- Second quarter consolidated revenue up 11.3% with 230 basis
points gross margin expansion
- Second quarter service revenue up 17.5%; service organic
revenue growth of 10.0%
- Second quarter service gross profit increased 22.6%; service
gross margin expanded 140 basis points
- Second quarter consolidated adjusted EBITDA grew 23.9%;
adjusted EBITDA margin expanded 160 basis points
- Second quarter adjusted diluted earnings per share of $0.60
increased $0.16 versus prior year
Transcat, Inc. (Nasdaq: TRNS) (“Transcat” or the “Company”), a
leading provider of accredited calibration, repair, inspection and
laboratory instrument services and value-added distributor of
professional grade handheld test, measurement, and control
instrumentation, today reported financial results for its second
quarter ended September 23, 2023 (the “second quarter”) of fiscal
year 2024, which ends March 30, 2024 (“fiscal 2024”). Results
include the previously reported acquisitions of TIC-MS, Inc.
("TIC-MS") effective March 27, 2023, SteriQual, Inc. ("SteriQual"),
effective July 12, 2023 and Axiom Test Equipment, Inc. (“Axiom”),
effective August 8, 2023.
“We are extremely pleased with our strong second quarter results
as Service gross margin expanded 140 basis points driven by
double-digit organic Service growth of 10% and increased
productivity throughout our network of labs. Service segment
revenue grew 17% as demand in our highly regulated end markets,
including life sciences, remained strong and our recent
acquisitions continued to perform at a high level. Consolidated
revenue was up 11% with gross margin expansion of 230 basis points
year over year driven by our differentiated value proposition and
execution of our automation and process improvement initiatives,”
commented Lee D. Rudow, President and CEO. “Adjusted EBITDA growth
of 24% for the second quarter reflects our ability to leverage
organic Service revenue growth and the successful integration of
acquired companies. The Transcat Team continues to deliver strong
revenue growth and sustainable gross margin expansion.”
“We recently completed a public offering of our common stock,
which was used to repay our credit facility, for working capital,
and for other general corporate purposes. The successful offering
displayed robust demand for Transcat stock among institutional
investors due to our consistent long-term track record of
profitable revenue growth,” stated Mr. Rudow.
Mr. Rudow added, “Transcat’s differentiated and proven formula
for success with acquisitions centers around our disciplined and
selective approach to identify, acquire, and integrate strong
companies that will be accretive over the long term, the Transcat
way. We completed two acquisitions in the second quarter, including
SteriQual, a provider of expert consulting services to the life
sciences industry that specializes in commissioning, qualification,
and validation (“CQV”), as well as Axiom Test Equipment, the
largest acquisition in the history of Transcat. Axiom is a
well-established, fast-growing player in the test equipment rental
market that will expand our existing Rental offering. We believe
Axiom will create opportunities for accelerated growth while
improving the margin profile of our Distribution segment as the
rental business continues to grow faster than the traditional
distribution business. The two rental businesses are complementary
to one another in that there is minimal overlap in the rental asset
portfolios, as well as little overlap in customers. We believe this
presents a compelling cross sell opportunity to quickly leverage in
the rental business, but more importantly provides additional
opportunity to drive organic calibration service growth into this
newly acquired customer base.”
Second Quarter Fiscal 2024 Review (Results are compared
with the second quarter of the fiscal year ended March 25, 2023
(“fiscal 2023”))
($ in thousands)
Change
FY24 Q2
FY23 Q2
$'s
%
Service Revenue
$
41,431
$
35,267
$
6,164
17.5
%
Distribution Sales
21,373
21,172
201
0.9
%
Revenue
$
62,804
$
56,439
$
6,365
11.3
%
Gross Profit
$
20,125
$
16,767
$
3,358
20.0
%
Gross Margin
32.0
%
29.7
%
Operating Income
$
1,643
$
3,626
$
(1,983
)
(54.7
)%
Operating Margin
2.6
%
6.4
%
Net Income
$
460
$
2,357
$
(1,897
)
(80.5
)%
Net Margin
0.7
%
4.2
%
Adjusted EBITDA*
$
9,330
$
7,531
$
1,799
23.9
%
Adjusted EBITDA* Margin
14.9
%
13.3
%
Diluted EPS
$
0.06
$
0.31
$
(0.25
)
(80.6
)%
Adjusted Diluted EPS*
$
0.60
$
0.44
$
0.16
36.4
%
*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 $62.8 million, an increase of 11.3%.
Consolidated gross profit was $20.1 million, an increase of $3.4
million, or 20.0%, while gross margin expanded 230 basis points due
to improvements in both operating segments. Operating expenses were
$18.5 million, an increase of $5.3 million, or 40.6%, driven by
incremental expenses from acquired businesses (including
stock-based compensation expense), higher incentive-based employee
costs due to higher sales and a non-cash charge related to the
amended NEXA Earn-Out agreement. Adjusted EBITDA was $9.3 million
which represented an increase of $1.8 million or 23.9%. Net income
per diluted share was $0.06 compared to $0.31 last year, which
includes the non-cash charge of $2.8 million for the amended NEXA
Earn-Out agreement. Adjusted diluted earnings per share was $0.60
versus $0.44 last year impacted by the stock-based tax benefit move
from Q1 of last year to Q2 this year and higher interest
expense.
Service segment delivers strong second quarter
results
Represents the accredited calibration, repair, inspection and
laboratory instrument services business (66.0% of total revenue for
the second quarter of fiscal 2024).
($ in thousand)
Change
FY24 Q2
FY23 Q2
$'s
%
Service Segment Revenue
$
41,431
$
35,267
$
6,164
17.5
%
Gross Profit
$
14,084
$
11,487
$
2,597
22.6
%
Gross Margin
34.0
%
32.6
%
Operating Income
$
742
$
2,507
$
(1,765
)
(70.4
)%
Operating Margin
1.8
%
7.1
%
Adjusted EBITDA*
$
6,798
$
5,549
$
1,249
22.5
%
Adjusted EBITDA* Margin
16.4
%
15.7
%
*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 $41.4 million, an increase of $6.2
million or 17.5%, and included $2.6 million of incremental revenue
from acquisitions. Organic revenue growth was 10.0% and was driven
by strong end-market demand and continued market share gains. The
segment gross margin increased 140 basis points from prior year
primarily due to continued productivity improvements offset by
increased start-up costs from new client-based lab
implementations.
Distribution segment shows continued margin
improvement
Represents the sale and rental of new and used professional
grade handheld test, measurement and control instrumentation (34.0%
of total revenue for the first quarter of fiscal 2024).
($ in thousands)
Change
FY24 Q2
FY23 Q2
$'s
%
Distribution Segment Sales
$
21,373
$
21,172
$
201
0.9
%
Gross Profit
$
6,041
$
5,280
$
761
14.4
%
Gross Margin
28.3
%
24.9
%
Operating Income
$
901
$
1,119
$
(218
)
(19.5
)%
Operating Margin
4.2
%
5.3
%
Adjusted EBITDA*
$
2,532
$
1,982
$
550
27.7
%
Adjusted EBITDA* Margin
11.8
%
9.4
%
*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.
Distribution sales were $21.4 million, relatively flat compared
to the prior year. Distribution segment gross margin was 28.3%, an
increase of 340 basis points due to a favorable sales mix driven by
strength in the Rentals business.
Six Month Review (Results are compared with the first six
months of fiscal 2023)
Total revenue was $123.4 million, an increase of $12.3 million
or 11.1%. Consolidated gross profit was up $6.0 million, or 18.4%,
and gross margin expanded to 31.5% or 200 basis points.
Consolidated operating expenses increased $7.0 million, or 27.3%,
driven by incremental expenses from acquired businesses, (including
stock-based compensation expense), increased intangibles
amortization expense, investments in technology and our employee
base to support future growth, and a non-cash charge related to the
amended NEXA Earn-Out agreement. As a result, consolidated
operating income was $6.3 million compared with $7.2 million in
last fiscal year’s period.
Adjusted EBITDA was $17.8 million which represented an increase
of $3.0 million or 20.0%. Net income per diluted share decreased to
$0.43 from $0.71 and adjusted diluted earnings per share was $1.13
versus $0.98 last year. The effective tax rate was 25.3% compared
to 16.9% in the prior year, due to the discrete tax treatment of
the non-cash charge related to the amended NEXA Earn-Out agreement.
The increase in the tax rate had an unfavorable impact of $0.01 per
diluted earnings per share and adjusted diluted earnings per share
when compared to the prior year.
Balance Sheet and Cash Flow Overview
On September 23, 2023, the Company had $32.0 million available
for borrowing under its secured revolving credit facility. Total
debt of $53.3 million was up $4.2 million from fiscal 2023 year-end
due to cash used for acquisitions, partially offset by increased
cash flow from operations. The Company’s leverage ratio, as defined
in the credit agreement, was 1.37 on September 23, 2023, compared
with 1.60 on March 25, 2023. Subsequent to the end of the quarter,
the revolving credit facility was paid off using funds from the
secondary offering. As previously disclosed, the NEXA Earn-Out
agreement was amended to recognize the expanded scope of the NEXA
portfolio, which includes the acquisition of SteriQual. The
amendment required a non-cash charge of $2.8 million in the fiscal
second quarter.
Outlook
Mr. Rudow added, “We have demonstrated our ability to drive
growth through various economic cycles over the past decade and a
half, and we are confident that will continue. We expect organic
Service revenue growth in the high-single digit to low double-digit
range and gross margin expansion for the fiscal 2024 year. We
believe our unique value proposition drives a sustainable
competitive advantage in the highly regulated markets that we
serve, particularly the Life Science, Aerospace, and Defense
markets. Additionally, we expect our successful and unique
acquisition strategy will continue to drive synergistic growth
opportunities and expand our addressable markets.”
Transcat expects its income tax rate to range between 24% and
26% in fiscal 2024. This estimate includes Federal, various state,
Canadian and Irish income taxes and reflects the discrete tax
accounting associated with share-based payment awards. The tax rate
is higher than in recent years and is an increase versus the
estimate provided last quarter due to the amended NEXA Earn-Out
agreement. The NEXA Earn-Out charge is non-deductible for tax
purposes and impacts the full year rate for fiscal year 2024,
however this does not impact the actual amount of taxes paid.
Webcast and Conference Call
Transcat will host a conference call and webcast on Tuesday,
October 31, 2023 at 11:00 a.m. ET. Management will review the
financial and operating results for the second 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 7, 2023. To listen to the
archived call, dial (412) 317-6671 and enter conference ID number
13742041, access the webcast replay at
www.transcat.com/investor-relations, where a transcript will be
posted once available.
NOTE 1 – Non-GAAP Financial Measures
In addition to reporting net income, a U.S. generally accepted
accounting principle (“GAAP”) measure, we present Adjusted EBITDA
(earnings before interest, income taxes, depreciation and
amortization, non-cash stock compensation expense, acquisition
related transaction expenses, non-cash loss on sale of building and
restructuring expense), 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,
acquisition amortization of backlog and restructuring expense),
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 27
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.
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 are identified by words such as
“expects,” “estimates,” “projects,” “anticipates,” “believes,”
“could,” “plans,” “aims” and other similar words. All statements
addressing operating performance, events or developments that
Transcat expects or anticipates will occur in the future, including
but not limited to statements relating to anticipated revenue,
profit margins, the commercialization of software projects, sales
operations, capital expenditures, cash flows, operating income,
growth strategy, segment growth, potential acquisitions,
integration of acquired businesses, market position, customer
preferences, outlook and changes in market conditions in the
industries in which Transcat operates are forward-looking
statements. Forward-looking statements should be evaluated in light
of important risk factors and uncertainties. These risk factors and
uncertainties include those more fully described in Transcat’s
Annual Report and Quarterly Reports filed with the Securities and
Exchange Commission, including under the heading entitled “Risk
Factors.” Should one or more of these risks or uncertainties
materialize or should any of the Company’s underlying assumptions
prove incorrect, actual results may vary materially from those
currently anticipated. In addition, undue reliance should not be
placed on the Company’s forward-looking statements, which speak
only as of the date they are made. Except as required by law, the
Company disclaims any obligation to update, correct or publicly
announce any revisions to any of the forward-looking statements
contained in this news release, whether as the result of new
information, future events or otherwise.
FINANCIAL TABLES FOLLOW.
TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(In Thousands, Except Per Share
Amounts)
(Unaudited)
(Unaudited)
Second Quarter Ended
Six Months Ended
September 23,
September 24,
September 23,
September 24,
2023
2022
2023
2022
Service Revenue
$
41,431
$
35,267
$
81,284
$
69,143
Distribution Sales
21,373
21,172
42,118
41,957
Total Revenue
62,804
56,439
123,402
111,100
Cost of Service Revenue
27,347
23,780
54,229
46,821
Cost of Distribution Sales
15,332
15,892
30,338
31,474
Total Cost of Revenue
42,679
39,672
84,567
78,295
Gross Profit
20,125
16,767
38,835
32,805
Selling, Marketing and Warehouse
Expenses
6,856
5,900
13,325
11,720
General and Administrative Expenses
11,626
7,241
19,227
13,855
Total Operating Expenses
18,482
13,141
32,552
25,575
Operating Income
1,643
3,626
6,283
7,230
Interest and Other Expense, net
841
537
1,719
693
Income Before Income Taxes
802
3,089
4,564
6,537
Provision for Income Taxes
342
732
1,155
1,108
Net Income
$
460
$
2,357
$
3,409
$
5,429
Basic Earnings Per Share
$
0.06
$
0.31
$
0.44
$
0.72
Average Shares Outstanding
7,819
7,550
7,732
7,542
Diluted Earnings Per Share
$
0.06
$
0.31
$
0.43
$
0.71
Average Shares Outstanding
7,948
7,646
7,840
7,635
TRANSCAT, INC.
CONSOLIDATED BALANCE
SHEETS
(In Thousands, Except Share and
Per Share Amounts)
(Unaudited)
(Audited)
September 23,
March 25,
2023
2023
ASSETS
Current Assets:
Cash
$
1,246
$
1,531
Accounts Receivable, less allowance for
credit losses of $614 and $457 as of September 23, 2023 and March
25, 2023, respectively
44,382
44,698
Other Receivables
335
506
Inventory, net
15,685
16,929
Prepaid Expenses and Other Current
Assets
3,525
3,935
Total Current Assets
65,173
67,599
Property and Equipment, net
35,648
29,064
Goodwill
106,366
69,360
Intangible Assets, net
23,156
13,799
Right To Use Assets, net
16,784
14,876
Other Assets
1,083
1,051
Total Assets
$
248,210
$
195,749
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts Payable
$
12,523
$
15,869
Accrued Compensation and Other Current
Liabilities
13,295
10,201
Current Portion of Long-Term Debt
2,293
2,248
Total Current Liabilities
28,111
28,318
Long-Term Debt
51,000
46,869
Deferred Tax Liabilities, net
10,836
6,538
Lease Liabilities
14,534
12,960
Other Liabilities
5,477
1,434
Total Liabilities
109,958
96,119
Shareholders' Equity:
Common Stock, par value $0.50 per share,
30,000,000 shares authorized; 7,978,401 and 7,562,604 shares issued
and outstanding as of September 23, 2023 and March 25, 2023,
respectively
3,989
3,781
Capital in Excess of Par Value
64,310
27,886
Accumulated Other Comprehensive Loss
(1,064
)
(1,200
)
Retained Earnings
71,017
69,163
Total Shareholders' Equity
138,252
99,630
Total Liabilities and Shareholders'
Equity
$
248,210
$
195,749
TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended
September 23,
September 24,
2023
2022
Cash Flows from Operating
Activities:
Net Income
$
3,409
$
5,429
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Net Loss on Disposal of Property and
Equipment
11
34
Deferred Income Taxes
23
(54
)
Depreciation and Amortization
6,078
5,419
Provision for Accounts Receivable and
Inventory Reserves
347
94
Stock-Based Compensation Expense
2,171
1,942
Changes in Assets and Liabilities, net of
acquisitions:
Accounts Receivable and Other
Receivables
2,384
(1,238
)
Inventory
3,376
(3,724
)
Prepaid Expenses and Other Current
Assets
465
881
Accounts Payable
(3,969
)
(586
)
Accrued Compensation and Other Current
Liabilities
1,677
(2,962
)
Net Cash Provided by Operating
Activities
15,972
5,235
Cash Flows from Investing
Activities:
Purchases of Property and Equipment
(5,444
)
(4,772
)
Proceeds from Sale of Property and
Equipment
-
10
Business Acquisitions, net of cash
acquired
(12,882
)
(4,040
)
Net Cash Used in Investing Activities
(18,326
)
(8,802
)
Cash Flows from Financing
Activities:
Proceeds from Revolving Credit Facility,
net
5,288
3,387
Repayments of Term Loan
(1,112
)
(1,026
)
Issuance of Common Stock
384
364
Repurchase of Common Stock
(2,247
)
(437
)
Net Cash Provided by Financing
Activities
2,313
2,288
Effect of Exchange Rate Changes on
Cash
(244
)
792
Net Decrease in Cash
(285
)
(487
)
Cash at Beginning of Period
1,531
1,396
Cash at End of Period
$
1,246
$
909
TRANSCAT, INC.
Adjusted EBITDA Reconciliation
Table
(In thousands)
(Unaudited)
Fiscal 2024
Q1
Q2
Q3
Q4
YTD
Net Income
$
2,949
$
460
$
3,409
+ Interest Expense
814
890
1,704
+ Other Expense / (Income)
64
(49
)
15
+ Tax Provision
813
342
1,155
Operating Income
$
4,640
$
1,643
$
-
$
-
$
6,283
+ Depreciation & Amortization
2,790
3,269
6,059
+ Transaction Expense
185
328
513
+ Acquisition Earn-Out Adjustment
-
2,800
2,800
+ Other (Expense) / Income
(64
)
49
(15
)
+ Noncash Stock Compensation
930
1,241
2,171
Adjusted EBITDA
$
8,481
$
9,330
$
-
$
-
$
17,811
Segment
Breakdown
Service Operating Income
$
3,192
$
742
$
3,934
+ Depreciation & Amortization
2,226
2,325
4,551
+ Transaction Expense
185
76
261
+ Acquisition Earn-Out Adjustment
-
2,800
2,800
+ Other (Expense) / Income
(47
)
29
(18
)
+ Noncash Stock Compensation
676
826
1,502
Service Adjusted EBITDA
$
6,232
$
6,798
$
-
$
-
$
13,030
Distribution Operating Income
$
1,448
$
901
$
2,349
+ Depreciation & Amortization
564
944
1,508
+ Transaction Expense
-
252
252
+ Other (Expense) / Income
(17
)
20
3
+ Noncash Stock Compensation
254
415
669
Distribution Adjusted EBITDA
$
2,249
$
2,532
$
-
$
-
$
4,781
TRANSCAT, INC.
Adjusted EBITDA Reconciliation
Table
(In thousands)
(Unaudited)
Fiscal 2023
Q1
Q2
Q3
Q4
YTD
Net Income
$
3,072
$
2,357
$
1,601
$
3,658
$
10,688
+ Interest Expense
360
550
726
781
2,417
+ Other Expense / (Income)
(204
)
(13
)
313
248
344
+ Tax Provision
376
732
523
1,168
2,799
Operating Income
$
3,604
$
3,626
$
3,163
$
5,855
$
16,248
+ Depreciation & Amortization
2,641
2,778
2,824
2,712
10,955
+ Transaction Expense
30
-
96
59
185
+ Other (Expense) / Income
204
13
(313
)
(248
)
(344
)
+ Noncash Stock Compensation
828
1,114
815
620
3,377
Adjusted EBITDA
$
7,307
$
7,531
$
6,585
$
8,998
$
30,421
Segment
Breakdown
Service Operating Income
$
2,532
$
2,507
$
1,836
$
4,547
$
11,422
+ Depreciation & Amortization
2,139
2,246
2,268
2,147
8,800
+ Transaction Expense
30
-
96
59
185
+ Other (Expense) / Income
134
3
(214
)
(170
)
(247
)
+ Noncash Stock Compensation
638
793
576
456
2,463
Service Adjusted EBITDA
$
5,473
$
5,549
$
4,562
$
7,039
$
22,623
Distribution Operating Income
$
1,072
$
1,119
$
1,327
$
1,308
$
4,826
+ Depreciation & Amortization
502
532
556
565
2,155
+ Other (Expense) / Income
70
10
(99
)
(78
)
(97
)
+ Noncash Stock Compensation
190
321
239
164
914
Distribution Adjusted EBITDA
$
1,834
$
1,982
$
2,023
$
1,959
$
7,798
TRANSCAT, INC.
Adjusted Diluted EPS
Reconciliation Table
(In Thousands, Except Per Share
Amounts)
(Unaudited)
Fiscal 2024
Q1
Q2
Q3
Q4
YTD
Net Income
$
2,949
$
460
$
3,409
+ Amortization of Intangible Assets
1,093
1,416
2,509
+ Acquisition Amortization of Backlog
-
19
19
+ Acquisition Deal Costs
367
602
969
+ Income Tax Effect at 25%
(365
)
(509
)
(874
)
+ Acquisition Earn-Out Adjustment
-
2,800
2,800
Adjusted Net Income
$
4,044
$
4,788
$
-
$
-
$
8,832
Average Diluted Shares Outstanding
7,762
7,948
7,840
Diluted Earnings Per Share
$
0.38
$
0.06
$
-
$
-
$
0.43
Adjusted Diluted Earnings Per Share
$
0.52
$
0.60
$
-
$
-
$
1.13
Fiscal 2023
Q1
Q2
Q3
Q4
YTD
Net Income
$
3,072
$
2,357
$
1,601
$
3,658
$
10,688
+ Amortization of Intangible Assets
1,084
1,147
1,180
1,043
4,454
+ Acquisition Deal Costs
299
239
254
226
1,018
+ Income Tax Effect at 25%
(346
)
(346
)
(359
)
(317
)
(1,368
)
Adjusted Net Income
$
4,109
$
3,397
$
2,676
$
4,610
$
14,792
Average Diluted Shares Outstanding
7,629
7,646
7,666
7,688
7,645
Diluted Earnings Per Share
$
0.40
$
0.31
$
0.21
$
0.48
$
1.40
Adjusted Diluted Earnings Per Share
$
0.54
$
0.44
$
0.35
$
0.60
$
1.93
TRANSCAT, INC.
Additional Information -
Business Segment Data
(Dollars in thousands)
(Unaudited)
Change
SERVICE
FY 2024 Q2
FY 2023 Q2
$'s
%
Service Revenue
$
41,431
$
35,267
$
6,164
17.5
%
Cost of Revenue
27,347
23,780
3,567
15.0
%
Gross Profit
$
14,084
$
11,487
$
2,597
22.6
%
Gross Margin
34.0
%
32.6
%
Selling, Marketing & Warehouse
Expenses
$
4,143
$
3,791
$
352
9.3
%
General and Administrative Expenses
9,199
5,189
4,010
77.3
%
Operating Income
$
742
$
2,507
$
(1,765
)
(70.4
)%
% of Revenue
1.8
%
7.1
%
Change
DISTRIBUTION
FY 2024 Q2
FY 2023 Q2
$'s
%
Distribution Sales
$
21,373
$
21,172
$
201
0.9
%
Cost of Sales
15,332
15,892
(560
)
(3.5
)%
Gross Profit
$
6,041
$
5,280
$
761
14.4
%
Gross Margin
28.3
%
24.9
%
Selling, Marketing & Warehouse
Expenses
$
2,713
$
2,109
$
604
28.6
%
General and Administrative Expenses
2,427
2,052
375
18.3
%
Operating Income
$
901
$
1,119
$
(218
)
(19.5
)%
% of Sales
4.2
%
5.3
%
Change
TOTAL
FY 2024 Q2
FY 2023 Q2
$'s
%
Total Revenue
$
62,804
$
56,439
$
6,365
11.3
%
Total Cost of Revenue
42,679
39,672
3,007
7.6
%
Gross Profit
$
20,125
$
16,767
$
3,358
20.0
%
Gross Margin
32.0
%
29.7
%
Selling, Marketing & Warehouse
Expenses
$
6,856
$
5,900
$
956
16.2
%
General and Administrative Expenses
11,626
7,241
4,385
60.6
%
Operating Income
$
1,643
$
3,626
$
(1,983
)
(54.7
)%
% of Revenue
2.6
%
6.4
%
TRANSCAT, INC.
Additional Information -
Business Segment Data
(Dollars in thousands)
(Unaudited)
Change
FY 2024
FY 2023
SERVICE
YTD
YTD
$'s
%
Service Revenue
$
81,284
$
69,143
$
12,141
17.6
%
Cost of Revenue
54,229
46,821
7,408
15.8
%
Gross Profit
$
27,055
$
22,322
$
4,733
21.2
%
Gross Margin
33.3
%
32.3
%
Selling, Marketing & Warehouse
Expenses
$
8,250
$
7,374
$
876
11.9
%
General and Administrative Expenses
14,871
9,909
4,962
50.1
%
Operating Income
$
3,934
$
5,039
$
(1,105
)
(21.9
)%
% of Revenue
4.8
%
7.3
%
Change
FY 2024
FY 2023
DISTRIBUTION
YTD
YTD
$'s
%
Distribution Sales
$
42,118
$
41,957
$
161
0.4
%
Cost of Sales
30,338
31,474
(1,136
)
(3.6
)%
Gross Profit
$
11,780
$
10,483
$
1,297
12.4
%
Gross Margin
28.0
%
25.0
%
Selling, Marketing & Warehouse
Expenses
$
5,075
$
4,346
$
729
16.8
%
General and Administrative Expenses
4,356
3,946
410
10.4
%
Operating Income
$
2,349
$
2,191
$
158
7.2
%
% of Sales
5.6
%
5.2
%
Change
FY 2024
FY 2023
TOTAL
YTD
YTD
$'s
%
Total Revenue
$
123,402
$
111,100
$
12,302
11.1
%
Total Cost of Revenue
84,567
78,295
6,272
8.0
%
Gross Profit
$
38,835
$
32,805
$
6,030
18.4
%
Gross Margin
31.5
%
29.5
%
Selling, Marketing & Warehouse
Expenses
$
13,325
$
11,720
$
1,605
13.7
%
General and Administrative Expenses
19,227
13,855
5,372
38.8
%
Operating Income
$
6,283
$
7,230
$
(947
)
(13.1
)%
% of Revenue
5.1
%
6.5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231030956263/en/
For more information contact: Tom Barbato Phone: (585)
505-6530 Email: Thomas.Barbato@transcat.com
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