Exhibit 99.1
Transcat, Inc. 35 Vantage Point Drive • Rochester • NY • 14624 • Phone: (585) 352-7777
IMMEDIATE RELEASE
Transcat Reports Third Quarter Results with Revenue Growth
| | ● | 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 |
ROCHESTER, NY, January 27, 2025 – 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 $25 million, and reputation for quality and customer satisfaction, makes it the perfect addition to the Transcat family.”
“Service organic revenue was below our historical trends and significantly impacted by the timing of this year’s Christmas holiday. Last year, the Christmas holiday fell in the first week of our fiscal fourth quarter. We typically see an acceleration of activity in the last two weeks of each quarter, but this year many of our customers closed facilities or had significantly reduced staffing levels, which limited the volume of incoming equipment throughout the month. That said, we are seeing higher activity levels in January, which we believe is in part, the receipt of units which we expected to receive in December.”
"Transcat Solutions (Nexa) revenue was soft in comparison to last year and in line with our expectations for the quarter. As previously communicated, we believe the actions our team is taking will result in the Solutions channel strengthening in the back half of fiscal 2026."
Mr. Rudow added, “Our organic sales pipeline is very strong and we believe it supports a return to more historic organic growth levels."
Transcat Reports Third Quarter Results with Revenue Growth
January 27, 2025
Page 2 of 14
Third Quarter Fiscal 2025 Review
(Results are compared with the third quarter of the fiscal year ended March 30, 2024 (“fiscal 2024”))
($ 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 $0.56 last year.
Transcat Reports Third Quarter Results with Revenue Growth
October 28, 2024
Page 3 of 14
Service segment third quarter results
Represents the accredited calibration, repair, inspection and laboratory instrument services business (63.7% of total revenue for the third quarter of fiscal 2025).
($ 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.
Transcat Reports Third Quarter Results with Revenue Growth
January 27, 2025
Page 4 of 14
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.
Transcat Reports Third Quarter Results with Revenue Growth
January 27, 2025
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 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.
Transcat Reports Third Quarter Results with Revenue Growth
January 27, 2025
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 Third Quarter Results with Revenue Growth
January 27, 2025
Page 7 of 14
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 Reports Third Quarter Results with Revenue Growth
January 27, 2025
Page 8 of 14
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 Reports Third Quarter Results with Revenue Growth
January 27, 2025
Page 9 of 14
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 Reports Third Quarter Results with Revenue Growth
January 27, 2025
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 | | | | 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 Reports Third Quarter Results with Revenue Growth
January 27, 2025
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 Third Quarter Results with Revenue Growth
January 27, 2025
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 | | | | 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 Reports Third Quarter Results with Revenue Growth
January 27, 2025
Page 13 of 14
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 Reports Third Quarter Results with Revenue Growth
January 27, 2025
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 | | $ | 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 | % | | | | | | | | |
