Financial Data and Key Metrics Changes - Fiscal year 2025 consolidated revenue increased by 7% to $278.4 million, driven by consistent demand for services and products [7] - Operating cash flow reached a record $38.6 million, an 18% year-over-year increase [8] - Q4 net income decreased to $4.5 million from $6.9 million in the prior year, with diluted earnings per share dropping to $0.48 from $0.77 [16] - Full year net income increased by 6% to $14.5 million [16] - Adjusted EBITDA for Q4 was $12.7 million, up 9% from the previous year, with a consistent EBITDA margin of 16.5% [18] Business Line Data and Key Metrics Changes - Service revenue grew by 11% to $52 million in Q4, with organic growth in the high single-digit range [12] - Distribution revenue increased by 4% to $25.1 million in Q4, driven by growth in the rental channel [13] - Full year service revenue benefited by $10.4 million from acquisitions [13] - Service gross margin expanded by 50 basis points to 36.2% in Q4, while distribution gross margin decreased by 30 basis points to 28.2% [14] Market Data and Key Metrics Changes - The rental platform continues to show growth, contributing to the overall performance of the distribution segment [10] - The company noted that barriers to entry in the calibration services market have defended its unique value proposition [10] Company Strategy and Development Direction - The acquisition of Martin Calibration is seen as highly synergistic, expanding geographic reach and capabilities [8] - The company aims to leverage its strengths in leadership and culture to drive future growth [21] - Management expressed confidence in the resilience of the calibration services channel, which benefits from recurring revenue streams in regulated markets [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term volatility but remains optimistic about long-term growth potential, particularly in the calibration services segment [52] - The leadership team is focused on improving sales and operational efficiencies, with expectations for high single-digit growth as macro trends normalize [54] Other Important Information - The company plans to file its 10-K on May 27 [19] - The integration of the Martin acquisition is reportedly ahead of schedule [23] Q&A Session Summary Question: Can you discuss the cadence of business performance in Q4? - Management characterized Q4 as solid, with pent-up demand contributing to high single-digit organic growth [30] Question: Were there any significant opportunities that closed recently? - Management indicated a healthy pipeline of new opportunities, expecting momentum in the latter half of the year [33] Question: How is the distribution segment responding to tariff announcements? - Management noted that distribution has held up well, but the impact of tariffs remains uncertain [36] Question: What are the levers for expense control? - Management highlighted delayed hires and good cost management as key factors in controlling operating expenses [48] Question: How is the Solutions business progressing? - Management reported steady progress in integrating the Solutions channel into the overall service platform [61] Question: What is the current status of automation efforts? - Management indicated that automation efforts are ongoing, with significant progress made but more work to be done [67] Question: How does the rental market perform in a challenging macro environment? - Management expects rental demand to increase as customers may prefer rentals over purchases during uncertain times [78]

Financial Data and Key Metrics Changes - Fiscal year 2025 consolidated revenue increased by 7% to $278.4 million, driven by consistent demand for services and products [5][12] - Service revenue grew by 7% to $181.4 million, while distribution revenue increased by 8% to $97 million [6][12] - Operating cash flow reached a record $38.6 million, an 18% year-over-year increase [6] - Q4 net income decreased to $4.5 million from $6.9 million in the prior year, with diluted earnings per share dropping to $0.48 from $0.77 [15] - Full year net income increased by 6% to $14.5 million [15] Business Line Data and Key Metrics Changes - Calibration Services achieved double-digit revenue growth of 11% in Q4, with organic growth in the high single-digit range [7][11] - Distribution revenue in Q4 grew by 4%, driven by growth in the rental channel [8][12] - Service gross margin expanded by 50 basis points to 36.2% in Q4, while distribution gross margin decreased by 30 basis points to 28.2% [13][14] Market Data and Key Metrics Changes - The rental platform continues to show growth, contributing to the overall performance of the distribution segment [8][12] - The company noted that barriers to entry in the service market have defended its unique value proposition and strong brand [10] Company Strategy and Development Direction - The acquisition of Martin Calibration is seen as highly synergistic, expanding geographic reach and capabilities [6][7] - The company aims to leverage its strengths in leadership and culture to execute its strategy and vision for future growth [20] - Management expressed confidence in the resilience of the calibration services channel, benefiting from recurring revenue streams in regulated markets [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term volatility but expressed confidence in the company's ability to return to high single-digit growth levels as macro trends normalize [19][29] - The leadership team is focused on improving sales and operational processes, with expectations for stabilization and growth in the Solutions business [20][50] - Management remains optimistic about the future, citing a strong pipeline for strategic acquisitions and ongoing improvements in service delivery [19][43] Other Important Information - The company plans to file its 10-K on May 27 [18] - Operating free cash flow improved by 31% to $25.4 million [16] Q&A Session Summary Question: Can you discuss the cadence of business performance in Q4? - Management characterized Q4 as solid, with pent-up demand contributing to high single-digit organic growth [25][26] Question: Were there any significant opportunities in the service business? - Management confirmed a healthy pipeline of new opportunities and new wins expected to contribute to momentum in the latter half of the year [28] Question: How is the distribution segment responding to tariff announcements? - Management noted that distribution has held up well, with current orders possibly influenced by customers trying to get ahead of tariffs [30][31] Question: What are the levers for expense control? - Management highlighted delayed hires and good cost management as key factors, with expectations for some nominal increases in expenses moving forward [37][38] Question: How is the Solutions business progressing? - Management reported steady progress in integrating the Solutions channel into the overall service platform, with expectations for improved results [50] Question: What is the current status of automation efforts? - Management indicated that automation efforts are ongoing, with significant progress made, but still more work to be done [54][56] Question: How does the company view the rental market in a challenging macro environment? - Management expects rental demand to grow in line with historical trends, particularly as uncertainty persists [66][68]

Core Viewpoint - Transcat, Inc. reported a revenue increase of 8.8% year-over-year for the quarter ended March 2025, but the EPS showed a decline compared to the previous year [1] Financial Performance - Revenue for the quarter was $77.13 million, exceeding the Zacks Consensus Estimate of $76.8 million by 0.44% [1] - EPS for the quarter was $0.64, down from $0.77 in the same quarter last year, resulting in an EPS surprise of -3.03% compared to the consensus estimate of $0.66 [1] - Distribution Sales revenue was $25.12 million, which is 3.9% higher year-over-year but below the average estimate of $26.57 million [4] - Service Revenue reached $52.01 million, surpassing the average estimate of $50.24 million and reflecting an 11.3% increase year-over-year [4] - Gross Profit from Distribution was $7.09 million, lower than the average estimate of $8 million [4] - Gross Profit from Service was $18.83 million, exceeding the average estimate of $16.99 million [4] Stock Performance - Transcat's shares have returned -4% over the past month, while the Zacks S&P 500 composite increased by 13.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Insights - Transcat, Inc. reported quarterly earnings of $0.64 per share, missing the Zacks Consensus Estimate of $0.66 per share, and down from $0.77 per share a year ago, representing an earnings surprise of -3.03% [1] - The company posted revenues of $77.13 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.44%, compared to year-ago revenues of $70.91 million [2] - Transcat shares have declined approximately 23.2% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.64 on revenues of $73.8 million, and for the current fiscal year, it is $2.63 on revenues of $306.01 million [7] - The estimate revisions trend for Transcat is mixed, leading to a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Instruments - Control industry, to which Transcat belongs, is currently in the top 39% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Another company in the same industry, Thermon Group, is expected to report quarterly earnings of $0.50 per share, reflecting a year-over-year change of +47.1%, with revenues anticipated to be $133.56 million, up 4.6% from the previous year [9][10]

Core Viewpoint - Transcat, Inc. (TRNS) is expected to report a quarterly earnings per share (EPS) of $0.66, indicating a 14.3% decline year-over-year, while revenues are projected to increase by 8.3% to $76.8 million [1] Group 1: Earnings and Revenue Estimates - Analysts predict quarterly earnings of $0.66 per share for Transcat, reflecting a 14.3% decline compared to the same period last year [1] - Revenue is forecasted to be $76.8 million, representing an 8.3% year-over-year increase [1] - The consensus EPS estimate has not changed over the past 30 days, indicating stability in analysts' projections [2] Group 2: Key Metrics Forecast - Revenue from Distribution Sales is expected to reach $26.57 million, a year-over-year increase of 9.9% [5] - Service Revenue is projected to be $50.24 million, reflecting a 7.5% increase from the previous year [5] - Gross Profit from Distribution is anticipated to be $8.00 million, up from $7.33 million in the same quarter last year [5] - Gross Profit from Service is expected to reach $16.99 million, slightly above the year-ago figure of $16.70 million [6] Group 3: Market Performance - Transcat shares have shown a return of -5.6% over the past month, contrasting with the Zacks S&P 500 composite's +9.9% change [6] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [6]

Financial Performance - Consolidated revenue for Q3 FY 2025 was $66.8 million, an increase of $1.6 million or 2.4% compared to Q3 FY 2024, primarily driven by acquisitions[95] - Gross profit for Q3 FY 2025 was $19.7 million, a decrease of $1.3 million or 6.0% year-over-year, with a gross margin of 29.5%, down 260 basis points from the previous year[96] - Operating expenses increased to $17.6 million in Q3 FY 2025, up $0.9 million or 5.6% from the prior year, resulting in an operating income of $2.1 million, a decrease of 51.1%[97] - Net income for Q3 FY 2025 was $2.4 million, down from $3.3 million in Q3 FY 2024, primarily due to lower operating income[98] - Total revenue for the first nine months of FY 2025 was $201.287 million, an increase of $12.719 million or 6.7% compared to the same period in FY 2024[118] - Net income for the first nine months of fiscal year 2025 was $10.1 million, an increase of $3.3 million or 48.7% compared to the same period in fiscal year 2024[125] - Total Adjusted EBITDA for Q3 FY 2025 was $7.9 million, a decrease of $1.2 million or 13.2% from Q3 FY 2024, with Adjusted EBITDA margin decreasing to 11.9%[117] - Total Adjusted EBITDA for the first nine months of fiscal year 2025 was $27.0 million, a slight increase of $0.1 million or 0.2% year-over-year[126] Revenue Breakdown - Service revenue accounted for 62.3% of total revenue in Q3 FY 2025, with a slight increase of $0.1 million or 0.1% year-over-year, while organic revenue decreased by 3.9%[101] - Distribution revenue was $25.2 million in Q3 FY 2025, an increase of $1.5 million or 6.5%, attributed to incremental revenue from the acquisition of Becnel[105] - The trailing twelve-month Service revenue for Q3 FY 2025 was $176.1 million, reflecting a growth of 8.3% compared to the prior year[103] - Service revenue for the first nine months of FY 2025 was $129.418 million, a 5.4% increase from FY 2024, including $4.2 million from recent acquisitions[118] Profitability Metrics - Operating margin decreased from 6.6% in Q3 FY 2024 to 3.1% in Q3 FY 2025, indicating a significant decline in profitability[97] - Total gross profit for Q3 FY 2025 was $19.679 million, a decrease of $1.257 million or 6.0% from Q3 FY 2024, with a gross margin of 29.5%[109] - Service gross profit in Q3 FY 2025 decreased by $1.137 million or 8.4%, with a service gross margin of 29.7%, down 280 basis points from Q3 FY 2024[110] - Distribution gross margin was 29.1% in Q3 FY 2025, a decrease of 240 basis points from 31.5% in Q3 FY 2024, attributed to the mix of non-rental products sold[112] Operating Expenses - Total operating expenses in Q3 FY 2025 were $17.579 million, an increase of $937,000 or 5.6% compared to Q3 FY 2024, with selling, marketing, and warehouse expenses rising by 8.0%[113] - The company plans to subcontract approximately 13% to 15% of Service revenue to third-party vendors while evaluating outsourcing needs and making capital investments[103] Cash Flow and Investments - Cash provided by operating activities was $28.4 million in the first nine months of fiscal year 2025, compared to $26.9 million in the same period of fiscal year 2024[140] - The company invested $10.5 million in capital expenditures during the first nine months of fiscal year 2025, primarily for customer-driven expansion[142] - The company used $86.1 million for business acquisitions in the first nine months of fiscal year 2025, compared to $12.9 million in the same period of fiscal year 2024[142] Balance Sheet and Leverage - As of December 28, 2024, the company had $80.0 million available for borrowing under its revolving credit facility, with $39.5 million outstanding[138] - The company's leverage ratio was 0.97 as of December 28, 2024, compared to 0.10 at March 30, 2024, indicating strong compliance with loan covenants[137] Earnings Per Share - Diluted earnings per share for the first nine months of fiscal year 2025 was $1.09, up from $0.83 in the same period of fiscal year 2024[132] - Adjusted diluted earnings per share for the first nine months of fiscal year 2025 was $1.65, compared to $1.68 in the same period of fiscal year 2024[132] Inventory and Liabilities - Inventory balance decreased by $3.6 million during the first nine months of fiscal year 2025, compared to a decrease of $0.8 million in the same period of fiscal year 2024[30] - Accounts payable increased by $4.7 million during the first nine months of fiscal year 2025, while it decreased by $4.5 million in the first nine months of fiscal year 2024[30] - Accrued compensation and other current liabilities decreased by $6.6 million in the first nine months of fiscal year 2025, compared to an increase of $5.5 million in the same period of fiscal year 2024[30] Future Outlook - Service organic revenue growth is expected to be in the mid-to-low single digits for fiscal year 2025, with a return to historic growth levels anticipated in fiscal year 2026[147] - The company expects its income tax rate to range between 21% and 23% for the full fiscal year 2025[148] Interest Rates and Currency Impact - A 1% change in interest rates would result in a yearly interest expense change of approximately $0.5 million, assuming constant borrowing levels[150] - The interest rate for the revolving credit facility was 5.6% during the first nine months of fiscal year 2025, while the 2018 Term Loan had a fixed interest rate of 3.90%[152] - Approximately 90% of total revenues for the first nine months of fiscal year 2025 were denominated in U.S. dollars, with a 10% change in the value of the Canadian dollar or Euro impacting revenue by approximately 1%[153] - The company utilized short-term foreign exchange forward contracts, resulting in a gain of $0.2 million in both the first nine months of fiscal years 2025 and 2024[154]

Financial Data and Key Metrics Changes - Consolidated revenue increased by 2% to $6,680,000, driven by growth in distribution [6][14] - Organic service revenue declined by 4% year-over-year, primarily due to softness in the Nexa solutions channel [6][14] - Consolidated gross profit decreased by 6% to $1,970,000, with service gross profit down 8% [15] - Net income for Q3 was $240,000, down $1,000,000 compared to the prior year, with diluted earnings per share at $0.25, down $0.13 [16] - Adjusted EBITDA was $790,000, down 13% from the same quarter in the prior year [17] Business Line Data and Key Metrics Changes - Service revenue saw a slight growth, but organic decline was offset by acquisitions [14] - Distribution revenue grew by 7% to $2,520,000, driven by strong product sales and rental growth [11][15] - Rental revenue experienced a decline in December due to extended customer closures, negatively impacting distribution service margins [11][12] Market Data and Key Metrics Changes - The core calibration service demand saw a decline in December, attributed to holiday-related manufacturing closures [7][9] - The rental channel faced similar demand declines, affecting overall distribution performance [11][54] Company Strategy and Development Direction - The company is focused on integrating Martin Calibration, which is expected to enhance service growth and productivity [10][22] - Management aims for strong organic service growth and improved operational efficiencies through process improvements and automation [22] - The company maintains a strong pipeline of new opportunities in calibration services, anticipating a return to historical growth rates [21][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of holiday timing on service demand and expressed confidence in a recovery in January [26][27] - The outlook for organic service revenue is expected to be in the low to mid-single digits, below previous expectations [21] - Management remains optimistic about the fundamentals of the business and the potential for strong performance in the upcoming fiscal year [35][36] Other Important Information - The company acquired Martin Calibration for $79,000,000, enhancing its presence in key markets [19] - The company reported total net debt of $4,080,000, with a leverage ratio of 0.97x [19] Q&A Session Summary Question: Near term outlook and guidance reduction - Management confirmed that December's slowdown impacted guidance, but January showed recovery, leading to conservative full-year guidance [26][27] Question: Visibility in the pipeline and expectations for next year - Management reported a strong core calibration pipeline, with some delays affecting guidance but remains optimistic for the upcoming year [30][31] Question: Service gross margins and future expectations - Management expects service margins to stabilize and grow in the upcoming quarters, aiming for consistent performance [46] Question: Distribution performance and rental recovery - Management indicated that the rental business was impacted similarly to calibration services, but expects recovery as demand increases [54] Question: Working capital and inventory management - Management noted improvements in inventory levels and accounts receivable due to the acquisition, aligning with revenue growth [50][51]

Financial Results Fiscal 2025 Q3 Lee D. Rudow President and CEO Michael West Chief Operating Officer Tom L. Barbato Chief Financial Officer 1 Safe Harbor Statement This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact and thus are subject to risks, uncertainties and assumptions. Forward-looking statements relate to expectations, estimates, beliefs, assumptions and pred ...

Revenue Performance - Consolidated revenue for Q3 FY2025 was $66.8 million, an increase of $1.6 million or 2.4% compared to Q3 FY2024[6] - Service revenue was $41.6 million, flat year-over-year with a slight increase of $48, while distribution revenue grew by $1.5 million or 6.5% to $25.2 million[5][13] - Total revenue for the first nine months of FY2025 was $201.3 million, an increase of $12.7 million or 6.7% compared to the same period last year[14] - Total revenue for Q3 of Fiscal 2025 was $66,754 million, representing a 2.4% increase from $65,166 million in Q3 of Fiscal 2024[40] - Service Revenue for FY 2025 reached $129,418 million, an increase of 5.4% from FY 2024's $122,793 million[42] - Distribution Revenue for FY 2025 was $71,869 million, reflecting a 9.3% growth compared to FY 2024's $65,775 million[42] - Total Revenue for FY 2025 amounted to $201,287 million, up 6.7% from $188,568 million in FY 2024[42] Profitability Metrics - Gross profit decreased by $1.3 million or 6.0% to $19.7 million, with gross margin dropping to 29.5% from 32.1%[7] - Operating income fell by 51.1% to $2.1 million, with operating margin decreasing to 3.1%[6] - Net income per diluted share was $0.25, down from $0.38, representing a decline of 34.2%[7] - Adjusted EBITDA was $7.9 million, a decrease of $1.2 million or 13.2%, with an adjusted EBITDA margin of 11.9%[7] - Gross profit for the third quarter was $19.679 million, down 6.0% from $20.936 million in the prior year[28] - Operating Income for FY 2025 increased to $10,934 million, a rise of 3.4% from $10,577 million in FY 2024[42] - Gross Profit for FY 2025 was $63,540 million, representing a 6.3% increase from FY 2024's $59,771 million[42] - Gross Margin for FY 2025 slightly decreased to 31.6% from 31.7% in FY 2024[42] Expenses and Costs - Selling, Marketing & Warehouse Expenses rose to $24,101 million in FY 2025, a 15.6% increase from $20,844 million in FY 2024[42] - General and Administrative Expenses for FY 2025 were $28,505 million, showing a marginal increase of 0.5% from $28,350 million in FY 2024[42] - Cost of Revenue for Total operations increased to $137,747 million, up 6.9% from $128,797 million in FY 2024[42] Debt and Assets - As of December 28, 2024, total debt was $41.9 million, with a leverage ratio of 0.97[16] - Total assets increased to $386.009 million as of December 28, 2024, from $287.552 million as of March 30, 2024[30] Strategic Initiatives - The acquisition of Martin Calibration, which has revenue exceeding $25 million, is expected to enhance geographic reach and capabilities[4] - Transcat plans to expand its addressable calibration market through acquisitions and capability investments[24] - The company operates out of more than 50 locations, including 33 Calibration Service Centers across the U.S., Puerto Rico, Canada, and Ireland[22] - Transcat's strategy includes leveraging its strong brand and unique value proposition to drive organic sales growth[24] Income Summary - Net income for the nine months ended December 28, 2024, was $10.051 million, compared to $6.757 million for the same period in 2023, representing a 48.0% increase[32] - Net income for Q1, Q2, and Q3 of Fiscal 2025 totaled $10,051 million, with Q1 at $4,408 million, Q2 at $3,286 million, and Q3 at $2,357 million[34] - Adjusted net income for Q3 of Fiscal 2025 was $4,154 million, with adjusted diluted earnings per share at $0.45[38] Share Metrics - The company reported a total of 9,243 million average diluted shares outstanding for Fiscal 2025 YTD[38] - Basic earnings per share for the third quarter was $0.26, down from $0.39 in the previous year[28]

Core Insights - Transcat, Inc. reported revenue of $66.75 million for the quarter ended December 2024, reflecting a year-over-year increase of 2.4% but a revenue surprise of -5.49% compared to the Zacks Consensus Estimate of $70.63 million [1] - The company's EPS for the quarter was $0.45, which is an increase from $0.38 in the same quarter last year, but fell short of the consensus estimate of $0.53, resulting in an EPS surprise of -15.09% [1] Financial Performance Metrics - Distribution Sales revenue was reported at $25.20 million, which is lower than the estimated $26.60 million, but shows a year-over-year increase of 6.5% [4] - Service Revenue was reported at $41.56 million, below the estimated $44.03 million, with a minimal year-over-year increase of 0.1% [4] - Gross Profit from Distribution was $7.32 million, compared to the average estimate of $8.68 million, indicating a shortfall [4] - Gross Profit from Service was $12.36 million, which also fell short of the average estimate of $14.28 million [4] Stock Performance - Over the past month, Transcat's shares have returned -6.1%, contrasting with a +1.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance relative to the broader market in the near term [3]