TRNS Transcat Inc

Date of Report (Date of earliest event reported)

May 21, 2024

Transcat, Inc.

(Exact name of registrant as specified in its charter)

Ohio	000-03905	16-0874418
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

35 Vantage Point Drive, Rochester, New York	14624
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code

(585) 352-7777

(Former name or former address, if changed since last report)

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value	TRNS	Nasdaq Global Market

Item 2.02

Results of Operations and Financial Condition.

Item 9.01

Financial Statements and Exhibits.

	Exhibit No.		Description
	99.1		Transcat, Inc. Press Release dated May 20, 2024
	99.2		Slides for the May 21, 2024 Earnings Conference Call and Webcast
	104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

			TRANSCAT, INC.
Dated: May 21, 2024		By:	/s/ James M. Jenkins
			James M. Jenkins
			General Counsel and VP of Corporate Development

Exhibit 99.1

 

NEWS RELEASE

 

Transcat, Inc. 35 Vantage Point Drive • Rochester • NY • 14624 • Phone: (585) 352-7777

 

IMMEDIATE RELEASE

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross

Margin expansion in both Segments for the Fourth Quarter and Full Year 2024

 

	●	Fourth Quarter Service gross margin expanded 170 basis points driven by 13% Service organic growth
	●	Fourth Quarter Distribution gross margin expands 510 basis points to 30.3% on strength of Rentals
	●	Fourth Quarter Consolidated adjusted EBITDA grew 29.8% with margins expanding 200 basis points
	●	Generated $32.6M of Operating Cash Flow in fiscal 2024, 92% growth versus prior year

 

ROCHESTER, NY, May 20, 2024 – Transcat, Inc. (Nasdaq: TRNS) (“Transcat” or the “Company”), a leading provider of accredited calibration services, cost control and optimization services, and distribution and rental of value-added professional grade handheld test, measurement, and control instrumentation, today reported financial results for its fourth quarter ended March 30, 2024 (the “fourth quarter”) of fiscal year 2024, which ends March 30, 2024 (“fiscal 2024”). Results include the previously reported acquisitions of TIC-MS, Inc. ("TIC-MS") effective March 27, 2023, SteriQual, Inc. ("SteriQual"), effective July 12, 2023 and Axiom Test Equipment, Inc. (“Axiom”), effective August 8, 2023. Transcat operates on a 52/53 week fiscal year, ending the last Saturday in March. In a 52-week fiscal year, each of the four quarters is a 13-week period. In a 53-week fiscal year (which occurs once every five or six years), the last quarter is a 14-week period. Fiscal 2024 consisted of 53 weeks while the fiscal year 2023 consisted of 52 weeks.

 

“We are extremely pleased with our fourth quarter and full year fiscal 2024 results as double-digit organic Service revenue growth and increased productivity drove Service gross margin expansion while Distribution gross margins soared due to growth in Rentals” commented Lee D. Rudow, President and CEO. “Adjusted EBITDA growth of 30% for the fourth quarter reflects our ability to leverage organic Service revenue growth and the successful integration of acquired companies. Fourth quarter Consolidated revenue was up 14% with gross margin expansion of 300 basis points year over year driven by our widened breadth of service offerings, excellent performance in the higher-margin rental business, and execution of automation and process improvement initiatives. Service segment revenue grew 18% in the fourth quarter as demand in highly regulated end markets, including life sciences, remained strong and our differentiated value proposition continues to resonate throughout Transcat’s expanded addressable markets”.

 

Mr. Rudow added, “In the fiscal year we completed three acquisitions, TIC-MS, SteriQual, and Axiom Test Equipment that have expanded our addressable markets, widened the breadth of offerings, and allowed us to leverage our existing infrastructure. The key differentiator of the Transcat acquisition strategy is the effectiveness of our integration processes enabling new acquisitions 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. On a final note, we are extremely excited about our recent rental acquisition, Becnel Rental Tools, which closed just after the end of the fiscal year. Becnel is a well-run business, with great customer relationships, which will differentiate our higher margin rental portfolio and will in time provide significant opportunities for cross-selling of Transcat’s products and services.”

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 2 of 14

 

Fourth Quarter Fiscal 2024 Review
(Results are compared with the fourth quarter of the fiscal year ended March 25, 2023 ("fiscal 2023"))

 

($ in thousands)										Change
		FY24 Q4				FY23 Q4				$'s				%
Service Revenue		$	46,732			$	39,763			$	6,969				17.5	%
Distribution Sales			24,181				22,304				1,877				8.4	%
Revenue		$	70,913			$	62,067			$	8,846				14.3	%
Gross Profit		$	24,035			$	19,150			$	4,885				25.5	%
Gross Margin			33.9	%			30.9	%
Operating Income		$	9,204			$	5,855			$	3,349				57.2	%
Operating Margin			13.0	%			9.4	%
Net Income		$	6,890			$	3,658			$	3,232				88.4	%
Net Margin			9.7	%			5.9	%
Adjusted EBITDA*		$	11,682			$	8,998			$	2,684				29.8	%
Adjusted EBITDA* Margin			16.5	%			14.5	%
Diluted EPS		$	0.77			$	0.48			$	0.29				60.0	%
Adjusted Diluted EPS*		$	0.66			$	0.60			$	0.06				9.8	%

 

*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 $70.9 million, an increase of 14.3%, and includes the benefit of the 53rd week in fiscal 2024. Consolidated gross profit was $24.0 million, an increase of $4.9 million, or 25.5%, while gross margin expanded 300 basis points due to margin improvements in both operating segments. Operating expenses were $14.8 million, an increase of $1.5 million, or 11.6%, driven by incremental expenses from acquired businesses (including stock-based compensation expense), increased intangibles amortization expense, higher sales-based incentives, and a reversal of the non-cash charge related to the amended NEXA Earn-Out agreement. Adjusted EBITDA was $11.7 million which represented an increase of $2.7 million or 29.8%. Net income per diluted share of $0.77 was up from $0.48 and adjusted diluted earnings per share increased to $0.66 versus $0.60 last year, which includes the non-cash reversal of $2.4 million for the amended NEXA Earn-Out agreement and a higher effective tax rate.

 

Service segment delivers record fourth quarter results

 

Represents the accredited calibration, repair, inspection and laboratory instrument services business (65.9% of total revenue for the fourth quarter of fiscal 2024).

 

($ in thousand)										Change
		FY24 Q4				FY23 Q4				$'s				%
Service Segment Revenue		$	46,732			$	39,763			$	6,969				17.5	%
Gross Profit		$	16,704			$	13,523			$	3,181				23.5	%
Gross Margin			35.7	%			34.0	%
Operating Income		$	8,144			$	4,547			$	3,597				79.1	%
Operating Margin			17.4	%			11.4	%
Adjusted EBITDA*		$	8,741			$	7,039			$	1,702				24.2	%
Adjusted EBITDA* Margin			18.7	%			17.7	%

 

*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.

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 3 of 14

 

Service segment revenue was $46.7 million, an increase of $7.0 million or 17.5% and included $1.2 million of incremental revenue from acquisitions. Organic revenue growth was 13.0% driven by strong end market demand and continued market share gains. When normalized for the 53rd week, organic revenue growth falls within the range of high single-digit to low double-digit guidance. The segment gross margin increased 170 basis points from prior year primarily due to continued productivity improvements.

 

Distribution segment shows continued margin improvement

 

Represents the sale and rental of new and used professional grade handheld test, measurement and control instrumentation (34.1% of total revenue for the fourth quarter of fiscal 2024).

 

($ in thousands)										Change
		FY24 Q4				FY23 Q4				$'s				%
Distribution Segment Sales		$	24,181			$	22,304			$	1,877				8.4	%
Gross Profit		$	7,331			$	5,627			$	1,704				30.3	%
Gross Margin			30.3	%			25.2	%
Operating Income		$	1,060			$	1,308			$	(248	)			(19.0	)%
Operating Margin			4.4	%			5.9	%
Adjusted EBITDA*		$	2,941			$	1,959			$	982				50.1	%
Adjusted EBITDA* Margin			12.2	%			8.8	%

 

*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 $24.2 million, an increase of 8.4% on improved end market demand and strength in our Rentals business. Distribution segment gross margin was 30.3%, an increase of 510 basis points due to a favorable sales mix driven by strength in the Rentals business.

 

Full-Year Fiscal 2024 Review
(Results are compared with full-year fiscal 2023)

 

($ in thousands)										Change
		FY 2024				FY 2023				$'s				%
Service Revenue			169,525				144,883			$	24,642				17.0	%
Distribution Sales			89,956				85,686				4,270				5.0	%
Revenue		$	259,481			$	230,569			$	28,912				12.5	%
Gross Profit		$	83,806			$	68,355			$	15,451				22.6	%
Gross Margin			32.3	%			29.6	%
Operating Income		$	19,781			$	16,248			$	3,533				21.7	%
Operating Margin			7.6	%			7.0	%
Net Income		$	13,647			$	10,688			$	2,959				27.7	%
Net Margin			5.3	%			4.6	%
Adjusted EBITDA*		$	38,613			$	30,421			$	8,192				26.9	%
Adjusted EBITDA* Margin			14.9	%			13.2	%
Diluted EPS		$	1.63			$	1.40			$	0.23				16.7	%
Adjusted Diluted EPS*		$	2.36			$	1.93			$	0.43				22.1	%

 

*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.

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 4 of 14

 

Total revenue was $259.5 million, an increase of $28.9 million or 12.5%. Consolidated gross profit was $83.8 million, up $15.5 million, or 22.6%, and gross margin expanded to 32.3% or 270 basis points.  Consolidated operating expenses were $64.0 million, an increase of $11.9 million, or 22.9%, driven by incremental expenses from acquired businesses (including stock-based compensation expense), increased intangibles amortization expense, and investments in technology and our employee base to support future growth. As a result, consolidated operating income was $19.8 million compared with $16.2 million in last fiscal year’s period, an increase of 21.7%.

 

Adjusted EBITDA was $38.6 million which represented an increase of $8.2 million or 26.9%. Net income per diluted share increased to $1.63 from $1.40 and adjusted diluted earnings per share was $2.36 versus $1.93 last year. 

 

Balance Sheet and Cash Flow Overview

 

On March 30, 2024, the Company had $35.2 million of cash and marketable securities on hand and $80.0 million available for borrowing under its secured revolving credit facility. Total debt of $4.2 million was down $44.9 million from fiscal 2023 year-end due to cash proceeds from our secondary stock offering. The Company’s leverage ratio, as defined in the credit agreement, was 0.10 on March 30, 2024, compared with 1.60 on March 25, 2023.

 

Outlook

 

Mr. Rudow concluded, “The Transcat team continues to deliver strong revenue growth and sustainable gross margin expansion as can be seen over the past decade and a half of profitable growth. As we think ahead into fiscal 2025, our business will continue to benefit from recurring revenue streams in highly regulated end markets, including life sciences, along with a growing Rentals business that performs well throughout various economic cycles. We expect another year of organic Service revenue growth in the high single-digit to low double-digit range when normalized for the extra week in fiscal 2024 and gross margin expansion. Automation of our calibration processes and overall process improvement will continue to be key enablers of future margin expansion.”

 

“We continue to be proud of our work on the leadership development front. We couldn’t be happier with our new COO Mike West; his performance has been stellar and impactful since taking over the role. Likewise, we are promoting John Cummins to lead the significant new growth opportunity Transcat Single Source Solution (TS3). TS3 is a comprehensive value proposition, full suite of services, sold to high level decision makers for new capital projects and existing operations, and a critical next step towards integration of NEXA's Cost, Control and Optimization services with the Transcat calibration business. The NEXA earnout agreement accrual has been reversed and converted to an incentive program associated with this new and expanded role. On a final note, we are very proud to announce Jim Jenkins was offered and accepted the role as CEO of Lakeland Industries. Jim has been our General Counsel for the last four years and we would like to thank him for his contributions to Transcat.”

 

“The Service segment has substantial runway ahead for growth, both organically and through acquisition. Our robust acquisition pipeline should enable strategic, accretive acquisitions that drive synergistic growth opportunities and will be a key component of our go-forward strategy. Transcat has a diverse portfolio designed to generate high returns for years to come. We believe strong execution, paired with several strategic acquisitions, will drive significant gains in the market and across key business channels. Our investments in leadership development, automation, and process improvement have made Transcat a stronger company and we are well positioned to continue to generate sustainable long-term shareholder value”.

 

Transcat expects its income tax rate to range between 24% and 26% in fiscal 2025. This estimate includes Federal, various state, Canadian and Irish income taxes and reflects the discrete tax accounting associated with share-based payment awards.

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 5 of 14

 

Webcast and Conference Call

 

Transcat will host a conference call and webcast on Tuesday, May 21, 2024 at 11:00 a.m. ET.  Management will review the financial and operating results for the fourth quarter and full fiscal year, 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, August 8, 2024. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13746612, 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 U.S. generally accepted accounting principle (“GAAP”) measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, non-cash stock compensation expense, acquisition related transaction expenses, non-cash loss on sale of building and restructuring expense), which is a non-GAAP measure. The Company’s management believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the performance of its core operations from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, stock-based compensation expense and other items, which is not always commensurate with the reporting period in which it is included. As such, the Company uses Adjusted EBITDA as a measure of performance when evaluating its business segments and as a basis for planning and forecasting. Adjusted EBITDA 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 for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. Adjusted EBITDA, 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 pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

 

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; divided by the average diluted shares outstanding during the period), 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 29 Calibration Service Centers strategically located across the United States, Puerto Rico, Canada, and Ireland. In addition, Transcat operates calibration labs in 21 imbedded customer-site locations. The breadth and depth of measurement parameters addressed by Transcat’s ISO/IEC 17025 scopes of accreditation are believed to be the best in the industry.

 

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 6 of 14

 

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 North America. The Company believes its combined Service and Distribution segment offerings, experience, technical expertise, and integrity create a unique and compelling value proposition for its customers.   Transcat’s strategy is to leverage its strong brand and unique value proposition that includes its comprehensive instrument service capabilities, Cost, Control and Optimizations services, 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 relate to expectations, estimates, beliefs, assumptions and predictions of future events and are identified by words such as “aim,” “anticipates,” “believes,” “can,” “could,” “designed,” “estimates,” “expects,” “focus,” “goal,” “intends,” “may,” “plan,” “outlook,” “potential,” “seek,” “strategy,” “strive,” “target,” “will,” “would,” 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.

 

For more information contact:

 

Tom Barbato
Phone: (585) 505-6530
Email: Thomas.Barbato@transcat.com

 

FINANCIAL TABLES FOLLOW.

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 7 of 14

 

TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)

 

		(Unaudited)								(Unaudited)
		Fourth Quarter Ended								Fiscal Year Ended
		March 30,				March 25,				March 30,				March 25,
		2024				2023				2024				2023
Service Revenue		$	46,732			$	39,763			$	169,525			$	144,883
Distribution Sales			24,181				22,304				89,956				85,686
Total Revenue			70,913				62,067				259,481				230,569
Cost of Service Revenue			30,028				26,240				112,272				98,245
Cost of Distribution Sales			16,850				16,677				63,403				63,969
Total Cost of Revenue			46,878				42,917				175,675				162,214
Gross Profit			24,035				19,150				83,806				68,355
Selling, Marketing and Warehouse Expenses			7,866				6,446				28,710				24,761
General and Administrative Expenses			6,965				6,849				35,315				27,346
Total Operating Expenses			14,831				13,295				64,025				52,107
Operating Income			9,204				5,855				19,781				16,248
Interest and Other Expense, net			(400	)			1,029				1,342				2,761
Income Before Income Taxes			9,604				4,826				18,439				13,487
Provision for Income Taxes			2,714				1,168				4,792				2,799
Net Income		$	6,890			$	3,658			$	13,647			$	10,688
Basic Earnings Per Share		$	0.78			$	0.48			$	1.66			$	1.42
Average Shares Outstanding			8,832				7,562				8,239				7,551
Diluted Earnings Per Share		$	0.77			$	0.48			$	1.63			$	1.40
Average Shares Outstanding			8,972				7,688				8,352				7,645

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 8 of 14

 

TRANSCAT, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)

 

		March 30,				March 25,
		2024				2023
ASSETS
Current Assets:
Cash and Cash Equivalents		$	19,646			$	1,531
Marketable Securities			15,533				-
Accounts Receivable, less allowance for credit losses of $544 and $457 as of March 30, 2024 and March 25, 2023, respectively			47,779				44,698
Other Receivables			506				506
Inventory, net			17,418				16,929
Prepaid Expenses and Other Current Assets			4,276				3,935
Total Current Assets			105,158				67,599
Property and Equipment, net			38,944				29,064
Goodwill			105,585				69,360
Intangible Assets, net			19,987				13,799
Right to Use Assets, net			16,823				14,876
Other Assets			1,055				1,051
Total Assets		$	287,552			$	195,749
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable		$	11,495			$	15,869
Accrued Compensation and Other Current Liabilities			16,739				10,201
Income Taxes Payable			2,926				-
Current Portion of Long-Term Debt			2,339				2,248
Total Current Liabilities			33,499				28,318
Long-Term Debt			1,817				46,869
Deferred Tax Liabilities, net			9,291				6,538
Lease Liabilities			14,873				12,960
Other Liabilities			2,903				1,434
Total Liabilities			62,383				96,119
Shareholders' Equity:
Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 8,839,299 and 7,562,604 shares issued and outstanding as of March 30, 2024 and March 25, 2023, respectively			4,420				3,781
Capital in Excess of Par Value			141,624				27,886
Accumulated Other Comprehensive Loss			(949	)			(1,200	)
Retained Earnings			80,074				69,163
Total Shareholders' Equity			225,169				99,630
Total Liabilities and Shareholders' Equity		$	287,552			$	195,749

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 9 of 14

 

TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

 

		(Unaudited)
		Fiscal Year Ended
		March 30,				March 25,
		2024				2023
Cash Flows from Operating Activities:
Net Income		$	13,647			$	10,688
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Net Loss on Disposal of Property and Equipment			53				88
Deferred Income Taxes			(1,597	)			(186	)
Depreciation and Amortization			13,544				10,955
Provision for Accounts Receivable and Inventory Reserves			406				74
Stock-Based Compensation Expense			4,512				3,377
Changes in Assets and Liabilities, net of acquisitions:
Accounts Receivable and Other Receivables			(1,259	)			(5,226	)
Inventory			2,318				(3,377	)
Prepaid Expenses and Other Current Assets			(299	)			1,119
Accounts Payable			(5,005	)			1,600
Accrued Compensation and Other Current Liabilities			3,397				(2,161	)
Income Taxes Payable			2,899				-
Net Cash Provided by Operating Activities			32,616				16,951
Cash Flows from Investing Activities:
Purchases of Property and Equipment			(13,280	)			(9,414	)
Proceeds from Sale of Property and Equipment			-				10
Business Acquisitions, net of cash acquired			(12,859	)			(9,109	)
Purchases of Marketable Securities			(15,533	)			-
Net Cash Used in Investing Activities			(41,672	)			(18,513	)
Cash Flows from Financing Activities:
Proceeds from Revolving Credit Facility, net			(42,713	)			2,786
Repayments of Term Loan			(2,248	)			(2,121	)
Issuance of Common Stock, net of direct costs			77,266				658
Repurchase of Common Stock			(4,906	)			(447	)
Net Cash Provided by Financing Activities			27,399				876
Effect of Exchange Rate Changes on Cash and Cash Equivalents			(228	)			821
Net Increase in Cash and Cash Equivalents			18,115				135
Cash and Cash Equivalents at Beginning of Period			1,531				1,396
Cash and Cash Equivalents at End of Period		$	19,646			$	1,531

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 10 of 14

 

TRANSCAT, INC.
Adjusted EBITDA Reconciliation Table
(In thousands)
(Unaudited)

 

		Fiscal 2024
		Q1				Q2				Q3				Q4				YTD
Net Income		$	2,949			$	460			$	3,348			$	6,890			$	13,647
+ Interest Expense			814				890				(266	)			(411	)			1,027
+ Other Expense / (Income)			64				(49	)			289				11				315
+ Tax Provision			813				342				923				2,714				4,792
Operating Income		$	4,640			$	1,643			$	4,294			$	9,204			$	19,781
+ Depreciation & Amortization			2,790				3,269				3,783				3,635				13,477
+ Transaction Expense			185				328				78				37				628
+ Acquisition Earn-Out Adjustment			-				2,800				87				(2,357	)			530
+ Other (Expense) / Income			(64	)			49				(289	)			(11	)			(315	)
+ Noncash Stock Compensation			930				1,241				1,167				1,174				4,512
Adjusted EBITDA		$	8,481			$	9,330			$	9,120			$	11,682			$	38,613
Segment Breakdown
Service Operating Income		$	3,192			$	742			$	2,966			$	8,144			$	15,044
+ Depreciation & Amortization			2,226				2,325				2,362				2,280				9,193
+ Transaction Expense			185				76				30				(44	)			247
+ Acquisition Earn-Out Adjustment			-				2,800				87				(2,357	)			530
+ Other (Expense) / Income			(47	)			29				(203	)			(18	)			(239	)
+ Noncash Stock Compensation			676				826				737				736				2,975
Service Adjusted EBITDA		$	6,232			$	6,798			$	5,979			$	8,741			$	27,750
Distribution Operating Income		$	1,448			$	901			$	1,328			$	1,060			$	4,737
+ Depreciation & Amortization			564				944				1,421				1,355				4,284
+ Transaction Expense			-				252				48				81				381
+ Other (Expense) / Income			(17	)			20				(86	)			7				(76	)
+ Noncash Stock Compensation			254				415				430				438				1,537
Distribution Adjusted EBITDA		$	2,249			$	2,532			$	3,141			$	2,941			$	10,863

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 11 of 14

 

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 Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 12 of 14

 

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			$	6,890			$	13,647
+ Amortization of Intangible Assets			1,093				1,416				1,674				1,447				5,630
+ Acquisition Amortization of Backlog			-				19				24				24				67
+ Acquisition Deal Costs			185				328				78				81				672
+ Acquisition Stock Expense			182				274				265				258				979
+ Income Tax Effect at 25%			(365	)			(509	)			(532	)			(431	)			(1,837	)
+ Acquisition Earn-Out Adjustment			-				2,800				87				(2,358	)			529
Adjusted Net Income		$	4,044			$	4,788			$	4,944			$	5,911			$	19,687
Average Diluted Shares Outstanding			7,762				7,948				8,752				8,972				8,352
Diluted Earnings Per Share		$	0.38			$	0.06			$	0.38			$	0.77			$	1.63
Adjusted Diluted Earnings Per Share		$	0.52			$	0.60			$	0.56			$	0.66			$	2.36
		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			30				-				96				59				185
+ Acquisition Stock Expense			269				239				158				167				833
+ Income Tax Effect at 25%			(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 Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 13 of 14

 

TRANSCAT, INC.
Additional Information - Business Segment Data
(Dollars in thousands)
(Unaudited)

 

										Change
SERVICE		FY 2024 Q4				FY 2023 Q4				$'s				%
Service Revenue		$	46,732			$	39,763			$	6,969				17.5	%
Cost of Revenue			30,028				26,240				3,788				14.4	%
Gross Profit		$	16,704			$	13,523			$	3,181				23.5	%
Gross Margin			35.7	%			34.0	%
Selling, Marketing & Warehouse Expenses		$	4,490			$	4,121			$	369				9.0	%
General and Administrative Expenses			4,070				4,855				(785	)			(16.2	)%
Operating Income		$	8,144			$	4,547			$	3,597				79.1	%
% of Revenue			17.4	%			11.4	%

 

										Change
DISTRIBUTION		FY 2024 Q4				FY 2023 Q4				$'s				%
Distribution Sales		$	24,181			$	22,304			$	1,877				8.4	%
Cost of Sales			16,850				16,677				173				1.0	%
Gross Profit		$	7,331			$	5,627			$	1,704				30.3	%
Gross Margin			30.3	%			25.2	%
Selling, Marketing & Warehouse Expenses		$	3,376			$	2,325			$	1,051				45.2	%
General and Administrative Expenses			2,895				1,994				901				45.2	%
Operating Income		$	1,060			$	1,308			$	(248	)			(19.0	)%
% of Sales			4.4	%			5.9	%

 

										Change
TOTAL		FY 2024 Q4				FY 2023 Q4				$'s				%
Total Revenue		$	70,913			$	62,067			$	8,846				14.3	%
Total Cost of Revenue			46,878				42,917				3,961				9.2	%
Gross Profit		$	24,035			$	19,150			$	4,885				25.5	%
Gross Margin			33.9	%			30.9	%
Selling, Marketing & Warehouse Expenses		$	7,866			$	6,446			$	1,420				22.0	%
General and Administrative Expenses			6,965				6,849				116				1.7	%
Operating Income		$	9,204			$	5,855			$	3,349				57.2	%
% of Revenue			13.0	%			9.4	%

 

Transcat Reports double-digit Organic Service Revenue Growth and significant Gross Margin expansion in both Segments for the Fourth Quarter and Full Year 2024
May 20, 2024
Page 14 of 14

 

TRANSCAT, INC.
Additional Information - Business Segment Data
(Dollars in thousands)
(Unaudited)

 

										Change
		FY 2024				FY 2023
SERVICE		YTD				YTD				$'s				%
Service Revenue		$	169,525			$	144,883			$	24,642				17.0	%
Cost of Revenue			112,272				98,245				14,027				14.3	%
Gross Profit		$	57,253			$	46,638			$	10,615				22.8	%
Gross Margin			33.8	%			32.2	%
Selling, Marketing & Warehouse Expenses		$	16,942			$	15,725			$	1,217				7.7	%
General and Administrative Expenses			25,268				19,491				5,777				29.6	%
Operating Income		$	15,043			$	11,422			$	3,621				31.7	%
% of Revenue			8.9	%			7.9	%

 

										Change
		FY 2024				FY 2023
DISTRIBUTION		YTD				YTD				$'s				%
Distribution Sales		$	89,956			$	85,686			$	4,270				5.0	%
Cost of Sales			63,403				63,969				(566	)			(0.9	)%
Gross Profit		$	26,553			$	21,717			$	4,836				22.3	%
Gross Margin			29.5	%			25.3	%
Selling, Marketing & Warehouse Expenses		$	11,769			$	9,036			$	2,733				30.2	%
General and Administrative Expenses			10,046				7,855				2,191				27.9	%
Operating Income		$	4,738			$	4,826			$	(88	)			(1.8	)%
% of Sales			5.3	%			5.6	%

 

										Change
		FY 2024				FY 2023
TOTAL		YTD				YTD				$'s				%
Total Revenue		$	259,481			$	230,569			$	28,912				12.5	%
Total Cost of Revenue			175,675				162,214				13,461				8.3	%
Gross Profit		$	83,806			$	68,355			$	15,451				22.6	%
Gross Margin			32.3	%			29.6	%
Selling, Marketing & Warehouse Expenses		$	28,711			$	24,761			$	3,950				16.0	%
General and Administrative Expenses			35,314				27,346				7,968				29.1	%
Operating Income		$	19,781			$	16,248			$	3,533				21.7	%
% of Revenue			7.6	%			7.0	%

 

EX-99 - Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

v3.24.1.1.u2

Document And Entity Information	May 21, 2024
Document Information [Line Items]
Entity, Registrant Name	Transcat, Inc.
Document, Type	8-K
Document, Period End Date	May 21, 2024
Entity, Incorporation, State or Country Code	OH
Entity, File Number	000-03905
Entity, Tax Identification Number	16-0874418
Entity, Address, Address Line One	35 Vantage Point Drive
Entity, Address, City or Town	Rochester
Entity, Address, State or Province	NY
Entity, Address, Postal Zip Code	14624
City Area Code	585
Local Phone Number	352-7777
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	TRNS
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000099302

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