Exhibit 99.1
News Release
Corporate Offices
35 Vantage Point Drive, Rochester, New York 14624
Telephone: 585-352-7777 Fax: 585-352-7788
35 Vantage Point Drive, Rochester, New York 14624
Telephone: 585-352-7777 Fax: 585-352-7788
Contact: | ||
| Charles P. Hadeed, President, CEO and COO | Van Negris / Lexi Terrero | |
| John J. Zimmer, Vice President of Finance and CFO | Van Negris & Company, Inc. – 212-759-0290 | |
| Transcat, Inc. | Robert Cavosi | |
| 585-352-7777 | Broadgate Consultants, LLC – 212-493-6981 |
FOR IMMEDIATE RELEASE
Transcat Announces Fiscal Year 2008
Second Quarter and First Half Results
Second Quarter and First Half Results
Net Sales Increase by 11.9% and 8.0% Respectively; Operating Income Up 14.5%
and 21.8% Respectively
and 21.8% Respectively
ROCHESTER, NY – October 23, 2007 – 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 the fiscal year 2008 second quarter and first half ended September 29, 2007.
Fiscal Year 2008 Second Quarter and First Half Overview
| • | Net sales increased 11.9% to $16.6 million in the fiscal year 2008 second quarter and increased 8.0% to $32.8 million in the fiscal year 2008 first half compared to the same periods in fiscal year 2007. | ||
| • | Gross profit increased 20.1% to $4.3 million in the fiscal year 2008 second quarter and increased 14.8% to $8.5 million in the fiscal year 2008 first half compared to the same periods in fiscal year 2007. Gross profit margin percentage increased 1.7 points to 25.6% in the fiscal year 2008 second quarter and increased 1.5 points to 25.9% in the fiscal year 2008 first half compared to the same periods in fiscal year 2007. | ||
| • | Operating income increased 14.5% to $0.6 million in the fiscal year 2008 second quarter and increased 21.8% to $1.0 million in the fiscal year 2008 first half compared to the same periods in fiscal year 2007. | ||
| • | Net income was $0.2 million in the fiscal year 2008 second quarter and $0.4 million in the fiscal year 2008 first half. Both of these amounts were comparable to the same periods in fiscal year 2007. | ||
| • | Earnings per share for the fiscal year 2008 second quarter were $0.03 per diluted share compared to $0.03 per diluted share for the fiscal year 2007 second quarter. Earnings per share for the fiscal year 2008 first half increased to $0.06 per diluted share compared to $0.05 per diluted share for the fiscal year 2007 first half. |
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Transcat, Inc.
Page Two – October 23, 2007
Page Two – October 23, 2007
| • | Distribution Products – Net sales increased 13.6% to $11.2 million in the fiscal year 2008 second quarter from $9.9 million in the fiscal year 2007 second quarter and gross profit increased by 27.1% to $3.1 million in the fiscal year 2008 second quarter from $2.5 million in the fiscal year 2007 second quarter. Net sales increased 8.5% to $22.1 million in the fiscal year 2008 first half from $20.4 million in the fiscal year 2007 first half and gross profit increased by 19.7% to $6.2 million in the fiscal year 2008 first half from $5.2 million in the fiscal year 2007 first half. | ||
| • | Calibration Services – Net sales increased 8.6% to $5.4 million in the fiscal year 2008 second quarter from $5.0 million in the fiscal year 2007 second quarter and gross profit increased by 4.3% to $1.13 million in the fiscal year 2008 second quarter from $1.08 million in the fiscal year 2007 second quarter. Net sales increased 7.1% to $10.7 million in the fiscal year 2008 first half from $10.0 million in the fiscal year 2007 first half and gross profit increased by 3.2% to $2.3 million in the fiscal year 2008 first half from $2.2 million in the fiscal year 2007 first half. |
Operations Review
Charles P. Hadeed, Transcat’s President, CEO and COO, stated: “We continue to grow our net sales in both our Distribution Products and Calibration Services business segments. This continued growth, combined with a 1.7 point increase in our gross profit margin percentage in the fiscal year 2008 second quarter, resulted in our improved operating earnings. Our operating cash flow remained strong and contributed to a further reduction in our debt this quarter. Overall, I am pleased with our results as we continue to build on a strong foundation.”
“Net sales in our Distribution Products segment continue to be driven by exciting new products and technology from our supplier partners and our ability to assist our customers in determining their needs and subsequently providing superior customer service to meet those needs.
“The initiatives and investments that have been implemented to drive sales growth in our Calibration Services segment have taken hold and are continuing to demonstrate tangible, positive results. We are committed to our core focus, which is to provide high quality calibration and repair services to customers who value and trust the integrity of our processes.”
Looking Ahead
Mr. Hadeed continued: “For the remainder of fiscal year 2008, we expect continued year-over-year sales growth in both our Distribution Products and Calibration Services business segments, a sustained increase in operating earnings (excluding the one-time deferred gain of $1.5 million which was recognized in the fiscal year 2007 third quarter) and continued strong cash flow. In our Distribution Products segment, we expect gross profit margins to be consistent with those reported for the fiscal year 2008 first half. Consistent with the historic seasonality of our Calibration Services segment, we expect the majority of our year-over-year annual sales increase to occur during the second half of fiscal year 2008, and as a result, we expect our gross profit margins to increase in this segment.”
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Transcat, Inc.
Page Three – October 23, 2007
Page Three – October 23, 2007
Fiscal Year 2008 Second Quarter Financial Summary
For the fiscal year 2008 second quarter, net sales were $16.6 million, an increase of $1.7 million or 11.9%, compared with net sales of $14.9 million for the fiscal year 2007 second quarter. Distribution Products net sales for the fiscal year 2008 second quarter were $11.2 million, an increase of $1.3 million or 13.6%, compared with net sales of $9.9 million for the fiscal year 2007 second quarter. Calibration Services net sales for the fiscal year 2008 second quarter were $5.4 million, an increase of $0.4 million or 8.6%, compared with net sales of $5.0 million for the fiscal year 2007 second quarter.
For the fiscal year 2008 first half, net sales were $32.8 million, an increase of $2.4 million or 8.0%, compared with net sales of $30.4 million for the fiscal year 2007 first half. Distribution Products net sales for the fiscal year 2008 first half were $22.1 million, an increase of $1.7 million or 8.5%, compared with net sales of $20.4 million for the fiscal year 2007 first half. Calibration Services net sales for the fiscal year 2008 first half were $10.7 million, an increase of $0.7 million or 7.1%, compared with net sales of $10.0 million for the fiscal year 2007 first half.
For the fiscal year 2008 second quarter, operating income was $0.6 million, an increase of $0.1 million or 14.5%, compared to operating income of $0.5 million for the fiscal year 2007 second quarter. For the fiscal year 2008 first half, operating income was $1.0 million, an increase of $0.1 million or 21.8%, compared to operating income of $0.9 million for the fiscal year 2007 first half.
Net income for the fiscal year 2008 second quarter was $0.2 million, or $0.03 per diluted share, compared to $0.2 million or $0.03 per diluted share, in the fiscal year 2007 second quarter. Net income for the fiscal year 2008 first half was $0.4 million, or $0.06 per diluted share, compared to $0.4 million, or $0.05 per diluted share for the fiscal year 2007 first half.
About Transcat, Inc.
Transcat, Inc. is a leading global distributor of professional grade test, measurement and calibration instruments and an accredited provider of calibration and repair services primarily to the process, life science and manufacturing industries.
Through the Company’s Calibration Services segment, Transcat offers precise, reliable, fast calibration services through its 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-9001: 2000 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. For a more detailed discussion of the risks and uncertainties that may affect Transcat’s operating and financial results and its ability to achieve the financial objectives discussed in this press release, interested parties should review the “Risk Factors” sections in Transcat’s reports filed with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended March 31, 2007.
– Statistical Tables Follow –
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Transcat, Inc.
Page Four – October 23, 2007
Page Four – October 23, 2007
TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
| (Unaudited) | (Unaudited) | |||||||||||||||
| Second Quarter Ended | Six Months Ended | |||||||||||||||
| September 29, | September 23, | September 29, | September 23, | |||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Product Sales | $ | 11,219 | $ | 9,880 | $ | 22,146 | $ | 20,417 | ||||||||
| Service Sales | 5,406 | 4,980 | 10,669 | 9,963 | ||||||||||||
| Net Sales | 16,625 | 14,860 | 32,815 | 30,380 | ||||||||||||
| Cost of Products Sold | 8,087 | 7,415 | 15,952 | 15,244 | ||||||||||||
| Cost of Services Sold | 4,276 | 3,897 | 8,362 | 7,728 | ||||||||||||
| Total Cost of Products and Services Sold | 12,363 | 11,312 | 24,314 | 22,972 | ||||||||||||
| Gross Profit | 4,262 | 3,548 | 8,501 | 7,408 | ||||||||||||
| Selling, Marketing and Warehouse Expenses | 1,919 | 1,807 | 4,127 | 3,942 | ||||||||||||
| Administrative Expenses | 1,749 | 1,222 | 3,331 | 2,610 | ||||||||||||
| Total Operating Expenses | 3,668 | 3,029 | 7,458 | 6,552 | ||||||||||||
| Operating Income | 594 | 519 | 1,043 | 856 | ||||||||||||
| Interest Expense | 29 | 90 | 63 | 184 | ||||||||||||
| Other Expense, net | 209 | 46 | 290 | 120 | ||||||||||||
| Total Other Expense | 238 | 136 | 353 | 304 | ||||||||||||
| Income Before Income Taxes | 356 | 383 | 690 | 552 | ||||||||||||
| Provision for Income Taxes | 162 | 137 | 258 | 189 | ||||||||||||
| Net Income | $ | 194 | $ | 246 | $ | 432 | $ | 363 | ||||||||
| Basic Earnings Per Share | $ | 0.03 | $ | 0.04 | $ | 0.06 | $ | 0.05 | ||||||||
| Average Shares Outstanding | 7,127 | 6,902 | 7,099 | 6,864 | ||||||||||||
| Diluted Earnings Per Share | $ | 0.03 | $ | 0.03 | $ | 0.06 | $ | 0.05 | ||||||||
| Average Shares Outstanding | 7,577 | 7,425 | 7,474 | 7,377 | ||||||||||||
Transcat, Inc.
Page Five – October 23, 2007
Page Five – October 23, 2007
TRANSCAT, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
| (Unaudited) | ||||||||
| September 29, | March 31, | |||||||
| 2007 | 2007 | |||||||
ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 188 | $ | 357 | ||||
| Accounts Receivable, less allowance for doubtful accounts of $62 and $47 as of September 29, 2007 and March 31, 2007, respectively | 7,874 | 8,846 | ||||||
| Other Receivables | 858 | 352 | ||||||
| Inventory, net | 3,662 | 4,336 | ||||||
| Prepaid Expenses and Other Current Assets | 1,108 | 762 | ||||||
| Deferred Tax Asset | 955 | 851 | ||||||
| Total Current Assets | 14,645 | 15,504 | ||||||
| Property and Equipment, net | 3,275 | 2,814 | ||||||
| Goodwill | 2,967 | 2,967 | ||||||
| Deferred Tax Asset | 769 | 791 | ||||||
| Other Assets | 352 | 346 | ||||||
| Total Assets | $ | 22,008 | $ | 22,422 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts Payable | $ | 5,411 | $ | 5,307 | ||||
| Accrued Compensation and Other Liabilities | 1,931 | 2,578 | ||||||
| Income Taxes Payable | 216 | 42 | ||||||
| Total Current Liabilities | 7,558 | 7,927 | ||||||
| Long-Term Debt | 1,333 | 2,900 | ||||||
| Other Liabilities | 411 | 366 | ||||||
| Total Liabilities | 9,302 | 11,193 | ||||||
| Shareholders’ Equity: | ||||||||
| Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 7,413,262 and 7,286,119 shares issued as of September 29, 2007 and March 31, 2007, respectively; 7,137,480 and 7,010,337 shares outstanding as of September 29, 2007 and March 31, 2007, respectively | 3,707 | 3,643 | ||||||
| Capital in Excess of Par Value | 5,792 | 5,268 | ||||||
| Warrants | 329 | 329 | ||||||
| Accumulated Other Comprehensive Income | 500 | 43 | ||||||
| Retained Earnings | 3,366 | 2,934 | ||||||
| Less: Treasury Stock, at cost, 275,782 shares as of September 29, 2007 and March 31, 2007 | (988 | ) | (988 | ) | ||||
| Total Shareholders’ Equity | 12,706 | 11,229 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 22,008 | $ | 22,422 | ||||
Transcat, Inc.
Page Six – October 23, 2007
Page Six – October 23, 2007
TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| (Unaudited) | ||||||||
| Six Months Ended | ||||||||
| September 29, | September 23, | |||||||
| 2007 | 2006 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Income | $ | 432 | $ | 363 | ||||
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||
| Deferred Income Taxes | (85 | ) | 148 | |||||
| Depreciation and Amortization | 788 | 769 | ||||||
| Provision for Accounts Receivable and Inventory Reserves | (63 | ) | 43 | |||||
| Stock-Based Compensation Expense | 428 | 328 | ||||||
| Changes in Assets and Liabilities: | ||||||||
| Accounts Receivable and Other Receivables | 892 | 515 | ||||||
| Inventory | 749 | (46 | ) | |||||
| Prepaid Expenses and Other Assets | (602 | ) | (280 | ) | ||||
| Accounts Payable | 104 | (408 | ) | |||||
| Accrued Compensation and Other Liabilities | (595 | ) | (924 | ) | ||||
| Income Taxes Payable | 174 | (41 | ) | |||||
| Net Cash Provided by Operating Activities | 2,222 | 467 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of Property and Equipment | (999 | ) | (454 | ) | ||||
| Net Cash Used in Investing Activities | (999 | ) | (454 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Chase Revolving Line of Credit, net | (1,567 | ) | – | |||||
| GMAC Revolving Line of Credit, net | – | 223 | ||||||
| Payments on Other Debt Obligations | – | (368 | ) | |||||
| Issuance of Common Stock | 160 | 110 | ||||||
| Net Cash Used in Financing Activities | (1,407 | ) | (35 | ) | ||||
| Effect of Exchange Rate Changes on Cash | 15 | 4 | ||||||
| Net Decrease in Cash | (169 | ) | (18 | ) | ||||
| Cash at Beginning of Period | 357 | 115 | ||||||
| Cash at End of Period | $ | 188 | $ | 97 | ||||
| Supplemental Disclosures of Cash Flow Activity: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 69 | $ | 198 | ||||
| Income Taxes, net | $ | 177 | $ | 85 | ||||
| Supplemental Disclosure of Non-Cash Financing Activity: | ||||||||
| Treasury Stock Acquired in Cashless Exercise of Stock Options | $ | – | $ | 50 | ||||