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Transcat Reports 3.0% Increase In Revenue For Fiscal 2013 Third Quarter

Stocks in this article: TRNS

ABOUT TRANSCAT

Transcat, Inc. is a leading provider of accredited calibration, repair, inspection and compliance services including analytical instrument qualifications, equipment and process validation. Targeted industries include life science, biotechnology, medical device, pharmaceutical and other FDA-regulated industries, industrial manufacturing, energy and utilities, chemical manufacturing and other industries. Throughout its 18 strategically located centers of excellence in the United States, Canada and Puerto Rico, Transcat delivers precise services with reliable turn-around times. The breadth and depth of measurement parameters addressed by Transcat’s ISO/IEC 17025 scopes of accreditation are believed to be among the best in the industry.

In addition, Transcat operates as a leading distributor of professional grade handheld test, measurement and control instrumentation. Through its distribution products segment, Transcat markets and distributes premier and propriety brand instruments to nearly 15,000 customers. The Company offers access to more than 25,000 test, measurement and control products.

Transcat’s growth strategy is to expand its product and service platform comprised of a balanced suite of test products and analytical, calibration, compliance, and validation services. The goal is to deliver specialized technical services with a quality assurance approach, which maximizes document accuracy and on-time job delivery. Transcat answers the call with cGMP, GLP, and GXP compliant services. Transcat can provide life science companies with a reliable alternative service and product solution to the OEMs and to the “generalist” service providers who cannot meet the client’s specialized needs.

More information about Transcat can be found on its website at: transcat.com

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and 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, its strategy to build its sales representative channel, customer preferences and changes in market conditions in the industries in which Transcat operates are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Transcat’s Annual 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 or publicly announce any revisions to any of the forward-looking statements contained in this press release.

                       
TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
 
 
(Unaudited) (Unaudited)
Third Quarter Ended Nine Months Ended
December 29, December 24, December 29, December 24,
2012 2011 2012 2011
 
Product Sales $ 19,440 $ 19,382 $ 52,753 $ 53,533
Service Revenue   9,884   9,078   28,456   25,715

Total Revenue

  29,324   28,460   81,209   79,248
 
Cost of Products Sold 14,937 14,420 40,317 39,992
Cost of Services Sold   7,757   7,252   21,977   20,017

Total Cost of Products and Services Sold

  22,694   21,672   62,294   60,009
 
Gross Profit   6,630   6,788   18,915   19,239
 
Selling, Marketing and Warehouse Expenses 3,386 3,403 9,786 10,071
Administrative Expenses   2,023   1,732   6,134   5,704

Total Operating Expenses

  5,409   5,135   15,920   15,775
 
Operating Income   1,221   1,653   2,995   3,464
 
Interest and Other Expense, net   37   44   135   127
 
Income Before Income Taxes 1,184 1,609 2,860 3,337
Provision for Income Taxes   402   585   972   1,242
 
Net Income   782   1,024   1,888   2,095
 
 
Basic Earnings Per Share $ 0.11 $ 0.14 $ 0.26 $ 0.29
Average Shares Outstanding 7,417 7,325 7,399 7,301
 
Diluted Earnings Per Share $ 0.10 $ 0.13 $ 0.25 $ 0.27
Average Shares Outstanding 7,562 7,680 7,575 7,647
 
           
TRANSCAT, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
 
(Unaudited)
December 29, March 31,
2012

2012

ASSETS
Current Assets:

Cash

$ 459 $ 32

Accounts Receivable, less allowance for doubtful accounts of $100

and $99 as of December 29, 2012 and March 31, 2012, respectively

13,868 13,800

Other Receivables

1,350 845

Inventory, net

6,753 6,396

Prepaid Expenses and Other Current Assets

1,307 1,064

Deferred Tax Asset

  901   1,041  

Total Current Assets

24,638 23,178
Property and Equipment, net 6,609 5,306
Goodwill 15,294 13,390
Intangible Assets, net 2,458 2,449
Deferred Tax Asset 332 -
Other Assets   1,010   654  

Total Assets

$ 50,341 $ 44,977  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:

Accounts Payable

$ 8,839 $ 7,516

Accrued Compensation and Other Liabilities

3,750 5,171

Income Taxes Payable

  -   366  

Total Current Liabilities

12,589 13,053
Long-Term Debt 6,642 3,365
Deferred Tax Liability - 139
Other Liabilities   1,538   1,042  

Total Liabilities

  20,769   17,599  
 
Shareholders' Equity:

Common Stock, par value $0.50 per share, 30,000,000 shares authorized;

7,417,294 and 7,840,994 shares issued as of December 29, 2012 and

March 31, 2012, respectively; 7,417,294 and 7,341,007 shares

outstanding as of December 29, 2012 and March 31, 2012, respectively

3,709 3,920

Capital in Excess of Par Value

10,680 10,810

Accumulated Other Comprehensive Income

402 448

Retained Earnings

14,781 14,394

Less: Treasury Stock, at cost, 498,782 shares as of March 31, 2012

  -   (2,194 )

Total Shareholders' Equity

  29,572   27,378  

Total Liabilities and Shareholders' Equity

$ 50,341 $ 44,977  
 
           

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

 

(Unaudited)

Nine Months Ended

December 29,

December 24,

2012

2011

Cash Flows from Operating Activities:
Net Income

$

1,888

$

2,095

Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Deferred Income Taxes (250 ) (105 )
Depreciation and Amortization 1,945 2,241
Provision for Accounts Receivable and Inventory Reserves 167 157
Stock-Based Compensation Expense 220 407
Changes in Assets and Liabilities:
Accounts Receivable and Other Receivables (252 ) (2,387 )
Inventory (349 ) (1,347 )
Prepaid Expenses and Other Assets (909 ) (627 )
Accounts Payable 1,337 1,270
Accrued Compensation and Other Liabilities (1,038 ) 873
Income Taxes Payable   (409 )   (42 )
Net Cash Provided by Operating Activities   2,350     2,535  
 
Cash Flows from Investing Activities:
Purchase of Property and Equipment (2,189 ) (1,233 )
Business Acquisitions   (3,129 )   (3,122 )
Net Cash Used in Investing Activities   (5,318 )   (4,355 )
 
Cash Flows from Financing Activities:
Revolving Line of Credit, net 3,277 1,606
Payments on Other Debt Obligations

-

(11 )
Payments of Contingent Consideration (14 ) (88 )
Issuance of Common Stock 199 350
Repurchase of Common Stock (110 ) (61 )
Excess Tax Benefits Related to Stock-Based Compensation   43     39  
Net Cash Provided by Financing Activities   3,395     1,835  
 
Effect of Exchange Rate Changes on Cash  

-

    10  
 
Net Increase in Cash 427 25
Cash at Beginning of Period   32     32  
Cash at End of Period

$

459

 

$

57

 
 
           

TRANSCAT, INC.

Fiscal Year 2013 and Fiscal Year 2012
Additional Information
 
EBITDA Reconciliation

(Dollars in thousands)

(Unaudited)

 

FY2013

Q1       Q2       Q3       YTD
Net Income $ 361       $ 745       $ 782       $ 1,888
+ Interest Expense 21 38 20 79
+ Other Expense / (Income) 26 13 17 56
+ Tax Provision   186           384           402           972  
Operating Income $ 594 $ 1,180 $ 1,221 $ 2,995
+ Depreciation & Amortization 600 621 724 1,945
+ Other (Expense) / Income   (26 )         (13 )         (17 )         (56 )
EBITDA $ 1,168 $ 1,788 $ 1,928 $ 4,884
 

Segment Breakdown

 
Service Operating Income (Loss) $ (258 ) $ 333 $ (19 ) $ 56
+ Depreciation & Amortization 359 422 439 1,220
+ Other (Expense) / Income   (18 )         (14 )         (18 )         (50 )
Service EBITDA $ 83 $ 741 $ 402 $ 1,226
 
Product Operating Income $ 852 $ 847 $ 1,240 $ 2,939
+ Depreciation & Amortization 241 199 285 725
+ Other (Expense) / Income   (8 )         1           1           (6 )
Product EBITDA $ 1,085 $ 1,047 $ 1,526 $ 3,658
                                       
 

FY2012

Q1       Q2       Q3       YTD
Net Income $ 325 $ 746 $ 1,024 $ 2,095
+ Interest Expense 28 28 35 91
+ Other Expense / (Income) 17 10 9 36
+ Tax Provision   200           457           585           1,242  
Operating Income $ 570 $ 1,241 $ 1,653 $ 3,464
+ Depreciation & Amortization 670 738 833 2,241
+ Other (Expense) / Income   (17 )         (10 )         (9 )         (36 )
EBITDA $ 1,223 $ 1,969 $ 2,477 $ 5,669
 

Segment Breakdown

 
Service Operating Income $ (251 ) $ (216 ) $ (201 ) $ (668 )
+ Depreciation & Amortization 474 511 557 1,542
+ Other (Expense) / Income   (11 )         (9 )         (8 )         (28 )
Service EBITDA $ 212 $ 286 $ 348 $ 846
 
Product Operating Income $ 821 $ 1,457 $ 1,854 $ 4,132
+ Depreciation & Amortization 196 227 276 699
+ Other (Expense) / Income   (6 )         (1 )         (1 )         (8 )
Product EBITDA $ 1,011 $ 1,683 $ 2,129 $ 4,823
 
                 
TRANSCAT, INC.
Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

Change
SERVICE FY 2013 Q3 FY 2012 Q3 $'s       %
 
Service Revenue $ 9,884 $ 9,078 $ 806 8.9 %
Cost of Services Sold $ 7,757   $ 7,252   $ 505   7.0 %
Gross Profit $ 2,127 $ 1,826 $ 301 16.5 %
Gross Margin 21.5 % 20.1 %
 
Selling, Marketing & Warehouse Expenses $ 1,313   $ 1,334   $ (21 ) (1.6 %)
Contribution Margin $ 814 $ 492 $ 322 65.4 %
% of Revenue 8.2 % 5.4 %
 
Administrative Expenses $ 833   $ 693   $ 140   20.2 %
Operating Loss $ (19 ) $ (201 ) $ 182 90.5 %
% of Revenue (0.2 %) (2.2 %)
 
 
Change
PRODUCT FY 2013 Q3 FY 2012 Q3 $'s %
Product Sales $ 19,440 $ 19,382 $ 58 0.3 %
Cost of Products Sold $ 14,937   $ 14,420   $ 517   3.6 %
Gross Profit $ 4,503 $ 4,962 $ (459 ) (9.3 %)
Gross Margin 23.2 % 25.6 %
 
Selling, Marketing & Warehouse Expenses $ 2,073   $ 2,069   $ 4   0.2 %
Contribution Margin $ 2,430 $ 2,893 $ (463 ) (16.0 %)
% of Sales 12.5 % 14.9 %
 
Administrative Expenses $ 1,190   $ 1,039   $ 151   14.5 %
Operating Income $ 1,240 $ 1,854 $ (614 ) (33.1 %)
% of Sales 6.4 % 9.6 %
                                 
 
Change
TOTAL FY 2013 Q3 FY 2012 Q3 $'s %
 
Total Revenue $ 29,324 $ 28,460 $ 864 3.0 %
Total Cost of Products and Services Sold $ 22,694   $ 21,672   $ 1,022   4.7 %
Gross Profit $ 6,630 $ 6,788 $ (158 ) (2.3 %)
Gross Margin 22.6 % 23.9 %
 
Selling, Marketing & Warehouse Expenses $ 3,386   $ 3,403   $ (17 ) (0.5 %)
Contribution Margin $ 3,244 $ 3,385 $ (141 ) (4.2 %)
% of Revenue 11.1 % 11.9 %
 
Administrative Expenses $ 2,023   $ 1,732   $ 291   16.8 %
Operating Income $ 1,221 $ 1,653 $ (432 ) (26.1 %)
% of Revenue 4.2 % 5.8 %
 
                 
TRANSCAT, INC.
Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

Change
SERVICE FY 2013 YTD FY 2012 YTD $'s       %
 
Service Revenue $ 28,456 $ 25,715 $ 2,741 10.7%
Cost of Services Sold $ 21,977 $ 20,017 $ 1,960 9.8%
Gross Profit $ 6,479 $ 5,698 $ 781 13.7%
Gross Margin 22.8% 22.2%
 
Selling, Marketing & Warehouse Expenses $ 3,748 $ 3,966 $ (218) (5.5%)
Contribution Margin $ 2,731 $ 1,732 $ 999 57.7%
% of Revenue 9.6% 6.7%
 
Administrative Expenses $ 2,675 $ 2,400 $ 275 11.5%
Operating Income (Loss) $ 56 $ (668) $ 724 108.4%
% of Revenue 0.2% (2.6%)
 
Change
PRODUCT FY 2013 YTD FY 2012 YTD $'s     %
Product Sales $ 52,753 $ 53,533 $ (780) (1.5%)
Cost of Products Sold $ 40,317 $ 39,992 $ 325 0.8%
Gross Profit $ 12,436 $ 13,541 $ (1,105) (8.2%)
Gross Margin 23.6% 25.3%
 
Selling, Marketing & Warehouse Expenses $ 6,038 $ 6,105 $ (67) (1.1%)
Contribution Margin $ 6,398 $ 7,436 $ (1,038) (14.0%)
% of Sales 12.1% 13.9%
 
Administrative Expenses $ 3,459 $ 3,304 $ 155 4.7%
Operating Income $ 2,939 $ 4,132 $ (1,193) (28.9%)
% of Sales 5.6% 7.7%
                                 
Change
TOTAL FY 2013 YTD FY 2012 YTD $'s %
 
Total Revenue $ 81,209 $ 79,248 $ 1,961 2.5%
Total Cost of Products and Services Sold $ 62,294 $ 60,009 $ 2,285 3.8%
Gross Profit $ 18,915 $ 19,239 $ (324) (1.7%)
Gross Margin 23.3% 24.3%
 
Selling, Marketing & Warehouse Expenses $ 9,786 $ 10,071 $ (285) (2.8%)
Contribution Margin $ 9,129 $ 9,168 $ (39) (0.4%)
% of Revenue 11.2% 11.6%
 
Administrative Expenses $ 6,134 $ 5,704 $ 430 7.5%
Operating Income $ 2,995 $ 3,464 $ (469) (13.5%)
% of Revenue 3.7% 4.4%
 
                         

PRODUCT SALES PER BUSINESS DAY

(Dollars in thousands)

(Unaudited)

 
Change
FY 2013 Q3               FY 2012 Q3       $'s       %
Product Sales $ 19,440 $ 19,382 $ 58       0.3%
Business Days 61 63 (2)
Sales Per Business Day $ 319               $ 308       $ 11       3.6%
 
                 
Change
FY 2013 YTD       FY 2012 YTD       $'s       %
Product Sales $ 52,753 $ 53,533 $ (780)       (1.5%)
Business Days 187 190 (3)
Sales Per Business Day $ 282       $ 282       $ 0       0.1%
 




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