Financial Data and Key Metrics Changes - Consolidated Q2 revenue increased by 21% to $50.4 million, setting a record for the second quarter [6][13] - Consolidated gross margin expanded by 140 basis points to 29% [7][16] - Adjusted EBITDA grew by 36% from the prior year to $7.1 million, with an adjusted EBITDA margin of 14% [7][22] - Net income for Q2 was $3 million, an increase of $1 million from the prior year, with diluted earnings per share rising to $0.40, up $0.13 [18] Business Line Data and Key Metrics Changes - Service segment revenue grew by 20.3%, with 14% of this growth being organic and the remainder from acquisitions [14] - Distribution segment revenue increased by 22%, driven by strong demand, particularly in the wind power generation market [11][15] - Service gross margin reached 32.9%, a record for the second quarter, reflecting effective cost management and productivity [10][16] - Distribution gross margin improved to 23.5%, a 240 basis point increase from the prior year [11][16] Market Data and Key Metrics Changes - The life sciences market continues to be a significant driver for service revenue, contributing to the overall growth [9] - The wind power generation market showed particular strength, contributing to distribution growth [11][15] Company Strategy and Development Direction - The company is focused on leveraging its strong balance sheet for strategic capital allocation and pursuing an active M&A pipeline [26] - The acquisition of NEXA is expected to enhance service offerings and expand addressable markets, particularly in the U.S. and Ireland [27] - Future growth is anticipated in both service and distribution segments, with expectations of continued revenue growth and margin expansion [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to pass on increased costs to customers, maintaining margins despite wage pressures [36] - The company is optimistic about its automation initiatives, which are expected to provide a competitive advantage in a tight labor market [39][60] - Management anticipates continued strong performance in the third quarter, with similar revenue growth to Q2 [28][30] Other Important Information - The company expects to file its Form 10-Q later today [24] - Cash flow from operations was in line with expectations, with year-to-date CapEx at $3.8 million, focused on service segment capabilities [23] Q&A Session All Questions and Answers Question: Can you elaborate on the gross margin guidance for the current quarter? - Management confirmed that the guidance includes a $500,000 gross profit impact from purchase accounting, with an expected 100 basis point positive impact in future quarters [34][35] Question: How is the company managing pricing and cost pressures? - Management noted that they have been able to pass on increased costs to the market, maintaining margins through strategic pricing [36] Question: What is the current concentration of the life sciences business? - Management estimated that life sciences currently represent about 60% of the business [42] Question: What are the expected margin synergies from recent acquisitions? - Management indicated that margins could improve post-acquisition as accounting costs are burned off, with potential for mid-30s margins over time [46] Question: How is the company addressing labor shortages? - Management stated that they are utilizing overtime and training programs to manage labor challenges effectively [57] Question: What are the opportunities in alternative energy markets? - Management expressed optimism about the wind power generation market and the long-term shift towards alternative energy [68] Question: What is the immediate strategy for integrating NEXA? - Management highlighted the focus on cross-selling services between Transcat and NEXA's customer bases [72]

PART I. FINANCIAL INFORMATION This section presents Transcat, Inc.'s unaudited consolidated financial statements and management's discussion for Q2 and H1 FY22 [ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents Transcat, Inc.'s unaudited consolidated financial statements and notes for Q2 and H1 FY22, detailing income, balance sheets, cash flows, equity, and accounting policies [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) This section provides a summary of Transcat's consolidated statements of income for the second quarter and six months ended September 25, 2021, and September 26, 2020 | Metric (in Thousands) | Second Quarter Ended Sep 25, 2021 | Second Quarter Ended Sep 26, 2020 | Six Months Ended Sep 25, 2021 | Six Months Ended Sep 26, 2020 | | :-------------------- | :-------------------------------- | :-------------------------------- | :---------------------------- | :---------------------------- | | Service Revenue | $29,544 | $24,554 | $57,101 | $47,521 | | Distribution Sales | $20,843 | $17,053 | $41,076 | $32,990 | | **Total Revenue** | **$50,387** | **$41,607** | **$98,177** | **$80,511** | | Gross Profit | $14,611 | $11,494 | $28,131 | $20,903 | | Operating Income | $3,578 | $3,078 | $7,267 | $4,042 | | Net Income | $3,015 | $2,024 | $6,703 | $2,822 | | Basic EPS | $0.40 | $0.27 | $0.90 | $0.38 | | Diluted EPS | $0.40 | $0.27 | $0.88 | $0.38 | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section outlines Transcat's consolidated statements of comprehensive income for the second quarter and six months ended September 25, 2021, and September 26, 2020 | Metric (in Thousands) | Second Quarter Ended Sep 25, 2021 | Second Quarter Ended Sep 26, 2020 | Six Months Ended Sep 25, 2021 | Six Months Ended Sep 26, 2020 | | :-------------------- | :-------------------------------- | :-------------------------------- | :---------------------------- | :---------------------------- | | Net Income | $3,015 | $2,024 | $6,703 | $2,822 | | Currency Translation Adjustment | $(242) | $128 | $(81) | $253 | | Other Comprehensive (Loss) Income | $(233) | $165 | $(51) | $328 | | **Comprehensive Income** | **$2,782** | **$2,189** | **$6,652** | **$3,150** | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section presents Transcat's consolidated balance sheets as of September 25, 2021, and March 27, 2021 | Metric (in Thousands) | September 25, 2021 | March 27, 2021 | | :-------------------- | :----------------- | :------------- | | Cash | $2,551 | $560 | | Total Current Assets | $53,773 | $48,928 | | Property and Equipment, net | $23,034 | $22,203 | | Goodwill | $59,441 | $43,272 | | Intangible Assets, net | $12,753 | $7,513 | | **Total Assets** | **$158,313** | **$132,116** | | Total Current Liabilities | $21,572 | $25,142 | | Long-Term Debt | $40,917 | $17,494 | | **Total Liabilities** | **$77,569** | **$57,038** | | Total Shareholders' Equity | $80,744 | $75,078 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details Transcat's consolidated statements of cash flows for the six months ended September 25, 2021, and September 26, 2020 | Cash Flow Activity (in Thousands) | Six Months Ended Sep 25, 2021 | Six Months Ended Sep 26, 2020 | | :-------------------------------- | :---------------------------- | :---------------------------- | | Net Cash Provided by Operating Activities | $7,502 | $12,476 | | Net Cash Used in Investing Activities | $(24,680) | $(3,116) | | Net Cash Provided by (Used in) Financing Activities | $19,079 | $(8,424) | | Net Increase in Cash | $1,991 | $463 | | Cash at End of Period | $2,551 | $962 | - Investing activities for the six months ended September 25, 2021, included **$20.9 million for business acquisitions**, a significant increase from the prior year[16](index=16&type=chunk) [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) This section outlines Transcat's consolidated statements of shareholders' equity as of September 25, 2021, and March 27, 2021 - Total Shareholders' Equity increased from **$75,078 thousand** as of March 27, 2021, to **$80,744 thousand** as of September 25, 2021, driven by net income and common stock issuance, partially offset by share repurchases and other comprehensive loss[18](index=18&type=chunk) | Metric (in Thousands) | March 27, 2021 | September 25, 2021 | | :-------------------- | :------------- | :----------------- | | Common Stock Amount | $3,729 | $3,759 | | Capital in Excess of Par Value | $19,287 | $22,713 | | Accumulated Other Comprehensive Loss | $(451) | $(502) | | Retained Earnings | $52,513 | $54,774 | | **Total Shareholders' Equity** | **$75,078** | **$80,744** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to Transcat's consolidated financial statements, explaining accounting policies, debt, compensation, segments, and acquisitions [NOTE 1 – GENERAL](index=8&type=section&id=NOTE%201%20%E2%80%93%20GENERAL) This note describes Transcat, Inc.'s business operations and general accounting policies - Transcat, Inc. is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement, and control instrumentation, primarily serving highly regulated industries like life sciences[21](index=21&type=chunk) - The company recognized non-cash stock-based compensation expense of **$1.1 million** for the first six months of fiscal year 2022, up from **$0.7 million** in the prior year period[26](index=26&type=chunk) | Metric (in Thousands) | September 25, 2021 | March 27, 2021 | | :-------------------- | :----------------- | :------------- | | Goodwill | $59,441 | $43,272 | | Intangible Assets | $12,753 | $7,513 | [NOTE 2 – LONG-TERM DEBT](index=10&type=section&id=NOTE%202%20%E2%80%93%20LONG-TERM%20DEBT) This note details Transcat's long-term debt obligations and credit facility agreements - Transcat entered into a Second Amended and Restated Credit Facility Agreement on July 7, 2021, increasing the revolving credit commitment from **$40.0 million to $80.0 million** and extending its term to June 2026[33](index=33&type=chunk)[34](index=34&type=chunk) - The new credit agreement increased the aggregate purchase price for permitted acquisitions to **$65.0 million** for the current fiscal year and **$50.0 million** for subsequent fiscal years, with an additional **$40.0 million** for UK/EU businesses[34](index=34&type=chunk) - The company's leverage ratio was **1.54** at September 25, 2021, compared to **0.94** at March 27, 2021, and it was in compliance with all loan covenants[42](index=42&type=chunk) [NOTE 3 – STOCK-BASED COMPENSATION](index=12&type=section&id=NOTE%203%20%E2%80%93%20STOCK-BASED%20COMPENSATION) This note describes Transcat's stock-based compensation plans and related expenses - The Transcat, Inc. 2021 Stock Incentive Plan was approved in September 2021, replacing the 2003 Plan, with **0.7 million shares** available for future grants[45](index=45&type=chunk) - Total expense for restricted stock units was **$0.9 million** in the first six months of fiscal year 2022, up from **$

September 13, 2021 HC Wainwright Conference | --- | --- | --- | |-------|----------------------------------------|--------------| | | | | | | | | | | Lee D. Rudow | | | | President and CEO | | | | Mark A. Doheny Chief Financial Officer | | | | | | | | | | | | | | | | | Nasdaq: TRNS | Safe Harbor Statement This presentation 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 a ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the first quarter ended June 26, 2021, compared to the same period in 2020 [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) Transcat reported significant Q1 FY2022 growth, with total revenue up 22.8% and net income surging over 360% Consolidated Statements of Income (Q1 FY2022 vs Q1 FY2021) | Metric | Q1 Ended June 26, 2021 (In Thousands) | Q1 Ended June 27, 2020 (In Thousands) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$47,790** | **$38,904** | **+22.8%** | | Service Revenue | $27,557 | $22,967 | +20.0% | | Distribution Sales | $20,233 | $15,937 | +27.0% | | **Gross Profit** | **$13,520** | **$9,409** | **+43.7%** | | **Operating Income** | **$3,689** | **$964** | **+282.7%** | | **Net Income** | **$3,688** | **$798** | **+362.2%** | | **Diluted EPS** | **$0.49** | **$0.11** | **+345.5%** | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 26, 2021, Transcat's balance sheet showed a slight decrease in total assets, a reduction in liabilities, and an increase in shareholders' equity Key Balance Sheet Items (As of June 26, 2021) | Account | June 26, 2021 (In Thousands) | March 27, 2021 (In Thousands) | | :--- | :--- | :--- | | **Total Assets** | **$131,139** | **$132,116** | | Total Current Assets | $48,739 | $48,928 | | Goodwill | $43,904 | $43,272 | | **Total Liabilities** | **$54,432** | **$57,038** | | Long-Term Debt | $20,107 | $17,494 | | **Total Shareholders' Equity** | **$76,707** | **$75,078** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased in Q1 FY2022 due to working capital changes, while investing activities used cash for property and an acquisition Cash Flow Summary (Q1 FY2022 vs Q1 FY2021) | Activity | Q1 Ended June 26, 2021 (In Thousands) | Q1 Ended June 27, 2020 (In Thousands) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $2,055 | $4,042 | | Net Cash Used in Investing Activities | ($2,134) | ($1,261) | | Net Cash Used in Financing Activities | ($43) | ($2,721) | | **Net Decrease in Cash** | **($306)** | **($133)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail the company's business, accounting policies, debt amendments, stock compensation, segment performance, and recent acquisitions - On July 7, 2021, the company entered into a new credit agreement that increased the revolving credit commitment from **$40.0 million to $80.0 million** and extended the term to June 2026[32](index=32&type=chunk)[33](index=33&type=chunk) - The Service segment's operating income **more than doubled** to **$3.0 million** from **$1.1 million** year-over-year, while the Distribution segment's operating income turned positive at **$0.7 million** from a **loss of $0.2 million**[52](index=52&type=chunk) - Effective April 29, 2021, Transcat acquired Upstate Metrology for a total purchase price of approximately **$0.9 million**, with the goodwill allocated to the Service segment[54](index=54&type=chunk)[56](index=56&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q1 FY2022 performance to economic rebound, with significant revenue growth, gross margin expansion, and increased borrowing capacity - Consolidated revenue for Q1 FY2022 increased **22.8%** to **$47.8 million** compared to the prior year, driven by economic rebound and lower customer demand in the prior year due to the COVID-19 pandemic[66](index=66&type=chunk) - Gross margin increased by **410 basis points** to **28.3%** due to operating leverage in the Service segment and a favorable product mix in the Distribution segment[67](index=67&type=chunk) - Adjusted EBITDA for Q1 FY2022 was **$6.1 million**, a **75.2% increase** from **$3.5 million** in the prior-year quarter[88](index=88&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Q1 FY2022 saw strong revenue growth in both segments, significant gross margin expansion, and improved operating margin due to expense management Segment Revenue Growth (Q1 FY2022 vs Q1 FY2021) | Segment | Q1 FY2022 Revenue (in thousands) | Q1 FY2021 Revenue (in thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | Service | $27,557 | $22,967 | 20.0% | | Distribution | $20,233 | $15,937 | 27.0% | | **Total** | **$47,790** | **$38,904** | **22.8%** | Segment Gross Margin (Q1 FY2022 vs Q1 FY2021) | Segment | Q1 FY2022 Gross Margin | Q1 FY2021 Gross Margin | Basis Point Change | | :--- | :--- | :--- | :--- | | Service | 31.8% | 26.4% | +540 bps | | Distribution | 23.6% | 21.0% | +260 bps | | **Total** | **28.3%** | **24.2%** | **+410 bps** | [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company enhanced financial flexibility with a new credit agreement, increasing borrowing capacity, despite a decrease in net cash from operations - Entered into a Second Amended and Restated Credit Facility Agreement on July 7, 2021, increasing the revolving credit commitment from **$40.0 million to $80.0 million** and extending the term to June 2026[91](index=91&type=chunk)[92](index=92&type=chunk) - As of June 26, 2021, the company had **$12.1 million** outstanding on its revolving credit facility and **$10.0 million** outstanding on its term loan[96](index=96&type=chunk)[97](index=97&type=chunk) - Net cash provided by operations **decreased from $4.0 million to $2.1 million** in Q1 FY2022, primarily due to changes in net working capital, including a **$3.1 million decrease** in accrued compensation and other liabilities[102](index=102&type=chunk) [Outlook](index=24&type=section&id=Outlook) Management anticipates continued strong organic growth for Q2 FY2022, with revised tax rate expectations and projected capital expenditures - For Q2 FY2022, Service organic growth is expected to be **similar to Q1**, while Distribution sales are expected to see **high teens growth**[108](index=108&type=chunk)[109](index=109&type=chunk) - The estimated effective tax rate for fiscal year 2022 has been revised down to a range of **16% to 18%**[110](index=110&type=chunk) - Total capital expenditures for fiscal year 2022 are anticipated to be between **$7.5 million and $8.5 million**[111](index=111&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate fluctuations and foreign currency exposure, mitigated by hedging strategies - A **1% change** in interest rates would result in an approximate **$0.1 million change** in annual interest expense[112](index=112&type=chunk) - Approximately **10% of total revenues** are denominated in Canadian dollars The company utilizes short-term foreign exchange forward contracts to reduce currency risk[114](index=114&type=chunk)[115](index=115&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed effective, with no material changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were **effective** as of June 26, 2021[116](index=116&type=chunk)[117](index=117&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[118](index=118&type=chunk) [PART II. OTHER INFORMATION](index=26&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 FY2022, the company repurchased 62,191 shares of common stock, primarily to cover employee tax-withholding obligations Issuer Purchases of Equity Securities (Q1 FY2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | 03/28/21 - 04/24/21 | 279 | $49.08 | | 04/25/21 - 05/22/21 | 61,912 | $54.35 | | 05/23/21 - 06/26/21 | - | - | | **Total** | **62,191** | **$54.33** | - The repurchased shares were withheld **to cover employee tax-withholding obligations** upon the vesting of restricted stock units and stock option exercises under the company's 2003 Incentive Plan[120](index=120&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q report, including certifications and XBRL data files - Lists exhibits filed with the report, including the **Second Amended and Restated Credit Facility Agreement**, **CEO/CFO certifications (Sections 302 and 906)**, and **XBRL data files**[122](index=122&type=chunk)

Transcat, Inc. (NASDAQ:TRNS) Q1 2022 Earnings Conference Call July 30, 2021 11:00 AM ET Company Participants Lee Rudow - CEO Mark Doheny - CFO Conference Call Participants Greg Palm - Craig-Hallum Capital Group Scott Buck - H.C. Wainwright Jeff Van Sinderen - B. Riley & Company Gerry Sweeney - ROTH Capital Dick Ryan - Colliers Mitra Ramgopal - Sidoti & Company Operator Greetings, and welcome to the Transcat, Inc. First Quarter Fiscal Year 2022 Financial Results Call. [Operator Instructions] As a reminder, t ...

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 27, 2021 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) Ohio 16-0874418 (St ...

Transcat, Inc. (NASDAQ:TRNS) Q4 2021 Earnings Conference Call May 19, 2021 11:00 AM ET Company Participants Craig Mychajluk - IR Lee Rudow - CEO Mark Doheny - CFO Conference Call Participants Gregory Palm - Craig-Hallum Scott Buck - H.C. Wainwright Gerry Sweeney - ROTH capital Mitra Ramgopal - Sidoti & Company Richard Ryan - Colliers Securities Kara Anderson - B. Riley Securities Operator Greetings, and welcome to Transcat, Inc's. Fourth Quarter and Full Fiscal Year 2021 Conference Call and Webcast. At thi ...

Transcat, Inc. (NASDAQ:TRNS) Q3 2021 Results Conference Call February 3, 2021 11:00 AM ET Company Participants Craig Mychajluk - IR Lee Rudow - CEO Mark Doheny - CFO Conference Call Participants Greg Palm - Craig Capital Group Kara Anderson - B. Riley Securities Scott Buck - HC Wainwright Mitra Ramgopal - Sidoti Dick Ryan - Colliers Chris Sakai - Singular Research Operator Good evening. Welcome to the Transcat, Inc. Third Quarter Fiscal Year 2021 Financial Results Conference Call. [Operator Instructions] Pl ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 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 jurisdiction of incorporation or organiza ...

Nov 17 2020 Craig-Hallum Alpha Select Conference | --- | --- | --- | |-------|-------------------------|--------------| | | | | | | | | | | Lee D. Rudow | | | | President and CEO | | | | | | | | Mark A. Doheny | | | | Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | Nasdaq: TRNS | ...