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Transcat Reports Record Revenue and Adjusted Earnings Per Share for Fourth Quarter and Full Year Fiscal 2022

  • Consolidated fourth quarter revenue of $55.9 million up 14.6% from prior year; full fiscal year revenue up 18.2% and surpassed the $200 million milestone
  • Service segment fourth quarter revenue grew 19.6%; full fiscal year revenue up 20.5%
  • Service segment fourth quarter gross margin of 33.1%; full fiscal year gross margin expanded 160 basis points to 31.9%
  • Fourth quarter diluted earnings per share of $0.40 and adjusted diluted earnings per share of $0.54; full fiscal year diluted earnings per share of $1.50 and adjusted diluted earnings per share of $2.03, up 46% and 50%, respectively, over prior fiscal year

Transcat, Inc. (Nasdaq: TRNS) (“Transcat” or the “Company”), a leading provider of accredited calibration services, enterprise asset management services, and value-added distributor of professional grade handheld test, measurement and control instrumentation, today reported financial results for its fourth quarter and fiscal year ended March 26, 2022 (“fiscal 2022”). Results include the previously reported acquisitions of BioTek Services, Inc. (“BioTek”) effective December 16, 2020, Upstate Metrology (“Upstate”) effective April 29, 2021, Cal OpEx Limited (d/b/a NEXA Enterprise Asset Management), (“NEXA”) effective August 31, 2021 and Tangent Labs, LLC (“Tangent”) effective December 31, 2021.

“Fiscal 2022 was a strong year for Transcat. Overall, we delivered well-rounded financial performance, even with the COVID-19 case surge we experienced in January. We are particularly pleased with our Service segment organic revenue growth of 11.6%, Service segment gross margin expansion of 160 basis points and the acquisition and integration of three companies that have increased our capabilities, expanded our addressable markets and allowed us to leverage our existing infrastructure,” commented Lee D. Rudow, President and CEO. “In our fourth quarter, we continued to see strong demand for both our services and products as consolidated revenue increased 15% and drove full year consolidated revenue to over $200 million for the first time in company history. Our Service segment fourth quarter revenue grew 20%, 8% organically, and we reported gross margin of 33.1%. The strong momentum we carried into our fourth quarter was negatively impacted by the onset of the COVID-19 Omicron variant in late December and subsequent case surge we experienced throughout January. This created significant inefficiencies due to our technician COVID cases and related work absences spiking to pandemic highs. As a result, Service segment gross margin contracted from prior year in January. We returned to gross margin expansion in February and March, even with lingering inefficiencies and higher than originally planned technician overtime, a result of the January labor shortage.”

“Distribution segment demand remained strong and fourth quarter revenue grew 7.2% despite continued supply chain constraints and extended vendor lead times. Gross margin of 24.5% expanded 350 basis points from prior year, largely driven by a favorable mix and continued strength in our Rentals business. Overall, fourth quarter diluted earnings per share was $0.40 and adjusted diluted earnings per share was $0.54 compared to $0.42 and $0.52, respectively, in the prior year fourth quarter.”

Mr. Rudow added, “In the past fiscal year, we made several strategic long-term investments that have expanded our addressable markets, widened the breadth of our service offerings and increased our overall capacity and capabilities. We completed three acquisitions, NEXA, Tangent and Upstate Metrology, and all have exceeded expectations to date. We have relocated our Boston-area pipettes facility, which we acquired two years ago, as we outgrew the facility faster than planned due to very strong demand. Additionally, we relocated and upgraded our Toronto-based lab and also began work on a newly-leased greenfield lab in Southeast Florida to take advantage of Florida’s attractive and growing life science, aerospace and general industrial markets. We expect the new Florida lab to be open by early-to-mid summer.”

Fourth Quarter Fiscal 2022 Review (Results compared with the fourth quarter of fiscal 2021)

($ in thousands)

 

 

 

 

Change

 

FY22 Q4

 

FY21 Q4

 

$'s

 

%

Service Revenue

$

34,667

 

$

28,977

 

$

5,690

 

19.6%

Distribution Sales

 

21,213

 

 

19,785

 

 

1,428

 

7.2%

Revenue

$

55,880

 

$

48,762

 

$

7,118

 

14.6%

Gross Profit

$

16,672

 

$

13,970

 

$

2,702

 

19.3%

Gross Margin

 

29.8%

 

 

28.6%

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

$

4,515

 

$

4,512

 

$

3

 

0.1%

Operating Margin

 

8.1%

 

 

9.3%

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

3,048

 

$

3,208

 

$

(160)

 

(5.0%)

Net Margin

 

5.5%

 

 

6.6%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA*

$

7,652

 

$

7,302

 

$

350

 

4.8%

Adjusted EBITDA* Margin

 

13.7%

 

 

15.0%

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

$

0.40

 

$

0.42

 

$

(0.02)

 

(4.8%)

 

 

 

 

 

 

 

 

Adjusted Diluted EPS*

$

0.54

 

$

0.52

 

$

0.02

 

3.8%

*See Note 1 on page 5 for a description of these non-GAAP financial measures and pages 11 and 12 for the reconciliation tables.

Consolidated revenue was $55.9 million, an increase of 14.6%. Consolidated gross profit was $16.7 million, an increase of $2.7 million, or 19.3%, and gross margin expanded 120 basis points to 29.8% due to improvement in our Distribution segment. Operating expenses increased $2.7 million, or 28.5%, driven by incremental expenses from acquired businesses (including stock expense), increased intangibles amortization expense, and investments in technology and our employee base to support future growth. Net income per diluted share decreased from $0.42 to $0.40. Adjusted EBITDA was $7.7 million and increased by 4.8%. Diluted earnings per share of $0.40 was down from $0.42 and adjusted diluted earnings per share increased to $0.54 from $0.52.

Service segment revenue growth remained strong in the fourth quarter

Represents accredited calibration services, analytical pipette calibration services and NEXA enterprise asset management’s five service tracks (62% of total revenue for the fourth quarter of fiscal 2022).

($ in thousands)

 

 

 

 

Change

 

FY22 Q4

 

FY21 Q4

 

$'s

 

%

 

 

 

 

 

 

 

 

Service Segment Revenue

$

34,667

 

$

28,977

 

$

5,690

 

19.6%

Gross Profit

$

11,474

 

$

9,811

 

$

1,663

 

17.0%

Gross Margin

 

33.1%

 

 

33.9%

 

 

 

 

Operating Income

$

3,532

 

$

4,379

 

$

(847)

 

(19.3%)

Operating Margin

 

10.2%

 

 

15.1%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA*

$

6,028

 

$

6,276

 

$

(248)

 

(4.0%)

Adjusted EBITDA* Margin

 

17.4%

 

 

21.7%

 

 

 

 

*See Note 1 on page 5 for a description of this non-GAAP financial measure and page 11 for the Adjusted EBITDA Reconciliation table.

Service segment revenue increased 19.6% to $34.7 million and was driven by strong end market demand and continued market share gains. Service segment represented 62% of total revenue in the fourth quarter.

The segment gross margin decreased 80 basis points from prior year primarily due to inefficiencies created by the January COVID-19 Omicron variant surge.

Distribution segment posts solid revenue growth in fourth quarter

Represents the sale and rental of new and used professional grade handheld test, measurement and control instrumentation (38% of total revenue for the fourth quarter of fiscal 2022).

($ in thousands)

 

 

 

 

Change

 

FY22 Q4

 

FY21 Q4

 

$'s

 

%

 

 

 

 

 

 

 

 

Distribution Segment Sales

$

21,213

 

$

19,785

 

$

1,428

 

7.2%

Gross Profit

$

5,198

 

$

4,159

 

$

1,039

 

25.0%

Gross Margin

 

24.5%

 

 

21.0%

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

$

983

 

$

133

 

$

850

639.1%

Operating Margin

 

4.6%

 

 

0.7%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA*

$

1,624

 

$

1,026

 

$

598

 

58.3%

Adjusted EBITDA* Margin

 

7.7%

 

 

5.2%

 

 

 

 

*See Note 1 on page 5 for a description of this non-GAAP financial measure and page 11 for the Adjusted EBITDA Reconciliation table.

Distribution sales increased 7.2% on improved end market demand and strength in our Rentals business. Distribution segment gross margins were 24.5%, an increase of 350 basis points due to a favorable sales mix driven by strength in the Rentals business.

Full-Year Fiscal 2022 Review (Results compared with fiscal 2021)

($ in thousands)

 

 

 

 

Change

 

FY22

 

FY21

 

$'s

 

%

Service Revenue

$

122,005

 

$

101,274

 

$

20,731

 

20.5%

Distribution Sales

 

82,954

 

 

72,061

 

 

10,893

 

15.1%

Revenue

$

204,959

 

$

173,335

 

$

31,624

 

18.2%

Gross Profit

$

58,439

 

$

46,118

 

$

12,321

 

26.7%

Gross Margin

 

28.5%

 

 

26.6%

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

$

14,143

 

$

11,073

 

$

3,070

 

27.7%

Operating Margin

 

6.9%

 

 

6.4%

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

11,380

 

$

7,791

 

$

3,589

 

46.1%

Net Margin

 

5.6%

 

 

4.5%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA*

$

26,307

 

$

20,575

 

$

5,732

 

27.9%

Adjusted EBITDA* Margin

 

12.8%

 

 

11.9%

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

$

1.50

 

$

1.03

 

$

0.47

 

45.6%

 

 

 

 

 

 

 

 

Adjusted Diluted EPS*

$

2.03

 

$

1.35

 

$

0.68

 

50.4%

*See Note 1 on page 5 for a description of these non-GAAP financial measures and pages 11 and 12 for the reconciliation tables.

Total revenue was $205.0 million, an increase of 18.2%. Consolidated gross profit was up $12.3 million, or 26.7%, and gross margin expanded 190 basis points to 28.5%. Total operating expenses increased $9.3 million, or 26.4%, driven by incremental expenses from acquired businesses (including stock expense), increased intangibles amortization expense, investments in technology and our employee base to support future growth and one-time transaction expenses related to acquisitions that closed in the fiscal year. Consolidated operating income was $14.1 million compared with $11.1 million in last fiscal year’s period, an increase of 27.7%.

Net income was $11.4 million, or $1.50 per diluted share, compared with $7.8 million, or $1.03 per diluted share in prior year. Adjusted EBITDA was $26.3 million, an increase of 27.9% and adjusted diluted earnings per share was $2.03, an increase of 50% from prior year.

Balance Sheet and Cash Flow Overview

At March 26, 2022, the Company had $40.1 million available for borrowing under its secured revolving credit facility. Total debt of $48.5 million was up $28.9 million from fiscal 2021 year-end due to the three acquisitions completed within fiscal 2022. The Company’s leverage ratio, as defined in the credit agreement, was 1.74 at March 26, 2022, compared with 0.94 at March 27, 2021.

Outlook

Mr. Rudow concluded, “We are proud of our dedicated team, which successfully executed through the challenges of the past year and consistently delivered excellent results. As we think ahead into fiscal 2023 and beyond, we are well positioned for profitable growth and we expect the strength of our value proposition to continue to increase. We have demonstrated our ability to drive growth through various economic cycles as can be seen over the past 10 years and we are confident and expect that will continue. The business continues to benefit from a predominately life science-oriented market, driven by regulation and recurring revenue streams. Strong organic Service growth remains a centerpiece of our strategy. In the year ahead we expect organic Service growth in the high-single digit range. Volume increase is an important component to driving the inherent operating leverage in the Transcat Service model.”

“Acquisitions that strengthen our fundamental value proposition will continue to be an important component of our go-forward strategy. We will identify and pursue opportunities to expand our addressable markets like we did with Nexa and our pipettes business. These acquisitions, along with our recent acquisition of Tangent and the bolt-on Upstate acquisition, represent a gain in value which raises the ceiling and trajectory of the business.”

“Additionally, Transcat has made significant investments in the quality of our team, including leaders that maintain expertise relating to continuous process improvement and automation. We have generated sustainable margin improvement over the past several years and we believe the improvement will continue. Automation of our calibration processes and overall process improvement are designed to foster future margin gains. Relating to selling, general and administrative expenses, we anticipate demonstrating more leverage in the years ahead.”

“We believe Transcat has substantial runway ahead for Service revenue growth and margin expansion. We have a long history that demonstrates that we know how to succeed on both fronts. We continue to focus on generating sustainable long-term value for our shareholders and providing a dynamic, rewarding workplace for our team.”

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 discrete tax accounting associated with share-based payment awards.

Webcast and Conference Call

Transcat will host a conference call and webcast on Tuesday, May 24, 2022 at 11:00 a.m. Eastern Time. Management will review the financial and operating results for the fourth quarter and full fiscal year, 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. Eastern Time on the day of the call through Tuesday, May 31, 2022. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13729880, or 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, restructuring expense, non-cash loss on sale of building 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, rather 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 the attached Adjusted EBITDA Reconciliation table below.

In addition to reporting 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 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.

ABOUT TRANSCAT

Transcat, Inc. is a leading provider of accredited calibration, repair, inspection and laboratory instrument 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, and services at 20 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 the complementary nature of its two operating segments, its comprehensive service capabilities, strong brand, enhanced e-commerce capabilities 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.

The Company plans on timely filing its Annual Report on Form 10-K before the required filing date.

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

   

Fourth Quarter Ended

Fiscal Year Ended

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

March 26,

 

March 27,

March 26,

 

March 27,

2022

 

2021

2022

 

2021

Service Revenue

$

4,667

 

$

28,977

$

122,005

 

$

101,274

Distribution Sales

 

21,213

 

 

19,785

 

82,954

 

 

72,061

Total Revenue

 

55,880

 

 

48,762

 

204,959

 

 

173,335

     

Cost of Service Revenue

 

23,193

 

 

19,166

 

83,084

 

 

70,579

Cost of Distribution Sales

 

16,015

 

 

15,626

 

63,436

 

 

56,638

Total Cost of Revenue

 

39,208

 

 

34,792

 

146,520

 

 

127,217

     

Gross Profit

 

16,672

 

 

13,970

 

58,439

 

 

46,118

     

Selling, Marketing and Warehouse Expenses

 

5,627

 

 

4,703

 

20,649

 

 

17,743

General and Administrative Expenses

 

6,530

 

 

4,755

 

23,647

 

 

17,302

Total Operating Expenses

 

12,157

 

 

9,458

 

44,296

 

 

35,045

     

Operating Income

 

4,515

 

 

4,512

 

14,143

 

 

11,073

     

Interest and Other Expense, net

 

372

 

312 

 

 

953

 

 

1,091

     

Income Before Income Taxes

 

4,143

 

 

4,200

 

13,190

 

 

9,982

Provision for Income Taxes

 

1,095

 

 

992

 

1,810

 

 

2,191

     

Net Income

$

3,048

 

$

3,208

$

11,380

 

$

7,791

     

Basic Earnings Per Share

$

0.41

 

$

0.43

$

1.52

 

$

1.05

Average Shares Outstanding

 

7,523

 

 

7,447

 

7,496

 

 

7,423

     

Diluted Earnings Per Share

$

0.40

 

$

0.42

$

1.50

 

$

1.03

Average Shares Outstanding

 

7,636

 

 

7,611

 

7,589

 

 

7,548

TRANSCAT, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts)

   

(Unaudited)

 

March 26,

 

March 27,

2022

 

2021

ASSETS

 

Current Assets:

 

Cash

$

1,396

 

$

560

Accounts Receivable, less allowance for doubtful accounts of $460

 

and $526 as of March 26, 2022, and March 27, 2021, respectively

 

39,737

 

 

33,950

Other Receivables

 

558

 

 

428

Inventory, net

 

12,712

 

 

11,636

Prepaid Expenses and Other Current Assets

 

5,301

 

 

2,354

Total Current Assets

 

59,704

 

 

48,928

Property and Equipment, net

 

26,439

 

 

22,203

Goodwill

 

65,074

 

 

43,272

Intangible Assets, net

 

14,692

 

 

7,513

Right to Use Asset, net

 

11,026

 

 

9,392

Other Assets

 

827

 

 

808

Total Assets

$

177,762

 

$

132,116

   

LIABILITIES AND SHAREHOLDERS' EQUITY

 

Current Liabilities:

 

Accounts Payable

$

14,171

 

$

12,276

Accrued Compensation and Other Liabilities

 

11,378

 

 

10,417

Income Taxes Payable

 

-

 

 

382

Current Portion of Long-Term Debt

 

2,161

 

 

2,067

Total Current Liabilities

 

27,710

 

 

25,142

Long-Term Debt

 

46,291

 

 

17,494

Deferred Tax Liabilities

 

6,724

 

 

3,201

Lease Liabilities

 

9,194

 

 

7,958

Other Liabilities

 

1,667

 

 

3,243

Total Liabilities

 

91,586

 

 

57,038

   

Shareholders' Equity:

 

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

 

7,529,078 and 7,458,251 shares issued and outstanding

 

as of March 26, 2022, and March 27, 2021, respectively

 

3,765

 

 

3,729

Capital in Excess of Par Value

 

23,900

 

 

19,287

Accumulated Other Comprehensive Loss

 

(233)

 

 

(451)

Retained Earnings

 

58,744

 

 

52,513

Total Shareholders' Equity

 

86,176

 

 

75,078

Total Liabilities and Shareholders' Equity

$

177,762

 

$

132,116

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

 

For Fiscal Years Ended

 

 

(Unaudited)

 

 

March 26,

 

March 27,

2022

 

2021

Cash Flows from Operating Activities:

 

Net Income

$

11,380

 

$

7,791

Adjustments to Reconcile Net Income to Net Cash Provided

 

 

by Operating Activities:

 

Net Loss on Disposal of Property and Equipment

 

88

 

 

136

Deferred Income Taxes

 

559

 

 

176

Depreciation and Amortization

 

9,567

 

 

7,580

Provision for Accounts Receivable and Inventory Reserves

 

34

 

 

636

Stock-Based Compensation

 

2,329

 

 

1,513

Changes in Assets and Liabilities:

 

Accounts Receivable and Other Receivables

 

(3,392)

 

 

(1,796)

Inventory

 

(122)

 

 

2,724

Prepaid Expenses and Other Assets

 

(2,960)

 

 

(725)

Accounts Payable

 

1,901

 

 

329

Accrued Compensation and Other Liabilities

 

(1,113)

 

 

4,943

Income Taxes Payable

 

(653)

 

 

332

Net Cash Provided by Operating Activities

 

17,618

 

 

23,639

   

Cash Flows from Investing Activities:

 

Purchase of Property and Equipment

 

(10,152)

 

 

(6,617)

Proceeds from Sale of Property and Equipment

 

109

 

 

17

Business Acquisitions, net of cash acquired

 

(29,808)

 

 

(3,551)

Net Cash Used in Investing Activities

 

(39,851)

 

 

(10,151)

   

Cash Flows from Financing Activities:

 

Proceeds from (Repayment of) Revolving Credit Facility, net

 

31,005

 

 

(8,801)

Repayments of Term Loan

 

(2,114)

 

 

(1,982)

Issuance of Common Stock

 

1,486

 

 

1,177

Repurchase of Common Stock

 

(6,683)

 

 

(3,049)

Net Cash Provided by (Used in) Financing Activities

 

23,694

 

 

(12,655)

   

Effect of Exchange Rate Changes on Cash

 

(625)

 

 

(772)

   

Net Increase in Cash

 

836

 

 

61

Cash at Beginning of Period

 

560

 

 

499

Cash at End of Period

$

1,396

 

$

560

TRANSCAT, INC.

Adjusted EBITDA Reconciliation Table

(Dollars in thousands)

(Unaudited)

           
     

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

           
     

Fiscal 2021

   
           
 

Q1

 

Q2

 

Q3

 

Q4

 

YTD

Net Income

 

$

798

 

$

2,024

 

$

1,761

 

$

3,208

 

$

7,791

+ Interest Expense

 

 

224

 

 

233

 

 

203

 

 

190

 

 

850

+ Other Expense / (Income)

 

 

19

 

 

84

 

 

16

 

 

122

 

 

241

+ Tax Provision

 

 

(77)

 

 

737

 

 

539

 

 

992

 

 

2,191

Operating Income

 

$

964

 

$

3,078

 

$

2,519

 

$

4,512

 

$

11,073

+ Depreciation & Amortization

 

 

1,871

 

 

1,864

 

 

1,861

 

 

1,984

 

 

7,580

+ Restructuring Expense

 

 

360

 

 

-

 

 

-

 

 

290

 

 

650

+ Other (Expense) / Income

 

 

(19)

 

 

(85)

 

 

(15)

 

 

(122)

 

 

(241)

+ Noncash Stock Compensation

 

 

312

 

 

366

 

 

197

 

 

638

 

 

1,513

Adjusted EBITDA

 

$

3,488

 

$

5,223

 

$

4,562

 

$

7,302

 

$

20,575

           

Segment Breakdown

         
           

Service Operating Income

 

$

1,129

 

$

2,977

 

$

1,956

 

$

4,379

 

$

10,441

+ Depreciation & Amortization

 

 

1,394

 

 

1,359

 

 

1,372

 

 

1,472

 

 

5,597

+ Restructuring Expense

 

 

193

 

 

-

 

 

-

 

 

156

 

 

349

+ Other (Expense) / Income

 

 

(15)

 

 

(57)

 

 

(8)

 

 

(82)

 

 

(162)

+ Noncash Stock Compensation

 

 

162

 

 

196

 

 

126

 

 

351

 

 

835

Service Adjusted EBITDA

 

$

2,863

 

$

4,475

 

$

3,446

 

$

6,276

 

$

17,060

           

Distribution Operating Income

 

$

(165)

 

$

101

 

$

563

 

$

133

 

$

632

+ Depreciation & Amortization

 

 

477

 

 

505

 

 

489

 

 

512

 

 

1,983

+ Restructuring Expense

 

 

167

 

 

-

 

 

-

 

 

134

 

 

301

+ Other (Expense) / Income

 

 

(4)

 

 

(28)

 

 

(7)

 

 

(40)

 

 

(79)

+ Noncash Stock Compensation

 

 

150

 

 

170

 

 

71

 

 

287

 

 

678

Distribution Adjusted EBITDA

 

$

625

 

$

748

 

$

1,116

 

$

1,026

 

$

3,515

TRANSCAT, INC.

Adjusted EPS Reconciliation Table

(In Thousands, Except Per Share Amounts)

(Unaudited)

           
     

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

+ Business Restructuring Costs

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

+ 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

           
     

Fiscal 2021

   
           
 

Q1

 

Q2

 

Q3

 

Q4

 

YTD

Net Income

 

$

798

 

$

2,024

 

$

1,761

 

$

3,208

 

$

7,791

+ Amortization of Intangible Assets

 

 

637

 

 

622

 

 

594

 

 

685

 

 

2,538

+ Acquisition Amortization of Backlog

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

+ Acquisition Deal Costs

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

+ Business Restructuring Costs

 

 

360

 

 

-

 

 

-

 

 

290

 

 

650

+ Income Tax Effect at 25%

 

 

(249)

 

 

(156)

 

 

(148)

 

 

(244)

 

 

(797)

Adjusted Net Income

 

$

1,546

 

$

2,490

 

$

2,207

 

$

3,939

 

$

10,182

           

Average Diluted Shares Outstanding

 

 

7,514

 

 

7,549

 

 

7,580

 

 

7,611

 

 

7,548

           

Diluted Earnings Per Share

 

$

0.11

 

$

0.27

 

$

0.23

 

$

0.42

 

$

1.03

           

Adjusted Diluted Earnings Per Share

 

$

0.21

 

$

0.33

 

$

0.29

 

$

0.52

 

$

1.35

TRANSCAT, INC.

Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

     
     

 

 

 

 

 

Change

SERVICE

FY 2022 Q4

 

FY 2021 Q4

 

$'s

 

%

 

 

   

 

 

 

Service Revenue

$

34,667

 

$

28,977

 

$

5,690

 

19.6%

Cost of Revenue

 

23,193

 

 

19,166

 

 

4,027

 

21.0%

Gross Profit

$

11,474

 

$

9,811

 

$

1,663

 

17.0%

Gross Margin

 

33.1%

 

 

33.9%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

$

3,490

 

$

2,639

 

$

851

 

32.2%

General and Administrative Expenses

 

4,452

 

 

2,793

 

 

1,659

 

59.4%

Operating Income

$

3,532

 

$

4,379

 

$

(847)

 

(19.3%)

% of Revenue

 

10.2%

 

 

15.1%

 

 

 

 

 

     

 

   

Change

DISTRIBUTION

FY 2022 Q4

 

FY 2021 Q4

 

$'s

 

%

Distribution Sales

$

21,213

 

$

19,785

 

$

1,428

 

7.2%

Cost of Sales

 

16,015

 

 

15,626

 

 

389

 

2.5%

Gross Profit

$

5,198

 

$

4,159

 

$

1,039

 

25.0%

Gross Margin

 

24.5%

 

 

21.0%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

$

2,137

 

$

2,064

 

$

73

 

3.5%

General and Administrative Expenses

 

2,078

 

 

1,962

 

 

116

 

5.9%

Operating Income

$

983

 

$

133

 

$

850

 

639.1%

% of Sales

 

4.6%

 

 

0.7%

 

 

 

 

 

     

 

   

Change

TOTAL

FY 2022 Q4

 

FY 2021 Q4

 

$'s

 

%

 

     

Total Revenue

$

55,880

 

$

48,762

 

$

7,118

 

14.6%

Total Cost of Revenue

 

39,208

 

 

34,792

 

 

4,416

 

12.7%

Gross Profit

$

16,672

 

$

13,970

 

$

2,702

 

19.3%

Gross Margin

 

29.8%

 

 

28.6%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

$

5,627

 

$

4,703

 

$

924

 

19.6%

General and Administrative Expenses

 

6,530

 

 

4,755

 

 

1,775

 

37.3%

Operating Income

$

4,515

 

$

4,512

 

$

3

 

0.1%

% of Revenue

8.1%

 

9.3%

   

 

TRANSCAT, INC.

Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

   

 

 

 

 

 

 

Change

SERVICE

 

FY 2022 YTD

 

FY 2021 YTD

 

$'s

 

%

 

 

 

 

 

 

 

 

 

Service Revenue

 

$

122,005

 

$

101,274

 

$

20,731

 

20.5%

Cost of Revenue

 

 

83,084

 

 

70,579

 

 

12,505

 

17.7%

Gross Profit

 

$

38,921

 

$

30,695

 

$

8,226

 

26.8%

Gross Margin

 

 

31.9%

 

 

30.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

 

$

12,047

 

$

9,941

 

$

2,106

 

21.2%

General and Administrative Expenses

 

 

16,060

 

 

10,313

 

 

5,747

 

55.7%

Operating Income

 

$

10,814

 

$

10,441

 

$

373

 

3.6%

% of Revenue

 

 

8.9%

 

 

10.3%

 

 

 

 

 

 

 

 

Change

DISTRIBUTION

 

FY 2022 YTD

FY 2021 YTD

$'s

%

Distribution Sales

 

$

82,954

 

$

72,061

 

$

10,893

 

15.1%

Cost of Sales

 

 

63,436

 

 

56,638

 

 

6,798

 

12.0%

Gross Profit

 

$

19,518

 

$

15,423

 

$

4,095

 

26.6%

Gross Margin

 

 

23.5%

 

 

21.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

 

$

8,602

 

$

7,802

 

$

800

 

10.3%

General and Administrative Expenses

 

 

7,587

 

 

6,989

 

 

598

 

8.6%

Operating Income

 

$

3,329

 

$

632

 

$

2,697

 

426.7%

% of Sales

 

 

4.0%

 

 

0.9%

 

 

 

 

 

 

 

 

 

 

 

 

Change

TOTAL

 

FY 2022 YTD

FY 2021 YTD

$'s

%

 

 

 

 

 

 

 

 

 

Total Revenue

 

$

204,959

 

$

173,335

 

$

31,624

 

18.2%

Total Cost of Revenue

 

 

146,520

 

 

127,217

 

 

19,303

 

15.2%

Gross Profit

 

$

58,439

 

$

46,118

 

$

12,321

 

26.7%

Gross Margin

 

 

28.5%

 

 

26.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, Marketing & Warehouse Expenses

 

$

20,649

 

$

17,743

 

$

2,906

 

16.4%

General and Administrative Expenses

 

 

23,647

 

 

17,302

 

 

6,345

 

36.7%

Operating Income

 

$

14,143

 

$

11,073

 

$

3,070

 

27.7%

% of Revenue

 

 

6.9%

 

 

6.4%

 

 

 

 

 

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