- Solid Service segment organic revenue growth of 7.6%; total Service
revenue up 9.1%
- Distribution segment sales increase 7.3%; delivers expanded gross
and operating margins
- Operating leverage demonstrated with operating margin expansion of
150 basis points
to 5.6% - Net income nearly doubled to $1.5 million; Diluted earnings per
share increased
$0.09 to $0.20
Company Website:
http://www.transcat.com
ROCHESTER, N.Y. -- (Business Wire)
Transcat,
Inc. (Nasdaq:TRNS) (“Transcat” or the “Company”), a leading provider
of accredited calibration, repair, inspection and laboratory instrument
services and value-added distributor of professional grade handheld
test, measurement and control instrumentation, today reported financial
results for its second quarter ended September 29, 2018 (the “second
quarter”) of fiscal year 2019, which ends March 30, 2019 (“fiscal
2019”). Reported results include one month of the acquisition of
substantially all of the assets of Angel’s Instrumentation, Inc.
(“Angel’s”) effective August 31, 2018.
Lee D. Rudow, President and CEO, commented, “Our second quarter
performance demonstrates the solid execution of our strategic plan. As
expected, both of our operating segments turned in solid results with
strong organic revenue growth. We were especially pleased with the 9%
organic revenue growth we achieved in our U.S. operations Service
segment. And, when combined with our inherent operating leverage, we
measurably enhanced our profitability. We are also encouraged with the
early results and outlook from our Angel’s acquisition, which broadens
our geographic footprint and enhances our Service value proposition.”
Second Quarter Fiscal 2019 Review (Results are compared with
the second quarter of the fiscal year ended March 31, 2018 (“fiscal
2018”))
($ in thousands) |
|
| |
|
| |
|
| Change |
| | | FY19 Q2 | | | FY18 Q2 | | | $'s |
|
|
| % |
Service Revenue
| | |
$
|
19,902
| | |
$
|
18,239
| | |
$
|
1,663
| | | |
9.1%
|
Distribution Sales
| | |
$
|
18,977
| | |
$
|
17,688
| | |
$
|
1,289
| | | |
7.3%
|
Revenue | | | $ | 38,879 | | | $ | 35,927 | | | $ | 2,952 | | | | 8.2% |
Gross Profit
| | |
$
|
9,139
| | |
$
|
8,154
| | |
$
|
985
| | | |
12.1%
|
Gross Margin | | | | 23.5% | | | | 22.7% | | | | | | | |
| | | | | | | | | | | | |
|
Operating Income
| | |
$
|
2,176
| | |
$
|
1,458
| | |
$
|
718
| | | |
49.2%
|
Operating Margin | | | | 5.6% | | | | 4.1% | | | | | | | |
| | | | | | | | | | | | |
|
Net Income
| | |
$
|
1,488
| | |
$
|
781
| | |
$
|
707
| | | |
90.5%
|
Net Margin | | | | 3.8% | | | | 2.2% | | | | | | | |
| | | | | | | | | | | | |
|
Adjusted EBITDA*
| | |
$
|
4,015
| | |
$
|
3,297
| | |
$
|
718
| | | |
21.8%
|
Adjusted EBITDA* Margin | | | | 10.3% | | | | 9.2% | | | | | | | |
*See Note 1 on page4 for a description of this non-GAAP
financial measure and page 9 for the Adjusted EBITDA Reconciliation
table.
Transcat achieved consolidated revenue growth of 8.2%, or 7.4% if
excluding acquired revenue of $0.3 million. Gross margin expanded 80
basis points. Total operating expenses were up $0.3 million to $7.0
million, which reflected the Company’s continued investment in operating
infrastructure and operational excellence initiatives; however, as a
percent of revenue, operating costs were down 70 basis points to 17.9%.
As a result, operating income increased 49.2% and operating margin
increased 150 basis points to 5.6%. The effective tax rate decreased to
24.9% from 34.2%, largely due to lower U.S. federal tax rates from the
December 2017 Tax Cuts and Jobs Act. Net income nearly doubled and
diluted earnings per share increased to $0.20 from $0.11.
Service segment delivers strong organic growth while focusing on
productivity enhancements
Represents the accredited calibration, repair, inspection and
laboratory instrument services business (51% of total revenue for the
second quarter of fiscal 2019).
($ in thousands) |
|
| |
|
| |
|
| Change |
| | | FY19 Q2 | | | FY18 Q2 | | | $'s |
|
|
| % |
| | | | | | | | | | | | |
|
Service Segment Revenue
| | |
$
|
19,902
| | |
$
|
18,239
| | |
$
|
1,663
| | | |
9.1%
|
Gross Profit
| | |
$
|
4,807
| | |
$
|
4,320
| | |
$
|
487
| | | |
11.3%
|
Gross Margin | | | | 24.2% |
| | | 23.7% | | | | | | | |
| | | | | | | | | | | | |
|
Operating Income
| | |
$
|
1,125
| | |
$
|
790
| | |
$
|
335
| | | |
42.4%
|
Operating Margin | | | | 5.7% |
| | | 4.3% | | | | | | | |
| | | | | | | | | | | | |
|
Adjusted EBITDA*
| | |
$
|
2,414
| | |
$
|
2,069
| | |
$
|
345
| | | |
16.7%
|
Adjusted EBITDA* Margin | | | | 12.1% |
| | | 11.3% | | | | | | | |
*See Note 1 on page 4 for a description of this non-GAAP financial
measure andpage 9 for the Adjusted EBITDA Reconciliation table.
Excluding acquired revenue of $0.3 million, the Service segment had
organic growth of 7.6%. Higher revenue was the result of new business
from the life sciences market and growth in general industrial
manufacturing. On a trailing twelve-month basis, Service segment revenue
was $80.0 million, an 8.5% improvement compared with the trailing
twelve-month period ending with the prior-year second quarter.
Segment operating margin improved 140 basis points due to the inherent
operating leverage in the segment and the negative impact from
Hurricanes Harvey and Maria in the second quarter of fiscal year 2018.
The Company estimated that impact to fiscal year 2018’s second quarter
was between 40 and 90 basis points of operating margin.
Distribution segment generated strong gross and operating profit
performance
Represents the sale and rental of new and used professional grade
handheld test, measurement and control instrumentation (49% of total
revenue for the second quarter of fiscal 2019).
($ in thousands) |
|
| |
|
| |
|
| Change |
| | | FY19 Q2 | | | FY18 Q2 | | | $'s |
|
| % |
Distribution Segment Sales
| | |
$
|
18,977
| | |
$
|
17,688
| | |
$
|
1,289
| | |
7.3%
|
Gross Profit
| | |
$
|
4,332
| | |
$
|
3,834
| | |
$
|
498
| | |
13.0%
|
Gross Margin | | | | 22.8% | | | | 21.7% | | | | | | |
| | | | | | | | | | | |
|
Operating Income
| | |
$
|
1,051
| | |
$
|
668
| | |
$
|
383
| | |
57.3%
|
Operating Margin | | | | 5.5% | | | | 3.8% | | | | | | |
| | | | | | | | | | | |
|
Adjusted EBITDA*
| | |
$
|
1,601
| | |
$
|
1,228
| | |
$
|
373
| | |
30.4%
|
Adjusted EBITDA* Margin | | | | 8.4% | | | | 6.9% | | | | | | |
*See Note 1 on page4 for a description of this non-GAAP
financial measure and page 9 for the Adjusted EBITDA Reconciliation
table.
The Distribution sales increase reflected higher demand from core
industrial customers and increased rental revenue of 15% to $1.0 million
year-over-year. Distribution gross margin increased 110 basis points due
to the mix of products sold, the timing of certain vendor rebates, and
pricing initiatives that were implemented as part of the Company’s
ongoing operational excellence program. Segment operating margin
expanded 170 basis points.
Six Month Review (Results are compared with the first six
months of fiscal 2018)
Total revenue increased 4.6%, or $3.3 million, to $75.5 million,
primarily due to the factors described above in the second quarter
fiscal 2019 review. Consolidated gross profit was up $1.4 million, or
8.4%, to $18.3 million, and gross margin expanded 90 basis points to
24.2%. Operating expenses increased $0.1 million to $14.1 million as the
Company continued to invest in its operating infrastructure and
operational excellence initiatives. However, as a percentage of total
revenue, consolidated operating expenses were 18.6%, down 80 basis
points. As a result, operating income increased $1.3 million or 46.4%,
and operating margin expanded 160 basis points to 5.6%.
Net income was $2.9 million, or $0.39 per diluted share, compared with
$1.6 million, or $0.23 per diluted share. Adjusted EBITDA was $7.9
million, or 10.4% of revenue, compared with $6.7 million, or 9.2% of
revenue. See Note 1 on page 4 for a description of this non-GAAP
financial measure and page 9 for the Adjusted EBITDA Reconciliation
table.
Balance Sheet and Cash Flow Overview
Transcat acquired substantially all of the assets of Angel’s effective
August 31, 2018. The purchase price was $4.7 million, before purchase
agreement holdbacks of $1.0 million, and was funded with debt and cash
generated from operations. At September 29, 2018, the Company had total
debt of $25.3 million, with $17.7 million available under its secured
revolving credit facility. The Company’s leverage ratio, as defined in
its credit agreement, was 1.34 at September 29, 2018, compared with 1.40
at fiscal 2018 year-end. Year-to-date net cash provided by operating
activities was $4.9 million, up from $1.7 million in the prior-year
period.
Capital expenditures were $3.7 million for the first six months of
fiscal 2019. Investments were primarily for assets for the Company’s
rental business and customer-driven expansion of Service segment
capabilities.
Outlook
Mr. Rudow added, “Our team is executing well. Distribution continues to
show strength in both top-line and margins. And, our Services business
is continuing to capture market share as our quality, full service
capabilities and geographic breadth address our customers’ needs. The
Angel’s integration is on track and our pipeline of other acquisition
opportunities continues to be robust. Our goal is to drive double-digit
Service segment revenue growth.
“Our strengthened margin profile shows the strong operating leverage
inherent in our business. In addition, we continue to capitalize on the
synergies that exist between our two business segments – a component of
our value proposition that we believe is unique in our industry. Looking
further out, we are making early strides with our operational excellence
initiatives, and believe these efforts will be more meaningful drivers
of profitability in the next year or two. Through productivity and
automation efficiencies, we believe we can improve the earnings power of
Transcat and continue to create a strong foundation upon which to grow
revenue and profits.”
Transcat expects its income tax rate to range between 25% and 27% for
full year fiscal 2019.
The Company continues to expect to invest $7.0 million to $7.5 million
in capital expenditures during fiscal 2019. Capital investments will be
primarily focused on technology infrastructure to drive operational
excellence and organic growth opportunities within both operating
segments, and for rental pool assets.
Webcast and Conference Call
Transcat will host a conference call and webcast on Wednesday, October
24, 2018 at 11:00 a.m. ET. Management will review the financial and
operating results for the second quarter, as well as the Company’s
strategy and outlook. A question and answer session will follow the
formal discussion. The review will be accompanied by a slide
presentation, which will be available at www.transcat.com/investor-relations.
The conference call can be accessed by calling (201) 689-8471.
Alternatively, the webcast can be monitored at www.transcat.com/investor-relations.
A telephonic replay will be available from 2:00 p.m. ET on the day of
the call through Wednesday, October 31, 2018. To listen to the archived
call, dial (412) 317-6671 and enter conference ID number 13683727, or
access the webcast replay at www.transcat.com/investor-relations,
where a transcript will be posted once available.
NOTE 1 – Non-GAAP Financial Measures
In addition to reporting net income, a U.S. generally accepted
accounting principle (“GAAP”) measure, we present Adjusted EBITDA
(earnings before interest, income taxes, depreciation and amortization,
and non-cash stock-based compensation expense), which is a non-GAAP
measure. The Company’s management believes Adjusted EBITDA is an
important measure of operating performance because it allows management,
investors and others to evaluate and compare the performance of its core
operations from period to period by removing the impact of the capital
structure (interest), tangible and intangible asset base (depreciation
and amortization), taxes, and stock-based compensation expense, which is
not always commensurate with the reporting period in which it is
included. As such, the Company uses Adjusted EBITDA as a measure of
performance when evaluating its business segments and as a basis for
planning and forecasting. Adjusted EBITDA is not a measure of financial
performance under GAAP and is not calculated through the application of
GAAP. As such, it should not be considered as a substitute for the GAAP
measure of net income and, therefore, should not be used in isolation
of, but in conjunction with, the GAAP measure. Adjusted EBITDA, as
presented, may produce results that vary from the GAAP measure and may
not be comparable to a similarly defined non-GAAP measure used by other
companies. See the attached Adjusted EBITDA Reconciliationtable
on page 9.
ABOUT TRANSCAT
Transcat, Inc. is a leading provider of accredited calibration, repair,
inspection and laboratory instrument services. The Company is focused on
providing best-in-class services and products to highly regulated
industries, including life science, aerospace and defense,
pharmaceutical, medical device manufacturing and biotechnology. Transcat
provides permanent and periodic on-site services, mobile calibration
services and in-house services through 21 Calibration Service Centers
strategically located across the United States, Puerto Rico and Canada.
The breadth and depth of measurement parameters addressed by Transcat’s
ISO/IEC 17025 scopes of accreditation are believed to be the best in the
industry.
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. The Company
believes its combined Service and Distribution segment offerings,
experience, technical expertise and integrity create a unique and
compelling value proposition for its customers.
Transcat’s growth strategy is to leverage the complimentary nature of
its two operating segments, its comprehensive service capabilities,
strong brand, enhanced e-commerce capabilities and leading distribution
platform to drive organic sales growth. The Company will also look to
expand its addressable calibration market through acquisitions and
capability investments to further realize its inherent leverage of its
business model.
More information about Transcat can be found at: Transcat.com.
Safe Harbor Statement
This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are not statements of historical fact and thus are subject to
risks, uncertainties and assumptions. Forward-looking statements are
identified by words such as “expects,” “estimates,” “projects,”
“anticipates,” “believes,” “could,” and other similar words. All
statements addressing operating performance, events or developments that
Transcat, Inc. expects or anticipates will occur in the future,
including but not limited to statements relating to anticipated revenue,
profit margins, sales operations, capital expenditures, cash flows,
operating income, growth strategy, segment growth, potential
acquisitions, integration of acquired businesses, market position,
customer preferences, outlook and changes in market conditions in the
industries in which Transcat operates are forward-looking statements.
Forward-looking statements should be evaluated in light of important
risk factors and uncertainties. These risk factors and uncertainties are
more fully described in Transcat’s Annual Report and Quarterly Reports
filed with the Securities and Exchange Commission, including under the
heading entitled “Risk Factors.” Should one or more of these risks or
uncertainties materialize, or should any of the Company’s underlying
assumptions prove incorrect, actual results may vary materially from
those currently anticipated. In addition, undue reliance should not be
placed on the Company’s forward-looking statements. Except as required
by law, the Company disclaims any obligation to update, correct or
publicly announce any revisions to any of the forward-looking statements
contained in this news release.
|
|
| |
|
| |
|
| |
TRANSCAT, INC. CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
|
| | | | | | | | |
|
| | |
(Unaudited)
| | |
(Unaudited)
|
| | | Second Quarter Ended | | | Six Months Ended |
| | | September 29, |
|
| September 23, | | | September 29, | | | September 23, |
| | | 2018 | | | 2017 | | | 2018 | | | 2017 |
Service Revenue
| | |
$
|
19,902
| | |
$
|
18,239
| | |
$
|
39,227
| | |
$
|
36,721
|
Distribution Sales
| | |
|
18,977
| | |
|
17,688
| | |
|
36,310
| | |
|
35,485
|
Total Revenue
| | |
|
38,879
| | |
|
35,927
| | |
|
75,537
| | |
|
72,206
|
| | | | | | | | | | | |
|
Cost of Service Revenue
| | | |
15,095
| | | |
13,919
| | | |
29,501
| | | |
27,765
|
Cost of Distribution Sales
| | |
|
14,645
| | |
|
13,854
| | |
|
27,784
| | |
|
27,596
|
Total Cost of Revenue
| | |
|
29,740
| | |
|
27,773
| | |
|
57,285
| | |
|
55,361
|
| | | | | | | | | | | |
|
Gross Profit
| | |
|
9,139
| | |
|
8,154
| | |
|
18,252
| | |
|
16,845
|
| | | | | | | | | | | |
|
Selling, Marketing and Warehouse Expenses
| | | |
4,020
| | | |
4,005
| | | |
8,052
| | | |
8,097
|
Administrative Expenses
| | |
|
2,943
| | |
|
2,691
| | |
|
5,999
| | |
|
5,879
|
Total Operating Expenses
| | |
|
6,963
| | |
|
6,696
| | |
|
14,051
| | |
|
13,976
|
| | | | | | | | | | | |
|
Operating Income
| | |
|
2,176
| | |
|
1,458
| | |
|
4,201
| | |
|
2,869
|
| | | | | | | | | | | |
|
Interest and Other Expense, net
| | |
|
195
| | |
|
271
| | |
|
420
| | |
|
543
|
| | | | | | | | | | | |
|
Income Before Income Taxes
| | | |
1,981
| | | |
1,187
| | | |
3,781
| | | |
2,326
|
Provision for Income Taxes
| | |
|
493
| | |
|
406
| | |
|
865
| | |
|
689
|
| | | | | | | | | | | |
|
Net Income
| | |
$
|
1,488
| | |
$
|
781
| | |
$
|
2,916
| | |
$
|
1,637
|
| | | | | | | | | | | |
|
Basic Earnings Per Share
| | |
$
|
0.21
| | |
$
|
0.11
| | |
$
|
0.41
| | |
$
|
0.23
|
Average Shares Outstanding
| | | |
7,200
| | | |
7,131
| | | |
7,187
| | | |
7,102
|
| | | | | | | | | | | |
|
Diluted Earnings Per Share
| | |
$
|
0.20
| | |
$
|
0.11
| | |
$
|
0.39
| | |
$
|
0.23
|
Average Shares Outstanding
| | | |
7,520
| | | |
7,286
| | | |
7,486
| | | |
7,242
|
| | | | | | | | | | | | | | | |
|
|
|
| |
|
| |
TRANSCAT, INC. CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
|
| | | | | |
|
| | |
(Unaudited)
| | | |
| | | September 29, | | | March 31, |
| | |
| 2018 |
| | |
| 2018 |
|
ASSETS | | | | | | |
Current Assets:
| | | | | | |
Cash
| | |
$
|
571
| | | |
$
|
577
| |
Accounts Receivable, less allowance for doubtful accounts of $300
| | | | | | |
and $296 as of September 29, 2018 and March 31, 2018, respectively
| | | |
24,053
| | | | |
24,684
| |
Other Receivables
| | | |
1,623
| | | | |
1,361
| |
Inventory, net
| | | |
14,161
| | | | |
12,651
| |
Prepaid Expenses and Other Current Assets
| | |
|
1,227
|
|
|
|
|
1,240
|
|
Total Current Assets
| | | |
41,635
| | | | |
40,513
| |
Property and Equipment, net
| | | |
19,591
| | | | |
17,091
| |
Goodwill
| | | |
34,120
| | | | |
32,740
| |
Intangible Assets, net
| | | |
6,197
| | | | |
5,505
| |
Other Assets
| | |
|
870
|
| | |
|
973
|
|
Total Assets
| | |
$
|
102,413
|
|
|
|
$
|
96,822
|
|
| | | | | |
|
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
Current Liabilities:
| | | | | | |
Accounts Payable
| | |
$
|
12,903
| | | |
$
|
13,535
| |
Accrued Compensation and Other Liabilities
| | | |
5,160
| | | | |
5,240
| |
Income Taxes Payable
| | | |
624
| | | | |
232
| |
Current Portion of Long-Term Debt
| | |
|
2,143
|
|
|
|
|
2,143
|
|
Total Current Liabilities
| | | |
20,830
| | | | |
21,150
| |
Long-Term Debt
| | | |
23,153
| | | | |
20,707
| |
Deferred Tax Liability
| | | |
1,708
| | | | |
1,709
| |
Other Liabilities
| | |
|
1,856
|
|
|
|
|
1,908
|
|
Total Liabilities
| | |
|
47,547
|
|
|
|
|
45,474
|
|
| | | | | |
|
Shareholders' Equity:
| | | | | | |
Common Stock, par value $0.50 per share, 30,000,000 shares
authorized;
| | | | | | |
7,201,589 and 7,155,050 shares issued and outstanding
| | | | | | |
as of September 29, 2018 and March 31, 2018, respectively
| | | |
3,601
| | | | |
3,578
| |
Capital in Excess of Par Value
| | | |
15,599
| | | | |
14,965
| |
Accumulated Other Comprehensive Loss
| | | |
(274
|
)
| | | |
(281
|
)
|
Retained Earnings
| | |
|
35,940
|
|
|
|
|
33,086
|
|
Total Shareholders' Equity
| | |
|
54,866
|
|
|
|
|
51,348
|
|
Total Liabilities and Shareholders' Equity
| | |
$
|
102,413
|
|
|
|
$
|
96,822
|
|
| | | | | | | | | |
|
|
|
| |
TRANSCAT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
|
| | |
|
| | |
(Unaudited)
For the Six Months Ended |
| | |
| | | September 29, |
|
| September 23, |
| | |
| 2018 |
|
|
|
| 2017 |
|
Cash Flows from Operating Activities: | | | | | | |
Net Income
| | |
$
|
2,916
| | | |
$
|
1,637
| |
Adjustments to Reconcile Net Income to Net Cash Provided
| | | | | | |
by Operating Activities:
| | | | | | |
Loss on Sale of Property and Equipment
| | | |
6
| | | | |
25
| |
Deferred Income Taxes
| | | |
(1
|
)
| | | |
41
| |
Depreciation and Amortization
| | | |
3,067
| | | | |
2,984
| |
Provision for Accounts Receivable and Inventory Reserves
| | | |
74
| | | | |
203
| |
Stock-Based Compensation Expense
| | | |
606
| | | | |
831
| |
Changes in Assets and Liabilities:
| | | | | | |
Accounts Receivable and Other Receivables
| | | |
856
| | | | |
760
| |
Inventory
| | | |
(1,172
|
)
| | | |
(1,020
|
)
|
Prepaid Expenses and Other Assets
| | | |
101
| | | | |
(145
|
)
|
Accounts Payable
| | | |
(706
|
)
| | | |
(1,747
|
)
|
Accrued Compensation and Other Liabilities
| | | |
(1,271
|
)
| | | |
(1,458
|
)
|
Income Taxes Payable
| | |
|
389
|
|
|
|
|
(456
|
)
|
Net Cash Provided by Operating Activities
| | |
|
4,865
|
|
|
|
|
1,655
|
|
| | | | | |
|
Cash Flows from Investing Activities: | | | | | | |
Purchase of Property and Equipment
| | | |
(3,703
|
)
| | | |
(3,942
|
)
|
Proceeds from Sale of Property and Equipment
| | | |
-
| | | | |
6
| |
Business Acquisitions, net of cash acquired
| | |
|
(3,614
|
)
|
|
|
|
-
|
|
Net Cash Used in Investing Activities
| | |
|
(7,317
|
)
|
|
|
|
(3,936
|
)
|
| | | | | |
|
Cash Flows from Financing Activities: | | | | | | |
Proceeds from Revolving Credit Facility, net
| | | |
3,517
| | | | |
3,110
| |
Repayments of Term Loan
| | | |
(1,071
|
)
| | | |
(714
|
)
|
Issuance of Common Stock
| | | |
132
| | | | |
761
| |
Repurchase of Common Stock
| | | |
(143
|
)
| | | |
(344
|
)
|
Stock Option Redemption
| | |
|
-
|
|
|
|
|
(90
|
)
|
Net Cash Provided by Financing Activities
| | |
|
2,435
|
|
|
|
|
2,723
|
|
| | | | | |
|
Effect of Exchange Rate Changes on Cash
| | |
|
11
|
|
|
|
|
(659
|
)
|
| | | | | |
|
Net Decrease in Cash
| | | |
(6
|
)
| | | |
(217
|
)
|
Cash at Beginning of Period
| | |
|
577
|
|
|
|
|
842
|
|
Cash at End of Period
| | |
$
|
571
|
|
|
|
$
|
625
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
TRANSCAT, INC. Adjusted EBITDA Reconciliation Table
(Dollars in thousands)
(Unaudited) |
| | | | | | | | | | | | | | |
|
| | | Fiscal 2019 |
| | | | | | | | | | | | | | |
|
| | | Q1 |
|
| Q2 |
|
| Q3 |
|
| Q4 |
|
| YTD |
Net Income
| | |
$
|
1,428
| | | |
$
|
1,488
| | | | | | | | | |
$
|
2,916
| |
+ Interest Expense
| | | |
206
| | | | |
197
| | | | | | | | | | |
403
| |
+ Other Expense / (Income)
| | | |
19
| | | | |
(2
|
)
| | | | | | | | | |
17
| |
+ Tax Provision
| | |
|
372
|
|
|
|
|
493
|
|
|
|
|
|
|
|
|
|
|
865
|
|
Operating Income
| | |
$
|
2,025
| | | |
$
|
2,176
| | | | | | | | | |
$
|
4,201
| |
+ Depreciation & Amortization
| | | |
1,567
| | | | |
1,500
| | | | | | | | | | |
3,067
| |
+ Other (Expense) / Income
| | | |
(19
|
)
| | | |
2
| | | | | | | | | | |
(17
|
)
|
+ Noncash Stock Compensation
| | |
|
269
|
|
|
|
|
337
|
|
|
|
|
|
|
|
|
|
|
606
|
|
Adjusted EBITDA
| | |
$
|
3,842
| | | |
$
|
4,015
| | | | | | | | | |
$
|
7,857
| |
| | | | | | | | | | | | | | |
|
Segment Breakdown | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Service Operating Income
| | |
$
|
1,068
| | | |
$
|
1,125
| | | | | | | | | |
$
|
2,193
| |
+ Depreciation & Amortization
| | | |
1,189
| | | | |
1,116
| | | | | | | | | | |
2,305
| |
+ Other (Expense) / Income
| | | |
(13
|
)
| | | |
(1
|
)
| | | | | | | | | |
(14
|
)
|
+ Noncash Stock Compensation
| | |
|
146
|
|
|
|
|
174
|
|
|
|
|
|
|
|
|
|
|
320
|
|
Service Adjusted EBITDA
| | |
$
|
2,390
| | | |
$
|
2,414
| | | | | | | | | |
$
|
4,804
| |
| | | | | | | | | | | | | | |
|
Distribution Operating Income
| | |
$
|
957
| | | |
$
|
1,051
| | | | | | | | | |
$
|
2,008
| |
+ Depreciation & Amortization
| | | |
378
| | | | |
384
| | | | | | | | | | |
762
| |
+ Other (Expense) / Income
| | | |
(6
|
)
| | | |
3
| | | | | | | | | | |
(3
|
)
|
+ Noncash Stock Compensation
| | |
|
123
|
|
|
|
|
163
|
|
|
|
|
|
|
|
|
|
|
286
|
|
Distribution Adjusted EBITDA
| | |
$
|
1,452
| | | |
$
|
1,601
| | | | | | | | | |
$
|
3,053
| |
| | | | | | | | | | | | | | |
|
| | | Fiscal 2018 |
| | | | | | | | | | | | | | |
|
| | | Q1 |
|
| Q2 |
|
| Q3 |
|
| Q4 |
|
| YTD |
Net Income
| | |
$
|
856
| | | |
$
|
781
| | | |
$
|
1,831
| | | |
$
|
2,454
| | | |
$
|
5,922
| |
+ Interest Expense
| | | |
236
| | | | |
281
| | | | |
250
| | | | |
251
| | | | |
1,018
| |
+ Other Expense / (Income)
| | | |
36
| | | | |
(10
|
)
| | | |
61
| | | | |
(27
|
)
| | | |
60
| |
+ Tax Provision
| | |
|
283
|
|
|
|
|
406
|
|
|
|
|
512
|
|
|
|
|
825
|
|
|
|
|
2,026
|
|
Operating Income
| | |
$
|
1,411
| | | |
$
|
1,458
| | | |
$
|
2,654
| | | |
$
|
3,503
| | | |
$
|
9,026
| |
+ Depreciation & Amortization
| | | |
1,487
| | | | |
1,497
| | | | |
1,543
| | | | |
1,464
| | | | |
5,991
| |
+ Other (Expense) / Income
| | | |
(36
|
)
| | | |
10
| | | | |
(61
|
)
| | | |
27
| | | | |
(60
|
)
|
+ Noncash Stock Compensation
| | |
|
499
|
|
|
|
|
332
|
|
|
|
|
264
|
|
|
|
|
316
|
|
|
|
|
1,411
|
|
Adjusted EBITDA
| | |
$
|
3,361
| | | |
$
|
3,297
| | | |
$
|
4,400
| | | |
$
|
5,310
| | | |
$
|
16,368
| |
| | | | | | | | | | | | | | |
|
Segment Breakdown | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Service Operating Income
| | |
$
|
885
| | | |
$
|
790
| | | |
$
|
1,063
| | | |
$
|
2,420
| | | |
$
|
5,158
| |
+ Depreciation & Amortization
| | | |
1,110
| | | | |
1,107
| | | | |
1,126
| | | | |
1,054
| | | | |
4,397
| |
+ Other (Expense) / Income
| | | |
(28
|
)
| | | |
4
| | | | |
(45
|
)
| | | |
8
| | | | |
(61
|
)
|
+ Noncash Stock Compensation
| | |
|
249
|
|
|
|
|
168
|
|
|
|
|
134
|
|
|
|
|
155
|
|
|
|
|
706
|
|
Service Adjusted EBITDA
| | |
$
|
2,216
| | | |
$
|
2,069
| | | |
$
|
2,278
| | | |
$
|
3,637
| | | |
$
|
10,200
| |
| | | | | | | | | | | | | | |
|
Distribution Operating Income
| | |
$
|
526
| | | |
$
|
668
| | | |
$
|
1,591
| | | |
$
|
1,083
| | | |
$
|
3,868
| |
+ Depreciation & Amortization
| | | |
377
| | | | |
390
| | | | |
417
| | | | |
410
| | | | |
1,594
| |
+ Other (Expense) / Income
| | | |
(8
|
)
| | | |
6
| | | | |
(16
|
)
| | | |
19
| | | | |
1
| |
+ Noncash Stock Compensation
| | |
|
250
|
|
|
|
|
164
|
|
|
|
|
130
|
|
|
|
|
161
|
|
|
|
|
705
|
|
Distribution Adjusted EBITDA
| | |
$
|
1,145
| | | |
$
|
1,228
| | | |
$
|
2,122
| | | |
$
|
1,673
| | | |
$
|
6,168
| |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
| |
|
| |
|
| |
TRANSCAT, INC. Additional Information - Business Segment Data
(Dollars in thousands)
(Unaudited) |
| | | | | | | | |
|
| | | | | | | | | Change |
SERVICE | | | FY 2019 Q2 | | | FY 2018 Q2 | | | $'s |
|
| % |
| | | | | | | | | | | |
|
Service Revenue
| | |
$
|
19,902
| | | |
$
|
18,239
| | | |
$
|
1,663
| | | |
9.1
|
%
|
Cost of Revenue
| | |
$
|
15,095
|
| | |
$
|
13,919
|
| | |
$
|
1,176
|
| | |
8.4
|
%
|
Gross Profit
| | |
$
|
4,807
| | | |
$
|
4,320
| | | |
$
|
487
| | | |
11.3
|
%
|
Gross Margin | | | | 24.2 | % | | | | 23.7 | % | | | | | | |
| | | | | | | | | | | |
|
Selling, Marketing & Warehouse Expenses
| | |
$
|
2,031
| | | |
$
|
2,146
| | | |
$
|
(115
|
)
| | |
(0.5
|
%)
|
General and Administrative Expenses
| | |
$
|
1,651
|
| | |
$
|
1,384
|
| | |
$
|
267
|
| | |
19.3
|
%
|
Operating Income
| | |
$
|
1,125
| | | |
$
|
790
| | | |
$
|
335
| | | |
42.4
|
%
|
% of Revenue | | | | 5.7 | % | | | | 4.3 | % | | | | | | |
| | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | |
|
| | | | | | | | | Change |
DISTRIBUTION | | | FY 2019 Q2 | | | FY 2018 Q2 | | | $'s | | | % |
Distribution Sales
| | |
$
|
18,977
| | | |
$
|
17,688
| | | |
$
|
1,289
| | | |
7.3
|
%
|
Cost of Sales
| | |
$
|
14,645
|
| | |
$
|
13,854
|
| | |
$
|
791
|
| | |
5.7
|
%
|
Gross Profit
| | |
$
|
4,332
| | | |
$
|
3,834
| | | |
$
|
498
| | | |
13.0
|
%
|
Gross Margin | | | | 22.8 | % | | | | 21.7 | % | | | | | | |
| | | | | | | | | | | |
|
Selling, Marketing & Warehouse Expenses
| | |
$
|
1,989
| | | |
$
|
1,859
| | | |
$
|
130
| | | |
7.0
|
%
|
General and Administrative Expenses
| | |
$
|
1,292
|
| | |
$
|
1,307
|
| | |
$
|
(15
|
)
| | |
(1.1
|
%)
|
Operating Income
| | |
$
|
1,051
| | | |
$
|
668
| | | |
$
|
383
| | | |
57.3
|
%
|
% of Sales | | | | 5.5 | % | | | | 3.8 | % | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | |
|
| | | | | | | | |
|
| | | | | | | | | Change |
TOTAL | | | FY 2019 Q2 | | | FY 2018 Q2 | | | $'s | | | % |
| | | | | | | | | | | |
|
Total Revenue
| | |
$
|
38,879
| | | |
$
|
35,927
| | | |
$
|
2,952
| | | |
8.2
|
%
|
Total Cost of Revenue
| | |
$
|
29,740
|
| | |
$
|
27,773
|
| | |
$
|
1,967
|
| | |
7.1
|
%
|
Gross Profit
| | |
$
|
9,139
| | | |
$
|
8,154
| | | |
$
|
985
| | | |
12.1
|
%
|
Gross Margin | | | | 23.5 | % | | | | 22.7 | % | | | | | | |
| | | | | | | | | | | |
|
Selling, Marketing & Warehouse Expenses
| | |
$
|
4,020
| | | |
$
|
4,005
| | | |
$
|
15
| | | |
0.4
|
%
|
General and Administrative Expenses
| | |
$
|
2,943
|
| | |
$
|
2,691
|
| | |
$
|
252
|
| | |
9.4
|
%
|
Operating Income
| | |
$
|
2,176
| | | |
$
|
1,458
| | | |
$
|
718
| | | |
49.2
|
%
|
% of Revenue | | | | 5.6 | % | | | | 4.1 | % | | | | | | |
|
|
| |
|
| |
|
| |
TRANSCAT, INC. Additional Information - Business Segment Data
(Dollars in thousands)
(Unaudited) |
| | | | | | | | |
|
| | | | | | | | | Change |
SERVICE | | | FY 2019 YTD | | | FY 2018 YTD | | | $'s |
|
| % |
| | | | | | | | | | | |
|
Service Revenue
| | |
$
|
39,227
| | | |
$
|
36,721
| | | |
$
|
2,506
| | | |
6.8
|
%
|
Cost of Revenue
| | |
$
|
29,501
|
| | |
$
|
27,765
|
| | |
$
|
1,736
|
| | |
6.3
|
%
|
Gross Profit
| | |
$
|
9,726
| | | |
$
|
8,956
| | | |
$
|
770
| | | |
8.6
|
%
|
Gross Margin | | | | 24.8 | % | | | | 24.4 | % | | | | | | |
| | | | | | | | | | | |
|
Selling, Marketing & Warehouse Expenses
| | |
$
|
4,131
| | | |
$
|
4,218
| | | |
$
|
(87
|
)
| | |
(2.1
|
%)
|
General and Administrative Expenses
| | |
$
|
3,402
|
| | |
$
|
3,063
|
| | |
$
|
339
|
| | |
11.1
|
%
|
Operating Income
| | |
$
|
2,193
| | | |
$
|
1,675
| | | |
$
|
518
| | | |
30.9
|
%
|
% of Revenue | | | | 5.6 | % | | | | 4.6 | % | | | | | | |
| | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | |
|
| | | | | | | | | Change |
DISTRIBUTION | | | FY 2019 YTD | | | FY 2018 YTD | | | $'s | | | % |
Distribution Sales
| | |
$
|
36,310
| | | |
$
|
35,485
| | | |
$
|
825
| | | |
2.3
|
%
|
Cost of Sales
| | |
$
|
27,784
|
| | |
$
|
27,596
|
| | |
$
|
188
|
| | |
0.7
|
%
|
Gross Profit
| | |
$
|
8,526
| | | |
$
|
7,889
| | | |
$
|
637
| | | |
8.1
|
%
|
Gross Margin | | | | 23.5 | % | | | | 22.2 | % | | | | | | |
| | | | | | | | | | | |
|
Selling, Marketing & Warehouse Expenses
| | |
$
|
3,921
| | | |
$
|
3,879
| | | |
$
|
42
| | | |
1.1
|
%
|
General and Administrative Expenses
| | |
$
|
2,597
|
| | |
$
|
2,816
|
| | |
$
|
(219
|
)
| | |
(7.8
|
%)
|
Operating Income
| | |
$
|
2,008
| | | |
$
|
1,194
| | | |
$
|
814
| | | |
68.2
|
%
|
% of Sales | | | | 5.5 | % | | | | 3.4 | % | | | | | | |
| | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | |
|
| | | | | | | | | Change |
TOTAL | | | FY 2019 YTD | | | FY 2018 YTD | | | $'s | | | % |
| | | | | | | | | | | |
|
Total Revenue
| | |
$
|
75,537
| | | |
$
|
72,206
| | | |
$
|
3,331
| | | |
4.6
|
%
|
Total Cost of Revenue
| | |
$
|
57,285
|
| | |
$
|
55,361
|
| | |
$
|
1,924
|
| | |
3.5
|
%
|
Gross Profit
| | |
$
|
18,252
| | | |
$
|
16,845
| | | |
$
|
1,407
| | | |
8.4
|
%
|
Gross Margin | | | | 24.2 | % | | | | 23.3 | % | | | | | | |
| | | | | | | | | | | |
|
Selling, Marketing & Warehouse Expenses
| | |
$
|
8,052
| | | |
$
|
8,097
| | | |
$
|
(45
|
)
| | |
(0.6
|
%)
|
General and Administrative Expenses
| | |
$
|
5,999
|
| | |
$
|
5,879
|
| | |
$
|
120
|
| | |
2.0
|
%
|
Operating Income
| | |
$
|
4,201
| | | |
$
|
2,869
| | | |
$
|
1,332
| | | |
46.4
|
%
|
% of Revenue | | | | 5.6 | % | | | | 4.0 | % | | | | | | |
View source version on businesswire.com: https://www.businesswire.com/news/home/20181023006011/en/
Contacts:
Transcat, Inc.
Michael J. Tschiderer, 585-563-5766
Chief
Financial Officer
mtschiderer@transcat.com
or
Deborah
K. Pawlowski, Investor Relations, 716-843-3908
dpawlowski@keiadvisors.com
Source: Transcat, Inc.
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