Transcat(US:TRNS)2025-05-27 20:06Revenue and Growth - Total revenue for fiscal year 2025 was $278.4 million, an increase of $18.9 million or 7.3% compared to $259.5 million in fiscal year 2024[182]. - Service revenue reached $181.4 million in fiscal year 2025, up $11.9 million or 7.0%, accounting for 65.2% of total revenue[183]. - Distribution segment sales increased by 7.8% to $97.0 million in fiscal year 2025, representing 34.8% of total revenue[184]. - Service revenue increased by $11.9 million, or 7.0%, in fiscal year 2025, with $10.4 million attributed to acquisitions[209]. - Distribution sales rose by $7.0 million, or 7.8%, in fiscal year 2025, primarily due to $7.2 million from acquisitions[213]. - Service organic growth was in the high single-digit range for both the fourth quarter and full fiscal year 2025, driven by consistent demand in the Calibration business[246]. - The company expects a return to high single-digit organic Service revenue growth once the macroeconomic environment normalizes[248]. Profitability - Total gross profit was $89.5 million in fiscal year 2025, a 6.7% increase from $83.8 million in fiscal year 2024[185]. - Service gross profit was $60.7 million, reflecting a 5.9% increase from fiscal year 2024[216]. - Net income for fiscal year 2025 was $14.5 million, an increase of $0.9 million from $13.6 million in fiscal year 2024[187]. - Net income for fiscal year 2025 was 5.2% of total revenue, slightly down from 5.3% in fiscal year 2024[207]. - Adjusted EBITDA for FY 2025 was $39.7 million, a 2.9% increase from $38.6 million in FY 2024[226]. - Adjusted diluted earnings per share for FY 2025 was $2.29, down from $2.36 in FY 2024[230]. Expenses and Margins - Operating expenses were $71.6 million, or 25.7% of total revenue, compared to $64.0 million, or 24.7% of total revenue, in fiscal year 2024[186]. - Total operating expenses increased by $7.6 million, or 11.8%, to $71.6 million in FY 2025 compared to FY 2024[220]. - The Service segment gross margin decreased by 40 basis points to 33.4% in fiscal year 2025, while the Distribution segment gross margin increased by 20 basis points to 29.7%[185]. - Service gross margin for FY 2025 was 36.2% in Q4, up from 35.7% in Q4 FY 2024[217]. - Distribution gross margin for FY 2025 was 28.2% in Q4, an increase of 20 basis points compared to FY 2024[219]. Cash Flow and Financial Position - Cash provided by operating activities was $39.0 million in FY 2025, up from $32.6 million in FY 2024[238]. - Net cash provided by operating activities increased to $39.0 million in fiscal year 2025 from $32.6 million in fiscal year 2024, primarily due to increases in depreciation and amortization[240]. - Accounts receivable rose by $8.2 million in fiscal year 2025, including $7.7 million from acquisitions, compared to a $3.1 million increase in fiscal year 2024[240]. - The inventory balance decreased by $2.9 million in fiscal year 2025, following a $0.5 million increase in fiscal year 2024[240]. - The company has access to a revolving credit facility of $80.0 million through June 2026[232]. - The interest rate for the revolving credit facility ranged from 5.1% to 6.2% during fiscal year 2025, with a fixed rate of 3.90% on the 2018 Term Loan[251]. - As of March 29, 2025, the leverage ratio was 0.78, compared to 0.10 at March 30, 2024[235]. Acquisitions and Strategic Initiatives - Acquired revenue from recent acquisitions, including Martin and Becnel, contributed $10.4 million to the Service segment's growth[175]. - Business acquisitions totaled $87.4 million in fiscal year 2025, significantly higher than $12.9 million in fiscal year 2024[242]. - Management is implementing a diversification strategy in the Distribution segment to mitigate impacts from specific industries and enhance competitive differentiation[179]. Tax and Currency - The company expects an effective tax rate of 27.0% to 29.0% for FY 2026[222]. - The anticipated income tax rate for fiscal year 2026 is projected to range between 27.0% and 29.0%[249]. - Approximately 90% of total revenues for fiscal years 2025 and 2024 were denominated in U.S. dollars, with a 10% change in the value of the Canadian dollar or Euro impacting revenue by approximately 1%[253]. - A foreign exchange contract with a notional amount of $1.1 million was outstanding as of March 29, 2025, to mitigate currency risk[254]. Product Shipments and Backorders - Total pending product shipments decreased by $1.8 million, or 34.7%, at the end of fiscal year 2025 compared to fiscal year 2024[214]. - Backorders at the end of fiscal year 2025 were $2.7 million, down from $4.5 million at the end of fiscal year 2024[214].