Transcat Reports Strong Second Quarter Results on 19% Service Revenue Growth

Transcat, Inc., 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, reported financial results for its second quarter ended September 24, 2022 of fiscal year 2023, which ends March 25, 2023.

  • Consolidated revenue of $56.4 million, up 12.0% from prior year
  • Service segment revenue of $35.3 million, up 19.4%; organic revenue grew 9.3%
  • Consolidated gross profit of $16.8 million, up 14.8%; gross margin increased 70 basis points to 29.7%

ROCHESTER, N.Y.--(BUSINESS WIRE)-- 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 24, 2022 (the “second quarter”) of fiscal year 2023, which ends March 25, 2023 (“fiscal 2023”). Results include the previously reported acquisitions of Cal OpEx Limited (d/b/a NEXA Enterprise Asset Management) (“NEXA”) effective August 31, 2021, Tangent Labs, LLC (“Tangent”) effective December 31, 2021 and Charlton Jeffmont Inc., Raitz Inc. and Toolroom Calibration Inc. (d/b/a Alliance Calibration) (“Alliance”) effective May 31, 2022.

“Our Service business continued to perform at a high level in the second quarter, despite growing economic uncertainty.” commented Lee D. Rudow, President and CEO. “Service segment revenue grew 19%, 9% organically, as demand in both our core calibration and NEXA asset management businesses remained strong. Service gross margin was a solid 32.6%, relatively flat with prior year, despite start-up costs primarily driven by the implementation of new client-based labs and an influx of new technicians to support future growth. As we have previously discussed, client-based labs can weigh on margins in the early stages of ramp-up and new technicians typically take several months to achieve expected productivity levels.”

“Our Distribution segment performed very well in the second quarter with revenue increasing 1.6% and gross margin expanding 140 basis points to 24.9%, largely driven by continued strength in our high-margin rental business and the sell-through of prior strategic inventory buys at higher prices. We are pleased that we were able to turn in such a strong performance despite the ongoing supply chain challenges that are impacting the industry on a macro level. Demand remained strong as our backlog increased 18% from prior year to a record $9.1 million. In total, continued growth in both operating segments drove second quarter EBITDA of $7.5 million, an increase of 6% from prior year.

Mr. Rudow added, “Acquisitions continue to be an important part of Transcat’s long-term growth strategy and we closed on two deals right after the end of the second quarter. Complete Calibrations is a small, but very strategic acquisition for Transcat. It provides Transcat with a local calibration presence to support the robust and growing life science market in Ireland and also brings us over 10 years of experience in developing robotics for calibrations. Our vision is to leverage this promising robotics technology over time in both Ireland and North America to further enhance our automation initiatives and differentiate Transcat from our competitors by driving gains in efficiency and quality while improving turnaround times for our customers.”

“e2b Calibration, located in Cleveland, Ohio, is a proven industry leader in calibration services related to the aviation industry, with particular strength in avionics. We believe that we can leverage Transcat’s current infrastructure and significant geographic footprint to further accelerate the growth in e2b’s capabilities across the U.S and Canada. In addition, there is an attractive life sciences market in the greater Cleveland area, which we are now nicely positioned to capitalize on.”

Second Quarter Fiscal 2023 Review (Results are compared with the second quarter of the fiscal year ended March 26, 2022 (“fiscal 2022”))

($ in thousands)

         

Change

   

FY23 Q2

 

FY22 Q2

 

$'s

 

%

Service Revenue

 

$

35,267

 

$

29,544

 

$

5,723

 

19.4%

Distribution Sales

   

21,172

   

20,843

   

329

 

1.6%

Revenue

 

$

56,439

 

$

50,387

 

$

6,052

 

12.0%

Gross Profit

 

$

16,767

 

$

14,611

 

$

2,156

 

14.8%

Gross Margin

   

29.7%

   

29.0%

       
                 

Operating Income

 

$

3,626

 

$

3,578

 

$

48

 

1.3%

Operating Margin

   

6.4%

   

7.1%

       
                 

Net Income

 

$

2,357

 

$

3,015

 

$

(658)

 

(21.8%)

Net Margin

   

4.2%

   

6.0%

       
                 

Adjusted EBITDA*

 

$

7,531

 

$

7,079

 

$

452

 

6.4%

Adjusted EBITDA* Margin

   

13.3%

   

14.0%

       

*See Note 1 on page 4 for a description of this non-GAAP financial measure and page 10 for the Adjusted EBITDA Reconciliation table.

Consolidated revenue was $56.4 million, an increase of 12.0%. Consolidated gross profit was $16.8 million, an increase of $2.2 million, or 14.8%, and gross margin expanded 70 basis points to 29.7% due to strong performance in the Distribution segment. Operating expenses increased $2.1 million, or 19.1%, driven by incremental expenses from acquired businesses (including stock-based compensation expense), increased intangibles amortization expense, and investments in technology and our employee base to support future growth. Adjusted EBITDA was $7.5 million which represented an increase of $0.5 million or 6.4%. Net income per diluted share decreased to $0.31 from $0.40 and adjusted diluted earnings per share was $0.44 versus $0.57 last year. The effective tax rate was 23.7% compared to 9.4% in the prior year, which benefited significantly from share-based payments and stock option activity. The increase in the tax rate had an unfavorable impact of $0.06 per diluted earnings per share and adjusted diluted earnings per share when compared to the prior year.

Service segment delivers strong second quarter results

Represents the accredited calibration, repair, inspection and laboratory instrument services business (62.5% of total revenue for the second quarter of fiscal 2023).

($ in thousands)

         

Change

   

FY23 Q2

 

FY22 Q2

 

$'s

 

%

                 

Service Segment Revenue

 

$

35,267

 

$

29,544

 

$

5,723

 

19.4%

Gross Profit

 

$

11,487

 

$

9,712

 

$

1,775

 

18.3%

Gross Margin

   

32.6%

   

32.9%

       
                 

Operating Income

 

$

2,507

 

$

2,647

 

$

(140)

 

(5.3%)

Operating Margin

   

7.1%

   

9.0%

       
                 

Adjusted EBITDA*

 

$

5,549

 

$

5,460

 

$

89

 

1.6%

Adjusted EBITDA* Margin

   

15.7%

   

18.5%

       

* See Note 1 on page 4 for a description of this non-GAAP financial measure and page 10 for the Adjusted EBITDA Reconciliation table.

Service segment revenue was $35.3 million, an increase of $5.7 million or 19.4% and included $3.0 million of incremental revenue from acquisitions. Organic revenue growth was 9.3% and was driven by strong end market demand and continued market share gains. The segment gross margin decreased 30 basis points from prior year primarily due to 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 (37.5% of total revenue for the second quarter of fiscal 2023).

($ in thousands)

         

Change

   

FY23 Q2

 

FY22 Q2

 

$'s

 

%

Distribution Segment Sales

 

$

21,172

 

$

20,843

 

$

329

 

1.6%

Gross Profit

 

$

5,280

 

$

4,899

 

$

381

 

7.8%

Gross Margin

   

24.9%

   

23.5%

       
                 

Operating Income

 

$

1,119

 

$

931

 

$

188

 

20.2%

Operating Margin

   

5.3%

   

4.5%

       
                 

Adjusted EBITDA*

 

$

1,982

 

$

1,619

 

$

363

 

22.4%

Adjusted EBITDA* Margin

   

9.4%

   

7.8%

       

* See Note 1 on page 4 for a description of this non-GAAP financial measure and page 10 for the Adjusted EBITDA Reconciliation table.

Distribution sales increased 1.6% on improved end market demand and strength in our Rentals business. Distribution segment gross margin was 24.9%, an increase of 140 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 2022)

Total revenue was $111.1 million, an increase of $12.9 million or 13.2%. Consolidated gross profit was up $4.7 million, or 16.6%, and gross margin expanded to 29.5% or 800 basis points. Consolidated operating expenses increased $4.7 million, or 22.6%, driven by incremental expenses from acquired businesses, (including stock-based compensation expense), increased intangibles amortization expense, and investments in technology and our employee base to support future growth. As a result, consolidated operating income was $7.2 million compared with $7.3 million in last fiscal year’s period.

Adjusted EBITDA was $14.8 million which represented an increase of $1.6 million or 12.5%. Net income per diluted share decreased to $0.71 from $0.88 and adjusted diluted earnings per share was $0.98 versus $1.12 last year. The effective tax rate was 16.9% compared to 1.7% in the prior year, which benefited significantly from share-based payments and stock option activity. The increase in the tax rate had an unfavorable impact of $0.13 per diluted earnings per share and adjusted diluted earnings per share when compared to the prior year.

Balance Sheet and Cash Flow Overview

At September 24, 2022, the Company had $36.7 million available for borrowing under its secured revolving credit facility. Total debt of $50.8 million was up $2.3 million from fiscal 2022 year-end due to the acquisition of Alliance in the first quarter. The Company’s leverage ratio, as defined in the credit agreement, was 1.81 at September 24, 2022, compared with 1.74 at March 26, 2022.

Outlook

Mr. Rudow concluded, “As economic uncertainty continues to ramp up, we are pleased with the strong demand levels we experienced in our fiscal second quarter. We continue to demonstrate our ability to drive growth through various economic cycles as can be seen over the past 10 plus years, which provides us confidence that will continue. The business continues to benefit from significant participation in the life-science, aerospace and defense and other highly regulated industries, where there are extremely high costs of failure and where there are high recurring revenue streams. Additionally, we also expect Nexa Enterprise Asset Management to perform very well through various economic cycles. As a result, we remain confident that in the year ahead, we expect organic Service revenue growth in the high-single digit range and we expect gross margin improvement to continue over time.”

Transcat expects its income tax rate to range between 22% and 24% in fiscal 2023. 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, November 1, 2022 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 8, 2022. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13733840, 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 page 10 for the Adjusted EBITDA Reconciliation table.

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 11 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 24 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 Company’s response to the coronavirus (“COVID-19”) pandemic, 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 24,

 

September 25,

 

September 24,

 

September 25,

     

2022

 

2021

 

2022

 

2021

Service Revenue

 

$

35,267

 

$

29,544

 

$

69,143

 

$

57,101

Distribution Sales

   

21,172

   

20,843

   

41,957

   

41,076

 

Total Revenue

   

56,439

   

50,387

   

111,100

   

98,177

                   

Cost of Service Revenue

   

23,780

   

19,832

   

46,821

   

38,637

Cost of Distribution Sales

   

15,892

   

15,944

   

31,474

   

31,409

 

Total Cost of Revenue

   

39,672

   

35,776

   

78,295

   

70,046

                   

Gross Profit

   

16,767

   

14,611

   

32,805

   

28,131

                   

Selling, Marketing and Warehouse Expenses

   

5,900

   

4,974

   

11,720

   

9,971

General and Administrative Expenses

   

7,241

   

6,059

   

13,855

   

10,893

 

Total Operating Expenses

   

13,141

   

11,033

   

25,575

   

20,864

                   

Operating Income

   

3,626

   

3,578

   

7,230

   

7,267

                   

Interest and Other Expense, net

   

537

   

250

   

693

   

445

                   

Income Before Income Taxes

   

3,089

   

3,328

   

6,537

   

6,822

Provision for Income Taxes

   

732

   

313

   

1,108

   

119

                   

Net Income

 

$

2,357

 

$

3,015

 

$

5,429

 

$

6,703

                   

Basic Earnings Per Share

 

$

0.31

 

$

0.40

 

$

0.72

 

$

0.90

Average Shares Outstanding

   

7,550

   

7,482

   

7,542

   

7,473

                   

Diluted Earnings Per Share

 

$

0.31

 

$

0.40

 

$

0.71

 

$

0.88

Average Shares Outstanding

   

7,646

   

7,595

   

7,635

   

7,578

TRANSCAT, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts)

           
     

(Unaudited)

 

(Audited)

     

September 24,

 

March 26,

     

2022

 

2022

ASSETS

     

Current Assets:

     
 

Cash

$

909

   

$

1,396

 
 

Accounts Receivable, less allowance for doubtful accounts of $515

     
   

and $460 as of September 24, 2022, and March 26, 2022, respectively

 

39,744

     

39,737

 
 

Other Receivables

 

780

     

558

 
 

Inventory, net

 

16,764

     

12,712

 
 

Prepaid Expenses and Other Current Assets

 

4,419

     

5,301

 
   

Total Current Assets

 

62,616

     

59,704

 

Property and Equipment, net

 

27,770

     

26,439

 

Goodwill

 

66,118

     

65,074

 

Intangible Assets, net

 

14,880

     

14,692

 

Right To Use Asset, net

 

14,532

     

11,026

 

Other Assets

 

805

     

827

 
 

Total Assets

$

186,721

   

$

177,762

 
           

LIABILITIES AND SHAREHOLDERS' EQUITY

     

Current Liabilities:

     
 

Accounts Payable

$

13,599

   

$

14,171

 
 

Accrued Compensation and Other Liabilities

 

9,086

     

11,378

 
 

Current Portion of Long-Term Debt

 

2,205

     

2,161

 
   

Total Current Liabilities

 

24,890

     

27,710

 

Long-Term Debt

 

48,608

     

46,291

 

Deferred Tax Liabilities

 

6,670

     

6,724

 

Lease Liabilities

 

12,733

     

9,194

 

Other Liabilities

 

1,492

     

1,667

 
 

Total Liabilities

 

94,393

     

91,586

 
           

Shareholders' Equity:

     
 

Common Stock, par value $0.50 per share, 30,000,000 shares authorized:

     
   

7,557,626 and 7,529,078 shares issued and outstanding

     
   

as of September 24, 2022, and March 26, 2022, respectively

 

3,779

     

3,765

 
 

Capital in Excess of Par Value

 

26,170

     

23,900

 
 

Accumulated Other Comprehensive Loss

 

(1,524

)

   

(233

)

 

Retained Earnings

 

63,903

     

58,744

 
   

Total Shareholders' Equity

 

92,328

     

86,176

 
   

Total Liabilities and Shareholders' Equity

$

186,721

   

$

177,762

 

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

         

(Unaudited)

For the Six Months Ended

         
         

September 24,

 

September 25,

         

2022

 

2021

Cash Flows from Operating Activities:

       
 

Net Income

 

$

5,429

   

$

6,703

 
 

Adjustments to Reconcile Net Income to Net Cash Provided

       
   

by Operating Activities:

       
     

Net Loss on Disposal of Property and Equipment

   

34

     

84

 
     

Deferred Income Taxes

   

(54

)

   

7

 
     

Depreciation and Amortization

   

5,419

     

4,131

 
     

Provision for Accounts Receivable and Inventory Reserves

   

94

     

499

 
     

Stock-Based Compensation Expense

   

1,942

     

1,057

 
 

Changes in Assets and Liabilities, net of acquisitions:

       
   

Accounts Receivable and Other Receivables

   

(1,238

)

   

(374

)

   

Inventory

   

(3,724

)

   

1,739

 
   

Prepaid Expenses and Other Current Assets

   

881

     

(1,847

)

   

Accounts Payable

   

(586

)

   

(1,293

)

   

Accrued Compensation and Other Current Liabilities

   

(2,962

)

   

(2,812

)

   

Income Taxes Payable

   

-

     

(392

)

     

Net Cash Provided by Operating Activities

   

5,235

     

7,502

 
               

Cash Flows from Investing Activities:

       
 

Purchase of Property and Equipment

   

(4,772

)

   

(3,770

)

 

Proceeds from Sale of Property and Equipment

   

10

     

-

 
 

Business Acquisitions, net of cash acquired

   

(4,040

)

   

(20,910

)

     

Net Cash Used in Investing Activities

   

(8,802

)

   

(24,680

)

               

Cash Flows from Financing Activities:

       
 

Proceeds from Revolving Credit Facility, net

   

3,387

     

24,511

 
 

Repayments of Term Loan

   

(1,026

)

   

(1,021

)

 

Issuance of Common Stock

   

364

     

1,238

 
 

Repurchase of Common Stock

   

(437

)

   

(5,649

)

     

Net Cash Provided by Financing Activities

   

2,288

     

19,079

 
               

Effect of Exchange Rate Changes on Cash

   

792

     

90

 
               

Net (Decrease) Increase in Cash

   

(487

)

   

1,991

 

Cash at Beginning of Period

   

1,396

     

560

 

Cash at End of Period

 

$

909

   

$

2,551

 

TRANSCAT, INC.

Adjusted EBITDA Reconciliation Table

(in thousands)

(Unaudited)

             

Fiscal 2023

       
                       
     

Q1

 

Q2

 

Q3

 

Q4

 

YTD

Net Income

 

$

3,072

   

$

2,357

           

$

5,429

 
 

+ Interest Expense

   

360

     

550

             

910

 
 

+ Other Expense / (Income)

   

(204

)

   

(13

)

           

(217

)

 

+ Tax Provision

   

376

     

732

             

1,108

 

Operating Income

 

$

3,604

   

$

3,626

           

$

7,230

 
 

+ Depreciation & Amortization

   

2,641

     

2,778

             

5,419

 
 

+ Transaction Expense

   

30

     

-

             

30

 
 

+ Other (Expense) / Income

   

204

     

13

             

217

 
 

+ Noncash Stock Compensation

   

828

     

1,114

             

1,942

 

Adjusted EBITDA

 

$

7,307

   

$

7,531

           

$

14,838

 
                       

Segment Breakdown

                   
                       

Service Operating Income

 

$

2,532

   

$

2,507

           

$

5,039

 
 

+ Depreciation & Amortization

   

2,139

     

2,246

             

4,385

 
 

+ Transaction Expense

   

30

     

-

             

30

 
 

+ Other (Expense) / Income

   

134

     

3

             

137

 
 

+ Noncash Stock Compensation

   

638

     

793

             

1,431

 

Service Adjusted EBITDA

 

$

,473

   

$

5,549

           

$

11,022

 
                       

Distribution Operating Income

 

$

1,072

   

$

1,119

           

$

2,191

 
 

+ Depreciation & Amortization

   

502

     

532

             

1,034

 
 

+ Other (Expense) / Income

   

70

     

10

             

80

 
 

+ Noncash Stock Compensation

   

190

     

321

             

511

 

Distribution Adjusted EBITDA

 

$

1,834

   

$

1,982

           

$

3,816

 
                       
             

Fiscal 2022

       
                       
     

Q1

 

Q2

 

Q3

 

Q4

 

YTD

Net Income

 

$

3,688

   

$

3,015

   

$

1,629

   

$

3,048

   

$

11,380

 
 

+ Interest Expense

   

189

     

169

     

194

     

258

     

810

 
 

+ Other Expense / (Income)

   

6

     

81

     

(58

)

   

114

     

143

 
 

+ Tax Provision

   

(194

)

   

313

     

596

     

1,095

     

1,810

 

Operating Income

 

$

3,689

   

$

3,578

   

$

2,361

   

$

4,515

   

$

14,143

 
 

+ Depreciation & Amortization

   

1,990

     

2,141

     

2,368

     

2,578

     

9,077

 
 

+ Transaction Expense

   

-

     

821

     

55

     

26

     

902

 
 

+ Other (Expense) / Income

   

(6

)

   

(81

)

   

58

     

(114

)

   

(143

)

 

+ Noncash Stock Compensation

   

437

     

620

     

624

     

647

     

2,328

 

Adjusted EBITDA

 

$

6,110

   

$

7,079

   

$

5,466

   

$

7,652

   

$

26,307

 
                       

Segment Breakdown

                   
                       

Service Operating Income

 

$

2,974

   

$

2,647

   

$

1,661

   

$

3,532

   

$

10,814

 
 

+ Depreciation & Amortization

   

1,488

     

1,634

     

1,861

     

2,070

     

7,053

 
 

+ Transaction Expense

   

-

     

821

     

55

     

26

     

902

 
 

+ Other (Expense) / Income

   

(2

)

   

(56

)

   

36

     

(82

)

   

(104

)

 

+ Noncash Stock Compensation

   

261

     

414

     

475

     

482

     

1,632

 

Service Adjusted EBITDA

 

$

4,721

   

$

5,460

   

$

4 088

   

$

6,028

   

$

20,297

 
                       

Distribution Operating Income

 

$

715

   

$

931

   

$

700

   

$

983

   

$

3,329

 
 

+ Depreciation & Amortization

   

502

     

507

     

507

     

508

     

2,024

 
 

+ Other (Expense) / Income

   

(4

)

   

(25

)

   

22

     

(32

)

   

(39

)

 

+ Noncash Stock Compensation

   

176

     

206

     

149

     

165

     

696

 

Distribution Adjusted EBITDA

 

$

1,389

   

$

1,619

   

$

1,378

   

$

1,624

   

$

6,010

 
                     

TRANSCAT, INC.

Adjusted Diluted EPS Reconciliation Table

(In Thousands, Except Per Share Amounts)

(Unaudited)

             

Fiscal 2023

       
                       
     

Q1

 

Q2

 

Q3

 

Q4

 

YTD

Net Income

 

$

3,072

     

2,357

           

$

5,429

 
 

+ Amortization of Intangible Assets

   

1,084

     

1,147

             

2,231

 
 

+ Acquisition Amortization of Backlog

   

-

                 

-

 
 

+ Acquisition Deal Costs

   

299

     

239

             

538

 
 

+ Income Tax Effect at 25%

   

(346

)

   

(346

)

           

(692

)

Adjusted Net Income

 

$

4,109

     

3,397

           

$

7,506

 
                       

Average Diluted Shares Outstanding

   

7,629

     

7,646

             

7,635

 
                       

Diluted Earnings Per Share

 

$

0.40

   

$

0.31

           

$

0.71

 
                       

Adjusted Diluted Earnings Per Share

 

$

0.54

   

$

0.44

           

$

0.98

 
                       
             

Fiscal 2022

       
                       
     

Q1

 

Q2

 

Q3

 

Q4

 

YTD

Net Income

 

$

3,688

   

$

3,015

   

$

1,629

   

$

3,048

   

$

11,380

 
 

+ Amortization of Intangible Assets

   

620

     

729

     

947

     

1,098

     

3,394

 
 

+ Acquisition Amortization of Backlog

   

-

     

100

     

300

     

90

     

490

 
 

+ Acquisition Deal Costs

   

-

     

900

     

293

     

265

     

1,458

 
 

+ Income Tax Effect at 25%

   

(155

)

   

(432

)

   

(385

)

   

(363

)

   

(1,335

)

Adjusted Net Income

 

$

4,153

   

$

4,312

   

$

2,784

   

$

4,138

   

$

15,387

 
                       

Average Diluted Shares Outstanding

   

7,593

     

7,595

     

7,653

     

7,636

     

7,589

 
                       

Diluted Earnings Per Share

 

$

0.49

   

$

0.40

   

$

0.21

   

$

0.40

   

$

1.50

 
                                         

Adjusted Diluted Earnings Per Share

  $

0.55

    $

0.57

    $

0.36

    $

0.54

    $

2.03

 

TRANSCAT, INC.

Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

           
         

Change

SERVICE

FY 2023 Q2

 

FY 2022 Q2

 

$'s

 

%

               

Service Revenue

$

35,267

 

$

29,544

 

$

5,723

 

19.4%

Cost of Service Revenue

 

23,780

   

19,832

   

3,948

 

19.9%

Gross Profit

$

11,487

 

$

9,712

 

$

1,775

 

18.3%

Gross Margin

 

32.6%

   

32.9%

       
               

Selling, Marketing & Warehouse Expenses

$

3,791

 

$

2,835

 

$

956

 

33.7%

General and Administrative Expenses

 

5,189

   

4,230

   

959

 

22.7%

Operating Income

$

2,507

 

$

2,647

 

$

(140)

 

(5.3%)

% of Revenue

 

7.1%

   

9.0%

       
               
         

Change

DISTRIBUTION

FY 2023 Q2

 

FY 2022 Q2

 

$'s

 

%

               

Distribution Sales

$

21,172

 

$

20,843

 

$

329

 

1.6%

Cost of Distribution Sales

 

15,892

   

15,944

   

(52)

 

(0.3%)

Gross Profit

$

5,280

 

$

4,899

 

$

381

 

7.8%

Gross Margin

 

24.9%

   

23.5%

       
               

Selling, Marketing & Warehouse Expenses

$

2,109

 

$

2,139

 

$

(30)

 

(1.4%)

General and Administrative Expenses

 

2,052

   

1,829

   

223

 

12.2%

Operating Income

$

1,119

 

$

931

 

$

188

 

20.2%

% of Sales

 

5.3%

   

4.5%

       
               
         

Change

TOTAL

FY 2023 Q2

 

FY 2022 Q2

 

$'s

 

%

               

Total Revenue

$

56,439

 

$

50,387

 

$

6,052

 

12.0%

Total Cost of Revenue

 

39,672

   

35,776

   

3,896

 

10.9%

Gross Profit

$

16,767

 

$

14,611

 

$

2,156

 

14.8%

Gross Margin

 

29.7%

   

29.0%

       
               

Selling, Marketing & Warehouse Expenses

$

5,900

 

$

4,974

 

$

926

 

18.6%

General and Administrative Expenses

 

7,241

   

6,059

   

1,182

 

19.5%

Operating Income

$

3,626

 

$

3,578

 

$

48

 

1.3%

% of Revenue

 

6.4%

   

7.1%

       

TRANSCAT, INC.

Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

           
         

Change

SERVICE

FY 2023
YTD

 

FY 2022
YTD

 

$'s

 

%

               

Service Revenue

$

69,143

 

$

57,101

 

$

12,042

 

21.1%

Cost of Service Revenue

 

46,821

   

38,637

   

8,184

 

21.2%

Gross Profit

$

22,322

 

$

18,464

 

$

3,858

 

20.9%

Gross Margin

 

32.3%

   

32.3%

       
               

Selling, Marketing & Warehouse Expenses

$

7,374

 

$

5,550

 

$

1,824

 

32.9%

General and Administrative Expenses

 

9,909

   

7,293

   

2,616

 

35.9%

Operating Income

$

5,039

 

$

5,621

 

$

(582)

 

(10.4%)

% of Revenue

 

7.3%

   

9.8%

       
               
         

Change

DISTRIBUTION

FY 2023
YTD

 

FY 2022
YTD

 

$'s

 

%

               

Distribution Sales

$

41,957

 

$

41,076

 

$

881

 

2.1%

Cost of Distribution Sales

 

31,474

   

31,409

   

65

 

0.2%

Gross Profit

$

10,483

 

$

9,667

 

$

816

 

8.4%

Gross Margin

 

25.0%

   

23.5%

       
               

Selling, Marketing & Warehouse Expenses

$

4,346

 

$

4,421

 

$

(75)

 

(1.7%)

General and Administrative Expenses

 

3,946

   

3,600

   

346

 

9.6%

Operating Income

$

2,191

 

$

1,646

 

$

545

 

33.1%

% of Sales

 

5.2%

   

4.0%

       
               
         

Change

TOTAL

FY 2023
YTD

 

FY 2022
YTD

 

$'s

 

%

               

Total Revenue

$

111,100

 

$

98,177

 

$

12,923

 

13.2%

Total Cost of Revenue

 

78,295

   

70,046

   

8,249

 

11.8%

Gross Profit

$

32,805

 

$

28,131

 

$

4,674

 

16.6%

Gross Margin

 

29.5%

   

28.7%

       
               

Selling, Marketing & Warehouse Expenses

$

11,720

 

$

9,971

 

$

1,749

 

17.5%

General and Administrative Expenses

 

13,855

   

10,893

   

2,962

 

27.2%

Operating Income

$

7,230

 

$

7,267

 

$

(37)

 

(0.5%)

% of Revenue

 

6.5%

   

7.4%

       

View source version on businesswire.com: https://www.businesswire.com/news/home/20221031005656/en/

Contacts

For more information contact:
Audrey Calzolaio
Phone: (585) 866-1969
Email: Audrey.vanzummeren@transcat.com

Source: Transcat, Inc.

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