Exhibit 99.1
Transcat Announces Fiscal 2004 Second Quarter Results;
Reports Net Profit In The Second Quarter
ROCHESTER, NY – October 20, 2003 – Transcat, Inc. (Nasdaq: TRNS), a leading global distributor of professional grade test, measurement, and calibration instruments and a provider of calibration and repair services, today announced financial results for its second quarter ended September 27, 2003.
Commenting on the fiscal year 2004 second quarter results, Carl E. Sassano, President and Chief Executive Officer, stated: “We are pleased to report another quarter of solid performance. We believe that our results are in line with our strategy of executing and sustaining a consistent, profitable business model, regardless of the economic conditions.
“We have sustained our operating profitability despite an 18% decrease in sales compared to the prior year fiscal quarter. Consistent with last quarter, more than 85% of the sales decrease in the fiscal year 2004 second quarter came from our distribution products segment, which again continues to be adversely impacted, on a comparative basis, by the lingering economic downturn.
“Our calibration services sales performance was in line with our expectations. A sixteen point increase in calibration gross profit as a percent of sales over the prior year fiscal quarter directly contributed to our profitability. This increase was largely derived from the consolidation in fiscal 2003 of our calibration operations into ten strategically located Calibration Centers of Excellence.”
Net sales for the fiscal year 2004 second quarter were $11.9 million compared with net sales of $14.4 million during the fiscal year 2003 second quarter. Distribution products net sales for the current quarter were $7.6 million compared with net sales of $9.8 million in the prior year fiscal quarter. Calibration services net sales for the current quarter were $4.3 million compared with net sales of $4.6 million in the prior year fiscal quarter.
Net income for the fiscal year 2004 second quarter was $0.4 million, or $0.05 per share on a fully diluted basis, as compared with a net income of $0.5 million, or $0.08 per share in the prior year fiscal quarter.
For the first six months of fiscal year 2004, net sales were $24.5 million compared with net sales of $28.7 million for the first six months of fiscal year 2003. Distribution products net sales for the first six months of fiscal year 2004 were $15.6 million compared with net sales of $19.3 million in the first six months of fiscal year 2003. Calibration services net sales for the first six months of fiscal year 2004 were $8.9 million compared with net sales of $9.3 million in the first six months of fiscal year 2003.
Net income for the first six months of fiscal year 2004 was $0.5 million, or $0.08 per share on a fully diluted basis, as compared with a net income before cumulative effect of a change in accounting principle of $0.4 million, or $0.06 per share in the first six months of fiscal year 2003.
About Transcat, Inc.
Transcat, Inc. is a leading distributor of professional grade test, measurement, and calibration instruments and a provider of calibration and repair services primarily throughout the process, life science, and manufacturing industries.
Through the Company’s distribution products segment, Transcat markets and distributes national and proprietary brand instruments to approximately 10,000 global customers. Transcat’s Master Catalog offers easy access to more than 25,000 instruments, such as: calibrators, deadweight testers, temperature devices, multimeters, oscilloscopes, pressure pumps, testers, recorders, and related accessories, from nearly 250 of the industry’s leading manufacturers including Fluke, Hart Scientific, Agilent, Ametek, and GE-Druck. In addition, Transcat is the exclusive worldwide distributor for Altek and Transmation products. The majority of this instrumentation requires expert calibration service to ensure that it maintains the most exacting measurements.
Through the Company’s calibration services segment, Transcat offers precise, reliable, fast calibration services through ten Calibration Centers of Excellence strategically located across the United States and Canada to approximately 8,000 customers. To support the Company’s customers calibration service needs, Transcat delivers the industry’s highest quality calibration services and repairs. Each of the calibration laboratories is ISO-9000: 2000 registered with Underwriter’s Laboratories, Inc. and the scope of accreditation to ISO/IEC 17025 is the widest in the industry.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:This press release contains forward-looking statements, which are subject to various risks and uncertainties. The Company’s actual results could differ from those anticipated in such forward-looking statements as a result of numerous factors that may be beyond the Company’s control.
TRANSCAT, INC.
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
| (Unaudited) | (Unaudited) | |||||||||||||||||
| Second Quarter Ended | Six Months Ended | |||||||||||||||||
| September | September | September | September | |||||||||||||||
| 27, 2003 | 30, 2002 | 27, 2003 | 30, 2002 | |||||||||||||||
| Product Sales | $ | 7,620 | $ | 9,832 | $ | 15,632 | $ | 19,331 | ||||||||||
| Service Sales | 4,276 | 4,613 | 8,859 | 9,348 | ||||||||||||||
| Net Sales | 11,896 | 14,445 | 24,491 | 28,679 | ||||||||||||||
| Cost of Products Sold | 5,427 | 7,197 | 11,389 | 14,221 | ||||||||||||||
| Cost of Services Sold | 2,986 | 3,939 | 6,420 | 7,954 | ||||||||||||||
| Total Cost of Products and Services Sold | 8,413 | 11,136 | 17,809 | 22,175 | ||||||||||||||
| Gross Profit | 3,483 | 3,309 | 6,682 | 6,504 | ||||||||||||||
| Selling, Marketing, and Warehouse Expenses | 1,984 | 1,935 | 4,154 | 4,034 | ||||||||||||||
| Administrative Expenses | 1,283 | 973 | 2,122 | 1,976 | ||||||||||||||
| Total Operating Expenses | 3,267 | 2,908 | 6,276 | 6,010 | ||||||||||||||
| Operating Income | 216 | 401 | 406 | 494 | ||||||||||||||
| Interest Expense | 64 | 138 | 143 | 383 | ||||||||||||||
| Other Income | (34 | ) | - | (105 | ) | (7 | ) | |||||||||||
| Total Other Expense | 30 | 138 | 38 | 376 | ||||||||||||||
| Income Before Income Taxes and Cumulative Effect of a Change in Accounting Principle | 186 | 263 | 368 | 118 | ||||||||||||||
| Benefit for Income Taxes | (169 | ) | (246 | ) | (162 | ) | (246 | ) | ||||||||||
| Income Before Cumulative Effect of a Change in Accounting Principle | 355 | 509 | 530 | 364 | ||||||||||||||
| Cumulative Effect of a Change in Accounting Principle | - | - | - | (6,472 | ) | |||||||||||||
| Net Income (Loss) | $ | 355 | $ | 509 | $ | 530 | $ | (6,108 | ) | |||||||||
| Basic Earnings (Loss) Per Share: | ||||||||||||||||||
| Before Cumulative Effect of a Change in Accounting Principle | $ | 0.06 | $ | 0.08 | $ | 0.09 | $ | 0.06 | ||||||||||
| From Cumulative Effect of a Change in Accounting Principle | - | - | - | (1.06 | ) | |||||||||||||
| Total Basic Earnings (Loss) Per Share | $ | 0.06 | $ | 0.08 | $ | 0.09 | $ | (1.00 | ) | |||||||||
| Average Shares Outstanding (in thousands) | 6,255 | 6,136 | 6,234 | 6,132 | ||||||||||||||
| Diluted Earnings (Loss) Per Share: | ||||||||||||||||||
| Before Cumulative Effect of a Change in Accounting Principle | $ | 0.05 | $ | 0.08 | $ | 0.08 | $ | 0.06 | ||||||||||
| From Cumulative Effect of a Change in Accounting Principle | - | - | - | (1.06 | ) | |||||||||||||
| Total Diluted Earnings (Loss) Per Share | $ | 0.05 | $ | 0.08 | $ | 0.08 | $ | (1.00 | ) | |||||||||
| Average Shares Outstanding (in thousands) | 6,726 | 6,136 | 6,624 | 6,132 | ||||||||||||||
Certain reclassifications of prior year and prior quarter financial information have been made to conform to current quarter and six month presentation.
TRANSCAT, INC.
Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Amounts)
| (Unaudited) | ||||||||||
| September | March | |||||||||
| 27, 2003 | 31, 2003 | |||||||||
| ASSETS | ||||||||||
| Current Assets: | ||||||||||
| Cash | $ | 102 | $ | 114 | ||||||
| Accounts Receivable, less allowance for doubtful accounts of $116 and $114 as of September 27, 2003 and March 31, 2003, respectively | 6,100 | 6,879 | ||||||||
| Other Receivables | 378 | 159 | ||||||||
| Finished Goods Inventory, net | 3,216 | 2,842 | ||||||||
| Income Taxes Receivable | 484 | 799 | ||||||||
| Prepaid Expenses and Deferred Charges | 594 | 454 | ||||||||
| Total Current Assets | 10,874 | 11,247 | ||||||||
| Property, Plant and Equipment, net | 2,293 | 2,556 | ||||||||
| Goodwill | 2,524 | 2,524 | ||||||||
| Deferred Charges | 129 | 197 | ||||||||
| Other Assets | 244 | 234 | ||||||||
| Total Assets | $ | 16,064 | $ | 16,758 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Current Liabilities: | ||||||||||
| Current Portion of Long-Term Debt | $ | 761 | $ | 666 | ||||||
| Accounts Payable | 3,655 | 3,738 | ||||||||
| Accrued Payrolls, Commissions and Other | 1,273 | 1,812 | ||||||||
| Income Taxes Payable | 100 | 100 | ||||||||
| Deposits | 64 | 64 | ||||||||
| Total Current Liabilities | 5,853 | 6,380 | ||||||||
| Long-Term Debt, less current portion | 5,050 | 5,916 | ||||||||
| Deferred Compensation | 307 | 220 | ||||||||
| Deferred Gain on TPG Divestiture | 1,544 | 1,544 | ||||||||
| Total Liabilities | 12,754 | 14,060 | ||||||||
| Stockholders’ Equity: | ||||||||||
| Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 6,304,915 and 6,296,000 shares issued as of September 27, 2003 and March 31, 2003, respectively; 6,185,557 and 6,176,642 shares outstanding as of September 27, 2003 and March 31, 2003, respectively | 3,152 | 3,148 | ||||||||
| Capital in Excess of Par Value | 3,038 | 3,031 | ||||||||
| Warrants | 518 | 518 | ||||||||
| Accumulated Other Comprehensive Loss | (164 | ) | (235 | ) | ||||||
| Retained Deficit | (2,781 | ) | (3,311 | ) | ||||||
| Less: Treasury Stock, at cost, 119,358 shares | (453 | ) | (453 | ) | ||||||
| Total Stockholders’ Equity | 3,310 | 2,698 | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | 16,064 | $ | 16,758 | ||||||
Certain reclassifications of prior year and prior quarter financial information have been made to conform to current quarter and six month presentation.
TRANSCAT, INC.
Consolidated Statements of Cash Flows
(In Thousands)
| (Unaudited) | |||||||||||
| Six Months Ended | |||||||||||
| September | September | ||||||||||
| 27, 2003 | 30, 2002 | ||||||||||
| Cash Flows from Operating Activities: | |||||||||||
| Net Income (Loss) | $ | 530 | $ | (6,108 | ) | ||||||
| Cumulative Effect of a Change in Accounting Principle | - | 6,472 | |||||||||
| Net Income Before Cumulative Effect of a Change in Accounting Principle | 530 | 364 | |||||||||
| Adjustments to Reconcile Net Income Before Cumulative Effect of a Change in Accounting Principle to Net Cash Provided by Operating Activities: | |||||||||||
| Depreciation and Amortization | 833 | 801 | |||||||||
| Provision for Doubtful Accounts Receivable and Returns | (72 | ) | 88 | ||||||||
| Common Stock Expense | 11 | 14 | |||||||||
| Deferred Revenue – MAC | - | (107 | ) | ||||||||
| Changes in Assets and Liabilities: | |||||||||||
| Accounts Receivable and Other Receivables | 560 | 1,325 | |||||||||
| MAC Escrow and Holdback | - | 75 | |||||||||
| Inventories | (374 | ) | 578 | ||||||||
| Income Taxes Receivable / Payable | 315 | (245 | ) | ||||||||
| Prepaid Expenses, Deferred Charges, and Other | (415 | ) | (53 | ) | |||||||
| Accounts Payable | (83 | ) | (858 | ) | |||||||
| Accrued Payrolls, Commissions, and Other | (467 | ) | (653 | ) | |||||||
| Deposits | - | (239 | ) | ||||||||
| Deferred Compensation | 87 | (28 | ) | ||||||||
| Net Cash Provided by Operating Activities | 925 | 1,062 | |||||||||
| Cash Flows from Investing Activities: | |||||||||||
| Purchase of Property, Plant and Equipment | (237 | ) | (207 | ) | |||||||
| Net Cash Used in Investing Activities | (237 | ) | (207 | ) | |||||||
| Cash Flows from Financing Activities: | |||||||||||
| Revolving Line of Credit, net | (354 | ) | (795 | ) | |||||||
| Payments on Long-Term Borrowings | (417 | ) | (334 | ) | |||||||
| Net Cash Used in Financing Activities | (771 | ) | (1,129 | ) | |||||||
| Effect of Exchange Rate Changes on Cash | 71 | (5 | ) | ||||||||
| Net Decrease in Cash | (12 | ) | (279 | ) | |||||||
| Cash at Beginning of Period | 114 | 508 | |||||||||
| Cash at End of Period | $ | 102 | $ | 229 | |||||||
Certain reclassifications of prior year and prior quarter financial information have been made to conform to current quarter and six month presentation.