Transcat(TRNS) - 2024 Q4 - Annual Results

Executive Summary & Highlights 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 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] - Fiscal 2024 consisted of 53 weeks, while fiscal 2023 had 52 weeks[3] - 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] - Adjusted EBITDA grew 30% for Q4, reflecting leverage of organic Service revenue growth and successful acquisition integration[4] - Consolidated revenue was up 14% in Q4 with gross margin expansion of 300 basis points year over year[4] Key Achievements 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] - Acquisition strategy emphasizes effective integration processes to quickly make new acquisitions accretive and drive cross-sell synergies[5] - Post-fiscal year-end, acquired Becnel Rental Tools, expected to differentiate the higher-margin rental portfolio and provide cross-selling opportunities[5] 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 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 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] - 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] Service Segment Performance The Service segment, representing 65.9% of total revenue, delivered record Q4 results with revenue growing 17.5% to $46.7 million, including 13.0% organic growth. Gross margin expanded 170 basis points due to productivity improvements - Service segment accounted for 65.9% of total revenue for the fourth quarter of fiscal 2024[9] Q4 FY24 Service Segment Financial Highlights | Metric | FY24 Q4 ($ 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] - Organic revenue growth was 13.0% driven by strong end market demand and continued market share gains[11] Distribution Segment Performance The Distribution segment, comprising 34.1% of total revenue, saw sales increase 8.4% to $24.2 million in Q4 FY24, primarily due to strength in the Rentals business. Gross margin significantly improved by 510 basis points to 30.3% - Distribution segment accounted for 34.1% of total revenue for the fourth quarter of fiscal 2024[12] Q4 FY24 Distribution Segment Financial Highlights | Metric | FY24 Q4 ($ 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] - 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] Full-Year Fiscal 2024 Financial Review 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 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] Financial Position & Cash Flow 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 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] Outlook & Strategic Initiatives 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 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] - Anticipates continued gross margin expansion, enabled by automation of calibration processes and overall process improvement[19] - 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] Strategic Initiatives & Leadership 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] - The NEXA earnout agreement accrual has been reversed and converted to an incentive program associated with this new and expanded role[19] - The Service segment has substantial runway ahead for growth, both organically and through acquisition, with a robust acquisition pipeline for strategic, accretive acquisitions[19] - Investments in leadership development, automation, and process improvement have made Transcat a stronger company, well positioned to generate sustainable long-term shareholder value[19] Income Tax Rate Expectation 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] - This estimate includes Federal, various state, Canadian and Irish income taxes and reflects the discrete tax accounting associated with share-based payment awards[20] Investor Information 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 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] - 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] - 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] Non-GAAP Financial Measures Explanation 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 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] - 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] - Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as a substitute for GAAP net income[23] Adjusted Diluted EPS 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] - Management believes it is an important measure for comparing business operations between periods by excluding items not indicative of core operating performance[24] - 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] About Transcat 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 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] - 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] - Transcat provides services through 29 Calibration Service Centers across the United States, Puerto Rico, Canada, and Ireland, and 21 imbedded customer-site locations[25] - 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] Business Strategy 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] - 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] Safe Harbor Statement 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] - Forward-looking statements address operating performance, revenue, profit margins, growth strategy, potential acquisitions, and market conditions[28] - These statements are subject to risks, uncertainties, and assumptions, and actual results may vary materially from those anticipated[28] - 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] Financial Statements 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 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 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 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 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 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 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% |