TRNS Transcat Inc

• Consolidated Revenue grew 2% compared to prior year
• Distribution Revenue grew 7% compared to prior year
• Service Revenue was flat on a year over year basis

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 third quarter ended December 28, 2024 (the “third quarter”) of fiscal year 2025, which ends March 29, 2025 (“fiscal 2025”). Results include the previously reported acquisitions of TIC-MS, Inc. ("TIC-MS") effective March 27, 2023, SteriQual, Inc. ("SteriQual"), effective July 12, 2023, Axiom Test Equipment, Inc. (“Axiom”), effective August 8, 2023, Becnel Rental Tools, LLC ("Becnel") effective April 15, 2024 and Martin Calibration Inc. ("Martin) effective December 10, 2024.

“In the 3rd quarter, we were pleased to close the Martin Calibration deal. Martin is a coveted calibration company that is highly synergistic and fulfills all our strategic acquisition drivers by expanding our geographic reach, increasing our capabilities and leveraging our existing infrastructure" commented Lee D. Rudow, President and CEO. “Martin's size, with revenue in excess of $25 million, and reputation for quality and customer satisfaction, makes it the perfect addition to the Transcat family.”

“Service organic revenue was below our historical trends and significantly impacted by the timing of this year’s Christmas holiday. Last year, the Christmas holiday fell in the first week of our fiscal fourth quarter. We typically see an acceleration of activity in the last two weeks of each quarter, but this year many of our customers closed facilities or had significantly reduced staffing levels, which limited the volume of incoming equipment throughout the month. That said, we are seeing higher activity levels in January, which we believe is in part, the receipt of units which we expected to receive in December.”

"Transcat Solutions (Nexa) revenue was soft in comparison to last year and in line with our expectations for the quarter. As previously communicated, we believe the actions our team is taking will result in the Solutions channel strengthening in the back half of fiscal 2026."

Mr. Rudow added, “Our organic sales pipeline is very strong and we believe it supports a return to more historic organic growth levels."

Third Quarter Fiscal 2025 Review (Results are compared with the third quarter of the fiscal year ended March 30, 2024 (“fiscal 2024”))

($ in thousands)

 

 

 

 

 

 

 

 

 

Change

 

 

 

FY25 Q3

 

 

FY24 Q3

 

 

$'s

 

 

%

 

Service Revenue

 

$

41,557

 

 

$

41,509

 

 

$

48

 

 

 

0.1

%

Distribution Revenue

 

 

25,197

 

 

 

23,657

 

 

 

1,540

 

 

 

6.5

%

Revenue

 

$

66,754

 

 

$

65,166

 

 

$

1,588

 

 

 

2.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

$

19,679

 

 

$

20,936

 

 

$

(1,257

)

 

 

(6.0

)%

Gross Margin

 

 

29.5

%

 

 

32.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

2,100

 

 

$

4,294

 

 

$

(2,194

)

 

 

(51.1

)%

Operating Margin

 

 

3.1

%

 

 

6.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

2,357

 

 

$

3,348

 

 

$

(991

)

 

 

(29.6

)%

Net Margin

 

 

3.5

%

 

 

5.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA*

 

$

7,914

 

 

$

9,120

 

 

$

(1,206

)

 

 

(13.2

)%

Adjusted EBITDA* Margin

 

 

11.9

%

 

 

14.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

$

0.25

 

 

$

0.38

 

 

$

(0.13

)

 

 

(34.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted EPS*

 

$

0.45

 

 

$

0.56

 

 

$

(0.11

)

 

 

(19.6

)%

*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 $66.8 million, an increase of $1.6 million or 2.4%. Consolidated gross profit was $19.7 million, a decrease of $1.3 million, or 6.0%, while gross margin decreased 260 basis points primarily due to lower organic revenue. Operating expenses were $17.6 million, an increase of $0.9 million, or 5.6%. Adjusted EBITDA was $7.9 million which represented a decrease of $1.2 million or 13.2%. Net income per diluted share was $0.25 compared to $0.38 last year. Adjusted diluted earnings per share were $0.45 versus $0.56 last year.

Service segment third quarter results

Represents the accredited calibration, repair, inspection and laboratory instrument services business (63.7% of total revenue for the third quarter of fiscal 2025).

($ in thousand)

 

 

 

 

 

 

 

 

 

Change

 

 

 

FY25 Q3

 

 

FY24 Q3

 

 

$'s

 

 

%

 

Service Segment Revenue

 

$

41,557

 

 

$

41,509

 

 

$

48

 

 

 

0.1

%

Gross Profit

 

$

12,357

 

 

$

13,494

 

 

$

(1,137

)

 

 

(8.4

)%

Gross Margin

 

 

29.7

%

 

 

32.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

1,412

 

 

$

2,966

 

 

$

(1,554

)

 

 

(52.4

)%

Operating Margin

 

 

3.4

%

 

 

7.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA*

 

$

4,921

 

 

$

5,979

 

 

$

(1,058

)

 

 

(17.7

)%

Adjusted EBITDA* Margin

 

 

11.8

%

 

 

14.4

%

 

 

 

 

 

 

 

 

*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.

Service segment revenue was $41.6 million, an increase of less than $0.1 million or 0.1%, and included $2.0 million of incremental revenue from acquisitions. Organic revenue decreased by 3.8% driven by the timing of the Christmas holiday. The segment gross margin was 29.7%, a decrease of 280 basis points from the prior year primarily due to lower organic revenue.

Distribution segment second quarter results

Represents the sale and rental of new and used professional grade handheld test, measurement and control instrumentation (36.3% of total revenue for the second quarter of fiscal 2025).

($ in thousands)

 

 

 

 

 

 

 

 

 

Change

 

 

 

FY25 Q3

 

 

FY24 Q3

 

 

$'s

 

 

%

 

Distribution Segment Revenue

 

$

25,197

 

 

$

23,657

 

 

$

1,540

 

 

 

6.5

%

Gross Profit

 

$

7,322

 

 

$

7,442

 

 

$

(120

)

 

 

(1.6

)%

Gross Margin

 

 

29.1

%

 

 

31.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

688

 

 

$

1,328

 

 

$

(640

)

 

 

(48.2

)%

Operating Margin

 

 

2.7

%

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA*

 

$

2,993

 

 

$

3,141

 

 

$

(148

)

 

 

(4.7

)%

Adjusted EBITDA* Margin

 

 

11.9

%

 

 

13.3

%

 

 

 

 

 

 

 

 

*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 revenue was $25.2 million, which represented an increase of $1.5 million or 6.5%, driven by growth in the rental business including acquisitions. Distribution segment gross margin was 29.1%, a decrease of 240 basis points due to a mix shift as product sales experienced a strong quarter but have a lower margin profile.

Nine Month Review (Results are compared with the first nine months of fiscal 2024)

Total revenue was $201.3 million, an increase of $12.7 million or 6.7%. Consolidated gross profit was $63.5 million, an increase of $3.8 million, or 6.3%, and gross margin decreased to 31.6% or 10 basis points. Consolidated operating expenses were $52.6 million, an increase of $3.4 million, or 6.9%, driven by incremental expenses from acquired businesses, increased intangibles amortization expense and investments in technology and our employee base to support future growth, offset by the previously mentioned amended Nexa Earn-Out agreement in the second quarter of fiscal year 2024. As a result, consolidated operating income was $10.9 million compared with $10.6 million in last fiscal year’s period.

Adjusted EBITDA was $27.0 million which represented an increase of $0.1 million or 0.2%. Net income per diluted share increased to $1.09 from $0.83 and adjusted diluted earnings per share was $1.65 versus $1.69 last year. The effective tax rate was 16.7% compared to 23.5% in the prior year, due to the timing of discrete benefits related to share-based compensation items.

Balance Sheet and Cash Flow Overview

On December 28, 2024, the Company had $4.6 million in cash and cash equivalents on hand and $40.5 million available for borrowing under its secured revolving credit facility. Total debt was $41.9 million versus $4.2 million on March 30, 2024. The Company’s leverage ratio, as defined in the credit agreement, was 0.97 on December 28, 2024, compared with 0.10 on March 30, 2024.

Outlook

Mr. Rudow concluded, “The Transcat team has consistently delivered excellent results over an extended period. We are disappointed with the Service organic revenue decline in fiscal Q3 as the timing of the holiday impacted the quarter’s results. Looking ahead, our growth investments, track record of strong execution, and diversified portfolio will drive sustainable organic revenue growth.” “We expect FY25 Service organic revenue growth in the mid-to-low single digits, when normalized for the extra week in fiscal 2024. Due to the previously mentioned strong Service sales pipeline, we anticipate a return to more historic organic growth levels. We have demonstrated the ability to leverage automation of our calibration processes and focus on productivity to improve our operational efficiency. These tools remain key enablers of margin expansion.”

“We are very excited about the acquisition of Martin Calibration due to Martin’s commitment to quality, extensive customer base, geographic coverage, and strong culture. We believe that Transcat, together with Martin, is a perfect match.”

Transcat expects its income tax rate to range between 21% and 23% 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.

Webcast and Conference Call

Transcat will host a conference call and webcast on Tuesday, January 28, 2025 at 11:00 a.m. ET. Management will review the financial and operating results for the first 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 4, 2025. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13747789, 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, and acquisition related transaction expenses, 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, and acquisition amortization of backlog; 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 33 Calibration Service Centers strategically located across the United States, Puerto Rico, Canada, and Ireland. Inclusive of customer embedded locations and other field offices, we operate out of more than 50 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 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, 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 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.

FINANCIAL TABLES FOLLOW.

 

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

Third Quarter Ended

 

 

Nine Months Ended

 

 

 

December 28,

 

 

December 23,

 

 

December 28,

 

 

December 23,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Revenue

 

$

41,557

 

 

$

41,509

 

 

$

129,418

 

 

$

122,793

 

Distribution Revenue

 

 

25,197

 

 

 

23,657

 

 

 

71,869

 

 

 

65,775

 

Total Revenue

 

 

66,754

 

 

 

65,166

 

 

 

201,287

 

 

 

188,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Service Revenue

 

 

29,200

 

 

 

28,015

 

 

 

87,587

 

 

 

82,244

 

Cost of Distribution Revenue

 

 

17,875

 

 

 

16,215

 

 

 

50,160

 

 

 

46,553

 

Total Cost of Revenue

 

 

47,075

 

 

 

44,230

 

 

 

137,747

 

 

 

128,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

19,679

 

 

 

20,936

 

 

 

63,540

 

 

 

59,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing and Warehouse Expenses

 

 

8,119

 

 

 

7,519

 

 

 

24,101

 

 

 

20,844

 

General and Administrative Expenses

 

 

9,460

 

 

 

9,123

 

 

 

28,505

 

 

 

28,350

 

Total Operating Expenses

 

 

17,579

 

 

 

16,642

 

 

 

52,606

 

 

 

49,194

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

2,100

 

 

 

4,294

 

 

 

10,934

 

 

 

10,577

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

199

 

 

 

81

 

 

 

327

 

 

 

1,785

 

Interest Income

 

 

(219

)

 

 

(347

)

 

 

(817

)

 

 

(347

)

Other (Income) Expense

 

 

(1,009

)

 

 

289

 

 

 

(646

)

 

 

304

 

Total Interest and Other (Income) Expense, net

 

 

(1,029

)

 

 

23

 

 

 

(1,136

)

 

 

1,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Provision For Income Taxes

 

 

3,129

 

 

 

4,271

 

 

 

12,070

 

 

 

8,835

 

Provision for Income Taxes

 

 

772

 

 

 

923

 

 

 

2,019

 

 

 

2,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

2,357

 

 

$

3,348

 

 

$

10,051

 

 

$

6,757

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.26

 

 

$

0.39

 

 

$

1.10

 

 

$

0.84

 

Average Shares Outstanding

 

 

9,230

 

 

 

8,615

 

 

 

9,147

 

 

 

8,060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

$

0.25

 

 

$

0.38

 

 

$

1.09

 

 

$

0.83

 

Average Shares Outstanding

 

 

9,326

 

 

 

8,752

 

 

 

9,243

 

 

 

8,187

 

 

TRANSCAT, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts)

 

 

 

(Unaudited)

 

 

(Audited)

 

 

 

December 28,

 

 

March 30,

 

 

 

2024

 

 

2024

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

4,640

 

 

$

19,646

 

Marketable Securities

 

 

-

 

 

 

15,533

 

Accounts Receivable, less allowance for credit losses of $577 and $544 as of December 28, 2024 and March 30, 2024, respectively

 

 

51,621

 

 

 

47,779

 

Other Receivables

 

 

734

 

 

 

506

 

Inventory, net

 

 

13,793

 

 

 

17,418

 

Prepaid Expenses and Other Current Assets

 

 

5,771

 

 

 

4,276

 

Total Current Assets

 

 

76,559

 

 

 

105,158

 

Property and Equipment, net

 

 

50,490

 

 

 

38,944

 

Goodwill

 

 

176,617

 

 

 

105,585

 

Intangible Assets, net

 

 

57,682

 

 

 

19,987

 

Right to Use Assets, net

 

 

23,568

 

 

 

16,823

 

Other Assets

 

 

1,093

 

 

 

1,055

 

Total Assets

 

$

386,009

 

 

$

287,552

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

$

16,184

 

 

$

11,495

 

Accrued Compensation and Other Current Liabilities

 

 

13,085

 

 

 

19,665

 

Current Portion of Long-Term Debt

 

 

2,410

 

 

 

2,339

 

Total Current Liabilities

 

 

31,679

 

 

 

33,499

 

Long-Term Debt

 

 

39,496

 

 

 

1,817

 

Deferred Tax Liabilities, net

 

 

9,255

 

 

 

9,291

 

Lease Liabilities

 

 

20,780

 

 

 

14,873

 

Other Liabilities

 

 

3,719

 

 

 

2,903

 

Total Liabilities

 

 

104,929

 

 

 

62,383

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity:

 

 

 

 

 

 

 

 

Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 9,309,257 and 8,839,299 shares issued and outstanding as of December 28, 2024 and March 30, 2024, respectively

 

 

4,655

 

 

 

4,420

 

Capital in Excess of Par Value

 

 

190,200

 

 

 

141,624

 

Accumulated Other Comprehensive Loss

 

 

(1,881

)

 

 

(949

)

Retained Earnings

 

 

88,106

 

 

 

80,074

 

Total Shareholders' Equity

 

 

281,080

 

 

 

225,169

 

Total Liabilities and Shareholders' Equity

 

$

386,009

 

 

$

287,552

 

 

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

 

 

 

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

December 28,

 

 

December 23,

 

 

 

2024

 

 

2023

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Net Income

 

$

10,051

 

 

$

6,757

 

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

 

 

 

 

 

 

 

 

Net (Gain)Loss on Disposal of Property and Equipment

 

 

(64

)

 

 

24

 

Deferred Income Taxes

 

 

(36

)

 

 

42

 

Depreciation and Amortization

 

 

12,941

 

 

 

9,841

 

Gain on Sale of Assets

 

 

(855

)

 

 

-

 

Provision for Accounts Receivable and Inventory Reserves

 

 

147

 

 

 

379

 

Stock-Based Compensation Expense

 

 

2,075

 

 

 

3,338

 

Changes in Assets and Liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

Accounts Receivable and Other Receivables

 

 

1,848

 

 

 

3,819

 

Inventory

 

 

4,612

 

 

 

3,208

 

Prepaid Expenses and Other Current Assets

 

 

(1,419

)

 

 

728

 

Accounts Payable

 

 

4,179

 

 

 

(5,194

)

Accrued Compensation and Other Current Liabilities

 

 

(2,197

)

 

 

3,947

 

Income Taxes Payable

 

 

(2,925

)

 

 

-

 

Net Cash Provided by Operating Activities

 

 

28,357

 

 

 

26,889

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Purchase of Property and Equipment

 

 

(10,502

)

 

 

(9,099

)

Business Acquisitions, net of cash acquired

 

 

(86,095

)

 

 

(12,932

)

Proceeds from Sale of Assets

 

 

1,100

 

 

 

-

 

Sales of Marketable Securities

 

 

15,533

 

 

 

-

 

Net Cash Used in Investing Activities

 

 

(79,964

)

 

 

(22,031

)

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Proceeds From/(Repayment of) Revolving Credit Facility, net

 

 

39,495

 

 

 

(42,713

)

Repayments of Term Loan

 

 

(1,745

)

 

 

(1,678

)

Issuance of Common Stock, net of direct costs

 

 

1,766

 

 

 

75,714

 

Repurchase of Common Stock

 

 

(3,208

)

 

 

(2,247

)

Net Cash Provided by Financing Activities

 

 

36,308

 

 

 

29,076

 

 

 

 

 

 

 

 

 

 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

 

 

293

 

 

 

(260

)

 

 

 

 

 

 

 

 

 

Net (Decrease)/Increase in Cash and Cash Equivalents

 

 

(15,006

)

 

 

33,674

 

Cash and Cash Equivalents at Beginning of Period

 

 

19,646

 

 

 

1,531

 

Cash and Cash Equivalents at End of Period

 

$

4,640

 

 

$

35,205

 

 

TRANSCAT, INC.

Adjusted EBITDA Reconciliation Table

(In thousands)

(Unaudited)

 

 

 

Fiscal 2025

 

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Q4

 

 

YTD

 

Net Income

 

$

4,408

 

 

 

3,286

 

 

 

2,357

 

 

 

 

 

 

 

10,051

 

+ Interest Income

 

 

(260

)

 

 

(210

)

 

 

(20

)

 

 

 

 

 

 

(490

)

+ Other Expense

 

 

131

 

 

 

232

 

 

 

(1,009

)

 

 

 

 

 

 

(646

)

+ Tax Provision

 

 

820

 

 

 

427

 

 

 

772

 

 

 

 

 

 

 

2,019

 

Operating Income

 

 

5,099

 

 

 

3,735

 

 

 

2,100

 

 

 

 

 

 

 

10,934

 

+ Depreciation & Amortization

 

 

4,113

 

 

 

4,399

 

 

 

4,430

 

 

 

 

 

 

 

12,942

 

+ Transaction Expenses

 

 

434

 

 

 

33

 

 

 

778

 

 

 

 

 

 

 

1,245

 

+ Other Expense

 

 

(131

)

 

 

(232

)

 

 

154

 

 

 

 

 

 

 

(209

)

+ Non-cash Stock Compensation

 

 

697

 

 

 

926

 

 

 

452

 

 

 

 

 

 

 

2,075

 

Adjusted EBITDA

 

 

10,212

 

 

 

8,861

 

 

 

7,914

 

 

 

 

 

 

 

26,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Breakdown

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Operating Income

 

$

4,091

 

 

 

3,704

 

 

 

1,412

 

 

 

 

 

 

 

9,207

 

+ Depreciation & Amortization

 

 

2,402

 

 

 

2,455

 

 

 

2,451

 

 

 

 

 

 

 

7,308

 

+ Transaction Expenses

 

 

146

 

 

 

-

 

 

 

778

 

 

 

 

 

 

 

924

 

+ Other Expense

 

 

(96

)

 

 

(164

)

 

 

94

 

 

 

 

 

 

 

(166

)

+ Non-cash Stock Compensation

 

 

421

 

 

 

629

 

 

 

186

 

 

 

 

 

 

 

1,236

 

Service Adjusted EBITDA

 

 

6,964

 

 

 

6,624

 

 

 

4,921

 

 

 

 

 

 

 

18,509

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution Operating Income

 

$

1,008

 

 

 

31

 

 

 

688

 

 

 

 

 

 

 

1,727

 

+ Depreciation & Amortization

 

 

1,711

 

 

 

1,944

 

 

 

1,979

 

 

 

 

 

 

 

5,634

 

+ Transaction Expenses

 

 

288

 

 

 

32

 

 

 

-

 

 

 

 

 

 

 

320

 

+ Other Expense

 

 

(35

)

 

 

(67

)

 

 

60

 

 

 

 

 

 

 

(42

)

+ Non-cash Stock Compensation

 

 

276

 

 

 

297

 

 

 

266

 

 

 

 

 

 

 

839

 

Distribution Adjusted EBITDA

 

 

3,248

 

 

 

2,237

 

 

 

2,993

 

 

 

 

 

 

 

8,478

 

 

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 / (Income)

 

 

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 Expenses

 

 

185

 

 

 

328

 

 

 

78

 

 

 

37

 

 

 

628

 

+ Acquisition Earn-Out Adjustment

 

 

-

 

 

 

2,800

 

 

 

87

 

 

 

(2,357

)

 

 

530

 

+ Other (Expense) / Income

 

 

(64

)

 

 

49

 

 

 

(289

)

 

 

(11

)

 

 

(315

)

+ Non-cash 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 Expenses

 

 

185

 

 

 

76

 

 

 

30

 

 

 

(44

)

 

 

247

 

+ Acquisition Earn-Out Adjustment

 

 

-

 

 

 

2,800

 

 

 

87

 

 

 

(2,357

)

 

 

530

 

+ Other (Expense) / Income

 

 

(47

)

 

 

29

 

 

 

(203

)

 

 

(18

)

 

 

(239

)

+ Non-cash 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 Expenses

 

 

-

 

 

 

252

 

 

 

48

 

 

 

81

 

 

 

381

 

+ Other (Expense) / Income

 

 

(17

)

 

 

20

 

 

 

(86

)

 

 

7

 

 

 

(76

)

+ Non-cash Stock Compensation

 

 

254

 

 

 

415

 

 

 

430

 

 

 

438

 

 

 

1,537

 

Distribution Adjusted EBITDA

 

 

2,249

 

 

 

2,532

 

 

 

3,141

 

 

 

2,941

 

 

 

10,863

 

 

TRANSCAT, INC.

Adjusted Diluted EPS Reconciliation Table

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

 

 

Fiscal 2025

 

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Q4

 

 

YTD

 

Net Income

 

$

4,408

 

 

 

3,286

 

 

 

2,357

 

 

 

 

 

 

 

10,051

 

+ Amortization of Intangible Assets

 

 

1,749

 

 

 

1,888

 

 

 

1,879

 

 

 

 

 

 

 

5,516

 

+ Acquisition Amortization of Backlog

 

 

24

 

 

 

4

 

 

 

-

 

 

 

 

 

 

 

28

 

+ Acquisition Deal Costs

 

 

434

 

 

 

33

 

 

 

778

 

 

 

 

 

 

 

1,245

 

+ Acquisition Stock Expense

 

 

234

 

 

 

130

 

 

 

(261

)

 

 

 

 

 

 

103

 

+ Income Tax Effect at 25%

 

 

(610

)

 

 

(514

)

 

 

(599

)

 

 

 

 

 

 

(1,723

)

Adjusted Net Income

 

 

6,239

 

 

 

4,827

 

 

 

4,154

 

 

 

-

 

 

 

15,220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Diluted Shares Outstanding

 

 

9,196

 

 

 

9,282

 

 

 

9,326

 

 

 

 

 

 

 

9,243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

 

0.48

 

 

 

0.35

 

 

 

0.25

 

 

 

-

 

 

 

1.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted Earnings Per Share

 

 

0.68

 

 

 

0.52

 

 

 

0.45

 

 

 

-

 

 

 

1.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

TRANSCAT, INC.

Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Change

 

SERVICE

 

FY 2025 Q3

 

 

FY 2024 Q3

 

 

$'s

 

 

%

 

Service Revenue

 

$

41,557

 

 

$

41,509

 

 

$

48

 

 

 

0.1

%

Cost of Revenue

 

 

29,200

 

 

 

28,015

 

 

 

1,185

 

 

 

4.2

%

Gross Profit

 

$

12,357

 

 

$

13,494

 

 

$

(1,137

)

 

 

(8.4

)%

Gross Margin

 

 

29.7

%

 

 

32.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

 

$

4,380

 

 

$

4,202

 

 

$

178

 

 

 

4.2

%

General and Administrative Expenses

 

 

6,565

 

 

 

6,326

 

 

 

239

 

 

 

3.8

%

Operating Income

 

$

1,412

 

 

$

2,966

 

 

$

(1,554

)

 

 

(52.4

)%

% of Revenue

 

 

3.4

%

 

 

7.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

DISTRIBUTION

 

FY 2025 Q3

 

 

FY 2024 Q3

 

 

$'s

 

 

%

 

Distribution Revenue

 

$

25,197

 

 

$

23,657

 

 

$

1,540

 

 

 

6.5

%

Cost of Revenue

 

 

17,875

 

 

 

16,215

 

 

 

1,660

 

 

 

10.2

%

Gross Profit

 

$

7,322

 

 

$

7,442

 

 

$

(120

)

 

 

(1.6

)%

Gross Margin

 

 

29.1

%

 

 

31.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

 

$

3,739

 

 

$

3,317

 

 

$

422

 

 

 

12.7

%

General and Administrative Expenses

 

 

2,895

 

 

 

2,797

 

 

 

98

 

 

 

3.5

%

Operating Income

 

$

688

 

 

$

1,328

 

 

$

(640

)

 

 

(48.2

)%

% of Sales

 

 

2.7

%

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

TOTAL

 

FY 2025 Q3

 

 

FY 2024 Q3

 

 

$'s

 

 

%

 

Total Revenue

 

$

66,754

 

 

$

65,166

 

 

$

1,588

 

 

 

2.4

%

Total Cost of Revenue

 

 

47,075

 

 

 

44,230

 

 

 

2,845

 

 

 

6.4

%

Gross Profit

 

$

19,679

 

 

$

20,936

 

 

$

(1,257

)

 

 

(6.0

)%

Gross Margin

 

 

29.5

%

 

 

32.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

 

$

8,119

 

 

$

7,519

 

 

$

600

 

 

 

8.0

%

General and Administrative Expenses

 

 

9,460

 

 

 

9,123

 

 

 

337

 

 

 

3.7

%

Operating Income

 

$

2,100

 

 

$

4,294

 

 

$

(2,194

)

 

 

(51.1

)%

% of Revenue

 

 

3.1

%

 

 

6.6

%

 

 

 

 

 

 

 

 

 

TRANSCAT, INC.

Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

 

FY 2025

 

 

FY 2024

 

 

 

 

 

 

 

 

 

SERVICE

 

YTD

 

 

YTD

 

 

$'s

 

 

 

%

Service Revenue

 

$

129,418

 

 

$

122,793

 

 

$

6,625

 

 

 

5.4

%

Cost of Revenue

 

 

87,587

 

 

 

82,244

 

 

 

5,343

 

 

 

6.5

%

Gross Profit

 

$

41,831

 

 

$

40,549

 

 

$

1,282

 

 

 

3.2

%

Gross Margin

 

 

32.3

%

 

 

33.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

 

$

13,269

 

 

$

12,452

 

 

$

817

 

 

 

6.6

%

General and Administrative Expenses

 

 

19,355

 

 

 

21,197

 

 

 

(1,842

)

 

 

(8.7

)%

Operating Income

 

$

9,207

 

 

$

6,900

 

 

$

2,307

 

 

 

33.4

%

% of Revenue

 

 

7.1

%

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

 

FY 2025

 

 

FY 2024

 

 

 

 

 

 

 

 

 

DISTRIBUTION

 

YTD

 

 

YTD

 

 

$'s

 

 

%

 

Distribution Revenue

 

$

71,869

 

 

$

65,775

 

 

$

6,094

 

 

 

9.3

%

Cost of Revenue

 

 

50,160

 

 

 

46,553

 

 

 

3,607

 

 

 

7.7

%

Gross Profit

 

$

21,709

 

 

$

19,222

 

 

$

2,487

 

 

 

12.9

%

Gross Margin

 

 

30.2

%

 

 

29.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

 

$

10,832

 

 

$

8,392

 

 

$

2,440

 

 

 

29.1

%

General and Administrative Expenses

 

 

9,150

 

 

 

7,153

 

 

 

1,997

 

 

 

27.9

%

Operating Income

 

$

1,727

 

 

$

3,677

 

 

$

(1,950

)

 

 

(53.0

)%

% of Sales

 

 

2.4

%

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

 

FY 2025

 

 

FY 2024

 

 

 

 

 

 

 

 

 

TOTAL

 

YTD

 

 

YTD

 

 

$'s

 

 

 

%

Total Revenue

 

$

201,287

 

 

$

188,568

 

 

$

12,719

 

 

 

6.7

%

Total Cost of Revenue

 

 

137,747

 

 

 

128,797

 

 

 

8,950

 

 

 

6.9

%

Gross Profit

 

$

63,540

 

 

$

59,771

 

 

$

3,769

 

 

 

6.3

%

Gross Margin

 

 

31.6

%

 

 

31.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

 

$

24,101

 

 

$

20,844

 

 

$

3,257

 

 

 

15.6

%

General and Administrative Expenses

 

 

28,505

 

 

 

28,350

 

 

 

155

 

 

 

0.5

%

Operating Income

 

$

10,934

 

 

$

10,577

 

 

$

357

 

 

 

3.4

%

% of Revenue

 

 

5.4

%

 

 

5.6

%

 

 

 

 

 

 

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250127185810/en/

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