- Product segment sales were $16.9 million in the second quarter of fiscal 2013, consistent with the prior-year period. Average Product segment sales per day were unchanged at $269 thousand in the second quarter of fiscal 2013 and 2012.
- Online sales of the Company’s products increased 31.7% to $2.0 million, or 11.7% of Product segment sales, in the second quarter of fiscal 2013 compared with $1.5 million, or 8.9% of Product segment sales, in the prior-year period.
- Second quarter Product segment gross profit decreased 13.6%, to $3.7 million, or 22.0% of Product segment sales, primarily due to reduced volume-based rebate income.
- Product segment operating income decreased $0.6 million, or 41.9% to $0.8 million in the second quarter of fiscal 2013 as a result of the contraction in gross profit. Operating margin was 5.0% and 8.6% of Product segment sales in the second quarter of fiscal 2013 and 2012, respectively.
- Product segment EBITDA was $1.0 million, or 6.2% of segment sales, in the second quarter of fiscal 2013, compared with $1.7 million, or 9.9% of segment sales, in the prior-year period. See Note 1 on page 4 for a description of this non-GAAP financial measure and page 9 for the EBITDA Reconciliation table.
Transcat, Inc. (NASDAQ: TRNS) (“Transcat” or the “Company”), a leading distributor of professional grade handheld test, measurement and control instruments and accredited provider of calibration, repair, inspection and other compliance services, today reported financial results for its second quarter ended September 29, 2012. Included in the reported results are those of Newark Corporation’s calibration services business, which the Company acquired on September 8, 2011 and those of Anacor Compliance Services, Inc., which the Company acquired on July 16, 2012. Fiscal 2013 second quarter total revenue increased 6.4%, to $26.8 million from $25.2 million in the second quarter of the prior fiscal year on strong Service segment revenue growth of 19.8%. Product segment sales were consistent with the prior year at $16.9 million. Net income was $0.7 million, or $0.10 per diluted share, in the second quarter of fiscal 2013 and fiscal 2012. Charles P. Hadeed, CEO of Transcat, commented, “Our revenue growth in the second quarter, against fairly challenging economic headwinds and prior year comparables, demonstrates the effectiveness of our strategy to take market share in our Service segment both organically and through acquisitions. “We achieved 33.8% incremental operating margin in the Service segment reflecting the potential earnings power of this segment as organic volume increases. Our product distribution business is a strong, steady performer despite the challenging economy and increased competition in the marketplace.” Strong Service Segment Performance Largely Offsets Compressed Product Segment Margins Operating income for the second quarter of fiscal 2013 was $1.2 million, a slight decrease from the prior fiscal year period, while operating margin declined 50 basis points to 4.4% in the second quarter of fiscal 2013 compared with 4.9% for the prior-year period. Total operating expenses in the second quarter of fiscal 2013 and 2012 were consistent. During the second quarter of fiscal 2013, Transcat generated $1.8 million of EBITDA (earnings before interest, taxes, depreciation and amortization), a decrease of $0.2 million when compared with the same quarter of the prior fiscal year. See Note 1 on page 4 for a description of this non-GAAP financial measure and page 9 for the EBITDA Reconciliation table. Product Segment Revenue Steady in Challenging Market Product Segment: Represents the Company’s distribution of professional grade handheld test and measurement instruments business (63.3% of total revenue for the second quarter of fiscal 2013) Lee D. Rudow, President and COO of Transcat, noted, “The impact of vendor rebates, which are based on sales growth targets, can vary significantly from period to period and impact our Product segment gross profit and gross margin. In the second quarter, we realized a decrease in annual rebates which had a negative impact on our Product segment results.”