|
|
|
|
TRANSCAT, INC. Additional Information - Business Segment Data (Dollars in thousands) (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Change |
|
|||||
|
|
FY 2024 |
|
|
FY 2023 |
|
|
|
|
|
|
|
|
|
||
SERVICE |
|
YTD |
|
|
YTD |
|
|
$'s |
|
|
% |
|||||
Service Revenue |
|
$ |
122,793 |
|
|
$ |
105,120 |
|
|
$ |
17,673 |
|
|
|
16.8 |
% |
Cost of Revenue |
|
|
82,244 |
|
|
|
72,005 |
|
|
|
10,239 |
|
|
|
14.2 |
% |
Gross Profit |
|
$ |
40,549 |
|
|
$ |
33,115 |
|
|
$ |
7,434 |
|
|
|
22.4 |
% |
Gross Margin |
|
|
33.0 |
% |
|
|
31.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, Marketing & Warehouse Expenses |
|
$ |
12,452 |
|
|
$ |
11,604 |
|
|
$ |
848 |
|
|
|
7.3 |
% |
General and Administrative Expenses |
|
|
21,197 |
|
|
|
14,636 |
|
|
|
6,561 |
|
|
|
44.8 |
% |
Operating Income |
|
$ |
6,900 |
|
|
$ |
6,875 |
|
|
$ |
25 |
|
|
|
0.4 |
% |
% of Revenue |
|
|
5.6 |
% |
|
|
6.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
|||||
|
|
FY 2024 |
|
|
FY 2023 |
|
|
|
|
|
|
|
|
|
||
DISTRIBUTION |
|
YTD |
|
|
YTD |
|
|
$'s |
|
|
% |
|||||
Distribution Sales |
|
$ |
65,775 |
|
|
$ |
63,382 |
|
|
$ |
2,393 |
|
|
|
3.8 |
% |
Cost of Sales |
|
|
46,553 |
|
|
|
47,292 |
|
|
|
(739 |
) |
|
|
(1.6 |
)% |
Gross Profit |
|
$ |
19,222 |
|
|
$ |
16,090 |
|
|
$ |
3,132 |
|
|
|
19.5 |
% |
Gross Margin |
|
|
29.2 |
% |
|
|
25.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, Marketing & Warehouse Expenses |
|
$ |
8,392 |
|
|
$ |
6,711 |
|
|
$ |
1,681 |
|
|
|
25.0 |
% |
General and Administrative Expenses |
|
|
7,153 |
|
|
|
5,861 |
|
|
|
1,292 |
|
|
|
22.0 |
% |
Operating Income |
|
$ |
3,677 |
|
|
$ |
3,518 |
|
|
$ |
159 |
|
|
|
4.5 |
% |
% of Sales |
|
|
5.6 |
% |
|
|
5.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
|||||
|
|
FY 2024 |
|
|
FY 2023 |
|
|
|
|
|
|
|
|
|
||
TOTAL |
|
YTD |
|
|
YTD |
|
|
$'s |
|
|
% |
|||||
Total Revenue |
|
$ |
188,568 |
|
|
$ |
168,502 |
|
|
$ |
20,066 |
|
|
|
11.9 |
% |
Total Cost of Revenue |
|
|
128,797 |
|
|
|
119,297 |
|
|
|
9,500 |
|
|
|
8.0 |
% |
Gross Profit |
|
$ |
59,771 |
|
|
$ |
49,205 |
|
|
$ |
10,566 |
|
|
|
21.5 |
% |
Gross Margin |
|
|
31.7 |
% |
|
|
29.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, Marketing & Warehouse Expenses |
|
$ |
20,844 |
|
|
$ |
18,315 |
|
|
$ |
2,529 |
|
|
|
13.8 |
% |
General and Administrative Expenses |
|
|
28,350 |
|
|
|
20,497 |
|
|
|
7,853 |
|
|
|
38.3 |
% |
Operating Income |
|
$ |
10,577 |
|
|
$ |
10,393 |
|
|
$ |
184 |
|
|
|
1.8 |
% |
% of Revenue |
|
|
5.6 |
% |
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240129185467/en/
For more information contact:
Tom Barbato
Phone: (585) 505-6530
Email: Thomas.Barbato@transcat.com
Source: Transcat, Inc.
FAQ
What is the ticker symbol for Transcat, Inc.?
What was the percentage increase in service revenue compared to the previous year?
What was the percentage increase in distribution sales compared to the previous year?
What was the change in gross margin for the distribution segment?
What was the change in operating cash flow year-to-date?
