false 0000099302 0000099302 2024-10-29 2024-10-29
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)
October 29, 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)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
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))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.50 par value
TRNS
Nasdaq Global Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
Item 2.02
Results of Operations and Financial Condition.
 
On October 28, 2024, Transcat, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal year 2025 second quarter ended September 28, 2024. The press release is attached to this Form 8-K as Exhibit 99.1.
 
In addition, on October 29, 2024, the Company posted slides to the Investor Relations section of its website that will accompany the Company’s earnings conference call and webcast at 11:00 a.m. Eastern Time on October 29, 2024. The slides are attached to this Form 8-K as Exhibit 99.2.
 
The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under such section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
 
Item 9.01
Financial Statements and Exhibits.
 
(d) Exhibits.
 
 
Exhibit No.
 
Description
       
 
99.1
 
 
99.2
 
 
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
     
TRANSCAT, INC.
       
       
Dated: October 29, 2024
 
By:     
/s/ Thomas L. Barbato
     
Thomas L. Barbato
     
Senior Vice President of Finance and Chief Financial Officer
       
 
 

Exhibit 99.1

 

logo.jpg

NEWS
RELEASE

 

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

 

IMMEDIATE RELEASE

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

 

 

  Consolidated Revenue grew 8% compared to prior year
     
 

Distribution Gross Profit grew 10% on double-digit Revenue growth

   

 

 

Services Gross Profit grew 4% driven by 4% Organic Revenue growth

 

 

ROCHESTER, NY, October 28, 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 second quarter ended September 28, 2024 (the “second 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 and Becnel Rental Tools, LLC ("Becnel") effective April 15, 2024.

 

“Consolidated revenue was up 8%.  Consistent demand in our Calibration Services business was supported by our differentiated value proposition which resonates well in the highly regulated end markets we serve, including life sciences,” commented Lee D. Rudow, President and CEO. “Service Revenue grew 6% versus prior year, the 62nd consecutive quarter of growth. Service organic revenue growth of 4% was below historical trends and was significantly impacted by a decline in our Nexa cost control  and optimization services business. Excluding Nexa, we are pleased with service organic growth of 9% versus prior year.” 

 

“Though the magnitude of Nexa's slowdown was greater than what we expected, we have identified the root causes and are committed to returning the Nexa business to growth.  This includes fully integrating Nexa's sales and marketing into Transcat's dynamic growth process and renaming the business Transcat Solutions, to fully leverage our industry leading brand."

 

"Nexa has performed very well since acquisition in calendar 2021, and while collaborating on a regular basis to drive calibration sales growth, we allowed that group to operate in a more autonomous fashion and missed an opportunity to fully integrate Nexa into the proven Transcat sales and marketing processes. Integration is now well underway, and we have the power of the Transcat leadership team focused on pipeline expansion, which we believe will contribute to the return to high single digit organic Services revenue growth in the first half of fiscal 2026.”

 

Mr. Rudow added, “Distribution Revenue grew 11% versus prior year.  However, Becnel revenue was negatively impacted by two hurricanes in the Gulf of Mexico, which pressured second quarter Distribution margins. Becnel is a well-run business that has cultivated strong customer relationships with companies that highly utilize Transcat’s core instrumentation and calibration services. We fully expect Becnel to deliver sequential improvements in the third and fourth quarters and expect Distribution Gross Margins to return to levels consistent with the second half of fiscal 2024.”

 

“Transcat has a proven history of successfully identifying, acquiring, and integrating dynamic companies that have expanded our addressable markets, widened the breadth of offerings, and allowed us to leverage existing infrastructure. In addition to strong returns, the acquisitions present compelling cross-sell synergies to drive organic revenue growth into these newly acquired customer bases. Transcat’s acquisition pipeline remains robust and is focused on all our strategic channels.”

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024
Page 2 of 14

 

Second Quarter Fiscal 2025 Review
(Results are compared with the second quarter of the fiscal year ended March 30, 2024 (fiscal 2024))

 

($ in thousands)

                 

Change

 
   

FY25 Q2

   

FY24 Q2

   

$'s

   

%

 

Service Revenue

  $ 44,083     $ 41,431     $ 2,652       6.4 %

Distribution Revenue

    23,743       21,373       2,370       11.1 %

Revenue

  $ 67,826     $ 62,804     $ 5,022       8.0 %
                                 

Gross Profit

  $ 21,206     $ 20,125     $ 1,081       5.4 %

Gross Margin

    31.3 %     32.0 %                
                                 

Operating Income

  $ 3,735     $ 1,643     $ 2,092       127.3 %

Operating Margin

    5.5 %     2.6 %                
                                 

Net Income

  $ 3,286     $ 460     $ 2,826       614.3 %

Net Margin

    4.8 %     0.7 %                
                                 

Adjusted EBITDA*

  $ 8,861     $ 9,330     $ (469 )     (5.0 )%

Adjusted EBITDA* Margin

    13.1 %     14.9 %                
                                 

Diluted EPS

  $ 0.35     $ 0.06     $ 0.29       483.3 %
                                 

Adjusted Diluted EPS*

  $ 0.52     $ 0.60     $ (0.08 )     (13.3 )%

 

*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 $67.8 million, an increase of $5.0 million or 8.0%. Consolidated gross profit was $21.2 million, an increase of $1.1 million, or 5.4%, while gross margin decreased 70 basis points primarily due to Nexa and Becnel Revenue softness. Operating expenses were $17.5 million, a decrease of $1.0 million, or 5.5%. The second quarter of fiscal year 2024 included a $2.8 million non-cash charge related to the Nexa earn-out agreement. Adjusted EBITDA was $8.9 million which represented a decrease of $0.5 million or 5.0%. Net income per diluted share was $0.35 compared to $0.06 last year. Adjusted diluted earnings per share was $0.52 versus $0.60 last year.

 

 

Transcat Reports  Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024
Page 3 of 14

 

Service segment  second quarter results

 

Represents the accredited calibration, repair, inspection and laboratory instrument services business (65.0% of total revenue for the second quarter of fiscal 2025).

 

($ in thousand)

                 

Change

 
   

FY25 Q2

   

FY24 Q2

   

$'s

   

%

 

Service Segment Revenue

  $ 44,083     $ 41,431     $ 2,652       6.4 %

Gross Profit

  $ 14,591     $ 14,084     $ 507       3.6 %

Gross Margin

    33.1 %     34.0 %                
                                 

Operating Income

  $ 3,704     $ 742     $ 2,962       399.2 %

Operating Margin

    8.4 %     1.8 %                
                                 

Adjusted EBITDA*

  $ 6,624     $ 6,798     $ (174 )     (2.6 )%

Adjusted EBITDA* Margin

    15.0 %     16.4 %                

 

*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 $44.1 million, an increase of $2.7 million or 6.4%, and included $0.8 million of incremental revenue from acquisitions.  Organic revenue growth of 4.4% driven by end-market demand and continued market share gains. The segment gross margin was 33.1%, a decrease of 90 basis points from prior year primarily due to lower revenue from Nexa.

 

Distribution segment second quarter results

 

Represents the sale and rental of new and used professional grade handheld test, measurement and control instrumentation (35.0% of total revenue for the second quarter of fiscal 2025).

 

($ in thousands)

                 

Change

 
   

FY25 Q2

   

FY24 Q2

   

$'s

   

%

 

Distribution Segment Revenue

  $ 23,743     $ 21,373     $ 2,370       11.1 %

Gross Profit

  $ 6,615     $ 6,041     $ 574       9.5 %

Gross Margin

    27.9 %     28.3 %                
                                 

Operating Income

  $ 31     $ 901     $ (870 )     (96.6 )%

Operating Margin

    0.1 %     4.2 %                
                                 

Adjusted EBITDA*

  $ 2,237     $ 2,532     $ (295 )     (11.7 )%

Adjusted EBITDA* Margin

    9.4 %     11.8 %                

 

*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 revenue was $23.7 million, which represented an increase of $2.4 million or 11.1%, driven by growth in the Rental business including acquisitions.  Distribution segment gross margin was 27.9%, a decrease of 40 basis points due to Becnel revenue impacted by the Gulf of Mexico hurricanes.

 

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 4 of 14

 

Six Month Review (Results are compared with the first six months of fiscal 2024)

Total revenue was $134.5 million, an increase of $11.1 million or 9.01%.  Consolidated gross profit was up $5.0 million, or 12.9%, and gross margin expanded to 32.6% or 110 basis points.  Consolidated operating expenses increased $2.5 million, or 7.6%, 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 $8.8 million compared with $6.3 million in last fiscal year’s period.

 

Adjusted EBITDA was $19.1 million which represented an increase of $1.3 million or 7.1%. Net income per diluted share increased to $0.83 from $0.43 and adjusted diluted earnings per share was $1.20 versus $1.12 last year. The effective tax rate was 13.9% compared to 25.3% in the prior year, due to the timing of discrete benefits related to share-based compensation items. 

 

Balance Sheet and Cash Flow Overview

 

On September 28, 2024, the Company had $23.8 million in cash and cash equivalents on hand and $80.0 million available for borrowing under its secured revolving credit facility.  Total debt was $3.0 million versus $4.2 million on March 30, 2024.  The Company’s leverage ratio, as defined in the credit agreement, was 0.08 on September 28, 2024, compared with 0.10 on March 30, 2024. 

 

Outlook

 

Mr. Rudow concluded, “We are very proud of the consistent results the Transcat team has delivered year in and year out over an extended period of time.  That said, we are disappointed with the Nexa-impacted aggregated results in fiscal Q2. We experienced short term, isolated revenue challenges in the Nexa services channel in the quarter but believe the swift actions our exceptional team is already taking will rectify the situation in the near term, as we continue to execute on our highly successful core growth strategy.”

 

“We expect FY25 organic Service revenue growth in the mid-single digits when normalized for the extra week in fiscal 2024 and gross margin expansion. We anticipate a return to high single digit organic growth by the first half of fiscal 2026.”

 

“Automation of our calibration processes and focus on productivity remain key enablers of margin expansion. We have demonstrated the ability to leverage these tools to improve our operational efficiency, which has become visible in our financial performance over time.”

 

“We continue to work our robust acquisition pipeline and are pleased with the current flow of strategic opportunities.”

 

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, October 29, 2024 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, November 5, 2024. 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.

 

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 5 of 14

 

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 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 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.

 

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 6 of 14

 

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 Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 7 of 14

 

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

 

   

(Unaudited)

   

(Unaudited)

 
   

Second Quarter Ended

   

Six Months Ended

 
   

September 28,

   

September 23,

   

September 28,

   

September 23,

 
   

2024

   

2023

   

2024

   

2023

 
                                 

Service Revenue

  $ 44,083     $ 41,431     $ 87,861     $ 81,284  

Distribution Revenue

    23,743       21,373       46,672       42,118  

Total Revenue

    67,826       62,804       134,533       123,402  
                                 

Cost of Service Revenue

    29,492       27,347       58,387       54,229  

Cost of Distribution Revenue

    17,128       15,332       32,285       30,338  

Total Cost of Revenue

    46,620       42,679       90,672       84,567  
                                 

Gross Profit

    21,206       20,125       43,861       38,835  
                                 

Selling, Marketing and Warehouse Expenses

    8,181       6,856       15,982       13,325  

General and Administrative Expenses

    9,290       11,626       19,045       19,227  

Total Operating Expenses

    17,471       18,482       35,027       32,552  
                                 

Operating Income

    3,735       1,643       8,834       6,283  
                                 

Interest Expense

    76       890       128       1,704  

Interest Income

    (286 )     -       (598 )     -  

Other Expense (Income)

    232       (49 )     363       15  

Total Interest and Other, net

    22       841       (107 )     1,719  
                                 

Income Before Provision For Income Taxes

    3,713       802       8,941       4,564  

Provision for Income Taxes

    427       342       1,247       1,155  
                                 

Net Income

  $ 3,286     $ 460     $ 7,694     $ 3,409  
                                 

Basic Earnings Per Share

  $ 0.36     $ 0.06     $ 0.84     $ 0.44  

Average Shares Outstanding

    9,159       7,819       9,107       7,732  
                                 

Diluted Earnings Per Share

  $ 0.35     $ 0.06     $ 0.83     $ 0.43  

Average Shares Outstanding

    9,282       7,948       9,222       7,840  

  

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 8 of 14

 

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

 

   

(Unaudited)

   

(Audited)

 
   

September 28,

   

March 30,

 
   

2024

   

2024

 

ASSETS

               

Current Assets:

               

Cash and Cash Equivalents

  $ 23,815     $ 19,646  

Marketable Securities

    -     $ 15,533  

Accounts Receivable, less allowance for credit losses of $565 and $544 as of September 28, 2024 and March 30, 2024, respectively

    48,933       47,779  

Other Receivables

    628       506  

Inventory, net

    15,549       17,418  

Prepaid Expenses and Other Current Assets

    6,241       4,276  

Total Current Assets

    95,166       105,158  

Property and Equipment, net

    47,493       38,944  

Goodwill

    138,127       105,585  

Intangible Assets, net

    24,362       19,987  

Right to Use Assets, net

    17,309       16,823  

Other Assets

    1,096       1,055  

Total Assets

  $ 323,553     $ 287,552  
                 

LIABILITIES AND SHAREHOLDERS' EQUITY

               

Current Liabilities:

               

Accounts Payable

  $ 13,043     $ 11,495  

Accrued Compensation and Other Current Liabilities

    11,092       19,665  

Current Portion of Long-Term Debt

    2,386       2,339  

Total Current Liabilities

    26,521       33,499  

Long-Term Debt

    612       1,817  

Deferred Tax Liabilities, net

    9,297       9,291  

Lease Liabilities

    14,661       14,873  

Other Liabilities

    3,705       2,903  

Total Liabilities

    54,796       62,383  
                 

Shareholders' Equity:

               

Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 9,199,277 and 8,839,299 shares issued and outstanding as of September 28, 2024 and March 30, 2024, respectively

    4,600       4,420  

Capital in Excess of Par Value

    178,986       141,624  

Accumulated Other Comprehensive Loss

    (718 )     (949 )

Retained Earnings

    85,889       80,074  

Total Shareholders' Equity

    268,757       225,169  

Total Liabilities and Shareholders' Equity

  $ 323,553     $ 287,552  

 

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 9 of 14

 

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

 

   

(Unaudited)

 
   

Six Months Ended

 
   

September 28,

   

September 23,

 
   

2024

   

2023

 

Cash Flows from Operating Activities:

               

Net Income

  $ 7,694     $ 3,409  

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

               

Net Loss on Disposal of Property and Equipment

    43       11  

Deferred Income Taxes

    6       23  

Depreciation and Amortization

    8,513       6,078  

Provision for Accounts Receivable and Inventory Reserves

    108       347  

Stock-Based Compensation Expense

    1,623       2,171  

Changes in Assets and Liabilities, net of acquisitions:

               

Accounts Receivable and Other Receivables

    1,746       2,384  

Inventory

    2,597       3,376  

Prepaid Expenses and Other Current Assets

    (1,918 )     465  

Accounts Payable

    1,525       (3,969 )

Accrued Compensation and Other Current Liabilities

    (3,248 )     1,677  

Income Taxes Payable

    (2,930 )     -  

Net Cash Provided by Operating Activities

    15,759       15,972  
                 

Cash Flows from Investing Activities:

               

Purchase of Property and Equipment

    (7,633 )     (5,444 )

Business Acquisitions, net of cash acquired

    (15,858 )     (12,882 )

Sales of Marketable Securities

    15,533       -  

Net Cash Used in Investing Activities

    (7,958 )     (18,326 )
                 

Cash Flows from Financing Activities:

               

Repayment of Revolving Credit Facility, net

    -       5,288  

Repayments of Term Loan

    (1,158 )     (1,112 )

Issuance of Common Stock, net of direct costs

    838       384  

Repurchase of Common Stock

    (3,026 )     (2,247 )

Net Cash (Used in)/Provided by Financing Activities

    (3,346 )     2,313  
                 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

    (286 )     (244 )
                 

Net Increase/(Decrease) in Cash and Cash Equivalents

    4,169       (285 )

Cash and Cash Equivalents at Beginning of Period

    19,646       1,531  

Cash and Cash Equivalents at End of Period

  $ 23,815     $ 1,246  

 

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 10 of 14

 

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

 

   

Fiscal 2025

 
   

Q1

   

Q2

   

Q3

   

Q4

   

YTD

 

Net Income

  $ 4,408     $ 3,286                     $ 7,694  

+ Interest Income

    (260 )     (210 )                     (470 )

+ Other Expense

    131       232                       363  

+ Tax Provision

    820       427                       1,247  

Operating Income

  $ 5,099     $ 3,735                     $ 8,834  

+ Depreciation & Amortization

    4,113       4,399                       8,512  

+ Transaction Expenses

    434       33                       467  

+ Other Expense

    (131 )     (232 )                     (363 )

+ Non-cash Stock Compensation

    697       926                       1,623  

Adjusted EBITDA

  $ 10,212     $ 8,861                     $ 19,073  
                                         

Segment Breakdown

                                       
                                         

Service Operating Income

  $ 4,091     $ 3,704                     $ 7,795  

+ Depreciation & Amortization

    2,402       2,455                       4,857  

+ Transaction Expenses

    146       -                       146  

+ Other Expense

    (96 )     (164 )                     (260 )

+ Non-cash Stock Compensation

    421       629                       1,050  

Service Adjusted EBITDA

  $ 6,964     $ 6,624                     $ 13,588  
                                         

Distribution Operating Income

  $ 1,008     $ 31                     $ 1,039  

+ Depreciation & Amortization

    1,711       1,944                       3,655  

+ Transaction Expenses

    288       32                       320  

+ Other Expense

    (35 )     (67 )                     (102 )

+ Non-cash Stock Compensation

    276       297                       573  

Distribution Adjusted EBITDA

  $ 3,248     $ 2,237                     $ 5,485  

 

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 11 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 / (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 Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 12 of 14

 

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                     $ 7,694  

+ Amortization of Intangible Assets

    1,749       1,888                       3,637  

+ Acquisition Amortization of Backlog

    24       4                       28  

+ Acquisition Deal Costs

    434       33                       467  

+ Acquisition Stock Expense

    234       130                       364  

+ Income Tax Effect at 25%

    (610 )     (514 )                     (1,124 )

Adjusted Net Income

  $ 6,239     $ 4,827     $ -     $ -     $ 11,066  
                                         

Average Diluted Shares Outstanding

    9,196       9,282                       9,222  
                                         

Diluted Earnings Per Share

  $ 0.48     $ 0.35     $ -     $ -     $ 0.83  
                                         

Adjusted Diluted Earnings Per Share

  $ 0.68     $ 0.52     $ -     $ -     $ 1.20  
                                         
   

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 Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 13 of 14

 

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

 

                   

Change

 

SERVICE

 

FY 2025 Q2

   

FY 2024 Q2

   

$'s

      %

Service Revenue

  $ 44,083     $ 41,431     $ 2,652       6.4 %

Cost of Revenue

    29,492       27,347       2,145       7.8 %

Gross Profit

  $ 14,591     $ 14,084     $ 507       3.6 %

Gross Margin

    33.1 %     34.0 %                
                                 

Selling, Marketing & Warehouse Expenses

  $ 4,586     $ 4,143     $ 443       10.7 %

General and Administrative Expenses

    6,301       9,199       (2,898 )     (31.5 )%

Operating Income

  $ 3,704     $ 742     $ 2,962       399.2 %

% of Revenue

    8.4 %     1.8 %                

 

                   

Change

 

DISTRIBUTION

 

FY 2025 Q2

   

FY 2024 Q2

   

$'s

      %

Distribution Revenue

  $ 23,743     $ 21,373     $ 2,370       11.1 %

Cost of Revenue

    17,128       15,332       1,796       11.7 %

Gross Profit

  $ 6,615     $ 6,041     $ 574       9.5 %

Gross Margin

    27.9 %     28.3 %                
                                 

Selling, Marketing & Warehouse Expenses

  $ 3,595     $ 2,713     $ 882       32.5 %

General and Administrative Expenses

    2,989       2,427       562       23.2 %

Operating Income

  $ 31     $ 901     $ (870 )     (96.6 )%

% of Sales

    0.1 %     4.2 %                

 

                   

Change

 

TOTAL

 

FY 2025 Q2

   

FY 2024 Q2

   

$'s

      %

Total Revenue

  $ 67,826     $ 62,804     $ 5,022       8.0 %

Total Cost of Revenue

    46,620       42,679       3,941       9.2 %

Gross Profit

  $ 21,206     $ 20,125     $ 1,081       5.4 %

Gross Margin

    31.3 %     32.0 %                
                                 

Selling, Marketing & Warehouse Expenses

  $ 8,181     $ 6,856     $ 1,325       19.3 %

General and Administrative Expenses

    9,290       11,626       (2,336 )     (20.1 )%

Operating Income

  $ 3,735     $ 1,643     $ 2,092       127.3 %

% of Revenue

    5.5 %     2.6 %                

  

 

 

Transcat Reports Second Quarter Results with growth in Revenue and Gross Profit

October 28, 2024

Page 14 of 14

 

 

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

 

                   

Change

 
   

FY 2025

   

FY 2024

                 

SERVICE

 

YTD

   

YTD

   

$'s

   

%

 

Service Revenue

  $ 87,861     $ 81,284     $ 6,577       8.1 %

Cost of Revenue

    58,387       54,229       4,158       7.7 %

Gross Profit

  $ 29,474     $ 27,055     $ 2,419       8.9 %

Gross Margin

    33.5 %     33.3 %                
                                 

Selling, Marketing & Warehouse Expenses

  $ 8,890     $ 8,250     $ 640       7.8 %

General and Administrative Expenses

    12,790       14,871       (2,081 )     (14.0 )%

Operating Income

  $ 7,794     $ 3,934     $ 3,860       98.1 %

% of Revenue

    8.9 %     4.8 %                

 

                   

Change

 
   

FY 2025

   

FY 2024

                 

DISTRIBUTION

 

YTD

   

YTD

   

$'s

      %

Distribution Revenue

  $ 46,672     $ 42,118     $ 4,554       10.8 %

Cost of Revenue

    32,285       30,338       1,947       6.4 %

Gross Profit

  $ 14,387     $ 11,780     $ 2,607       22.1 %

Gross Margin

    30.8 %     28.0 %                
                                 

Selling, Marketing & Warehouse Expenses

  $ 7,093     $ 5,075     $ 2,018       39.8 %

General and Administrative Expenses

    6,254       4,356       1,898       43.6 %

Operating Income

  $ 1,040     $ 2,349     $ (1,309 )     (55.7 )%

% of Sales

    2.2 %     5.6 %                

 

 

                   

Change

 
   

FY 2025

   

FY 2024

                 

TOTAL

 

YTD

   

YTD

   

$'s

   

%

 

Total Revenue

  $ 134,533     $ 123,402     $ 11,131       9.0 %

Total Cost of Revenue

    90,672       84,567       6,105       7.2 %

Gross Profit

  $ 43,861     $ 38,835     $ 5,026       12.9 %

Gross Margin

    32.6 %     31.5 %                
                                 

Selling, Marketing & Warehouse Expenses

  $ 15,983     $ 13,325     $ 2,658       19.9 %

General and Administrative Expenses

    19,044       19,227       (183 )     (1.0 )%

Operating Income

  $ 8,834     $ 6,283     $ 2,551       40.6 %

% of Revenue

    6.6 %     5.1 %                

 

Exhibit 99.2

 

 

 

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v3.24.3
Document And Entity Information
Oct. 29, 2024
Document Information [Line Items]  
Entity, Registrant Name Transcat, Inc.
Document, Type 8-K
Document, Period End Date Oct. 29, 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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