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Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $66.7 million, reflecting a 10% increase compared to the prior year, driven by strong demand in both segments [14][36] - Consolidated gross margin expanded by 310 basis points to 34%, with significant margin improvements in both Service and Distribution segments [12][41] - Adjusted EBITDA for the quarter was $10.2 million, up 20% from the same quarter last year, with an adjusted EBITDA margin increase of 130 basis points [16][42] - Net income increased by 49% to $4.4 million, with diluted earnings per share rising to $0.48, up $0.10 from the previous year [42] Business Line Data and Key Metrics Changes - Service revenue grew by 10% overall, with 6.4% of this growth being organic and the remainder from acquisitions [11][14] - Distribution revenue reached $22.9 million, an 11% increase, primarily due to strong performance in the higher-margin Rental business [14][15] - Service gross margins improved by 150 basis points to 34%, attributed to increased productivity and automation [38] Market Data and Key Metrics Changes - The company continues to focus on highly-regulated industries such as life sciences and aerospace and defense, which are driving consistent demand [11][23] - The expansion of addressable markets has significantly contributed to revenue and margin growth [12] Company Strategy and Development Direction - The company aims for organic Service growth in the high single-digit to low double-digit range for fiscal 2025, with a focus on gross margin expansion across its business portfolio [19] - A robust acquisition pipeline is in place to enhance core services and addressable markets, aiming to generate sustainable long-term value for shareholders [19][59] - The strategic shift towards higher-margin Rental business is expected to continue, with a gradual decrease in focus on low-margin Distribution business [49][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand and pipeline, indicating that fluctuations in organic growth should not be a cause for concern [22] - The company is focused on improving operational efficiency through automation and training programs to address labor challenges [66] - Management highlighted the importance of maintaining customer relationships while transitioning resources towards higher-margin segments [63] Other Important Information - The company ended the quarter with total net cash of $19.1 million and a leverage ratio of 0.1x, with $80 million available from its credit facility [17] - The acquisition of Becnel Rental Tools for $50 million was completed, expected to enhance service margin expansion over time [17] Q&A Session Summary Question: Insights on Services organic growth being below expectations - Management indicated that the 6.4% organic growth should not be overly scrutinized, as demand remains strong and fluctuations are expected [22] Question: Performance of Distribution segment and Rental business mix - Management acknowledged that while organic growth in Distribution was negative, the focus on Rental business is strategic and has shown impressive growth [24] Question: Updates on Services gross margin improvement drivers - Management detailed that productivity improvements and automation initiatives are key drivers of margin enhancement, with ongoing efforts to improve operational efficiency [52][66] Question: Addressable market updates and growth drivers - Management confirmed that the addressable market is being expanded adjacent to core calibration services, with a focus on recurrent revenue streams [73] Question: Expectations for second quarter margin trends - Management stated that no significant changes in seasonality are expected, and it would be safe to assume typical trends [78]

[Company Overview and Highlights](index=1&type=section&id=company_overview_and_highlights) Transcat reported strong Q1 FY25 results with significant gross margin and EBITDA growth, driven by service productivity, distribution rentals, and strategic acquisitions, reinforcing its position as a leading provider in highly regulated industries [First Quarter Fiscal 2025 Highlights](index=1&type=section&id=First%20Quarter%20Fiscal%202025%20Highlights) Transcat reported strong first quarter fiscal year 2025 results, characterized by significant gross margin expansion and EBITDA growth. This performance was driven by increased Service productivity, growth in Distribution segment rentals, and successful integration of acquired companies - Consolidated Gross Profit grew **21.1%** on double-digit Revenue growth[18](index=18&type=chunk) - Consolidated adjusted EBITDA grew **20.4%** with margins expanding **130 basis points**[2](index=2&type=chunk) - Distribution gross margins expanded **620 basis points** on strength of rentals[2](index=2&type=chunk) - Service gross margins expanded **150 basis points** on organic growth of **6.4%** and improved productivity[18](index=18&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Lee D. Rudow expressed satisfaction with the strong Q1 results, attributing success to increased Service productivity, Distribution segment rental growth, consistent demand in highly regulated markets, successful acquisitions, and expanded offerings. He highlighted the company's differentiated value proposition, execution of automation, and productivity enhancements, noting the strategic acquisition of Becnel Rental Tools for its high-margin rental portfolio and cross-selling opportunities - Consolidated revenue was up **10%** driven by consistent demand in highly regulated end markets, successful integration of acquired companies, and widened breadth of offerings[2](index=2&type=chunk) - Adjusted EBITDA grew **20%** and margins expanded driven by a differentiated value proposition and outstanding execution of automation and productivity enhancements[2](index=2&type=chunk) - The acquisition of Becnel Rental Tools differentiates the **higher margin rental portfolio** and has provided opportunities for cross-selling of Transcat's products and services[19](index=19&type=chunk) - Expects another year of organic Service revenue growth in the **high single-digit to low double-digit range** and gross margin expansion, with automation and productivity improvements as key enablers[8](index=8&type=chunk) [About Transcat](index=5&type=section&id=About%20Transcat) Transcat, Inc. is a leading provider of accredited calibration, reliability, and related services, primarily serving highly regulated industries such as Life Science, aerospace, defense, and energy. The company also operates as a value-added distributor of professional-grade test, measurement, and control instrumentation. Its strategy focuses on leveraging its brand and comprehensive offerings to drive organic growth and expand its market through strategic acquisitions and capability investments - Transcat is a **leading provider** of accredited calibration, reliability, maintenance optimization, quality and compliance, validation, CMMS, and pipette services[41](index=41&type=chunk) - The company focuses on providing **best-in-class services and products** to highly regulated industries, particularly Life Science, aerospace and defense, and energy and utilities[41](index=41&type=chunk) - Transcat operates **29 Calibration Service Centers** and **21 imbedded customer-site locations** across the United States, Puerto Rico, Canada, and Ireland[41](index=41&type=chunk) - The company's strategy is to leverage its **strong brand** and unique value proposition to drive organic sales growth and expand its addressable calibration market through acquisitions and capability investments[12](index=12&type=chunk) [Consolidated Financial Results](index=2&type=section&id=consolidated_financial_results) Transcat achieved robust Q1 FY25 consolidated financial performance, with total revenue increasing 10.1% to $66.7 million, gross profit up 21.1%, and adjusted diluted EPS rising 30.8%, despite higher operating expenses from acquisitions and sales growth [Key Financial Metrics](index=2&type=section&id=Key%20Financial%20Metrics) For Q1 FY25, Transcat's consolidated revenue increased **10.1%** to **$66.7 million**. Gross profit grew **21.1%** to **$22.7 million**, with gross margin expanding **310 basis points**. Net income per diluted share rose **26.3%** to **$0.48**, and Adjusted Diluted EPS increased **30.8%** to **$0.68** Consolidated Financial Performance (FY25 Q1 vs FY24 Q1) | Metric | FY25 Q1 ($ in thousands) | FY24 Q1 ($ in thousands) | Change ($) | Change (%) | | :-------------------------- | :----------------------- | :----------------------- | :--------- | :--------- | | Service Revenue | 43,778 | 39,853 | 3,925 | 9.8% | | Distribution Sales Revenue | 22,929 | 20,745 | 2,184 | 10.5% | | **Total Revenue** | **66,707** | **60,598** | **6,109** | **10.1%** | | Gross Profit | 22,655 | 18,710 | 3,945 | 21.1% | | Gross Margin | 34.0% | 30.9% | | 310 bps | | Operating Income | 5,099 | 4,640 | 459 | 9.9% | | Operating Margin | 7.6% | 7.7% | | (10) bps | | Net Income | 4,408 | 2,949 | 1,459 | 49.5% | | Net Margin | 6.6% | 4.9% | | 170 bps | | Adjusted EBITDA* | 10,212 | 8,481 | 1,731 | 20.4% | | Adjusted EBITDA* Margin | 15.3% | 14.0% | | 130 bps | | Diluted EPS | 0.48 | 0.38 | 0.10 | 26.3% | | Adjusted Diluted EPS* | 0.68 | 0.52 | 0.16 | 30.8% | [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses for Q1 FY25 increased by **$3.5 million**, or **24.8%**, to **$17.6 million**. This increase was primarily driven by incremental expenses from acquired businesses, including stock-based compensation, and higher incentive-based employee costs due to sales growth - Operating expenses were **$17.6 million**, an increase of **$3.5 million**, or **24.8%**, driven by incremental expenses from acquired businesses (including stock-based compensation expense) and higher incentive-based employee costs due to sales growth[3](index=3&type=chunk) Consolidated Operating Expenses (FY25 Q1 vs FY24 Q1) | Expense Category | FY25 Q1 ($ in thousands) | FY24 Q1 ($ in thousands) | Change ($) | Change (%) | | :-------------------------------- | :----------------------- | :----------------------- | :--------- | :--------- | | Selling, Marketing & Warehouse Expenses | 7,801 | 6,469 | 1,332 | 20.6% | | General and Administrative Expenses | 9,755 | 7,601 | 2,154 | 28.3% | [Segment Performance](index=3&type=section&id=segment_performance) Both Service and Distribution segments demonstrated strong Q1 FY25 performance, with Service revenue growing 9.8% and gross margin expanding 150 bps, while Distribution sales increased 10.5% and gross margin significantly expanded by 620 bps due to rental strength [Service Segment](index=3&type=section&id=Service%20Segment) The Service segment delivered strong first quarter results, with revenue increasing **9.8%** to **$43.8 million**, including **$1.3 million** from acquisitions. Organic revenue growth was **6.4%**, driven by robust end-market demand and market share gains. The segment's gross margin expanded **150 basis points** to **34.0%** due to continued productivity improvements - Service segment revenue was **$43.8 million**, an increase of **$3.9 million** or **9.8%**, including **$1.3 million** of incremental revenue from acquisitions[4](index=4&type=chunk) - Organic revenue growth for the Service segment was **6.4%**, driven by strong end-market demand and continued market share gains[4](index=4&type=chunk) - The Service segment gross margin was **34.0%**, an increase of **150 basis points** from prior year primarily due to continued productivity improvements[4](index=4&type=chunk) Service Segment Performance (FY25 Q1 vs FY24 Q1) | Metric | FY25 Q1 ($ in thousands) | FY24 Q1 ($ in thousands) | Change ($) | Change (%) | | :-------------------------- | :----------------------- | :----------------------- | :--------- | :--------- | | Service Revenue | 43,778 | 39,853 | 3,925 | 9.8% | | Gross Profit | 14,883 | 12,971 | 1,912 | 14.7% | | Gross Margin | 34.0% | 32.5% | | 150 bps | | Operating Income | 4,090 | 3,192 | 898 | 28.1% | | Operating Margin | 9.3% | 8.0% | | 130 bps | | Adjusted EBITDA* | 6,964 | 6,232 | 732 | 11.7% | | Adjusted EBITDA* Margin | 15.9% | 15.6% | | 30 bps | [Distribution Segment](index=3&type=section&id=Distribution%20Segment) The Distribution segment demonstrated continued margin improvement in Q1 FY25, with sales increasing **10.5%** to **$22.9 million**, driven by growth in the Rental business and acquisitions. The segment's gross margin significantly expanded by **620 basis points** to **33.9%**, primarily due to a favorable sales mix and strength in the Rentals business - Distribution sales were **$22.9 million**, an increase of **$2.2 million** or **10.5%**, driven by growth in the Rental business including acquisitions[23](index=23&type=chunk) - Distribution segment gross margin was **33.9%**, an increase of **620 basis points** due to a favorable sales mix driven by strength in the Rentals business[23](index=23&type=chunk) Distribution Segment Performance (FY25 Q1 vs FY24 Q1) | Metric | FY25 Q1 ($ in thousands) | FY24 Q1 ($ in thousands) | Change ($) | Change (%) | | :-------------------------- | :----------------------- | :----------------------- | :--------- | :--------- | | Distribution Sales | 22,929 | 20,745 | 2,184 | 10.5% | | Gross Profit | 7,772 | 5,739 | 2,033 | 35.4% | | Gross Margin | 33.9% | 27.7% | | 620 bps | | Operating Income | 1,009 | 1,448 | (439) | (30.3)% | | Operating Margin | 4.4% | 7.0% | | (260) bps | | Adjusted EBITDA* | 3,248 | 2,249 | 999 | 44.4% | | Adjusted EBITDA* Margin | 14.2% | 10.8% | | 340 bps | [Financial Position and Cash Flow](index=4&type=section&id=financial_position_and_cash_flow) As of June 29, 2024, Transcat maintained a strong financial position with $22.7 million in cash, $80.0 million available credit, and reduced total debt, while operating cash flow increased to $8.9 million despite significant investing activities [Balance Sheet Overview](index=4&type=section&id=Balance%20Sheet%20Overview) As of June 29, 2024, Transcat maintained a strong financial position with **$22.7 million** in cash and cash equivalents and **$80.0 million** available under its secured revolving credit facility. Total debt decreased to **$3.6 million** from **$4.2 million**, leading to a lower leverage ratio of **0.08**. Total assets increased to **$323.7 million** Cash and Liquidity (as of June 29, 2024) | Metric | Amount ($ in thousands) | | :-------------------------------- | :---------------------- | | Cash and Cash Equivalents | 22,657 | | Available Revolving Credit Facility | 80,000 | | Total Debt | 3,580 | | Leverage Ratio | 0.08 | - Total Assets increased to **$323.652 million** as of June 29, 2024, from **$287.552 million** as of March 30, 2024[44](index=44&type=chunk) - Total Liabilities decreased to **$61.364 million** as of June 29, 2024, from **$62.383 million** as of March 30, 2024[32](index=32&type=chunk) - Total Shareholders' Equity increased to **$262.288 million** as of June 29, 2024, from **$225.169 million** as of March 30, 2024[32](index=32&type=chunk) [Cash Flow Activities](index=9&type=section&id=Cash%20Flow%20Activities) Net cash provided by operating activities for the three months ended June 29, 2024, was **$8.9 million**, an increase from **$7.5 million** in the prior year. Net cash used in investing activities decreased to **$4.1 million**, despite significant business acquisitions. Net cash used in financing activities increased to **$1.9 million**, primarily due to common stock repurchases Cash Flow Summary (Three Months Ended June 29, 2024 vs June 24, 2023) | Activity | June 29, 2024 ($ in thousands) | June 24, 2023 ($ in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | 8,924 | 7,536 | | Net Cash Used in Investing Activities | (4,094) | (5,636) | | Net Cash Used in Financing Activities | (1,935) | (859) | | Net Increase in Cash and Cash Equivalents | 3,011 | 618 | | Cash and Cash Equivalents at End of Period | 22,657 | 2,149 | - Business acquisitions, net of cash acquired, amounted to **$15.953 million** for the three months ended June 29, 2024[33](index=33&type=chunk) - Sales of marketable securities generated **$15.533 million** in Q1 FY25[33](index=33&type=chunk) [Outlook and Strategy](index=4&type=section&id=outlook_and_strategy) Transcat anticipates continued strong performance in fiscal 2025, projecting high single-digit to low double-digit organic Service revenue growth and ongoing gross margin expansion, driven by leveraging its brand, comprehensive services, and strategic acquisitions [Fiscal 2025 Outlook](index=4&type=section&id=Fiscal%202025%20Outlook) Transcat anticipates continued strong performance in fiscal 2025, projecting **high single-digit to low double-digit range** organic Service revenue growth, normalized for the extra week in fiscal 2024. The company also expects ongoing gross margin expansion and an income tax rate ranging between **24% and 26%** - Transcat expects another year of organic Service revenue growth in the **high single-digit to low double-digit range** when normalized for the extra week in fiscal 2024[8](index=8&type=chunk) - Gross margin expansion is expected to continue, with automation of calibration processes and overall productivity improvements being **key enablers**[8](index=8&type=chunk) - The company expects its income tax rate to range between **24% and 26%** in fiscal 2025[25](index=25&type=chunk) [Company Strategy](index=4&type=section&id=Company%20Strategy) Transcat's strategy is centered on leveraging its strong brand, comprehensive service capabilities, enterprise asset management, and leading distribution platform to drive organic sales growth. The company also aims to expand its addressable calibration market through strategic, accretive acquisitions and capability investments, with a sharp focus on integration to achieve synergistic growth - Transcat's strategy is to leverage its **strong brand** and unique value proposition, including comprehensive instrument service capabilities, enterprise asset management, and a leading distribution platform, to drive organic sales growth[12](index=12&type=chunk) - The company will expand its addressable calibration market through acquisitions and capability investments, focusing on integration to drive **synergistic growth opportunities**[12](index=12&type=chunk)[8](index=8&type=chunk) - Transcat believes its unique value proposition drives a **sustainable competitive advantage** in highly regulated markets, particularly Life Science, Aerospace, and Defense, along with a growing Rentals business[8](index=8&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=5&type=section&id=non_gaap_financial_measures_reconciliation) This section provides reconciliations for non-GAAP measures, including Adjusted EBITDA and Adjusted Diluted EPS, which are used to evaluate core operating performance by excluding non-cash and non-recurring items [Adjusted EBITDA Reconciliation](index=5&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA is presented as a non-GAAP measure to provide insight into core operating performance by excluding non-operating and non-cash items such as interest, income taxes, depreciation, amortization, non-cash stock compensation, and acquisition-related transaction expenses. For Q1 FY25, consolidated Adjusted EBITDA was **$10.2 million**, representing a **20.4%** increase year-over-year - Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, non-cash stock compensation expense, acquisition related transaction expenses, non-cash loss on sale of building and restructuring expense[40](index=40&type=chunk) - This non-GAAP measure allows evaluation and comparison of core operations by removing the impact of capital structure, asset base, taxes, stock-based compensation, and other non-recurring items[40](index=40&type=chunk) Consolidated Adjusted EBITDA (FY25 Q1 vs FY24 Q1) | Metric | FY25 Q1 ($ in thousands) | FY24 Q1 ($ in thousands) | Change ($) | Change (%) | | :---------------- | :----------------------- | :----------------------- | :--------- | :--------- | | Adjusted EBITDA | 10,212 | 8,481 | 1,731 | 20.4% | | Adjusted EBITDA Margin | 15.3% | 14.0% | | 130 bps | Segment Adjusted EBITDA (FY25 Q1) | Segment | Adjusted EBITDA ($ in thousands) | | :---------------- | :----------------------------- | | Service | 6,964 | | Distribution | 3,248 | [Adjusted Diluted EPS Reconciliation](index=5&type=section&id=Adjusted%20Diluted%20EPS%20Reconciliation) Adjusted Diluted EPS is a non-GAAP measure that adjusts net income for acquisition-related amortization, transaction expenses, stock-based compensation, and backlog amortization, then divides by diluted shares outstanding. For Q1 FY25, Adjusted Diluted EPS was **$0.68**, representing a **30.8%** increase compared to **$0.52** in Q1 FY24 - Adjusted Diluted Earnings Per Share is a non-GAAP measure calculated as net income plus acquisition related amortization expense, acquisition related transaction expenses, acquisition related stock-based compensation, acquisition amortization of backlog and restructuring expense; divided by the average diluted shares outstanding[27](index=27&type=chunk) - This measure provides a basis for comparing business operations by excluding items not indicative of core operating performance[27](index=27&type=chunk) Diluted EPS vs. Adjusted Diluted EPS (FY25 Q1 vs FY24 Q1) | Metric | FY25 Q1 | FY24 Q1 | Change | Change (%) | | :---------------------- | :------ | :------ | :----- | :--------- | | Diluted Earnings Per Share | $0.48 | $0.38 | $0.10 | 26.3% | | Adjusted Diluted Earnings Per Share | $0.68 | $0.52 | $0.16 | 30.8% | - Adjusted Net Income for FY25 Q1 was **$6.239 million**[36](index=36&type=chunk) [Additional Information](index=4&type=section&id=additional_information) This section provides details on the Q1 FY25 webcast and conference call, a safe harbor statement regarding forward-looking information, and investor contact details [Webcast and Conference Call](index=4&type=section&id=Webcast%20and%20Conference%20Call) Transcat hosted a conference call and webcast on **Tuesday, July 30, 2024, at 11:00 a.m. ET**, to discuss Q1 financial and operating results, strategy, and outlook. A telephonic replay and webcast replay are available for those who missed the live event - A conference call and webcast were hosted on **Tuesday, July 30, 2024, at 11:00 a.m. ET**[26](index=26&type=chunk) - Access to the webcast replay and a transcript is available at **www.transcat.com/investor-relations**[9](index=9&type=chunk) - A telephonic replay was available from **2:00 p.m. ET on the day of the call through Tuesday, August 6, 2024**, by dialing **(412) 317-6671** and entering conference ID **13747789**[9](index=9&type=chunk) [Safe Harbor Statement](index=6&type=section&id=Safe%20Harbor%20Statement) The news release includes forward-looking statements that are subject to various risks, uncertainties, and assumptions. These statements pertain to future operating performance, revenue, profit margins, acquisitions, and market conditions. Readers are advised against undue reliance on these statements, which are valid only as of their original date, and the company disclaims any obligation to update them unless legally required - Forward-looking statements are not historical facts and are subject to **risks, uncertainties, and assumptions**[13](index=13&type=chunk) - These statements address future operating performance, revenue, profit margins, acquisitions, and market conditions[13](index=13&type=chunk) - Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made[13](index=13&type=chunk) - The company disclaims any obligation to update, correct, or publicly announce revisions to forward-looking statements, except as required by law[13](index=13&type=chunk) [Contact Information](index=6&type=section&id=Contact%20Information) Contact details for investor relations are provided for Tom Barbato - Contact Person: **Tom Barbato**[30](index=30&type=chunk) - Phone: **(585) 505-6530**[30](index=30&type=chunk) - Email: **Thomas.Barbato@transcat.com**[30](index=30&type=chunk)

Core Insights - Transcat, Inc. reported revenue of $66.71 million for the quarter ended June 2024, reflecting a year-over-year increase of 10.1% and an EPS of $0.48, up from $0.38 in the same quarter last year [1] Financial Performance Metrics - The reported revenue of $66.71 million was a surprise of -3.40% compared to the Zacks Consensus Estimate of $69.06 million [3] - The EPS surprise was +65.52%, with the consensus EPS estimate being $0.29 [3] - Distribution Sales revenue was $22.93 million, compared to the estimated $24.76 million, marking a year-over-year increase of +10.3% [5] - Service Revenue was reported at $43.78 million, slightly below the average estimate of $43.92 million, with a year-over-year change of +29.2% [5] - Gross Profit from Distribution was $7.77 million, close to the average estimate of $7.78 million [5] - Gross Profit from Service was $14.88 million, compared to the estimated $15.05 million [5] Stock Performance - Transcat's shares have returned +17% over the past month, while the Zacks S&P 500 composite experienced a -0.2% change [6] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [6]

分组1 - Transcat, Inc. reported quarterly earnings of $0.48 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, and up from $0.38 per share a year ago [1][5][12] - The company posted revenues of $66.71 million for the quarter, which was 3.40% below the Zacks Consensus Estimate, but an increase from $60.6 million year-over-year [9] - Transcat's stock has increased approximately 28.1% since the beginning of the year, outperforming the S&P 500's gain of 14.5% [6] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $71.86 million, and for the current fiscal year, it is $1.99 on revenues of $292.29 million [10] - The Instruments - Control industry, to which Transcat belongs, is currently ranked in the top 8% of over 250 Zacks industries, indicating strong performance potential [4] - Transcat has surpassed consensus EPS estimates four times over the last four quarters, demonstrating consistent earnings strength [12][13]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: March 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to ______ Commission File Number: 000-03905 TRANSCAT, INC. (Exact name of registrant as specified in its charter) (State or other jurisdictio ...

Financial Data and Key Metrics Changes - Fiscal 2024 consolidated revenue increased by 13% to $259 million, with double-digit organic service growth of 11% and total service growth of 17% [7][19] - Adjusted diluted earnings per share for Q4 was $0.66, up 10% from the same quarter of the prior year, while full-year net income increased by 28% [14][21] - Consolidated gross profit for Q4 was $24 million, up 26% from the prior year, with gross margin expanding by 300 basis points [12][19] - Full-year adjusted EBITDA grew by 27% to $38.6 million, reflecting strong performance across both segments [22][92] Business Line Data and Key Metrics Changes - The Service segment recorded 18% total service growth and 13% organic service growth, marking its 60th consecutive quarter of year-over-year growth [16][18] - Distribution revenue grew by 5% for the full year, driven by strong performance in the higher-margin rental business, which accounted for approximately 35% of the overall Distribution business post-Becnel acquisition [9][11][35] Market Data and Key Metrics Changes - The demand for Transcat's core calibration business remains strong, contributing to the overall growth in service revenue [18] - The recent acquisition of Becnel Rental Tools is expected to diversify the service portfolio and enhance growth opportunities in regulated markets [28][60] Company Strategy and Development Direction - The company aims to continue benefiting from recurring revenue streams and expects organic service growth in the high single-digit to low double-digit range [27] - Transcat's acquisition strategy focuses on integrating strategic acquisitions that enhance customer value and expand addressable markets [45] - The TS3 initiative, which integrates asset management and lifecycle services with core calibration services, is expected to provide a comprehensive suite of services to high-level decision-makers [29][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth of the high-margin rental business and the effectiveness of automation and process improvements in driving margin expansion [27][49] - The company anticipates that the integration of Becnel will provide synergistic growth opportunities and enhance its position in regulated markets [28][60] Other Important Information - The company had total net cash of $31 million at year-end, with a leverage ratio of 0.1x and $80 million available from its credit facility [43] - The acquisition of Becnel was completed for $50 million, paid in a combination of stock and cash [43] Q&A Session Summary Question: Growth outlook for the Service side - Management indicated that there is significant runway for growth in both service initiatives and operational leadership development [32] Question: Percentage of Distribution segment revenue from rentals post-Becnel acquisition - Approximately 35% of the overall Distribution business revenue comes from rentals post-acquisition [35] Question: Impact of acquisitions on future deals - Management confirmed that the strength of the company's equity allows for potential larger acquisitions that fit strategically [35] Question: Seasonality in the rental business - Management noted that calendar Q1 is typically the lightest quarter for the rental business, which aligns with Transcat's overall business seasonality [76] Question: Incremental CapEx for fiscal '25 related to Becnel - An increase in CapEx is expected to support the growth of the rental business, similar to the increase seen with the Axiom acquisition [65] Question: New brand positioning with TS3 - The TS3 initiative aims to present a comprehensive service offering to highly regulated customers, enhancing the company's value proposition [66][80]

Core Insights - Transcat exceeded quarterly expectations and forecasts continued growth, leading to a significant increase in share price [1][5] Financial Performance - The company reported earnings of $0.66 per share for the fiscal fourth quarter ending March 30, with revenue of $70.9 million, surpassing Wall Street estimates of $0.53 per share on sales of $68 million [2] - Consolidated adjusted EBITDA grew by 29.8% in the quarter, with EBITDA margin expanding by 200 basis points, driven by strong organic growth and acquisitions [3] - Fourth-quarter consolidated revenue increased by 14%, with gross margin expansion of 300 basis points year over year, attributed to a wider range of service offerings and strong performance in the rental business [4] Future Outlook - The CEO forecasts further gains in fiscal 2025, supported by predictable, recurring revenue streams from regulated markets like life sciences [5] - The rental business is positioned as a hedge against economic downturns, as it tends to perform better during economic cycles [5] - Transcat is identified as an under-the-radar stock with potential for growth if it continues its recent performance [6]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Transcat reported strong Q4 and full-year fiscal 2024 results, driven by double-digit organic Service revenue growth, significant gross margin expansion, and strategic acquisitions [Company Overview & Q4/FY24 Performance Highlights](index=1&type=section&id=Company%20Overview%20%26%20Q4%2FFY24%20Performance%20Highlights) Transcat, a leading provider of accredited calibration services and test instrumentation, reported strong financial results for Q4 and full-year fiscal 2024, driven by double-digit organic Service revenue growth, significant gross margin expansion in both segments, and successful integration of recent acquisitions - **Transcat** is a leading provider of accredited **calibration services**, cost control and optimization services, and distribution/rental of professional grade test, measurement, and control instrumentation[3](index=3&type=chunk) - **Fiscal 2024** consisted of **53 weeks**, while **fiscal 2023** had **52 weeks**[3](index=3&type=chunk) - Double-digit **organic Service revenue growth** and increased productivity drove **Service gross margin expansion**, while **Distribution gross margins** soared due to growth in **Rentals**[4](index=4&type=chunk) - **Adjusted EBITDA** grew **30%** for **Q4**, reflecting leverage of **organic Service revenue growth** and successful **acquisition** integration[4](index=4&type=chunk) - **Consolidated revenue** was up **14%** in **Q4** with **gross margin expansion** of **300 basis points** year over year[4](index=4&type=chunk) [Key Achievements](index=1&type=section&id=Key%20Achievements) The company completed three acquisitions (TIC-MS, SteriQual, Axiom Test Equipment) in fiscal 2024, expanding markets and offerings, with a focus on effective integration and cross-sell synergies. A new rental acquisition, Becnel Rental Tools, closed post-fiscal year-end - Completed three **acquisitions** in **fiscal year 2024**: TIC-MS, SteriQual, and Axiom Test Equipment, expanding addressable markets and offerings[5](index=5&type=chunk) - **Acquisition** strategy emphasizes effective integration processes to quickly make new **acquisitions** accretive and drive cross-sell synergies[5](index=5&type=chunk) - Post-**fiscal year-end**, acquired **Becnel Rental Tools**, expected to differentiate the higher-margin rental portfolio and provide cross-selling opportunities[5](index=5&type=chunk) Fourth Quarter and Fiscal Year 2024 Key Performance Indicators | Metric | Q4 FY24 | YoY Change | FY24 | YoY Change | | :-------------------------------- | :------ | :--------- | :----- | :--------- | | Service Organic Growth | 13% | - | - | - | | Service Gross Margin Expansion | 170 bps | - | - | - | | Distribution Gross Margin | 30.3% | +510 bps | - | - | | Consolidated Adjusted EBITDA Growth | 29.8% | - | 26.9% | - | | Operating Cash Flow | - | - | $32.6M | +92% | [Fourth Quarter Fiscal 2024 Financial Review](index=2&type=section&id=Fourth%20Quarter%20Fiscal%202024%20Financial%20Review) Transcat achieved a 14.3% increase in consolidated revenue to $70.9 million in Q4 FY24, with gross profit rising 25.5% and gross margin expanding 300 basis points, driven by strong segment performance [Consolidated Results](index=2&type=section&id=Consolidated%20Results%20Q4) Transcat achieved a 14.3% increase in consolidated revenue to $70.9 million in Q4 FY24, with gross profit rising 25.5% and gross margin expanding 300 basis points. Adjusted EBITDA grew by 29.8%, and diluted EPS increased significantly Q4 FY24 Consolidated Financial Highlights | Metric | FY24 Q4 ($ in thousands) | FY23 Q4 ($ in thousands) | Change ($) | Change (%) | | :---------------------- | :----------------------- | :----------------------- | :--------- | :--------- | | Service Revenue | 46,732 | 39,763 | 6,969 | 17.5% | | Distribution Sales | 24,181 | 22,304 | 1,877 | 8.4% | | **Total Revenue** | **70,913** | **62,067** | **8,846** | **14.3%** | | Gross Profit | 24,035 | 19,150 | 4,885 | 25.5% | | Gross Margin | 33.9% | 30.9% | - | +300 bps | | Operating Income | 9,204 | 5,855 | 3,349 | 57.2% | | Operating Margin | 13.0% | 9.4% | - | - | | Net Income | 6,890 | 3,658 | 3,232 | 88.4% | | Net Margin | 9.7% | 5.9% | - | - | | Adjusted EBITDA* | 11,682 | 8,998 | 2,684 | 29.8% | | Adjusted EBITDA* Margin | 16.5% | 14.5% | - | +200 bps | | Diluted EPS | $0.77 | $0.48 | $0.29 | 60.0% | | Adjusted Diluted EPS* | $0.66 | $0.60 | $0.06 | 9.8% | - **Consolidated revenue** of **$70.9 million** increased **14.3%**, benefiting from the **53rd week** in **fiscal 2024**[8](index=8&type=chunk) - **Operating expenses** increased **11.6%** to **$14.8 million**, driven by incremental expenses from acquired businesses, increased **intangibles amortization**, higher sales-based incentives, and a reversal of the non-cash charge related to the amended **NEXA Earn-Out agreement**[8](index=8&type=chunk) [Service Segment Performance](index=2&type=section&id=Service%20Segment%20Performance%20Q4) The Service segment, representing 65.9% of total revenue, delivered record Q4 results with revenue growing 17.5% to $46.7 million, including 13.0% organic growth. Gross margin expanded 170 basis points due to productivity improvements - **Service segment** accounted for **65.9%** of **total revenue** for the **fourth quarter** of **fiscal 2024**[9](index=9&type=chunk) Q4 FY24 Service Segment Financial Highlights | Metric | FY24 Q4 ($ in thousands) | FY23 Q4 ($ in thousands) | Change ($) | Change (%) | | :---------------------- | :----------------------- | :----------------------- | :--------- | :--------- | | Service Segment Revenue | 46,732 | 39,763 | 6,969 | 17.5% | | Gross Profit | 16,704 | 13,523 | 3,181 | 23.5% | | Gross Margin | 35.7% | 34.0% | - | +170 bps | | Operating Income | 8,144 | 4,547 | 3,597 | 79.1% | | Operating Margin | 17.4% | 11.4% | - | - | | Adjusted EBITDA* | 8,741 | 7,039 | 1,702 | 24.2% | | Adjusted EBITDA* Margin | 18.7% | 17.7% | - | - | - **Service segment revenue** was **$46.7 million**, an increase of **17.5%**, including **$1.2 million** of incremental **revenue** from **acquisitions**[11](index=11&type=chunk) - **Organic revenue growth** was **13.0%** driven by strong end market demand and continued market share gains[11](index=11&type=chunk) [Distribution Segment Performance](index=3&type=section&id=Distribution%20Segment%20Performance%20Q4) The Distribution segment, comprising 34.1% of total revenue, saw sales increase 8.4% to $24.2 million in Q4 FY24, primarily due to strength in the Rentals business. Gross margin significantly improved by 510 basis points to 30.3% - **Distribution segment** accounted for **34.1%** of **total revenue** for the **fourth quarter** of **fiscal 2024**[12](index=12&type=chunk) Q4 FY24 Distribution Segment Financial Highlights | Metric | FY24 Q4 ($ in thousands) | FY23 Q4 ($ in thousands) | Change ($) | Change (%) | | :------------------------- | :----------------------- | :----------------------- | :--------- | :--------- | | Distribution Segment Sales | 24,181 | 22,304 | 1,877 | 8.4% | | Gross Profit | 7,331 | 5,627 | 1,704 | 30.3% | | Gross Margin | 30.3% | 25.2% | - | +510 bps | | Operating Income | 1,060 | 1,308 | (248) | (19.0)% | | Operating Margin | 4.4% | 5.9% | - | - | | Adjusted EBITDA* | 2,941 | 1,959 | 982 | 50.1% | | Adjusted EBITDA* Margin | 12.2% | 8.8% | - | - | - **Distribution sales** were **$24.2 million**, an increase of **8.4%** on improved end market demand and strength in our **Rentals business**[14](index=14&type=chunk) - **Distribution segment gross margin** was **30.3%**, an increase of **510 basis points** due to a favorable sales mix driven by strength in the **Rentals business**[14](index=14&type=chunk) [Full-Year Fiscal 2024 Financial Review](index=3&type=section&id=Full-Year%20Fiscal%202024%20Financial%20Review) For the full fiscal year 2024, Transcat's total revenue grew 12.5% to $259.5 million, with gross profit increasing 22.6% and Adjusted EBITDA rising 26.9% [Consolidated Results](index=3&type=section&id=Consolidated%20Results%20FY24) For the full fiscal year 2024, Transcat's total revenue grew 12.5% to $259.5 million. Gross profit increased 22.6% with a 270 basis point margin expansion. Adjusted EBITDA rose 26.9%, and diluted EPS improved to $1.63 Full-Year FY24 Consolidated Financial Highlights | Metric | FY 2024 ($ in thousands) | FY 2023 ($ in thousands) | Change ($) | Change (%) | | :---------------------- | :----------------------- | :----------------------- | :--------- | :--------- | | Service Revenue | 169,525 | 144,883 | 24,642 | 17.0% | | Distribution Sales | 89,956 | 85,686 | 4,270 | 5.0% | | **Total Revenue** | **259,481** | **230,569** | **28,912** | **12.5%** | | Gross Profit | 83,806 | 68,355 | 15,451 | 22.6% | | Gross Margin | 32.3% | 29.6% | - | +270 bps | | Operating Income | 19,781 | 16,248 | 3,533 | 21.7% | | Operating Margin | 7.6% | 7.0% | - | - | | Net Income | 13,647 | 10,688 | 2,959 | 27.7% | | Net Margin | 5.3% | 4.6% | - | - | | Adjusted EBITDA* | 38,613 | 30,421 | 8,192 | 26.9% | | Adjusted EBITDA* Margin | 14.9% | 13.2% | - | - | | Diluted EPS | $1.63 | $1.40 | $0.23 | 16.7% | | Adjusted Diluted EPS* | $2.36 | $1.93 | $0.43 | 22.1% | - **Consolidated operating expenses** were **$64.0 million**, an increase of **$11.9 million**, or **22.9%**, driven by incremental expenses from acquired businesses, increased **intangibles amortization expense**, and investments in technology and our employee base to support future growth[16](index=16&type=chunk) [Financial Position & Cash Flow](index=4&type=section&id=Financial%20Position%20%26%20Cash%20Flow) As of March 30, 2024, Transcat held $35.2 million in cash and marketable securities, significantly reduced total debt by $44.9 million, and achieved a leverage ratio of 0.10 [Balance Sheet and Cash Flow Overview](index=4&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Overview) As of March 30, 2024, Transcat held $35.2 million in cash and marketable securities and had $80.0 million available under its credit facility. Total debt decreased significantly by $44.9 million from fiscal 2023 year-end, primarily due to proceeds from a secondary stock offering, resulting in a leverage ratio of 0.10 Key Balance Sheet and Cash Flow Data (March 30, 2024) | Metric | Amount ($ in millions) | | :-------------------------------- | :--------------------- | | Cash and Marketable Securities | $35.2 | | Available Revolving Credit Facility | $80.0 | | Total Debt | $4.2 | | Debt Reduction (vs. FY23) | $44.9 (down) | | Leverage Ratio (March 30, 2024) | 0.10 | | Leverage Ratio (March 25, 2023) | 1.60 | - **Total debt** of **$4.2 million** was down **$44.9 million** from **fiscal 2023 year-end** due to cash proceeds from our **secondary stock offering**[18](index=18&type=chunk) [Outlook & Strategic Initiatives](index=4&type=section&id=Outlook%20%26%20Strategic%20Initiatives) Transcat anticipates continued strong organic Service revenue growth and gross margin expansion in fiscal 2025, driven by strategic acquisitions, leadership development, and integrated service offerings [Fiscal 2025 Outlook](index=4&type=section&id=Fiscal%202025%20Outlook) Transcat anticipates continued strong revenue growth and sustainable gross margin expansion in fiscal 2025, driven by recurring revenue in highly regulated markets and a growing Rentals business. The company expects high single-digit to low double-digit organic Service revenue growth (normalized for the extra week in FY24) and further gross margin expansion through automation and process improvement - Expects another year of **organic Service revenue growth** in the high single-digit to low double-digit range when normalized for the extra week in **fiscal 2024**[19](index=19&type=chunk) - Anticipates continued **gross margin expansion**, enabled by automation of **calibration processes** and overall process improvement[19](index=19&type=chunk) - Business will continue to benefit from recurring **revenue** streams in highly regulated end markets, including **life sciences**, along with a growing **Rentals business** that performs well throughout various economic cycles[19](index=19&type=chunk) [Strategic Initiatives & Leadership](index=4&type=section&id=Strategic%20Initiatives%20%26%20Leadership) Transcat is focusing on leadership development, promoting John Cummins to lead the new Transcat Single Source Solution (TS3) initiative, which integrates NEXA's services with calibration. The company also plans strategic, accretive acquisitions to expand its Service segment and drive synergistic growth - Promoting John Cummins to lead **Transcat Single Source Solution (TS3)**, a comprehensive value proposition integrating **NEXA's Cost, Control and Optimization services** with the **Transcat calibration business**[19](index=19&type=chunk) - The **NEXA earnout agreement** accrual has been reversed and converted to an incentive program associated with this new and expanded role[19](index=19&type=chunk) - The **Service segment** has substantial runway ahead for growth, both organically and through **acquisition**, with a robust **acquisition** pipeline for strategic, accretive **acquisitions**[19](index=19&type=chunk) - Investments in leadership development, automation, and process improvement have made **Transcat** a stronger company, well positioned to generate sustainable long-term **shareholder value**[19](index=19&type=chunk) [Income Tax Rate Expectation](index=4&type=section&id=Income%20Tax%20Rate%20Expectation) Transcat expects its income tax rate for fiscal 2025 to be between 24% and 26%, including Federal, state, Canadian, and Irish income taxes, and reflecting discrete tax accounting for share-based payment awards - **Transcat** expects its **income tax rate** to range between **24%** and **26%** in **fiscal 2025**[20](index=20&type=chunk) - This estimate includes Federal, various state, Canadian and Irish **income taxes** and reflects the discrete tax accounting associated with share-based payment awards[20](index=20&type=chunk) [Investor Information](index=5&type=section&id=Investor%20Information) Transcat will host a conference call and webcast on May 21, 2024, to discuss Q4 and full-year fiscal results, strategy, and outlook, with replays available [Webcast and Conference Call](index=5&type=section&id=Webcast%20and%20Conference%20Call) Transcat will host a conference call and webcast on May 21, 2024, at 11:00 a.m. ET to discuss Q4 and full-year fiscal results, strategy, and outlook. A telephonic replay and webcast replay will be available - Conference call and webcast scheduled for **Tuesday, May 21, 2024**, at **11:00 a.m. ET**[21](index=21&type=chunk) - 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[21](index=21&type=chunk) - A telephonic replay will be available from **2:00 p.m. ET** on the day of the call through **Tuesday, August 8, 2024**, and a webcast replay will also be accessible[22](index=22&type=chunk) [Non-GAAP Financial Measures Explanation](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) This section defines and explains Adjusted EBITDA and Adjusted Diluted EPS, non-GAAP measures used to evaluate core operating performance by excluding specific non-recurring or non-cash items [Adjusted EBITDA](index=5&type=section&id=Adjusted%20EBITDA%20Explanation) Adjusted EBITDA is a non-GAAP measure used by management, investors, and others to evaluate core operating performance by excluding interest, income taxes, depreciation, amortization, non-cash stock compensation, acquisition-related transaction expenses, non-cash loss on sale of building, and restructuring expense. It is not a substitute for GAAP net income - **Adjusted EBITDA** is a non-GAAP measure defined as **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[23](index=23&type=chunk) - It allows evaluation and comparison of core operations performance by removing the impact of capital structure, tangible and intangible asset base, taxes, stock-based compensation expense, and other items[23](index=23&type=chunk) - **Adjusted EBITDA** is not a measure of financial performance under GAAP and should not be considered as a substitute for GAAP **net income**[23](index=23&type=chunk) [Adjusted Diluted EPS](index=5&type=section&id=Adjusted%20Diluted%20EPS%20Explanation) Adjusted Diluted EPS is a non-GAAP measure that adjusts diluted EPS for acquisition-related amortization, transaction expenses, stock-based compensation, backlog amortization, and restructuring expense. It aims to provide a clearer comparison of core business operations across periods - **Adjusted Diluted Earnings Per Share** is a non-GAAP measure calculated by adjusting **net income** for **acquisition** related **amortization expense**, **acquisition** related transaction expenses, **acquisition** related stock-based compensation, **acquisition amortization of backlog** and restructuring expense; divided by the average diluted shares outstanding[24](index=24&type=chunk) - Management believes it is an important measure for comparing business operations between periods by excluding items not indicative of core operating performance[24](index=24&type=chunk) - **Adjusted Diluted Earnings Per Share** is not a measure of financial performance under GAAP and should not be considered as a substitute for GAAP **Diluted Earnings Per Share**[24](index=24&type=chunk) [About Transcat](index=5&type=section&id=ABOUT%20TRANSCAT) Transcat, Inc. is a leading provider of accredited calibration and related services to highly regulated industries, leveraging its strong brand and distribution platform for organic and acquisition-driven growth [Company Description](index=5&type=section&id=Company%20Description) Transcat, Inc. is a leading provider of accredited calibration, reliability, maintenance optimization, quality and compliance, validation, CMMS, and pipette services. It serves highly regulated industries, particularly Life Sciences, aerospace and defense, and energy and utilities, through 29 service centers and 21 on-site labs - **Transcat, Inc.** is a leading provider of accredited **calibration**, reliability, maintenance optimization, quality and compliance, validation, Computerized Maintenance Management System (CMMS), and pipette services[25](index=25&type=chunk) - The Company is focused on providing best-in-class services and products to highly regulated industries, particularly the **Life Science industry**, as well as **aerospace and defense**, and **energy and utilities**[25](index=25&type=chunk) - **Transcat** provides services through **29 Calibration Service Centers** across the United States, Puerto Rico, Canada, and Ireland, and **21 imbedded customer-site locations**[25](index=25&type=chunk) - **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[26](index=26&type=chunk) [Business Strategy](index=6&type=section&id=Business%20Strategy) Transcat's strategy is to leverage its strong brand, comprehensive instrument service capabilities, Cost, Control and Optimizations services, and leading distribution platform to drive organic sales growth. It also aims to expand its addressable calibration market through strategic acquisitions and capability investments - **Transcat's strategy** is to leverage its strong brand and unique value proposition that includes its comprehensive instrument service capabilities, **Cost, Control and Optimizations services**, and leading distribution platform to drive organic **sales growth**[27](index=27&type=chunk) - 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[27](index=27&type=chunk) [Safe Harbor Statement](index=6&type=section&id=Safe%20Harbor%20Statement) This statement clarifies that the news release contains forward-looking statements subject to risks and uncertainties, and the company disclaims any obligation to update them, except as required by law - This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of **1995**, identified by words such as 'expects,' 'anticipates,' 'will,' etc[28](index=28&type=chunk) - Forward-looking statements address operating performance, **revenue**, **profit margins**, growth strategy, potential **acquisitions**, and market conditions[28](index=28&type=chunk) - These statements are subject to risks, uncertainties, and assumptions, and actual results may vary materially from those anticipated[28](index=28&type=chunk) - The Company disclaims any obligation to update, correct or publicly announce any revisions to any of the forward-looking statements, except as required by law[28](index=28&type=chunk) [Financial Statements](index=7&type=section&id=FINANCIAL%20TABLES) This section presents Transcat's consolidated statements of income, balance sheets, cash flows, and reconciliations for non-GAAP measures, detailing financial performance and position for fiscal years 2024 and 2023 [Consolidated Statements of Income](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) The consolidated statements of income show Transcat's revenue, cost of revenue, gross profit, operating expenses, operating income, interest and other expenses, income before taxes, provision for income taxes, and net income for the fourth quarter and full fiscal year 2024 and 2023 Consolidated Statements of Income (Q4 and FY Ended March 30, 2024 vs. March 25, 2023) | Metric (In Thousands, Except Per Share) | FY24 Q4 | FY23 Q4 | FY24 YTD | FY23 YTD | | :-------------------------------- | :------ | :------ | :------- | :------- | | Service Revenue | $46,732 | $39,763 | $169,525 | $144,883 | | Distribution Sales | $24,181 | $22,304 | $89,956 | $85,686 | | **Total Revenue** | **$70,913** | **$62,067** | **$259,481** | **$230,569** | | Cost of Service Revenue | $30,028 | $26,240 | $112,272 | $98,245 | | Cost of Distribution Sales | $16,850 | $16,677 | $63,403 | $63,969 | | **Total Cost of Revenue** | **$46,878** | **$42,917** | **$175,675** | **$162,214** | | **Gross Profit** | **$24,035** | **$19,150** | **$83,806** | **$68,355** | | Selling, Marketing and Warehouse Expenses | $7,866 | $6,446 | $28,710 | $24,761 | | General and Administrative Expenses | $6,965 | $6,849 | $35,315 | $27,346 | | **Total Operating Expenses** | **$14,831** | **$13,295** | **$64,025** | **$52,107** | | **Operating Income** | **$9,204** | **$5,855** | **$19,781** | **$16,248** | | Interest and Other Expense, net | $(400) | $1,029 | $1,342 | $2,761 | | Income Before Income Taxes | $9,604 | $4,826 | $18,439 | $13,487 | | Provision for Income Taxes | $2,714 | $1,168 | $4,792 | $2,799 | | **Net Income** | **$6,890** | **$3,658** | **$13,647** | **$10,688** | | Basic Earnings Per Share | $0.78 | $0.48 | $1.66 | $1.42 | | Diluted Earnings Per Share | $0.77 | $0.48 | $1.63 | $1.40 | [Consolidated Balance Sheets](index=8&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) The consolidated balance sheets present Transcat's assets, liabilities, and shareholders' equity as of March 30, 2024, and March 25, 2023, showing significant increases in cash, marketable securities, and total assets, alongside a decrease in long-term debt Consolidated Balance Sheets (As of March 30, 2024 vs. March 25, 2023) | Metric (In Thousands) | March 30, 2024 | March 25, 2023 | | :-------------------------------- | :------------- | :------------- | | **ASSETS** | | | | Cash and Cash Equivalents | $19,646 | $1,531 | | Marketable Securities | $15,533 | - | | Accounts Receivable, net | $47,779 | $44,698 | | Inventory, net | $17,418 | $16,929 | | **Total Current Assets** | **$105,158** | **$67,599** | | Property and Equipment, net | $38,944 | $29,064 | | Goodwill | $105,585 | $69,360 | | Intangible Assets, net | $19,987 | $13,799 | | **Total Assets** | **$287,552** | **$195,749** | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Accounts Payable | $11,495 | $15,869 | | Accrued Compensation and Other Current Liabilities | $16,739 | $10,201 | | Current Portion of Long-Term Debt | $2,339 | $2,248 | | **Total Current Liabilities** | **$33,499** | **$28,318** | | Long-Term Debt | $1,817 | $46,869 | | Deferred Tax Liabilities, net | $9,291 | $6,538 | | **Total Liabilities** | **$62,383** | **$96,119** | | **Total Shareholders' Equity** | **$225,169** | **$99,630** | | **Total Liabilities and Shareholders' Equity** | **$287,552** | **$195,749** | [Consolidated Statements of Cash Flows](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) The consolidated statements of cash flows detail Transcat's cash movements from operating, investing, and financing activities for fiscal years 2024 and 2023. Net cash provided by operating activities significantly increased, while investing activities saw substantial outflows due to acquisitions and marketable securities purchases. Financing activities provided net cash, largely from common stock issuance Consolidated Statements of Cash Flows (FY Ended March 30, 2024 vs. March 25, 2023) | Metric (In Thousands) | FY 2024 | FY 2023 | | :-------------------------------- | :------ | :------ | | **Cash Flows from Operating Activities:** | | | | Net Income | $13,647 | $10,688 | | Depreciation and Amortization | $13,544 | $10,955 | | Stock-Based Compensation Expense | $4,512 | $3,377 | | **Net Cash Provided by Operating Activities** | **$32,616** | **$16,951** | | **Cash Flows from Investing Activities:** | | | | Purchases of Property and Equipment | $(13,280) | $(9,414) | | Business Acquisitions, net of cash acquired | $(12,859) | $(9,109) | | Purchases of Marketable Securities | $(15,533) | - | | **Net Cash Used in Investing Activities** | **$(41,672)** | **$(18,513)** | | **Cash Flows from Financing Activities:** | | | | Proceeds from Revolving Credit Facility, net | $(42,713) | $2,786 | | Issuance of Common Stock, net of direct costs | $77,266 | $658 | | Repurchase of Common Stock | $(4,906) | $(447) | | **Net Cash Provided by Financing Activities** | **$27,399** | **$876** | | **Net Increase in Cash and Cash Equivalents** | **$18,115** | **$135** | | Cash and Cash Equivalents at End of Period | $19,646 | $1,531 | [Adjusted EBITDA Reconciliation](index=10&type=section&id=Adjusted%20EBITDA%20Reconciliation%20Table) This section provides detailed reconciliations of Net Income to Adjusted EBITDA for both consolidated and segment-level results across all quarters of fiscal years 2024 and 2023, highlighting adjustments for interest, taxes, depreciation, amortization, transaction expenses, acquisition earn-out adjustments, and non-cash stock compensation Consolidated Adjusted EBITDA Reconciliation (FY24 Q1-Q4 & YTD) | Metric (In Thousands) | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | YTD FY24 | | :-------------------------------- | :------ | :------ | :------ | :------ | :------- | | Net Income | $2,949 | $460 | $3,348 | $6,890 | $13,647 | | + Interest Expense | $814 | $890 | $(266) | $(411) | $1,027 | | + Tax Provision | $813 | $342 | $923 | $2,714 | $4,792 | | Operating Income | $4,640 | $1,643 | $4,294 | $9,204 | $19,781 | | + Depreciation & Amortization | $2,790 | $3,269 | $3,783 | $3,635 | $13,477 | | + Transaction Expense | $185 | $328 | $78 | $37 | $628 | | + Acquisition Earn-Out Adjustment | - | $2,800 | $87 | $(2,357) | $530 | | + Noncash Stock Compensation | $930 | $1,241 | $1,167 | $1,174 | $4,512 | | **Adjusted EBITDA** | **$8,481** | **$9,330** | **$9,120** | **$11,682** | **$38,613** | Service Segment Adjusted EBITDA Reconciliation (FY24 Q1-Q4 & YTD) | Metric (In Thousands) | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | YTD FY24 | | :-------------------------------- | :------ | :------ | :------ | :------ | :------- | | Service Operating Income | $3,192 | $742 | $2,966 | $8,144 | $15,044 | | + Depreciation & Amortization | $2,226 | $2,325 | $2,362 | $2,280 | $9,193 | | + Transaction Expense | $185 | $76 | $30 | $(44) | $247 | | + Acquisition Earn-Out Adjustment | - | $2,800 | $87 | $(2,357) | $530 | | + Noncash Stock Compensation | $676 | $826 | $737 | $736 | $2,975 | | **Service Adjusted EBITDA** | **$6,232** | **$6,798** | **$5,979** | **$8,741** | **$27,750** | Distribution Segment Adjusted EBITDA Reconciliation (FY24 Q1-Q4 & YTD) | Metric (In Thousands) | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | YTD FY24 | | :-------------------------------- | :------ | :------ | :------ | :------ | :------- | | Distribution Operating Income | $1,448 | $901 | $1,328 | $1,060 | $4,737 | | + Depreciation & Amortization | $564 | $944 | $1,421 | $1,355 | $4,284 | | + Transaction Expense | - | $252 | $48 | $81 | $381 | | + Noncash Stock Compensation | $254 | $415 | $430 | $438 | $1,537 | | **Distribution Adjusted EBITDA** | **$2,249** | **$2,532** | **$3,141** | **$2,941** | **$10,863** | [Adjusted Diluted EPS Reconciliation](index=12&type=section&id=Adjusted%20Diluted%20EPS%20Reconciliation%20Table) This section provides detailed reconciliations of Net Income to Adjusted Diluted EPS for all quarters of fiscal years 2024 and 2023, adjusting for amortization of intangible assets, acquisition amortization of backlog, acquisition deal costs, acquisition stock expense, income tax effects, and acquisition earn-out adjustments Adjusted Diluted EPS Reconciliation (FY24 Q1-Q4 & YTD) | Metric (In Thousands, Except Per Share) | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | YTD FY24 | | :-------------------------------------- | :------ | :------ | :------ | :------ | :------- | | Net Income | $2,949 | $460 | $3,348 | $6,890 | $13,647 | | + Amortization of Intangible Assets | $1,093 | $1,416 | $1,674 | $1,447 | $5,630 | | + Acquisition Amortization of Backlog | - | $19 | $24 | $24 | $67 | | + Acquisition Deal Costs | $185 | $328 | $78 | $81 | $672 | | + Acquisition Stock Expense | $182 | $274 | $265 | $258 | $979 | | + Income Tax Effect at 25% | $(365) | $(509) | $(532) | $(431) | $(1,837) | | + Acquisition Earn-Out Adjustment | - | $2,800 | $87 | $(2,358) | $529 | | **Adjusted Net Income** | **$4,044** | **$4,788** | **$4,944** | **$5,911** | **$19,687** | | Average Diluted Shares Outstanding | 7,762 | 7,948 | 8,752 | 8,972 | 8,352 | | Diluted Earnings Per Share | $0.38 | $0.06 | $0.38 | $0.77 | $1.63 | | **Adjusted Diluted Earnings Per Share** | **$0.52** | **$0.60** | **$0.56** | **$0.66** | **$2.36** | [Business Segment Data](index=13&type=section&id=Additional%20Information%20-%20Business%20Segment%20Data) This section provides detailed financial data for Transcat's Service and Distribution segments, as well as consolidated totals, for the fourth quarter and full fiscal year 2024 and 2023, including revenue, cost of revenue, gross profit, operating expenses, and operating income Q4 FY24 Business Segment Data (Service, Distribution, Total) | Metric (In Thousands) | SERVICE Q4 FY24 | SERVICE Q4 FY23 | DISTRIBUTION Q4 FY24 | DISTRIBUTION Q4 FY23 | TOTAL Q4 FY24 | TOTAL Q4 FY23 | | :-------------------------------- | :------------- | :------------- | :------------------- | :------------------- | :------------ | :------------ | | Revenue/Sales | $46,732 | $39,763 | $24,181 | $22,304 | $70,913 | $62,067 | | Cost of Revenue/Sales | $30,028 | $26,240 | $16,850 | $16,677 | $46,878 | $42,917 | | Gross Profit | $16,704 | $13,523 | $7,331 | $5,627 | $24,035 | $19,150 | | Gross Margin | 35.7% | 34.0% | 30.3% | 25.2% | 33.9% | 30.9% | | Selling, Marketing & Warehouse Expenses | $4,490 | $4,121 | $3,376 | $2,325 | $7,866 | $6,446 | | General and Administrative Expenses | $4,070 | $4,855 | $2,895 | $1,994 | $6,965 | $6,849 | | Operating Income | $8,144 | $4,547 | $1,060 | $1,308 | $9,204 | $5,855 | | % of Revenue/Sales | 17.4% | 11.4% | 4.4% | 5.9% | 13.0% | 9.4% | Full-Year FY24 Business Segment Data (Service, Distribution, Total) | Metric (In Thousands) | SERVICE FY24 YTD | SERVICE FY23 YTD | DISTRIBUTION FY24 YTD | DISTRIBUTION FY23 YTD | TOTAL FY24 YTD | TOTAL FY23 YTD | | :-------------------------------- | :--------------- | :--------------- | :-------------------- | :-------------------- | :------------- | :------------- | | Revenue/Sales | $169,525 | $144,883 | $89,956 | $85,686 | $259,481 | $230,569 | | Cost of Revenue/Sales | $112,272 | $98,245 | $63,403 | $63,969 | $175,675 | $162,214 | | Gross Profit | $57,253 | $46,638 | $26,553 | $21,717 | $83,806 | $68,355 | | Gross Margin | 33.8% | 32.2% | 29.5% | 25.3% | 32.3% | 29.6% | | Selling, Marketing & Warehouse Expenses | $16,942 | $15,725 | $11,769 | $9,036 | $28,711 | $24,761 | | General and Administrative Expenses | $25,268 | $19,491 | $10,046 | $7,855 | $35,314 | $27,346 | | Operating Income | $15,043 | $11,422 | $4,738 | $4,826 | $19,781 | $16,248 | | % of Revenue/Sales | 8.9% | 7.9% | 5.3% | 5.6% | 7.6% | 7.0% |

Transcat, Inc. (TRNS) reported $70.91 million in revenue for the quarter ended March 2024, representing a year-over-year increase of 14.3%. EPS of $0.77 for the same period compares to $0.48 a year ago. The reported revenue represents a surprise of +3.14% over the Zacks Consensus Estimate of $68.76 million. With the consensus EPS estimate being $0.52, the EPS surprise was +48.08%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to det ...