In its upcoming report, Transcat, Inc. (TRNS) is predicted by Wall Street analysts to post quarterly earnings of $0.66 per share, reflecting a decline of 14.3% compared to the same period last year. Revenues are forecasted to be $76.8 million, representing a year-over-year increase of 8.3%.The current level reflects no revision in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections ove ...

Financial Performance - Consolidated revenue for Q3 FY 2025 was $66.8 million, an increase of $1.6 million or 2.4% compared to Q3 FY 2024, primarily driven by acquisitions[95] - Gross profit for Q3 FY 2025 was $19.7 million, a decrease of $1.3 million or 6.0% year-over-year, with a gross margin of 29.5%, down 260 basis points from the previous year[96] - Operating expenses increased to $17.6 million in Q3 FY 2025, up $0.9 million or 5.6% from the prior year, resulting in an operating income of $2.1 million, a decrease of 51.1%[97] - Net income for Q3 FY 2025 was $2.4 million, down from $3.3 million in Q3 FY 2024, primarily due to lower operating income[98] - Total revenue for the first nine months of FY 2025 was $201.287 million, an increase of $12.719 million or 6.7% compared to the same period in FY 2024[118] - Net income for the first nine months of fiscal year 2025 was $10.1 million, an increase of $3.3 million or 48.7% compared to the same period in fiscal year 2024[125] - Total Adjusted EBITDA for Q3 FY 2025 was $7.9 million, a decrease of $1.2 million or 13.2% from Q3 FY 2024, with Adjusted EBITDA margin decreasing to 11.9%[117] - Total Adjusted EBITDA for the first nine months of fiscal year 2025 was $27.0 million, a slight increase of $0.1 million or 0.2% year-over-year[126] Revenue Breakdown - Service revenue accounted for 62.3% of total revenue in Q3 FY 2025, with a slight increase of $0.1 million or 0.1% year-over-year, while organic revenue decreased by 3.9%[101] - Distribution revenue was $25.2 million in Q3 FY 2025, an increase of $1.5 million or 6.5%, attributed to incremental revenue from the acquisition of Becnel[105] - The trailing twelve-month Service revenue for Q3 FY 2025 was $176.1 million, reflecting a growth of 8.3% compared to the prior year[103] - Service revenue for the first nine months of FY 2025 was $129.418 million, a 5.4% increase from FY 2024, including $4.2 million from recent acquisitions[118] Profitability Metrics - Operating margin decreased from 6.6% in Q3 FY 2024 to 3.1% in Q3 FY 2025, indicating a significant decline in profitability[97] - Total gross profit for Q3 FY 2025 was $19.679 million, a decrease of $1.257 million or 6.0% from Q3 FY 2024, with a gross margin of 29.5%[109] - Service gross profit in Q3 FY 2025 decreased by $1.137 million or 8.4%, with a service gross margin of 29.7%, down 280 basis points from Q3 FY 2024[110] - Distribution gross margin was 29.1% in Q3 FY 2025, a decrease of 240 basis points from 31.5% in Q3 FY 2024, attributed to the mix of non-rental products sold[112] Operating Expenses - Total operating expenses in Q3 FY 2025 were $17.579 million, an increase of $937,000 or 5.6% compared to Q3 FY 2024, with selling, marketing, and warehouse expenses rising by 8.0%[113] - The company plans to subcontract approximately 13% to 15% of Service revenue to third-party vendors while evaluating outsourcing needs and making capital investments[103] Cash Flow and Investments - Cash provided by operating activities was $28.4 million in the first nine months of fiscal year 2025, compared to $26.9 million in the same period of fiscal year 2024[140] - The company invested $10.5 million in capital expenditures during the first nine months of fiscal year 2025, primarily for customer-driven expansion[142] - The company used $86.1 million for business acquisitions in the first nine months of fiscal year 2025, compared to $12.9 million in the same period of fiscal year 2024[142] Balance Sheet and Leverage - As of December 28, 2024, the company had $80.0 million available for borrowing under its revolving credit facility, with $39.5 million outstanding[138] - The company's leverage ratio was 0.97 as of December 28, 2024, compared to 0.10 at March 30, 2024, indicating strong compliance with loan covenants[137] Earnings Per Share - Diluted earnings per share for the first nine months of fiscal year 2025 was $1.09, up from $0.83 in the same period of fiscal year 2024[132] - Adjusted diluted earnings per share for the first nine months of fiscal year 2025 was $1.65, compared to $1.68 in the same period of fiscal year 2024[132] Inventory and Liabilities - Inventory balance decreased by $3.6 million during the first nine months of fiscal year 2025, compared to a decrease of $0.8 million in the same period of fiscal year 2024[30] - Accounts payable increased by $4.7 million during the first nine months of fiscal year 2025, while it decreased by $4.5 million in the first nine months of fiscal year 2024[30] - Accrued compensation and other current liabilities decreased by $6.6 million in the first nine months of fiscal year 2025, compared to an increase of $5.5 million in the same period of fiscal year 2024[30] Future Outlook - Service organic revenue growth is expected to be in the mid-to-low single digits for fiscal year 2025, with a return to historic growth levels anticipated in fiscal year 2026[147] - The company expects its income tax rate to range between 21% and 23% for the full fiscal year 2025[148] Interest Rates and Currency Impact - A 1% change in interest rates would result in a yearly interest expense change of approximately $0.5 million, assuming constant borrowing levels[150] - The interest rate for the revolving credit facility was 5.6% during the first nine months of fiscal year 2025, while the 2018 Term Loan had a fixed interest rate of 3.90%[152] - Approximately 90% of total revenues for the first nine months of fiscal year 2025 were denominated in U.S. dollars, with a 10% change in the value of the Canadian dollar or Euro impacting revenue by approximately 1%[153] - The company utilized short-term foreign exchange forward contracts, resulting in a gain of $0.2 million in both the first nine months of fiscal years 2025 and 2024[154]

Financial Results Fiscal 2025 Q3 Lee D. Rudow President and CEO Michael West Chief Operating Officer Tom L. Barbato Chief Financial Officer 1 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 relate to expectations, estimates, beliefs, assumptions and pred ...

Revenue Performance - Consolidated revenue for Q3 FY2025 was $66.8 million, an increase of $1.6 million or 2.4% compared to Q3 FY2024[6] - Service revenue was $41.6 million, flat year-over-year with a slight increase of $48, while distribution revenue grew by $1.5 million or 6.5% to $25.2 million[5][13] - Total revenue for the first nine months of FY2025 was $201.3 million, an increase of $12.7 million or 6.7% compared to the same period last year[14] - Total revenue for Q3 of Fiscal 2025 was $66,754 million, representing a 2.4% increase from $65,166 million in Q3 of Fiscal 2024[40] - Service Revenue for FY 2025 reached $129,418 million, an increase of 5.4% from FY 2024's $122,793 million[42] - Distribution Revenue for FY 2025 was $71,869 million, reflecting a 9.3% growth compared to FY 2024's $65,775 million[42] - Total Revenue for FY 2025 amounted to $201,287 million, up 6.7% from $188,568 million in FY 2024[42] Profitability Metrics - Gross profit decreased by $1.3 million or 6.0% to $19.7 million, with gross margin dropping to 29.5% from 32.1%[7] - Operating income fell by 51.1% to $2.1 million, with operating margin decreasing to 3.1%[6] - Net income per diluted share was $0.25, down from $0.38, representing a decline of 34.2%[7] - Adjusted EBITDA was $7.9 million, a decrease of $1.2 million or 13.2%, with an adjusted EBITDA margin of 11.9%[7] - Gross profit for the third quarter was $19.679 million, down 6.0% from $20.936 million in the prior year[28] - Operating Income for FY 2025 increased to $10,934 million, a rise of 3.4% from $10,577 million in FY 2024[42] - Gross Profit for FY 2025 was $63,540 million, representing a 6.3% increase from FY 2024's $59,771 million[42] - Gross Margin for FY 2025 slightly decreased to 31.6% from 31.7% in FY 2024[42] Expenses and Costs - Selling, Marketing & Warehouse Expenses rose to $24,101 million in FY 2025, a 15.6% increase from $20,844 million in FY 2024[42] - General and Administrative Expenses for FY 2025 were $28,505 million, showing a marginal increase of 0.5% from $28,350 million in FY 2024[42] - Cost of Revenue for Total operations increased to $137,747 million, up 6.9% from $128,797 million in FY 2024[42] Debt and Assets - As of December 28, 2024, total debt was $41.9 million, with a leverage ratio of 0.97[16] - Total assets increased to $386.009 million as of December 28, 2024, from $287.552 million as of March 30, 2024[30] Strategic Initiatives - The acquisition of Martin Calibration, which has revenue exceeding $25 million, is expected to enhance geographic reach and capabilities[4] - Transcat plans to expand its addressable calibration market through acquisitions and capability investments[24] - The company operates out of more than 50 locations, including 33 Calibration Service Centers across the U.S., Puerto Rico, Canada, and Ireland[22] - Transcat's strategy includes leveraging its strong brand and unique value proposition to drive organic sales growth[24] Income Summary - Net income for the nine months ended December 28, 2024, was $10.051 million, compared to $6.757 million for the same period in 2023, representing a 48.0% increase[32] - Net income for Q1, Q2, and Q3 of Fiscal 2025 totaled $10,051 million, with Q1 at $4,408 million, Q2 at $3,286 million, and Q3 at $2,357 million[34] - Adjusted net income for Q3 of Fiscal 2025 was $4,154 million, with adjusted diluted earnings per share at $0.45[38] Share Metrics - The company reported a total of 9,243 million average diluted shares outstanding for Fiscal 2025 YTD[38] - Basic earnings per share for the third quarter was $0.26, down from $0.39 in the previous year[28]

For the quarter ended December 2024, Transcat, Inc. (TRNS) reported revenue of $66.75 million, up 2.4% over the same period last year. EPS came in at $0.45, compared to $0.38 in the year-ago quarter.The reported revenue represents a surprise of -5.49% over the Zacks Consensus Estimate of $70.63 million. With the consensus EPS estimate being $0.53, the EPS surprise was -15.09%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determin ...

Transcat, Inc. (TRNS) came out with quarterly earnings of $0.45 per share, missing the Zacks Consensus Estimate of $0.53 per share. This compares to earnings of $0.38 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -15.09%. A quarter ago, it was expected that this company would post earnings of $0.47 per share when it actually produced earnings of $0.35, delivering a surprise of -25.53%.Over the last four quarters, the company ...

Core Insights - Analysts project Transcat, Inc. (TRNS) will report quarterly earnings of $0.53 per share, reflecting a 39.5% year-over-year increase [1] - Revenue is expected to reach $70.63 million, marking an 8.4% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst projections [1] Revenue Estimates - Analysts estimate 'Revenue- Distribution Sales' at $26.60 million, representing a year-over-year change of +12.4% [3] - 'Revenue- Service Revenue' is projected to reach $44.03 million, indicating a year-over-year change of +6.1% [4] Profit Estimates - 'Gross Profit- Distribution' is expected to be $8.68 million, up from $7.44 million reported in the same quarter last year [4] - The consensus for 'Gross Profit- Service' is $14.28 million, compared to $13.49 million from the previous year [4] Market Performance - Transcat shares have returned -3.1% over the past month, contrasting with the Zacks S&P 500 composite's +2.1% change [5] - The company holds a Zacks Rank 5 (Strong Sell), suggesting it may underperform the overall market in the near future [5]

Financial Performance - Net income for the second quarter ended September 28, 2024, was $3,286,000, a significant increase from $460,000 in the same quarter of 2023, representing a growth of 615%[7] - For the six months ended September 28, 2024, net income reached $7,694,000, compared to $3,409,000 for the same period in 2023, marking a 126% increase[7] - The company reported comprehensive income of $3,672,000 for the second quarter of 2024, compared to $114,000 in the same quarter of 2023, showing a substantial increase[7] - The company reported a net foreign currency loss of $0.4 million for the first six months of fiscal year 2025, compared to a net gain of less than $0.1 million for the same period in fiscal year 2024[31] - Net income for the second quarter ended September 28, 2024, was $3,286,000, compared to $460,000 for the same period in 2023[7] - Comprehensive income for the six months ended September 28, 2024, was $7,925,000, up from $3,545,000 in the prior year[7] - Net income for the first six months of FY 2025 was $7.7 million, an increase of $4.3 million or 125.7% compared to $3.4 million in the same period of FY 2024[127] - Adjusted EBITDA for Q2 FY 2025 was $8.9 million, a decrease of $0.5 million or 5.0% from Q2 FY 2024, with a margin of 13.1% compared to 14.9%[118] Revenue and Growth - Total revenue for the second quarter ended September 28, 2024, was $67.826 million, a 8.08% increase from $62.804 million in the same quarter of fiscal year 2024[64] - Consolidated revenue for the second quarter of fiscal year 2025 was $67.8 million, an increase of $5.0 million or 8.0% compared to the same quarter in fiscal year 2024[93] - Total revenue for the first six months of FY 2025 was $134.5 million, an increase of $11.1 million or 9.0% from $123.4 million in the same period of FY 2024[119] - Service revenue accounted for 65.0% of total revenue in the second quarter of fiscal year 2025, increasing by $2.7 million or 6.4% year-over-year[99] - Distribution revenue was $23.7 million, an increase of $2.3 million or 11.1%, driven by acquisitions and rental revenue[105] - Service revenue accounted for 65.3% of total revenue in the first six months of FY 2025, increasing by $6.6 million or 8.1% year-over-year[119] Assets and Equity - Total assets as of September 28, 2024, amounted to $323,553,000, up from $287,552,000 as of March 30, 2024, indicating an increase of 12.5%[10] - The total shareholders' equity rose to $268,757,000 as of September 28, 2024, compared to $225,169,000 as of March 30, 2024, representing an increase of 19.3%[10] - As of September 28, 2024, the net book value of intangible assets totaled $138.1 million, with additions of $32.5 million during the fiscal year[36] - Goodwill and intangible assets increased to a total net book value of $138.127 million as of September 28, 2024, from $105.585 million[36] Cash Flow and Investments - Cash and cash equivalents increased to $23,815,000 as of September 28, 2024, from $19,646,000 at the beginning of the period, reflecting a growth of 21.0%[14] - The company incurred a net cash used in investing activities of $7,958,000 for the six months ended September 28, 2024, compared to $18,326,000 for the same period in 2023, indicating a reduction in cash outflow[14] - Cash provided by operating activities was $15.759 million for the first six months of fiscal year 2025, slightly down from $15.972 million in the same period last year[143] - The company invested $7.6 million in capital expenditures during the first six months of fiscal year 2025, compared to $5.4 million in the same period last year, marking a 40.7% increase[149] Stock and Compensation - The average shares outstanding for basic earnings per share increased to 9,160 thousand in the second quarter of fiscal year 2025 from 7,819 thousand in the same quarter of fiscal year 2024[34] - Stock-based compensation costs recorded for the first six months of fiscal year 2025 were $1.6 million, compared to $2.2 million for the same period in fiscal year 2024[28] - Total expense related to restricted stock units was $0.9 million in the first six months of fiscal year 2025, down from $1.5 million in the same period of fiscal year 2024[53] - The total expense related to stock option awards was $0.7 million in the first six months of fiscal year 2025, up from $0.6 million in the same period of fiscal year 2024, indicating a 16.67% increase[58] Acquisitions - The company acquired Becnel Rental Tools, LLC for approximately $49.8 million, consisting of $17.5 million in cash and $32.3 million in common stock[67] - The company purchased Axiom Test Equipment, Inc. on August 8, 2023, to enhance its Distribution capabilities[71] - The total purchase price for Axiom was approximately $38.7 million, paid with $10.0 million in cash and $28.6 million in common stock[75] - The total purchase price for SteriQual was approximately $4.3 million, with a reduction to $3.8 million due to unmet revenue targets[79] - The total purchase price for TIC-MS was approximately $9.7 million, including $2.9 million in cash and $6.9 million in common stock[84] Debt and Financing - The revolving credit facility has a commitment of $80.0 million, with no amounts outstanding as of September 28, 2024[43] - The interest rate for the revolving credit facility was 7.1% for the first six months of fiscal year 2025[45] - The company's leverage ratio was 0.08 as of September 28, 2024, compared to 0.10 at March 30, 2024, indicating strong compliance with loan covenants[46] - The company can make restricted payments up to $25.0 million over the term of the credit agreement for share repurchases and dividends[43] Operational Insights - The company serves highly regulated industries, including life sciences, industrial manufacturing, and aerospace, focusing on accuracy and risk management[19] - The company plans to subcontract approximately 13% to 15% of its service revenue to third-party vendors while evaluating outsourcing needs and making capital investments[102] - The company expects to fully integrate NEXA's sales and marketing to drive anticipated revenue growth despite a decline in its cost control services[101]

Financial Data and Key Metrics Changes - Consolidated revenue increased by 8% to $67.8 million, driven by consistent demand for calibration services and strong performance in the rental business [7][14] - Consolidated gross profit grew by 5% to $21.2 million, with service gross profit increasing by 4% [8][16] - Net income for Q2 was $3.3 million, up from $0.5 million in the prior year, with diluted earnings per share increasing by 29% to $0.35 [17] - Adjusted EBITDA decreased by 5% to $8.9 million due to lower-than-expected NEXA revenue impacting services EBITDA [19] Business Line Data and Key Metrics Changes - Service revenue grew by 6%, with 4% organic growth; excluding NEXA, organic service growth was 9% [15][10] - Distribution revenue increased by 11% to $23.7 million, with gross profits growing by 10% despite margin pressure from hurricanes [11][15] Market Data and Key Metrics Changes - The core calibration services business continues to perform well, benefiting from recurring revenue streams in regulated markets such as life sciences and aerospace [10][12] - The NEXA cost control and optimization services business experienced a decline, impacting overall service revenue growth [8][9] Company Strategy and Development Direction - The company plans to rename NEXA to Transcat Solutions to leverage the Transcat brand and improve integration into sales and marketing processes [9] - The M&A strategy remains a key component of growth, with a robust acquisition pipeline aimed at expanding geographical footprint and capabilities [23][24] - Continuous process improvement and automation are emphasized as enablers for future margin expansion [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in the first quarter of fiscal 2026, despite temporary setbacks in the NEXA sales channel [12][40] - The company expects organic service revenue growth in the mid-single digits for the full fiscal year 2025, normalizing for the extra week in fiscal 2024 [22][23] - Management noted that the challenges faced by NEXA are fixable and not indicative of broader market issues [39][38] Other Important Information - The balance sheet remains strong, with total net cash of $20.8 million and a leverage ratio of 0.8x [21] - Capital expenditures for Q2 were $2.2 million higher than the prior year, focused on service segment capabilities and growth projects [20] Q&A Session Summary Question: When did the company recognize NEXA was falling short of expectations? - Management noted subtle signs in the first quarter but did not anticipate the significant drop in Q2 [26][27] Question: Is the softness in NEXA indicative of broader macroeconomic issues? - Management clarified that the core calibration business grew organically by 9%, indicating isolated issues with NEXA [28] Question: What is the current state of the M&A pipeline? - Management expressed confidence in a robust M&A pipeline and the ability to pursue strategic deals [30] Question: What changes are being made to NEXA's sales and marketing processes? - Management is integrating NEXA into Transcat's established sales and marketing framework to enhance performance [45][46] Question: What is the revenue contribution of NEXA to the overall business? - NEXA contributes approximately 10% to service revenue [62] Question: How will the company manage operating expenses in the second half of the year? - An increase in operating expenses is expected as the company supports growth initiatives [31] Question: What impact did the hurricanes have on Becnel's performance? - The hurricanes caused both revenue and profit issues, but management expects distribution margins to return to previous levels [41][42]

Revenue Growth - Consolidated revenue for Q2 FY2025 was $67.8 million, an increase of 8.0% compared to $62.8 million in Q2 FY2024[3] - Service revenue grew to $44.1 million, up 6.4% year-over-year, while distribution revenue increased by 11.1% to $23.7 million[4] - Total revenue for the second quarter ended September 28, 2024, was $67.826 million, representing an increase from $62.804 million in the same quarter of the previous year, a growth of approximately 3.2%[24] - Total revenue for FY 2025 Q2 reached $67,826, an increase of 8.0% compared to $62,804 in FY 2024 Q2[36] - Service revenue for FY 2025 YTD was $87,861, up 8.1% from $81,284 in FY 2024 YTD[37] - Distribution revenue for FY 2025 YTD was $46,672, representing a 10.8% increase from $42,118 in FY 2024 YTD[38] Profitability - Gross profit for the quarter was $21.2 million, a 5.4% increase from $20.1 million in the prior year, with a gross margin of 31.3%[3] - Gross profit for the second quarter was $21.206 million, up from $20.125 million year-over-year, reflecting a growth of about 5.4%[24] - Operating income surged to $3.7 million, reflecting a 127.3% increase from $1.6 million in the same quarter last year[3] - Net income for the second quarter was $3.286 million, compared to $460,000 in the same quarter last year, indicating a significant increase[24] - Net income per diluted share rose to $0.35, compared to $0.06 in the prior year, marking a 483.3% increase[4] - Year-to-date operating income for FY 2025 reached $8,834, a 40.6% increase from $6,283 in FY 2024 YTD[39] Cash and Assets - The company had $23.8 million in cash and cash equivalents and $80.0 million available for borrowing as of September 28, 2024[13] - Total cash and cash equivalents at the end of the period were $23,815,000, compared to $1,246,000 at the end of the previous year[28] - Total assets increased to $323.553 million as of September 28, 2024, up from $287.552 million as of March 30, 2024[26] Operational Performance - Adjusted EBITDA is used as a key performance measure, allowing for evaluation of core operations by excluding non-GAAP items[17] - Adjusted EBITDA for Q2 was $8,861,000, with a year-to-date total of $19,073,000, reflecting strong operational performance[29] - Transcat's service segment adjusted EBITDA was $6,624,000 for Q2, while the distribution segment adjusted EBITDA was $2,237,000[30] - Cash flows from operating activities were $15,759,000 for the six months ended September 2024, slightly down from $15,972,000 in the prior year[28] Strategic Initiatives - The company expects FY25 organic service revenue growth in the mid-single digits, with a return to high single-digit growth anticipated by the first half of FY2026[14] - Transcat's acquisition pipeline remains robust, focusing on strategic opportunities to drive organic revenue growth[14] - The company aims to expand its addressable calibration market through acquisitions and capability investments[21] - Transcat operates 29 Calibration Service Centers across the U.S., Puerto Rico, Canada, and Ireland, enhancing its service capabilities[19] - The company emphasizes its strategy to leverage its strong brand and unique value proposition to drive organic sales growth[21] Shareholder Information - The company reported a total of 9,199,277 shares outstanding as of September 28, 2024, compared to 8,839,299 shares as of March 30, 2024[25] - Transcat's average diluted shares outstanding were 9,222,000 for the year-to-date period, reflecting a slight increase in share count[31] - Diluted earnings per share for the second quarter were $0.35, compared to $0.06 in the same quarter of the previous year, marking a substantial rise[24] - The company reported a diluted earnings per share of $0.83 for the year-to-date period, with an adjusted diluted earnings per share of $1.20[31] Expense Management - Selling, marketing, and warehouse expenses increased by 19.3% to $8,181 in FY 2025 Q2 from $6,856 in FY 2024 Q2[36] - General and administrative expenses decreased by 20.1% to $9,290 in FY 2025 Q2 from $11,626 in FY 2024 Q2[36] - Depreciation and amortization expenses for Q2 amounted to $4,399,000, contributing to the overall adjusted EBITDA calculation[29] - The company incurred transaction expenses of $33,000 in Q2, indicating ongoing costs related to acquisitions[29]