0001206774-18-000352.txt : 20180202 0001206774-18-000352.hdr.sgml : 20180202 20180202160126 ACCESSION NUMBER: 0001206774-18-000352 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 46 CONFORMED PERIOD OF REPORT: 20171223 FILED AS OF DATE: 20180202 DATE AS OF CHANGE: 20180202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSCAT INC CENTRAL INDEX KEY: 0000099302 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 160874418 STATE OF INCORPORATION: OH FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03905 FILM NUMBER: 18570626 BUSINESS ADDRESS: STREET 1: 35 VANTAGE POINT DRIVE CITY: ROCHESTER STATE: NY ZIP: 14624 BUSINESS PHONE: 5853527777 MAIL ADDRESS: STREET 1: 35 VANTAGE POINT DRIVE CITY: ROCHESTER STATE: NY ZIP: 14624 FORMER COMPANY: FORMER CONFORMED NAME: TRANSMATION INC DATE OF NAME CHANGE: 19920703 10-Q 1 transcat3375841-10q.htm QUARTERLY REPORT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________

FORM 10-Q

(Mark one)

[✓]

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: December 23, 2017

[ ]

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to _______________

Commission File Number: 000-03905

TRANSCAT, INC.
(Exact name of registrant as specified in its charter)

Ohio	16-0874418
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

35 Vantage Point Drive, Rochester, New York 14624
(Address of principal executive offices) (Zip Code)

(585) 352-7777
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [✓] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [✓] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and emerging growth company in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)		Smaller reporting company [✓]
Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [✓]

The number of shares of common stock, par value $0.50 per share, of the registrant outstanding as of February 1, 2018 was 7,152,764.

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		Page(s)
PART I.	FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements:

	Statements of Income for the Third Quarter and Nine Months Ended December 23, 2017 and December 24, 2016	1

	Statements of Comprehensive Income for the Third Quarter and Nine Months Ended December 23, 2017 and December 24, 2016	2

	Balance Sheets as of December 23, 2017 and March 25, 2017	3

	Statements of Cash Flows for the Nine Months Ended December 23, 2017 and December 24, 2016	4

	Statement of Shareholders’ Equity for the Nine Months Ended December 23, 2017	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21

Item 4.	Controls and Procedures	21

PART II.	OTHER INFORMATION

Item 6.	Exhibits	22

SIGNATURES		23

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PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)

	(Unaudited)				(Unaudited)
	Third Quarter Ended				Nine Months Ended
	December 23,		December 24,		December 23,		December 24,
	2017		2016		2017		2016
Service Revenue	$	18,769	$	17,455	$	55,490	$	51,577
Distribution Sales		21,714		20,358		57,199		53,868
Total Revenue		40,483		37,813		112,689		105,445

Cost of Service Revenue		14,070		13,149		41,835		38,402
Cost of Distribution Sales		16,712		15,749		44,308		41,855
Total Cost of Revenue		30,782		28,898		86,143		80,257

Gross Profit		9,701		8,915		26,546		25,188

Selling, Marketing and Warehouse Expenses		4,150		4,159		12,247		12,612
General and Administrative Expenses		2,897		2,403		8,776		7,207
Total Operating Expenses		7,047		6,562		21,023		19,819

Operating Income		2,654		2,353		5,523		5,369

Interest and Other Expense, net		311		188		854		547

Income Before Income Taxes		2,343		2,165		4,669		4,822
Provision for Income Taxes		512		895		1,201		1,729

Net Income	$	1,831	$	1,270	$	3,468	$	3,093

Basic Earnings Per Share	$	0.26	$	0.18	$	0.49	$	0.44
Average Shares Outstanding		7,142		7,010		7,115		6,984

Diluted Earnings Per Share	$	0.25	$	0.18	$	0.48	$	0.43
Average Shares Outstanding		7,319		7,204		7,273		7,161

See accompanying notes to consolidated financial statements.

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TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)

	(Unaudited)						(Unaudited)
	Third Quarter Ended						Nine Months Ended
	December 23,			December 24,			December 23,		December 24,
	2017			2016			2017		2016
Net Income	$	1,831		$	1,270		$	3,468	$	3,093

Other Comprehensive Income (Loss):

Currency Translation Adjustment		(151	)		(114	)		227		(88	)
Other, net of tax effects of $(28) and $(13) for the third quarters ended December 23, 2017 and December 24, 2016, respectively; and $(44) and $(27) for the nine months ended December 23, 2017 and December 24, 2016, respectively.		1			21			26		43
Total Other Comprehensive (Loss) Income		(150	)		(93	)		253		(45	)
Comprehensive Income	$	1,681		$	1,177		$	3,721	$	3,048

See accompanying notes to consolidated financial statements.

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TRANSCAT, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)

	(Unaudited)			(Audited)
	December 23,			March 25,
	2017			2017
ASSETS
Current Assets:
Cash	$	504		$	842
Accounts Receivable, less allowance for doubtful accounts of $270 and $210 as of December 23, 2017 and March 25, 2017, respectively		22,700			22,049
Other Receivables		1,535			1,227
Inventory, net		11,144			10,278
Prepaid Expenses and Other Current Assets		988			1,193
Total Current Assets		36,871			35,589
Property and Equipment, net		17,478			15,568
Goodwill		32,823			32,520
Intangible Assets, net		5,984			7,519
Other Assets		1,079			901
Total Assets	$	94,235		$	92,097

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable	$	11,478		$	11,615
Accrued Compensation and Other Liabilities		4,524			5,907
Income Taxes Payable		468			805
Current Portion of Long-Term Debt		2,143			1,429
Total Current Liabilities		18,613			19,756
Long-Term Debt		24,103			25,883
Deferred Tax Liabilities		955			1,134
Other Liabilities		1,960			1,923
Total Liabilities		45,631			48,696

Shareholders' Equity:
Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 7,144,475 and 7,043,754 shares issued and outstanding as of December 23, 2017 and March 25, 2017, respectively		3,572			3,522
Capital in Excess of Par Value		14,553			12,996
Accumulated Other Comprehensive Loss		(161	)		(414	)
Retained Earnings		30,640			27,297
Total Shareholders' Equity		48,604			43,401
Total Liabilities and Shareholders' Equity	$	94,235		$	92,097

See accompanying notes to consolidated financial statements.

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TRANSCAT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

	(Unaudited)
	Nine Months Ended
	December 23,			December 24,
	2017			2016
Cash Flows from Operating Activities:
Net Income	$	3,468		$	3,093
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Net Loss on Disposal of Property and Equipment		57			6
Deferred Income Taxes		11			121
Depreciation and Amortization		4,527			4,667
Provision for Accounts Receivable and Inventory Reserves		341			243
Stock-Based Compensation		1,095			316
Changes in Assets and Liabilities:
Accounts Receivable and Other Receivables		(1,009	)		(3,168	)
Inventory		(612	)		(3,967	)
Prepaid Expenses and Other Assets		(29	)		(341	)
Accounts Payable		(137	)		3,378
Accrued Compensation and Other Liabilities		(1,325	)		(454	)
Income Taxes Payable		(570	)		(20	)
Net Cash Provided by Operating Activities		5,817			3,874

Cash Flows from Investing Activities:
Purchases of Property and Equipment		(5,084	)		(4,104	)
Proceeds from Sale of Property and Equipment		11			29
Business Acquisitions		-			(6,977	)
Net Cash Used in Investing Activities		(5,073	)		(11,052	)

Cash Flows from Financing Activities:
Repayment of Revolving Credit Facility, net		(7,018	)		(1,924	)
Proceeds from Term Loan		7,143			10,000
Repayment of Term Loan		(1,190	)		(952	)
Payment of Contingent Consideration and Holdbacks Related to Business Acquisitions		-			(339	)
Issuance of Common Stock		821			384
Repurchase of Common Stock		(344	)		(98	)
Stock Option Redemption		(90	)		(137	)
Net Cash (Used in) Provided by Financing Activities		(678	)		6,934

Effect of Exchange Rate Changes on Cash		(404	)		162

Net Decrease in Cash		(338	)		(82	)
Cash at Beginning of Period		842			641
Cash at End of Period	$	504		$	559

Supplemental Disclosure of Cash Flow Activity:
Cash paid during the period for:
Interest	$	765		$	488
Income Taxes, net	$	1,783		$	1,595
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Holdback Amounts Related to Business Acquisitions	$	-		$	735

See accompanying notes to consolidated financial statements.

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TRANSCAT, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(In Thousands, Except Par Value Amounts)
(Unaudited)

						Capital
	Common Stock					In			Accumulated
	Issued					Excess			Other
	$0.50 Par Value					of Par			Comprehensive			Retained
	Shares		Amount			Value			(Loss)			Earnings			Total
Balance as of March 25, 2017	7,044		$	3,522		$	12,996		$	(414	)	$	27,297		$	43,401
Issuance of Common Stock	102			51			770			-			-			821
Repurchase of Common Stock	(27	)		(14	)		(205	)		-			(125	)		(344	)
Stock-Based Compensation	25			13			1,082			-			-			1,095
Redemption of Stock Options	-			-			(90	)		-			-			(90	)
Other Comprehensive Income	-			-			-			253			-			253
Net Income	-			-			-			-			3,468			3,468

Balance as of December 23, 2017	7,144		$	3,572		$	14,553		$	(161	)	$	30,640		$	48,604

See accompanying notes to consolidated financial statements.

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TRANSCAT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Per Share and Per Unit Amounts)
(Unaudited)

NOTE 1 – GENERAL

Description of Business: Transcat, Inc. (“Transcat” or the “Company”) is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement and control instrumentation. The Company is focused on providing services and products to highly regulated industries, particularly the life science industry, which includes pharmaceutical, biotechnology, medical device and other FDA-regulated businesses. Additional industries served include industrial manufacturing; energy and utilities, including oil and gas; chemical manufacturing; FAA-regulated businesses, including aerospace and defense and other industries that require accuracy in their processes, confirmation of the capabilities of their equipment, and have a high cost of failure.

Basis of Presentation: Transcat’s unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8-03 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation (consisting of normal recurring adjustments) have been included. The results for the interim periods are not necessarily indicative of what the results will be for the fiscal year. The accompanying Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended March 25, 2017 (“fiscal year 2017”) contained in the Company’s 2017 Annual Report on Form 10-K filed with the SEC.

Revenue Recognition: Distribution sales are recorded when an order’s title and risk of loss transfers to the customer. The Company recognizes the majority of its Service revenue based upon when the calibration or other activity is performed and then shipped and/or delivered to the customer. Some Service revenue is generated from managing customers’ calibration programs in which the Company recognizes revenue in equal amounts at fixed intervals. The Company generally invoices its customers for freight, shipping, and handling charges. Provisions for customer returns are provided for in the period the related revenue is recorded based upon historical data. In 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09 to provide specific guidance on how entities should recognize revenue derived from contracts with customers. Transcat is required to adopt ASU 2014-09 in its fiscal year ending March 30, 2019 (“fiscal year 2019”). This new standard supercedes previous guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures. We are continuing to evaluate certain contracts to determine their treatment under ASU 2014—09. The Company does not expect the adoption of this ASU to have a material impact on the Consolidated Financial Statements.

Fair Value of Financial Instruments: Transcat has determined the fair value of debt and other financial instruments using a valuation hierarchy. The hierarchy, which prioritizes the inputs used in measuring fair value, consists of three levels. Level 1 uses observable inputs such as quoted prices in active markets; Level 2 uses inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which is defined as unobservable inputs in which little or no market data exists, requires the Company to develop its own assumptions. The carrying amount of debt on the Consolidated Balance Sheets approximates fair value due to variable interest rate pricing, and the carrying amounts for cash, accounts receivable and accounts payable approximate fair value due to their short-term nature. Investment assets, which fund the Company’s non-qualified deferred compensation plan, consist of mutual funds and are valued based on Level 1 inputs. At December 23, 2017 and March 25, 2017, investment assets totaled $0.8 million and $0.7 million, respectively and are included as a component of other assets (non-current) on the Consolidated Balance Sheets.

Stock-Based Compensation: The Company measures the cost of services received in exchange for all equity awards granted, including stock options and restricted stock units, based on the fair market value of the award as of the grant date. The Company records compensation expense related to unvested equity awards by recognizing, on a straight-line basis, the unamortized grant date fair value over the remaining service period of each award. In 2016, FASB issued ASU 2016-09 to simplify certain aspects of the accounting for share-based payment transactions to employees. The Company elected to early adopt this ASU in the fourth quarter of fiscal year 2017. Upon adoption, excess tax benefits for share-based award activity are reflected in the statement of income as a component of the provision for income taxes. Excess tax benefits are realized benefits from tax deductions for exercised awards in excess of the deferred tax asset attributable to stock-based compensation costs for such awards. The Company did not capitalize any stock-based compensation costs as part of an asset. The Company estimates forfeiture rates based on its historical experience. During the first nine months of the fiscal year ending March 31, 2018 (“fiscal year 2018”) and fiscal year 2017, the Company recorded non-cash stock-based compensation expense of $1.1 million and $0.3 million, respectively, in the Consolidated Statements of Income.

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Foreign Currency Translation and Transactions: The accounts of Transcat Canada Inc., a wholly-owned subsidiary of the Company, are maintained in the local currency (Canadian dollars) and have been translated to U.S. dollars. Accordingly, the amounts representing assets and liabilities have been translated at the period-end rates of exchange and related revenue and expense accounts have been translated at an average rate of exchange during the period. Gains and losses arising from translation of Transcat Canada Inc.’s financial statements into U.S. dollars are recorded directly to the accumulated other comprehensive loss component of shareholders’ equity.

Transcat records foreign currency gains and losses on its Canadian business transactions. The net foreign currency loss was less than $0.1 million during the first nine months of each of fiscal years 2018 and 2017. The Company continually utilizes short-term foreign exchange forward contracts to reduce the risk that its earnings will be adversely affected by changes in currency exchange rates. The Company does not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a loss of $0.1 million during the first nine months of fiscal year 2018 and a gain of $0.1 million during the first nine months of fiscal year 2017, was recognized as a component of other expense in the Consolidated Statements of Income. The change in the fair value of the contracts is offset by the change in fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On December 23, 2017, the Company had a foreign exchange contract, which matured in January 2018, outstanding in the notional amount of $5.4 million. The foreign exchange contract was renewed in January 2018 and continues to be in place. The Company does not use hedging arrangements for speculative purposes.

Earnings Per Share: Basic earnings per share of common stock are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock reflect the assumed conversion of stock options and unvested restricted stock units using the treasury stock method in periods in which they have a dilutive effect. In computing the per share effect of assumed conversion, funds which would have been received from the exercise of options and unvested restricted stock units and the related tax benefits are considered to have been used to purchase shares of common stock at the average market prices during the period, and the resulting net additional shares of common stock are included in the calculation of average shares of common stock outstanding.

For the third quarter of fiscal year 2018 the net additional common stock equivalents had a $0.01 effect on the calculation of diluted earnings per share. For the third quarter of fiscal year 2017, the net additional common stock equivalents had no effect on the calculation of dilutive earnings per share. For each of the first nine months of fiscal year 2018 and fiscal year 2017, the net additional common stock equivalents had a $0.01 effect on the calculation of diluted earnings per share. The average shares outstanding used to compute basic and diluted earnings per share are as follows:

	Third Quarter Ended		Nine Months Ended
	December 23,	December 24,	December 23,	December 24,
	2017	2016	2017	2016
Average Shares Outstanding – Basic	7,142	7,010	7,115	6,984
Effect of Dilutive Common Stock Equivalents	177	194	158	177
Average Shares Outstanding – Diluted	7,319	7,204	7,273	7,161
Anti-dilutive Common Stock Equivalents	-	-	-	-

Recently Issued Accounting Pronouncements: In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, Compensation—Stock Compensation (Topic 718). This ASU provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This ASU is effective for annual reporting periods beginning after December 15, 2017 and should be applied prospectively. Early adoption of this ASU is permitted. The Company does not expect adoption of this ASU to have a material impact on its Consolidated Financial Statements.

NOTE 2 – LONG-TERM DEBT

Description: On October 30, 2017, the Company entered into an Amended and Restated Credit Agreement (the “2017 Agreement”), which amended and restated our prior credit facility agreement. The 2017 Agreement extended the term of the Company’s $30.0 million revolving credit facility (the “Revolving Credit Facility”) to October 29, 2021. As of December 23, 2017, $30.0 million was available under the Revolving Credit Facility, of which $11.6 million was outstanding and included in long-term debt on the Consolidated Balance Sheet. The 2017 Agreement also increased the amount of the Company’s outstanding term loan to $15.0 million (the “2017 Term Loan”), replacing the previous term loan. As of December 23, 2017, $14.6 million was outstanding on the 2017 Term Loan, of which $2.1 million was included in current liabilities on the Consolidated Balance Sheet with the remainder included in long-term debt. The 2017 Term Loan requires principal repayments of $0.2 million per month plus interest through September 2022 with a $4.3 million repayment required on October 29, 2022. Under the 2017 Agreement, borrowings that may be used for business acquisitions are limited to $20.0 million per fiscal year. During the first nine months of fiscal year 2018, no borrowings were used for business acquisitions.

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The allowable leverage ratio under the 2017 Agreement remains at a maximum multiple of 3.0 of total debt outstanding compared to earnings before income taxes, depreciation and amortization, and non-cash stock-based compensation expense for the preceding four consecutive fiscal quarters. The excess funds of the 2017 Term Loan over the previous term loan were used to repay amounts outstanding under the Revolving Credit Facility.

Previously, on March 31, 2016, the Company entered into Amendment 3 (“Amendment 3”) to the prior credit agreement. Under Amendment 3, borrowings that could be used for business acquisitions were limited to $15.0 million in fiscal years 2018 and 2019. Amendment 3 also provided the Company with a $10.0 million term loan. The term loan required principal repayments of $0.1 million per month plus interest. Total annual repayment amounts of $1.4 million were required in fiscal years 2017 through 2021 with a $3.0 million repayment required in fiscal year 2022. Amendment 3 also increased the allowable leverage ratio to a maximum of 3.0 from 2.75. As described above, in the third quarter of fiscal year 2018, we entered into the 2017 Agreement that amended and restated the prior credit agreement, including Amendment 3.

Interest and Other Costs: Interest on outstanding borrowings of the Revolving Credit Facility and term loan accrue, at Transcat’s election, at either the variable one-month London Interbank Offered Rate (“LIBOR”) or a fixed rate for a designated period at the LIBOR corresponding to such period, in each case, plus a margin. Commitment fees accrue based on the average daily amount of unused credit available on the Revolving Credit Facility. Interest rate margins and commitment fees are determined on a quarterly basis based upon the Company’s calculated leverage ratio, as defined in the 2017 Agreement. The one-month LIBOR at December 23, 2017 was 1.6%. The Company’s interest rate for the first nine months of fiscal year 2018 ranged from 3.2% to 3.4%.

Covenants: The 2017 Agreement has certain covenants with which the Company has to comply, including a fixed charge coverage ratio covenant and a leverage ratio covenant. The Company was in compliance with all loan covenants and requirements during the third quarter of fiscal year 2018.

Other Terms: The Company has pledged all of its U.S. tangible and intangible personal property, the equity interests of its U.S.-based subsidiaries, and a majority of the common stock of Transcat Canada Inc. as collateral security for the loans made under the Revolving Credit Facility.

NOTE 3 – STOCK-BASED COMPENSATION

The Transcat, Inc. 2003 Incentive Plan, as Amended and Restated (the “2003 Plan”), provides for, among other awards, grants of restricted stock units and stock options to directors, officers and key employees at the fair market value at the date of grant. At December 23, 2017, 1.1 million shares were available for future grant under the 2003 Plan.

Restricted Stock Units: The Company generally grants performance-based restricted stock units as a primary component of executive compensation. The units generally vest following the third fiscal year from the date of grant subject to certain cumulative diluted earnings per share growth targets over the eligible period. The restricted stock units granted in June 2017 were time vested. Compensation cost ultimately recognized for performance-based restricted stock units will equal the grant date fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, the Company records compensation cost based on the estimated level of achievement of the performance conditions. The expense relating to the time vested restricted stock units is recognized on a straight-line basis over the requisite service period for the entire award.

The Company achieved 50% of the target level for the performance-based restricted stock units granted in the fiscal year ended March 28, 2015 and as a result, issued 25 shares of common stock to executive officers and certain key employees during the first quarter of fiscal year 2018. The following table summarizes the non-vested performance-based restricted stock units outstanding as of December 23, 2017:

		Total	Grant Date		Estimated
		Number	Fair		Level of
Date	Measurement	of Units	Value		Achievement at
Granted	Period	Granted	Per Unit		December 23, 2017
April 2015	April 2015 - March 2018	63	$	9.59	50% of target level
April 2016	April 2016 - March 2019	84	$	10.13	115% of target level
April 2017	April 2017 – March 2020	77	$	12.90	100% of target level
June 2017	July 2017 – June 2020	3	$	12.00	Time Vested

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Total expense relating to performance-based restricted stock units, based on grant date fair value and the achievement criteria, was $0.6 million and $0.2 million, respectively in the first nine months of fiscal years 2018 and 2017. Total expense relating to time vested restricted stock units was less than $0.1 million for the first nine months of fiscal year 2018. As of December 23, 2017, unearned compensation to be recognized over the grants’ respective service periods totaled $1.2 million.

Stock Options: Options vest either immediately or over a period of up to four years using a straight-line basis and expire either five years or ten years from the date of grant. The expense relating to options is recognized on a straight-line basis over the requisite service period for the entire award.

The following table summarizes the Company’s options as of and for the first nine months of fiscal year 2018:

			Weighted		Weighted
			Average		Average
	Number		Exercise		Remaining	Aggregate
	Of		Price Per		Contractual	Intrinsic
	Shares		Share		Term (in years)	Value
Outstanding as of March 25, 2017	241		$	7.48

Granted	165			12.00
Exercised	(89	)		7.29
Forfeited	(15	)		7.36
Redeemed	(20	)		7.72
Outstanding as of December 23, 2017	282		$	10.17	5	$	1,167
Exercisable as of December 23, 2017	282		$	10.17	5	$	1,167

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the third quarter of fiscal year 2018 and the exercise price, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all holders exercised their options on December 23, 2017. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common stock.

Total expense related to stock options was $0.4 million and $0.1 million during each of the first nine months of fiscal years 2018 and 2017, respectively. There was no unrecognized compensation cost related to non-vested stock options as of December 23, 2017. The aggregate intrinsic value of stock options exercised in the first nine months of fiscal year 2018 was $0.6 million. Cash received from the exercise of options in the first nine months of fiscal year 2018 was $0.6 million.

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NOTE 4 – SEGMENT INFORMATION

Transcat has two reportable segments: Distribution and Service. The Company has no inter-segment sales. The following table presents segment information for the third quarter and first nine months of fiscal years 2018 and 2017:

	Third Quarter Ended				Nine Months Ended
	December 23,		December 24,		December 23,		December 24,
	2017		2016		2017		2016
Revenue:
Service	$	18,769	$	17,455	$	55,490	$	51,577
Distribution		21,714		20,358		57,199		53,868
Total		40,483		37,813		112,689		105,445

Gross Profit:
Service		4,699		4,306		13,655		13,175
Distribution		5,002		4,609		12,891		12,013
Total		9,701		8,915		26,546		25,188

Operating Expenses:
Service (1)		3,636		3,365		10,917		10,399
Distribution (1)		3,411		3,197		10,106		9,420
Total		7,047		6,562		21,023		19,819

Operating Income:
Service		1,063		941		2,738		2,776
Distribution		1,591		1,412		2,785		2,593
Total		2,654		2,353		5,523		5,369

Unallocated Amounts:
Interest and Other Expense, net		311		188		854		547
Provision for Income Taxes		512		895		1,201		1,729
Total		823		1,083		2,055		2,276

Net Income	$	1,831	$	1,270	$	3,468	$	3,093

(1)	Operating expense allocations between segments were based on actual amounts, a percentage of revenues, headcount, and management’s estimates.

NOTE 5 – BUSINESS ACQUISITIONS

During fiscal year 2017, Transcat acquired substantially all of the assets of Excalibur Engineering, Inc. (“Excalibur”), a California-based provider of calibration services, new and used test equipment sales, and equipment rentals.

This transaction aligned with the Company’s acquisition strategy of targeting businesses that expand the Company’s geographic reach and leverage its infrastructure while also increasing the depth and breadth of the Company’s service capabilities. In addition, Excalibur provided an established equipment rental and used equipment business, which are complimentary to the Company’s traditional Distribution segment sales.

The Company applies the acquisition method of accounting for business acquisitions. Under the acquisition method, the purchase price of an acquisition is assigned to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The Company uses a valuation hierarchy, as further described under Fair Value of Financial Instruments in Note 1 above, and typically utilizes independent third-party valuation specialists to determine the fair values used in this allocation. Purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. Intangible assets related to the Excalibur acquisition are being amortized for financial reporting purposes on an accelerated basis over the estimated useful life of up to 10 years and are deductible for tax purposes.

The total purchase price paid for the assets of Excalibur was approximately $7.6 million, net of less than $0.1 million cash acquired. The following is a summary of the purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of assets and liabilities acquired during the period presented:

		FY 2017
Goodwill		$	3,455
Intangible Assets – Customer Base			1,990
Intangible Assets – Covenant Not to Compete			100
			5,545
Plus:	Current Assets		973
	Non-Current Assets		1,652
Less:	Current Liabilities		(606	)
Total Purchase Price		$	7,564

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Certain of the Company’s acquisition agreements have included provisions for contingent consideration and other holdback amounts. The Company accrues for contingent consideration and holdback provisions based on their estimated fair value at the date of acquisition. As of December 23, 2017 and March 25, 2017, no contingent consideration or other holdback amounts were outstanding.

The results of the acquired businesses are included in Transcat’s consolidated operating results as of the dates the businesses were acquired. The following unaudited pro forma information presents the Company’s results of operations as if the acquisition of Excalibur had occurred at the beginning of fiscal year 2017. The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transaction had occurred at the beginning of the period presented or what the Company’s operating results will be in future periods.

	(Unaudited)
	Nine Months
	Ended
	December 24,
	2016
Total Revenue	$	105,595
Net Income	$	3,013
Basic Earnings Per Share	$	0.43
Diluted Earnings Per Share	$	0.42

During each of the first nine months of fiscal years 2018 and 2017, acquisition costs of less than $0.1 million were recorded as incurred as general and administrative expenses in the Consolidated Statements of Income.

NOTE 6 – INCOME TAXES

On December 22, 2017, the Tax Cuts and Jobs Act (H.R. 1), the tax reform bill (the "Act"), was signed into law. The Act includes numerous changes to existing tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%. Since the Company is a fiscal year taxpayer, the lower corporate income tax rate will be phased in and the U.S. federal tax rate recorded is a blended rate of the old rates and the new rates for fiscal year 2018. The result was a $0.1 million reduction of the Company’s provision for income taxes in the third quarter of fiscal year 2018.

The Company has concluded that the Act will cause the Company’s U.S. deferred tax assets and liabilities to be revalued. Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their reported basis in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are revalued and any change is adjusted through the provision for income tax expense in the reporting period of the enactment. The Act required the Company to do such a revaluation and record a reduction in its net deferred tax liability of approximately $0.2 million, which reduced the provision for income taxes during the third quarter of fiscal year 2018.

In addition, the Act provides for a one-time “deemed repatriation” of accumulated foreign earnings. The Company has estimated the additional provision for income tax expense on the repatriation to be less than $0.1 million. The Company will pay any amounts owed over eight years.

The reduction in the Company’s provision for income taxes due to the Act in the third quarter of fiscal year 2018 was approximately $0.3 million or $0.04 per share.

The impact of the Act may differ from this estimate, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the Act.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements. This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, estimates, beliefs, assumptions and predictions of future events and are identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “projects,” “intends,” “could,” “may” and other similar words. Forward-looking statements are not statements of historical fact and thus are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or those expressed in such forward-looking statements. You should evaluate forward-looking statements in light of important risk factors and uncertainties that may affect our operating and financial results and our ability to achieve our financial objectives. These factors include, but are not limited to, our reliance on one vendor to supply a significant amount of inventory purchases, the risks related to current and future indebtedness, the relatively low trading volume of our common stock, risks related to our acquisition strategy and the integration of the businesses we acquire, the impact of economic conditions, risks related to the accuracy of the estimates and assumptions we use to revalue our U.S. deferred tax assets and liabilities in accordance with the Act, volatility in the oil and gas industry, the highly competitive nature of our two business segments, foreign currency rate fluctuations and cybersecurity risks. These risk factors and uncertainties are more fully described by us under the heading “Risk Factors” in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended March 25, 2017. You should not place undue reliance on our forward-looking statements. Except as required by law, we undertake no obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this report, whether as a result of new information, future events or otherwise.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to our critical accounting policies and estimates from the information provided in our Annual Report on Form 10-K for the fiscal year ended March 25, 2017.

RESULTS OF OPERATIONS

We achieved record consolidated revenue of $40.5 million. This represented an increase of $2.7 million or 7.1% versus the third quarter of fiscal year 2017. Revenue growth was led by our Service segment, which increased 7.5% to $18.8 million. Sales growth in our Distribution segment was 6.7% to $21.7 million, a record quarter for that segment. The growth achieved in both segments was all organic.

Gross profit was $9.7 million, an increase of $0.8 million or 8.8% versus the third quarter of fiscal year 2017. Gross margin increased 40 basis points due to improved productivity in the Service segment and changes in the Distribution segment sales mix, with more rental revenues and opportunistic strategic pricing being applied to our core industrial customer base.

Operating expenses were $7.0 million, an increase of $0.5 million or 7.4% as compared to the third quarter of fiscal year 2017. General and administrative expenses increased as we continued to invest in our technology infrastructure and operational excellence initiatives. This was partially offset by a decrease in selling, marketing and warehouse expenses which was a result of reduced acquired customer amortization expense. Operating expenses as a percentage of total revenue were 17.4%, the same as in the third quarter of fiscal year 2017.

Net income was $1.8 million for the third quarter of fiscal year 2018 for the reasons stated above, up from $1.3 million in the third quarter of fiscal year 2017. The Company also benefitted from reduced provision for income taxes of $0.3 million due to the Act.

The following table presents, for the third quarter and first nine months of fiscal years 2018 and 2017, the components of our Consolidated Statements of Income:

	(Unaudited)		(Unaudited)
	Third Quarter Ended		Nine Months Ended
	December 23,	December 24,	December 23,	December 24,
	2017	2016	2017	2016
As a Percentage of Total Revenue:
Service Revenue	46.4%	46.2%	49.2%	48.9%
Distribution Sales	53.6%	53.8%	50.8%	51.1%
Total Revenue	100.0%	100.0%	100.0%	100.0%

Gross Profit Percentage:
Service Gross Profit	25.0%	24.7%	24.6%	25.5%
Distribution Gross Profit	23.0%	22.6%	22.5%	22.3%
Total Gross Profit	24.0%	23.6%	23.6%	23.9%

Selling, Marketing and Warehouse Expenses	10.2%	11.0%	10.9%	12.0%
General and Administrative Expenses	7.2%	6.4%	7.8%	6.8%
Total Operating Expenses	17.4%	17.4%	18.7%	18.8%

Operating Income	6.6%	6.2%	4.9%	5.1%

Interest and Other Expense, net	0.8%	0.5%	0.8%	0.5%

Income Before Income Taxes	5.8%	5.7%	4.1%	4.6%
Provision for Income Taxes	1.3%	2.3%	1.0%	1.6%

Net Income	4.5%	3.4%	3.1%	2.9%

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THIRD QUARTER ENDED DECEMBER 23, 2017 COMPARED TO THIRD QUARTER ENDED DECEMBER 24, 2016 (dollars in thousands):

Revenue:

	Third Quarter Ended				Change
	December 23,		December 24,
	2017		2016		$		%
Revenue:
Service	$	18,769	$	17,455	$	1,314	7.5%
Distribution		21,714		20,358		1,356	6.7%
Total	$	40,483	$	37,813	$	2,670	7.1%

Total revenue was $40.5 million, an increase of $2.7 million, or 7.1%, in our fiscal year 2018 third quarter compared to the prior year third quarter. This year-over-year growth was purely organic.

Service revenue, which accounted for 46.4% and 46.2% of our total revenue in the third quarter of fiscal years 2018 and 2017, respectively, increased 7.5% from the third quarter of fiscal year 2017 to the third quarter of fiscal year 2018. This year-over-year increase in Service revenue was comprised of new business from the life science market and growth in general industrial manufacturing customers, which includes the defense and aerospace market.

Our fiscal years 2018 and 2017 quarterly Service revenue growth, in relation to prior fiscal year quarter comparisons, was as follows:

	FY 2018			FY 2017
	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Service Revenue Growth	7.5%	7.6%	7.6%	11.2%	25.4%	19.4%	26.9%

Fiscal year 2017 quarterly growth comparisons include organic and acquisition related growth while the first, second, and third quarters of fiscal year 2018 include no acquisition related growth. Our goal is to deliver mid-to-high single digit organic Service revenue growth each quarter over the same quarter prior year.

Our strategy has been to focus our investments in the core electrical, temperature, pressure, physical/dimensional and radio frequency/microwave calibration disciplines. We expect to subcontract approximately 13% to 15% of our Service revenue to third-party vendors for calibration beyond our chosen scope of capabilities. We continually evaluate our outsourcing needs and make capital investments, as deemed necessary, to add more in-house capabilities and reduce the need for third-party vendors. Capability expansion through business acquisitions is another way that we seek to reduce the need for outsourcing. The following table presents the source of our Service revenue and the percentage of Service revenue derived from each source for each quarter during fiscal years 2018 and 2017:

	FY 2018			FY 2017
	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Percent of Service Revenue:
In-House	83.9%	83.6%	83.5%	85.1%	84.3%	83.6%	84.3%
Outsourced	14.4%	14.7%	14.7%	13.0%	13.9%	14.6%	13.8%
Freight Billed to Customers	1.7%	1.7%	1.8%	1.9%	1.8%	1.8%	1.9%
	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%

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Our Distribution sales accounted for 53.6% of our total revenue in the third quarter of fiscal year 2018 and 53.8% of our total revenue in the third quarter of fiscal year 2017. During the third quarter of fiscal year 2018, Distribution sales growth reflected higher demand from industrial customers, especially those sold through our independent sales representative network, increased rental business and web-based sales. Rental revenue was $1.0 million and $0.7 million in the third quarters of fiscal years 2018 and 2017, respectively.

Our fiscal years 2018 and 2017 Distribution sales growth (decline), in relation to prior fiscal year quarter comparisons, was as follows. The sales growth in fiscal year 2017 over fiscal year 2016 reflects the recovery of sales in the oil and gas market which were severely impacted by oil price drops and the ripple effects to that sector in fiscal year 2016.

	FY 2018			FY 2017
	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Distribution Sales Growth (Decline)	6.7%	0.9%	11.4%	23.7%	25.4%	14.7%	(1.0%)

Distribution orders include orders for instruments that we routinely stock in our inventory, customized products and other products ordered less frequently, which we do not stock. Pending product shipments are primarily backorders but also include products that are requested to be calibrated in our service centers prior to shipment, orders required by the customer to be shipped complete or at a future date, and other orders awaiting final credit or management review prior to shipment. Our total pending product shipments at the end of the third quarter of fiscal year 2018 were $3.9 million, a decrease of $0.1 million from $4.0 million at the end of the third quarter of fiscal year 2017. The following table presents our total pending product shipments and the percentage of total pending product shipments that were backorders at the end of each quarter of fiscal years 2018 and 2017:

	FY 2018						FY 2017
	Q3		Q2		Q1		Q4		Q3		Q2		Q1
Total Pending Product Shipments	$	3,929	$	3,940	$	3,513	$	3,662	$	3,989	$	3,530	$	3,469
% of Pending Product Shipments that were Backorders		71.4%		74.2%		69.6%		73.5%		66.1%		74.9%		69.8%

Gross Profit:

	Third Quarter Ended				Change
	December 23,		December 24
	2017		2016		$		%
Gross Profit:
Service	$	4,699	$	4,306	$	393	9.1%
Distribution		5,002		4,609		393	8.5%
Total	$	9,701	$	8,915	$	786	8.8%

Total gross profit for the third quarter of fiscal year 2018 was $9.7 million, an increase of $0.8 million or 8.8% versus the third quarter of fiscal year 2017. Total gross margin was 24.0% in the third quarter of fiscal year 2018, a 40 basis point increase versus the third quarter of fiscal year 2017.

Service gross profit in the third quarter of fiscal year 2018 increased $0.4 million, or 9.1%, from the third quarter of fiscal year 2017. Service gross margin was 25.0% in the third quarter of fiscal year 2018, a 30 basis point increase versus the third quarter of fiscal year 2017. This improved margin was largely due to productivity improvements, including the ramp-up productivity from service technicians hired earlier in fiscal year 2018.

The following table presents the quarterly historical trend of our Service gross margin as a percent of Service revenue:

	FY 2018			FY 2017
	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Service Gross Margin	25.0%	23.7%	25.1%	30.0%	24.7%	24.4%	27.5%

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Our Distribution gross margin includes net sales less the direct cost of inventory sold and the direct costs of equipment rental revenues, primarily depreciation expense for the fixed assets in our rental equipment pool, as well as the impact of rebates and cooperative advertising income we receive from vendors, freight billed to customers, freight expenses and direct shipping costs. In general, our Distribution gross margin can vary based upon the mix of products sold, price discounting, and the timing of periodic vendor rebates and cooperative advertising programs from suppliers.

The following table reflects the quarterly historical trend of our Distribution gross margin as a percent of Distribution sales:

	FY 2018			FY 2017
	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Total Distribution Gross Margin	23.0%	21.7%	22.8%	20.7%	22.6%	22.2%	22.0%

Distribution segment gross margin was 23.0% in the third quarter of fiscal year 2018, a 40 basis point increase versus the third quarter of fiscal year 2017. The increase in gross margin was driven by the sales mix which offset a decrease in volume-based vendor rebates.

Operating Expenses:

	Third Quarter Ended				Change
	December 23,		December 24,
	2017		2016		$			%
Operating Expenses:
Selling, Marketing and Warehouse	$	4,150	$	4,159	$	(9	)	(0.2%	)
General and
Administrative		2,897		2,403		494		20.6%
Total	$	7,047	$	6,562	$	485		7.4%

The year-over-year increase in operating expenses was primarily due to incremental general and administrative expenses related to our continued investment in technology infrastructure improvements and operational excellence initiatives. The year-over-year decrease in selling, marketing and warehouse expenses is due to reduced acquisition related amortization expense. As a percentage of total revenue, operating expenses were 17.4% in the third quarter of fiscal year 2018, the same as in the third quarter of fiscal year 2017.

Provision for Income Taxes:

	Third Quarter Ended				Change
	December 23,		December 24,
	2017		2016		$			%
Provision for Income Taxes	$	512	$	895	$	(383	)	(42.8%	)

Our effective tax rates for the third quarter of fiscal years 2018 and 2017 were 21.9% and 41.3%, respectively. The year-over-year decrease largely reflects the enactment of the Act which was signed into law on December 22, 2017. The Act required a reduction in our U.S. net deferred tax liability of approximately $0.2 million, which reduced the provision for income taxes during the third quarter of fiscal year 2018. The Act also required us to use a blended U.S. federal tax rate of the old rates and the new rates because we are a fiscal year taxpayer and, as a result, we will phase in the lower corporate income tax rate. This use of a blended rate reduced the provision for income taxes during the third quarter of fiscal year 2018 by $0.1 million. Due to the Act, we now expect our total fiscal year 2018 effective tax rate to be approximately 28.0% to 29.0%. The impact of the Act may differ from this estimate, possibly materially, due to, among other things, changes in interpretations and assumptions we have made, guidance that may be issued and actions we may take as a result of the Act.

Net Income:

	Third Quarter Ended				Change
	December 23,		December 24,
	2017		2016		$		%
Net Income	$	1,831	$	1,270	$	561	44.2%

Net income for the third quarter of fiscal year 2018 was up 44.2% from the third quarter of fiscal year 2017 for the reasons stated above.

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Adjusted EBITDA:

In addition to reporting net income, a GAAP measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, and non-cash stock compensation expense), which is a non-GAAP measure. Our management believes Adjusted EBITDA is an important measure of our operating performance because it allows management, investors and others to evaluate and compare the performance of our 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, our management uses Adjusted EBITDA as a measure of performance when evaluating our business segments and as a basis for planning and forecasting. Adjusted EBITDA is also commonly used by rating agencies, lenders and other parties to evaluate our credit worthiness.

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 or alternative for the GAAP measure of operating income or 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.

	Third Quarter Ended
	December 23,			December 24,
	2017			2016
Net Income	$	1,831		$	1,270
+ Interest Expense		250			184
+ Other Expense		61			4
+ Tax Provision		512			895
Operating Income	$	2,654		$	2,353
+ Depreciation & Amortization		1,543			1,562
+ Other Expense		(61	)		(4	)
+ Noncash Stock Compensation		264			(10	)
Adjusted EBITDA	$	4,400		$	3,901

Adjusted EBITDA for the third quarter of fiscal year 2018 was $4.4 million, a $0.5 million or 12.8% increase versus the third quarter of fiscal year 2017. As a percentage of revenue, Adjusted EBITDA was 10.9% for the third quarter of fiscal year 2018 and 10.3% for the third quarter of fiscal year 2017. The difference between the increase in Adjusted EBITDA and increase in net income during the third quarter of fiscal year 2018 is primarily driven by increased non-cash stock compensation expense and the impact of the Act on our tax provision.

NINE MONTHS ENDED DECEMBER 23, 2017 COMPARED TO NINE MONTHS ENDED DECEMBER 24, 2016
(dollars in thousands):

Revenue:

	Nine Months Ended				Change
	December 23,		December 24,
	2017		2016		$		%
Revenue:
Service	$	55,490	$	51,577	$	3,913	7.6%
Distribution		57,199		53,868		3,331	6.2%
Total	$	112,689	$	105,445	$	7,244	6.9%

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Service revenue, which accounted for 49.2% of our total revenue during the first nine months of fiscal year 2018 and 48.9% of our total revenue during the first nine months of fiscal year 2017, increased $4.0 million, or 7.6%, from the first nine months of fiscal year 2017 to the first nine months of fiscal year 2018. The year-over-year increase was all organic as we took market share in the life science sector and general industrial manufacturing sector which includes both the defense and aerospace markets and raised prices where appropriate.

Our Distribution sales accounted for 50.8% and 51.1% of our total revenue in the first nine months of fiscal years 2018 and 2017, respectively. For the first nine months of fiscal year 2018, Distribution sales increased $3.3 million, or 6.2%, compared to the first nine months of fiscal year 2017. This year-over-year increase in sales reflects higher demand from industrial customers, including those sold through our independent representative network and increased rental revenues.

Gross Profit:

	Nine Months Ended				Change
	December 23,		December 24,
	2017		2016		$		%
Gross Profit:
Service	$	13,655	$	13,175	$	480	3.6%
Distribution		12,891		12,013		878	7.3%
Total	$	26,546	$	25,188	$	1,358	5.4%

Total gross profit increased $1.4 million or 5.4% for the first nine months of fiscal year 2018 versus the first nine months of fiscal year 2017. Total gross margin was 23.6%, a 30 basis points reduction compared to 23.9% in the first nine months of fiscal year 2017. This year-over-year decline was primarily due to Service segment technician productivity challenges earlier in fiscal year 2018.

Operating Expenses:

	Nine Months Ended				Change
	December 23,		December 24,
	2017		2016		$			%
Operating Expenses:
Selling, Marketing and Warehouse	$	12,247	$	12,612	$	(365	)	(2.9%	)
General and Administrative		8,776		7,207		1,569		21.8%
Total	$	21,023	$	19,819	$	1,204		6.1%

The year-over-year increase in operating expenses was primarily due to incremental general and administrative expenses related to our continued investment in technology infrastructure improvements and operational excellence initiatives. The year-over-year decrease in selling, marketing and warehouse expenses is due to reduced acquisition related amortization expense. As a percentage of total revenue, operating expenses during the first nine months of fiscal year 2018 were 18.7%, compared to 18.8% in the first nine months of fiscal year 2017.

Provision for Income Taxes:

	Nine Months Ended				Change
	December 23,		December 24,
	2017		2016		$		%
Provision for Income Taxes	$	1,201	$	1,729	$	(528)	(30.5%)

Our effective tax rates for the first nine months of fiscal years 2018 and 2017 were 25.7% and 35.9%, respectively. The year-over-year decrease largely reflects the enactment of the Act which was signed into law on December 22, 2017. The Act required a reduction in our net U.S. deferred tax liability of approximately $0.2 million, which reduced the provision for income taxes during the third quarter of fiscal year 2018. The Act also required us to use a blended U.S. federal tax rate of the old rates and the new rates because we are a fiscal year taxpayer and, as a result, we will phase in the lower corporate income tax rate. This use of a blended rate reduced the provision for income taxes during the third quarter of fiscal year 2018 by $0.1 million. Due to the Act, we now expect our total fiscal year 2018 effective tax rate to be approximately 28.0% to 29.0%. The impact of the Act may differ from this estimate, possibly materially, due to, among other things, changes in interpretations and assumptions we have made, guidance that may be issued and actions we may take as a result of the Act.

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Net Income:

	Nine Months Ended				Change
	December 23,		December 24,
	2017		2016		$		%
Net Income	$	3,468	$	3,093	$	375	12.1%

Net income for the first nine months of fiscal year 2018 was up 12.1% from the first nine months of fiscal year 2017 as increased interest and other expense more than offset a lower provision for income taxes.

Adjusted EBITDA:

In addition to reporting net income, a GAAP measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, and non-cash stock compensation expense), which is a non-GAAP measure. Our management believes Adjusted EBITDA is an important measure of our 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, our management uses Adjusted EBITDA as a measure of performance when evaluating our business segments and as a basis for planning and forecasting. Adjusted EBITDA is also commonly used by rating agencies, lenders and other parties to evaluate our credit worthiness.

	Nine Months Ended
	December 23,			December 24,
	2017			2016
Net Income	$	3,468		$	3,093
+ Interest Expense		767			501
+ Other Expense		87			46
+ Tax Provision		1,201			1,729
Operating Income	$	5,523		$	5,369
+ Depreciation & Amortization		4,527			4,667
+ Other Expense		(87	)		(46	)
+ Noncash Stock Compensation		1,095			316
Adjusted EBITDA	$	11,058		$	10,306

During the first nine months of fiscal year 2018, Adjusted EBITDA was $11.1 million, an increase of $0.8 million or 7.3% versus the first nine months of fiscal year 2017. As a percentage of revenue, Adjusted EBITDA was 9.8% for each of the first nine months of fiscal year 2018 and 2017. The difference between the increase in Adjusted EBITDA and increase in net income during the first nine months of fiscal year 2018 is primarily driven by increased non-cash stock compensation expense and the impact of the Act on our tax provision.

LIQUIDITY AND CAPITAL RESOURCES

On October 30, 2017, the Company entered into an Amended and Restated Credit Agreement (the “2017 Agreement”), which amended and restated our prior credit facility agreement. The 2017 Agreement extended the term of the Company’s $30.0 million revolving credit facility (the “Revolving Credit Facility”) to October 29, 2021. As of December 23, 2017, $30.0 million was available under the Revolving Credit Facility, of which $11.6 million was outstanding and included in long-term debt on the Consolidated Balance Sheet.

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The 2017 Agreement also increased the amount of the Company’s outstanding term loan to $15.0 million (the “2017 Term Loan”), replacing the previous term loan. As of December 23, 2017, $14.6 million was outstanding on the 2017 Term Loan, of which $2.1 million was included in current liabilities on the Consolidated Balance Sheet with the remainder included in long-term debt. The 2017 Term Loan requires principal repayments of $0.2 million per month plus interest through September 2022 with a $4.3 million repayment required on October 29, 2022. Under the 2017 Agreement, borrowings that may be used for business acquisitions are limited to $20.0 million per fiscal year. During the first nine months of fiscal year 2018, no borrowings were used for business acquisitions.

The 2017 Agreement has certain covenants with which we must comply, including a fixed charge ratio covenant and a leverage ratio covenant. We were in compliance with all loan covenants and requirements during the third quarter of fiscal year 2018. Our leverage ratio, as defined in the 2017 Agreement, was 1.72 at December 23, 2017, compared with 1.88 at fiscal 2017 year-end.

Interest on the 2017 Agreement and 2017 Term Loan continues to accrue, at our election, at either the variable one-month London Interbank Offered Rate (“LIBOR”) or a fixed rate for a designated period at the LIBOR corresponding to such period, in each case, plus a margin. Commitment fees accrue based on the average daily amount of unused credit available under the 2017 Agreement. Interest rate margins and commitment fees are determined on a quarterly basis based upon our calculated leverage ratio, as defined in the 2017 Agreement.

Cash Flows: The following table is a summary of our Consolidated Statements of Cash Flows:

	Nine Months Ended
	December 23,			December 24,
	2017			2016
Cash (Used in) Provided by:
Operating Activities	$	5,817		$	3,874
Investing Activities	$	(5,073	)	$	(11,052	)
Financing Activities	$	(678	)	$	6,934

Operating Activities: Net cash provided by operating activities was $5.8 million during the first nine months of fiscal year 2018 compared to $3.9 million during the first nine months of fiscal year 2017. The year-over-year increase in cash provided by operations is primarily the result of changes in net working capital (defined as current assets less current liabilities). The significant working capital fluctuations were as follows:

●

Receivables: Accounts receivable increased by a net amount of $0.6 million during the first nine months of fiscal year 2018 while during the first nine months of fiscal year 2017, accounts receivable increased $2.9 million, inclusive of $0.9 million of accounts receivable acquired as part of the assets acquired during our business acquisition completed within the period. The year-over-year variation reflects changes in the timing of collections. The following table illustrates our days sales outstanding as of December 23, 2017 and December 24, 2016:

	December 23,		December 24,
	2017		2016
Net Sales, for the last two fiscal months	$	27,428	$	25,952
Accounts Receivable, net	$	22,700	$	19,967
Days Sales Outstanding		49		46

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●	Inventory: Our inventory strategy includes making appropriate large quantity, high dollar purchases with key manufacturers for various reasons, including maximizing on-hand availability of key products, expanding the number of SKU’s stocked in anticipation of customer demand, reducing backorders for products with long lead times and optimizing vendor purchase and sales volume discounts. As a result, inventory levels may vary from quarter-to-quarter based on the timing of these large orders in relation to our quarter end. Our inventory balance increased $0.9 million during the first nine months of fiscal year 2018 while inventory increased $4.3 million during the first nine months of fiscal year 2017, inclusive of $0.1 million inventory acquired as part of the Excalibur acquisition. The year-over-year change represents timing of strategic purchases and the addition of $0.4 million of Excalibur’s used equipment business inventory.
●	Accounts Payable: Changes in accounts payable may or may not correlate with changes in inventory balances at any given quarter end due to the timing of vendor payments for inventory, as well as the timing of payments for outsourced Service vendors and capital expenditures. Accounts payable decreased $0.1 million during the first nine months of fiscal year 2018. Accounts payable increased by $3.7 million during the first nine months of fiscal year 2017, inclusive of the addition of $0.4 million in accounts payable acquired as part of the Excalibur acquisition completed during the period.
●	Accrued Compensation and Other Liabilities: Accrued Compensation and Other Liabilities include, among other things, amounts to be paid to employees for non-equity performance-based compensation. At the end of any particular period, the amounts accrued for such compensation may vary due to many factors including, but not limited to, changes in expected performance levels, the performance measurement period, and timing of payments to employees. During the first nine months of fiscal year 2018, we used $1.6 million in cash to pay non-equity performance-based compensation compared with $0.9 million in the first nine months of fiscal year 2017.
●	Income Taxes Payable: In any given period, net working capital may be affected by the timing and amount of income tax payments. During the first nine months of fiscal year 2018, income taxes payable decreased by $0.3 million whereas in the first nine months of fiscal year 2017, income taxes payable was flat. The year-over-year difference is due to timing of income tax payments.

Investing Activities: During the first nine months of fiscal year 2018, we invested $5.1 million in capital expenditures, including $1.0 million spent for expanded Service segment capabilities, specifically for our mobile calibration truck fleet and radio-frequency asset capabilities, and $1.5 million spent for rental assets. During the first nine months of fiscal year 2017, we invested $4.1 million in capital expenditures, primarily for additional Service segment capabilities and rental assets. During the first nine months of fiscal year 2018, we had no business acquisitions. During the first nine months of fiscal year 2017, we used $7.0 million for a business acquisition. We generally fund capital expenditures with cash flow from operations and our Revolving Credit Facility.

Financing Activities: During the first nine months of fiscal year 2018, we received $7.1 million from the proceeds of the 2017 Term Loan and $0.8 million in cash was generated from the issuance of common stock. In addition, we used $7.0 million to repay our Revolving Credit Facility, we used $1.2 million in cash for repayment of our term loan and $0.3 million to repurchase shares of our common stock. During the first nine months of fiscal year 2017, we received $9.0 million in net proceeds from a term loan and used approximately $1.9 million in cash for repayment of our Revolving Credit Facility. In addition, we used $0.3 million in cash for payment of holdbacks related to a business acquisition. Commencing in fiscal year 2018, we have revised our non-employee director performance-based compensation program such that any compensation earned under that program will be paid in Company stock awards, rather than in cash. The achievement criteria and the payment parameters (target payment of $20,000 per non-employee director with a maximum payment of $30,000), have not changed.

On December 20, 2017, we filed a universal shelf registration statement on Form S-3 with the SEC. Under the shelf registration statement, we may from time to time in one or more future offerings, issue various types of securities up to an aggregate amount of $50 million. We have no immediate plans to use this registration statement. The SEC declared the shelf registration statement effective on January 5, 2018.

OUTLOOK

The fourth quarter of our fiscal year is an important one as we usually generate approximately one third of our annual operating income in the fourth quarter. We believe we are well positioned and on track for a record year in fiscal 2018. Although still early, we believe our multi-year technology infrastructure and operational excellence initiatives are starting to gain early traction and are positively impacting both segments. Our Service segment continues to strengthen its market position, particularly in the life science space where we believe our value proposition resonates the most, and where regulation and the high cost of failure drive recurring revenue streams. We will continue to focus on leveraging technology as a competitive advantage and a driver of increased margins.

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Given the changes to the federal corporate income tax rate, Transcat expects its blended income tax rate for fiscal year 2018 to range between 28% and 29%. For fiscal year 2019, the Company expects its effective income tax rate to be approximately 26%. The Company expects to invest any windfall from the Act in its people, processes and technology.

The Company tightened its capital expenditures expectations for the full year fiscal 2018 to a range of $6.0 million to $6.3 million, which is being used primarily for technology infrastructure investments to drive operational excellence, specific customer-opportunity driven Service capabilities and additional assets for the Company’s growing rental business.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATES

Our exposure to changes in interest rates results from our borrowing activities. In the event interest rates were to move by 1%, our yearly interest expense would increase or decrease by approximately $0.3 million assuming our average borrowing levels remained constant. As of December 23, 2017, $30.0 million was available under our Revolving Credit Facility, of which $11.6 million was outstanding and included in long-term debt on the Consolidated Balance Sheets. As described above under “Liquidity and Capital Resources,” we also had a $15.0 million (original principal) term loan during the third quarter of fiscal year 2018. The term loan is considered a LIBOR loan. As of December 23, 2017, $14.6 million was outstanding on the term loan and was included in long-term debt and current portion of long-term debt on the Consolidated Balance Sheet. The term loan requires principal repayments of $0.2 million per month plus interest.

At our option, we borrow from our Revolving Credit Facility and term loan at the variable one-month LIBOR or at a fixed rate for a designated period at the LIBOR corresponding to such period, in each case, plus a margin. Our interest rate margin is determined on a quarterly basis based upon our calculated leverage ratio. As of December 23, 2017, the one-month LIBOR was 1.6%. Our interest rate for the first nine months of fiscal year 2018 ranged from 3.2% to 3.4%. On December 23, 2017, we had no hedging arrangements in place to limit our exposure to upward movements in interest rates.

FOREIGN CURRENCY

Approximately 90% of our total revenues for each of the first nine months of fiscal years 2018 and 2017 were denominated in U.S. dollars, with the remainder denominated in Canadian dollars. A 10% change in the value of the Canadian dollar to the U.S. dollar would impact our revenue by approximately 1%. We monitor the relationship between the U.S. and Canadian currencies on a monthly basis and adjust sales prices for products and services sold in Canadian dollars as we believe to be appropriate.

We continually utilize short-term foreign exchange forward contracts to reduce the risk that future earnings would be adversely affected by changes in currency exchange rates. We do not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a loss of $0.1 million during the first nine months of fiscal year 2018 and a gain of $0.1 million for the first nine months of fiscal year 2017, was recognized as a component of other expense in the Consolidated Statements of Income. The change in the fair value of the contracts is offset by the change in the fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On December 23, 2017, we had a foreign exchange contract, which matured in January 2018, outstanding in the notional amount of $5.4 million. The foreign exchange contract was renewed in January 2018 and continues to be in place. We do not use hedging arrangements for speculative purposes.

ITEM 4. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures. Our principal executive officer and our principal financial officer evaluated our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report. Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of such date.

Changes in Internal Control over Financial Reporting. There has been no change in our internal control over financial reporting that occurred during the last fiscal quarter covered by this quarterly report (our third quarter of fiscal year 2018) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS

Index to Exhibits

	10.1		Amended and Restated Credit Facility Agreement, dated as of October 30, 2017, by and between Transcat, Inc. and Manufacturers and Traders Trust Company is incorporated herein by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 23, 2017.
	31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	101.INS		XBRL Instance Document
	101.SCH		XBRL Taxonomy Extension Schema Document
	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB		XBRL Taxonomy Extension Label Linkbase Document
	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		TRANSCAT, INC.

Date: February 2, 2018		/s/ Lee D. Rudow
		Lee D. Rudow
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: February 2, 2018		/s/ Michael J. Tschiderer
		Michael J. Tschiderer
		Vice President of Finance and Chief Financial Officer
		(Principal Financial Officer)

EX-31.1 2 transcat3375841-ex311.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lee D. Rudow, President and Chief Executive Officer of Transcat, Inc., certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Transcat, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 2, 2018	/s/ Lee D. Rudow
		Lee D. Rudow
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2 3 transcat3375841-ex312.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Tschiderer, Vice President of Finance and Chief Financial Officer of Transcat, Inc., certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Transcat, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 2, 2018	/s/ Michael J. Tschiderer
		Michael J. Tschiderer
		Vice President of Finance and Chief Financial Officer
		(Principal Financial Officer)

EX-32.1 4 transcat3375841-ex321.htm CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.1

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Transcat, Inc., Lee D. Rudow, the Chief Executive Officer of Transcat, Inc. and Michael J. Tschiderer, the Chief Financial Officer of Transcat, Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of their knowledge, that:

	1.	This quarterly report on Form 10-Q for the third quarter ended December 23, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	2.	The information contained in this quarterly report on Form 10-Q for the third quarter ended December 23, 2017 fairly presents, in all material respects, the financial condition and results of operations of Transcat, Inc.

Date:	February 2, 2018	/s/ Lee D. Rudow
		Lee D. Rudow
		President and Chief Executive Officer
		(Principal Executive Officer)


Date:	February 2, 2018	/s/ Michael J. Tschiderer
		Michael J. Tschiderer
		Vice President of Finance and Chief Financial Officer
		(Principal Financial Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Transcat, Inc. and will be retained by Transcat, Inc. and furnished to the SEC or its staff upon request.

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177000

194000

7273000

7161000

7319000

7204000

821000

51000

770000

102

344000

14000

205000

125000

1095000

13000

1082000

90000

4669000

4822000

2343000

2165000

8776000

7207000

2897000

2403000

12247000

12612000

4150000

4159000

86143000

80257000

30782000

28898000

44308000

41855000

16712000

15749000

41835000

38402000

14070000

13149000

57199000

53868000

21714000

20358000

55490000

51577000

18769000

17455000

5984000

7519000

17478000

15568000

36871000

35589000

988000

1193000

11144000

10278000

1535000

1227000

22700000

22049000

504000

842000

1079000

901000

94235000

92097000

45631000

48696000

1960000

1923000

955000

1134000

24103000

25883000

18613000

19756000

468000

805000

4524000

5907000

11478000

11615000

94235000

92097000

30640000

27297000

-161000

-414000

14553000

12996000

3572000

3522000

5817000

3874000

-570000

-20000

-1325000

-454000

29000

341000

612000

3967000

1009000

3168000

1095000

316000

341000

243000

4527000

4667000

11000

121000

-57000

-6000

11600000

30000000

0.016

10000000

15000000

14600000

1400000

20000000

3000000

4300000

0.032

0.034

7.36

15000

0.21

0.35

100000

200000

8 Years

137000

-3378000

339000

105595000

3013000

0.43

0.42

300000

0.01

NOTE 3 – STOCK-BASED COMPENSATION The Transcat, Inc. 2003 Incentive Plan, as Amended and Restated (the “2003 Plan”), provides for, among other awards, grants of restricted stock units and stock options to directors, officers and key employees at the fair market value at the date of grant. At December 23, 2017, 1.1 million shares were available for future grant under the 2003 Plan. Restricted Stock Units: The Company generally grants performance-based restricted stock units as a primary component of executive compensation. The units generally vest following the third fiscal year from the date of grant subject to certain cumulative diluted earnings per share growth targets over the eligible period. The restricted stock units granted in June 2017 were time vested. Compensation cost ultimately recognized for performance-based restricted stock units will equal the grant date fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, the Company records compensation cost based on the estimated level of achievement of the performance conditions. The expense relating to the time vested restricted stock units is recognized on a straight-line basis over the requisite service period for the entire award. The Company achieved 50% of the target level for the performance-based restricted stock units granted in the fiscal year ended March 28, 2015 and as a result, issued 25 shares of common stock to executive officers and certain key employees during the first quarter of fiscal year 2018. The following table summarizes the non-vested performance-based restricted stock units outstanding as of December 23, 2017: <table cellspacing="0" cellpadding="0" border="0" style="width: 100%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 18%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">Total</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td colspan="2" nowrap="nowrap" style="width: 18%; text-align: center">Grant Date</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 17%; text-align: center">Estimated</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 18%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">Number</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td colspan="2" nowrap="nowrap" style="width: 18%; text-align: center">Fair</td> <td nowrap="nowrap" style="width: 1%; text-align: center"> </td> <td nowrap="nowrap" style="width: 17%; text-align: center">Level of</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center">Date</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">Measurement</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">of Units</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td colspan="2" nowrap="nowrap" style="width: 18%; text-align: center">Value</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 17%; text-align: center">Achievement at</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center; border-bottom: #000000 1pt solid">Granted</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 18%; text-align: center; border-bottom: #000000 1pt solid">Period</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 18%; text-align: center; border-bottom: #000000 1pt solid">Granted</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td colspan="2" nowrap="nowrap" style="width: 18%; text-align: center; border-bottom: #000000 1pt solid">Per Unit</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 17%; text-align: center; border-bottom: #000000 1pt solid">December 23, 2017</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center; background-color: #c0c0c0">April 2015</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 18%; text-align: center; background-color: #c0c0c0">April 2015 - March 2018</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 18%; text-align: center; background-color: #c0c0c0">63</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: left; background-color: #c0c0c0">$     </td> <td nowrap="nowrap" style="width: 17%; text-align: right; background-color: #c0c0c0">9.59</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 17%; text-align: center; background-color: #c0c0c0">50% of target level</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center">April 2016</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">April 2016 - March 2019</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">84</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 17%; text-align: right">10.13</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 17%; text-align: center">115% of target level</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center; background-color: #c0c0c0">April 2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 18%; text-align: center; background-color: #c0c0c0">April 2017 – March 2020</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 18%; text-align: center; background-color: #c0c0c0">77</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: left; background-color: #c0c0c0">$</td> <td nowrap="nowrap" style="width: 17%; text-align: right; background-color: #c0c0c0">12.90</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 17%; text-align: center; background-color: #c0c0c0">100% of target level</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center">June 2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">July 2017 – June 2020</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">3</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 17%; text-align: right">12.00</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 17%; text-align: center">Time Vested</td></tr></table> Total expense relating to performance-based restricted stock units, based on grant date fair value and the achievement criteria, was $0.6 million and $0.2 million, respectively in the first nine months of fiscal years 2018 and 2017. Total expense relating to time vested restricted stock units was less than $0.1 million for the first nine months of fiscal year 2018. As of December 23, 2017, unearned compensation to be recognized over the grants’ respective service periods totaled $1.2 million. Stock Options: Options vest either immediately or over a period of up to four years using a straight-line basis and expire either five years or ten years from the date of grant. The expense relating to options is recognized on a straight-line basis over the requisite service period for the entire award. The following table summarizes the Company’s options as of and for the first nine months of fiscal year 2018: <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style="width: 80%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" style="text-align: center">Weighted</td> <td style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Weighted</td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" style="text-align: center">Average</td> <td style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Average</td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Number</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" style="text-align: center">Exercise</td> <td style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Remaining</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Aggregate</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Of</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" style="text-align: center">Price Per</td> <td style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Contractual</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Intrinsic</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">       </td> <td colspan="2" nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: center">Shares </td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: center">Share</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: center">Term (in years)</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: center">Value</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="width: 80%; text-align: left">Outstanding as of March 25, 2017</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">            241</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">       7.48</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Granted</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">165</td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">12.00</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Exercised</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">(89</td> <td nowrap="nowrap" style="text-align: left">)</td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">7.29</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Forfeited</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">(15</td> <td nowrap="nowrap" style="text-align: left">)</td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">7.36</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Redeemed</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid">(20</td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 1pt solid">)</td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 1pt solid"></td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid">7.72</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left">Outstanding as of December 23, 2017</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">282</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left">$</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">10.17</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" colspan="2" style="text-align: center; border-bottom: Black 1pt solid"> 5</td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left">$         </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">1,167</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="text-align: left">Exercisable as of December 23, 2017</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">282</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left">$</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">10.17</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" colspan="2" style="text-align: center; border-bottom: Black 1pt solid"> 5</td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left">$</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">1,167</td></tr></table></div> The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the third quarter of fiscal year 2018 and the exercise price, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all holders exercised their options on December 23, 2017. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common stock. Total expense related to stock options was $0.4 million and $0.1 million during each of the first nine months of fiscal years 2018 and 2017, respectively. There was no unrecognized compensation cost related to non-vested stock options as of December 23, 2017. The aggregate intrinsic value of stock options exercised in the first nine months of fiscal year 2018 was $0.6 million. Cash received from the exercise of options in the first nine months of fiscal year 2018 was $0.6 million.

NOTE 5 – BUSINESS ACQUISITIONS During fiscal year 2017, Transcat acquired substantially all of the assets of Excalibur Engineering, Inc. (“Excalibur”), a California-based provider of calibration services, new and used test equipment sales, and equipment rentals. This transaction aligned with the Company’s acquisition strategy of targeting businesses that expand the Company’s geographic reach and leverage its infrastructure while also increasing the depth and breadth of the Company’s service capabilities. In addition, Excalibur provided an established equipment rental and used equipment business, which are complimentary to the Company’s traditional Distribution segment sales. The Company applies the acquisition method of accounting for business acquisitions. Under the acquisition method, the purchase price of an acquisition is assigned to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The Company uses a valuation hierarchy, as further described under Fair Value of Financial Instruments in Note 1 above, and typically utilizes independent third-party valuation specialists to determine the fair values used in this allocation. Purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. Intangible assets related to the Excalibur acquisition are being amortized for financial reporting purposes on an accelerated basis over the estimated useful life of up to 10 years and are deductible for tax purposes. The total purchase price paid for the assets of Excalibur was approximately $7.6 million, net of less than $0.1 million cash acquired. The following is a summary of the purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of assets and liabilities acquired during the period presented: <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style="width: 50%; border-collapse: collapse; line-height: 14pt"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right">     </td> <td colspan="3" nowrap="nowrap" style="width: 5%; text-align: center">FY 2017</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td colspan="2" nowrap="nowrap" style="width: 93%; text-align: left; padding-left: 15pt">Goodwill</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">3,455</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td colspan="2" nowrap="nowrap" style="width: 93%; text-align: left; padding-left: 15pt">Intangible Assets – Customer Base</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">1,990</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td colspan="2" nowrap="nowrap" style="width: 93%; text-align: left; padding-left: 15pt">Intangible Assets – Covenant Not to Compete</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; border-bottom: black 1pt solid; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; border-bottom: black 1pt solid; text-align: right">100</td> <td nowrap="nowrap" style="width: 1%; border-bottom: black 1pt solid; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 1%; text-align: left; padding-left: 15pt"></td> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">5,545</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="width: 1%; text-align: left; padding-left: 15pt">Plus: </td> <td nowrap="nowrap" style="width: 92%; text-align: left">Current Assets</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">973</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 1%; text-align: left; padding-left: 15pt"></td> <td nowrap="nowrap" style="width: 92%; text-align: left">Non-Current Assets</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">1,652</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="width: 1%; text-align: left; padding-left: 15pt">Less:</td> <td nowrap="nowrap" style="width: 92%; text-align: left">Current Liabilities</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left; border-bottom: #000000 1px solid"></td> <td nowrap="nowrap" style="width: 3%; text-align: right; border-bottom: #000000 1px solid">(606</td> <td nowrap="nowrap" style="width: 1%; text-align: left; border-bottom: #000000 1px solid">)</td></tr> <tr style="vertical-align: bottom"> <td colspan="2" nowrap="nowrap" style="width: 93%; text-align: left">Total Purchase Price</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left; border-bottom: #000000 2pt double">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right; border-bottom: #000000 2pt double">     7,564</td> <td nowrap="nowrap" style="width: 1%; text-align: left; border-bottom: #000000 2pt double"></td></tr></table> </div> Certain of the Company’s acquisition agreements have included provisions for contingent consideration and other holdback amounts. The Company accrues for contingent consideration and holdback provisions based on their estimated fair value at the date of acquisition. As of December 23, 2017 and March 25, 2017, no contingent consideration or other holdback amounts were outstanding. The results of the acquired businesses are included in Transcat’s consolidated operating results as of the dates the businesses were acquired. The following unaudited pro forma information presents the Company’s results of operations as if the acquisition of Excalibur had occurred at the beginning of fiscal year 2017. The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transaction had occurred at the beginning of the period presented or what the Company’s operating results will be in future periods. <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style="width: 50%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center">(Unaudited)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center">Nine Months</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center; border-bottom: Black 1pt solid">Ended</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center">December 24,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center; border-bottom: Black 1pt solid">2016</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 95%; text-align: left">Total Revenue</td> <td nowrap="nowrap" style="width: 1%; text-align: left">         </td> <td nowrap="nowrap" style="width: 1%; text-align: left">$     </td> <td nowrap="nowrap" style="width: 3%; text-align: right">105,595</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left">Net Income</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">3,013</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 95%; text-align: left">Basic Earnings Per Share</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">0.43</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left">Diluted Earnings Per Share</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">0.42</td></tr></table> </div> During each of the first nine months of fiscal years 2018 and 2017, acquisition costs of less than $0.1 million were recorded as incurred as general and administrative expenses in the Consolidated Statements of Income.

The following table presents segment information for the third quarter and first nine months of fiscal years 2018 and 2017: <table cellspacing="0" cellpadding="0" border="0" style="border-collapse: collapse; line-height: 14pt; width: 100%"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td colspan="5" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">Third Quarter Ended</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="5" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">Nine Months Ended</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">       </td> <td colspan="2" nowrap="nowrap" style="text-align: center">December 23,</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="text-align: center">December 24,</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="text-align: center">December 23,</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="text-align: center">December 24,</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td colspan="2" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">2017</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">2016</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">2017</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">2016</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="width: 80%; text-align: left">Revenue:</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Service</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left">$</td> <td nowrap="nowrap" style="text-align: right">     18,769</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left">$</td> <td nowrap="nowrap" style="text-align: right">     17,455</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left">$</td> <td nowrap="nowrap" style="text-align: right">     55,490</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left">$</td> <td nowrap="nowrap" style="text-align: right">     51,577</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Distribution</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">21,714</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">20,358</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">57,199</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">53,868</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">40,483</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">37,813</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">112,689</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">105,445</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Gross Profit:</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Service</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">4,699</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">4,306</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">13,655</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">13,175</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Distribution</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">5,002</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">4,609</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">12,891</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">12,013</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">9,701</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">8,915</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">26,546</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">25,188</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Operating Expenses:</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Service (1)</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">3,636</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">3,365</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">10,917</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">10,399</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Distribution (1)</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">3,411</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">3,197</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">10,106</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">9,420</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">7,047</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">6,562</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">21,023</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">19,819</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Operating Income:</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Service</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">1,063</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">941</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">2,738</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">2,776</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Distribution</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,591</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,412</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,785</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,593</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,654</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,353</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">5,523</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">5,369</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Unallocated Amounts:</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Interest and Other Expense, net</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">311</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">188</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">854</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">547</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Provision for Income Taxes</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">512</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">895</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,201</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,729</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">823</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,083</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,055</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,276</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Net Income</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 2pt double">$</td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 2pt double">1,831</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 2pt double">$</td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 2pt double">1,270</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 2pt double">$</td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 2pt double">3,468</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 2pt double">$</td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 2pt double">3,093</td></tr></table> <table cellspacing="0" cellpadding="0" border="0" style="width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td nowrap="nowrap" style="width: 1%; text-align: left">(1) </td> <td style="width: 99%; text-align: justify">Operating expense allocations between segments were based on actual amounts, a percentage of revenues, headcount, and management’s estimates.</td></tr></table>

The following is a summary of the purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of assets and liabilities acquired during the period presented: <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style="width: 50%; border-collapse: collapse; line-height: 14pt"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right">     </td> <td colspan="3" nowrap="nowrap" style="width: 5%; text-align: center">FY 2017</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td colspan="2" nowrap="nowrap" style="width: 93%; text-align: left; padding-left: 15pt">Goodwill</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">3,455</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td colspan="2" nowrap="nowrap" style="width: 93%; text-align: left; padding-left: 15pt">Intangible Assets – Customer Base</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">1,990</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td colspan="2" nowrap="nowrap" style="width: 93%; text-align: left; padding-left: 15pt">Intangible Assets – Covenant Not to Compete</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; border-bottom: black 1pt solid; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; border-bottom: black 1pt solid; text-align: right">100</td> <td nowrap="nowrap" style="width: 1%; border-bottom: black 1pt solid; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 1%; text-align: left; padding-left: 15pt"></td> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">5,545</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="width: 1%; text-align: left; padding-left: 15pt">Plus: </td> <td nowrap="nowrap" style="width: 92%; text-align: left">Current Assets</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">973</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 1%; text-align: left; padding-left: 15pt"></td> <td nowrap="nowrap" style="width: 92%; text-align: left">Non-Current Assets</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">1,652</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="width: 1%; text-align: left; padding-left: 15pt">Less:</td> <td nowrap="nowrap" style="width: 92%; text-align: left">Current Liabilities</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left; border-bottom: #000000 1px solid"></td> <td nowrap="nowrap" style="width: 3%; text-align: right; border-bottom: #000000 1px solid">(606</td> <td nowrap="nowrap" style="width: 1%; text-align: left; border-bottom: #000000 1px solid">)</td></tr> <tr style="vertical-align: bottom"> <td colspan="2" nowrap="nowrap" style="width: 93%; text-align: left">Total Purchase Price</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left; border-bottom: #000000 2pt double">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right; border-bottom: #000000 2pt double">     7,564</td></tr></table></div>

The following unaudited pro forma information presents the Company’s results of operations as if the acquisition of Excalibur had occurred at the beginning of fiscal year 2017. The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transaction had occurred at the beginning of the period presented or what the Company’s operating results will be in future periods. <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style="width: 50%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center">(Unaudited)</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center">Nine Months</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center; border-bottom: Black 1pt solid">Ended</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center">December 24,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td colspan="2" nowrap="nowrap" style="width: 4%; text-align: center; border-bottom: Black 1pt solid">2016</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 95%; text-align: left">Total Revenue</td> <td nowrap="nowrap" style="width: 1%; text-align: left">         </td> <td nowrap="nowrap" style="width: 1%; text-align: left">$     </td> <td nowrap="nowrap" style="width: 3%; text-align: right">105,595</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left">Net Income</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">3,013</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td style="width: 95%; text-align: left">Basic Earnings Per Share</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">0.43</td></tr> <tr style="vertical-align: bottom"> <td style="width: 95%; text-align: left">Diluted Earnings Per Share</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">0.42</td></tr></table></div>

NOTE 4 – SEGMENT INFORMATION Transcat has two reportable segments: Distribution and Service. The Company has no inter-segment sales. The following table presents segment information for the third quarter and first nine months of fiscal years 2018 and 2017: <table cellspacing="0" cellpadding="0" border="0" style="border-collapse: collapse; line-height: 14pt; width: 100%"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td colspan="5" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">Third Quarter Ended</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="5" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">Nine Months Ended</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">       </td> <td colspan="2" nowrap="nowrap" style="text-align: center">December 23,</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="text-align: center">December 24,</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="text-align: center">December 23,</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="text-align: center">December 24,</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td colspan="2" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">2017</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">2016</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">2017</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: center">2016</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="width: 80%; text-align: left">Revenue:</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Service</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left">$</td> <td nowrap="nowrap" style="text-align: right">     18,769</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left">$</td> <td nowrap="nowrap" style="text-align: right">     17,455</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left">$</td> <td nowrap="nowrap" style="text-align: right">     55,490</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left">$</td> <td nowrap="nowrap" style="text-align: right">     51,577</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Distribution</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">21,714</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">20,358</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">57,199</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">53,868</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">40,483</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">37,813</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">112,689</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">105,445</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Gross Profit:</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Service</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">4,699</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">4,306</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">13,655</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">13,175</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Distribution</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">5,002</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">4,609</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">12,891</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">12,013</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">9,701</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">8,915</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">26,546</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">25,188</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Operating Expenses:</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Service (1)</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">3,636</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">3,365</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">10,917</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">10,399</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Distribution (1)</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">3,411</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">3,197</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">10,106</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">9,420</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">7,047</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">6,562</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">21,023</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">19,819</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Operating Income:</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Service</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">1,063</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">941</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">2,738</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">2,776</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Distribution</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,591</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,412</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,785</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,593</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,654</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,353</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">5,523</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">5,369</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Unallocated Amounts:</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Interest and Other Expense, net</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">311</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">188</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">854</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">547</td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Provision for Income Taxes</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">512</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">895</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,201</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,729</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt">Total</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">823</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">1,083</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,055</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 1px solid; text-align: right">2,276</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 30pt"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td></tr> <tr style="vertical-align: bottom; background-color: silver"> <td nowrap="nowrap" style="text-align: left">Net Income</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 2pt double">$</td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 2pt double">1,831</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 2pt double">$</td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 2pt double">1,270</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 2pt double">$</td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 2pt double">3,468</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 2pt double">$</td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 2pt double">3,093</td></tr></table> <table cellspacing="0" cellpadding="0" border="0" style="width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td nowrap="nowrap" style="width: 1%; text-align: left">(1) </td> <td style="width: 99%; text-align: justify">Operating expense allocations between segments were based on actual amounts, a percentage of revenues, headcount, and management’s estimates.</td></tr></table>

Earnings Per Share: Basic earnings per share of common stock are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock reflect the assumed conversion of stock options and unvested restricted stock units using the treasury stock method in periods in which they have a dilutive effect. In computing the per share effect of assumed conversion, funds which would have been received from the exercise of options and unvested restricted stock units and the related tax benefits are considered to have been used to purchase shares of common stock at the average market prices during the period, and the resulting net additional shares of common stock are included in the calculation of average shares of common stock outstanding. For the third quarter of fiscal year 2018 the net additional common stock equivalents had a $0.01 effect on the calculation of diluted earnings per share. For the third quarter of fiscal year 2017, the net additional common stock equivalents had no effect on the calculation of dilutive earnings per share. For each of the first nine months of fiscal year 2018 and fiscal year 2017, the net additional common stock equivalents had a $0.01 effect on the calculation of diluted earnings per share. The average shares outstanding used to compute basic and diluted earnings per share are as follows: <table cellspacing="0" cellpadding="0" border="0" style="width: 100%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td colspan="3" nowrap="nowrap" style="width: 3%; text-align: center; border-bottom: #000000 1pt solid">Third Quarter Ended</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td colspan="3" nowrap="nowrap" style="width: 3%; text-align: center; border-bottom: #000000 1pt solid">Nine Months Ended</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 23,</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 24,</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 23,</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 24,</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 1%; text-align: center; border-bottom: #000000 1pt solid">2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 1%; text-align: center; border-bottom: #000000 1pt solid">2016</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 1%; text-align: center; border-bottom: #000000 1pt solid">2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 1%; text-align: center; border-bottom: #000000 1pt solid">2016</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left; background-color: #c0c0c0">Average Shares Outstanding – Basic</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0">7,142</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0">7,010</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0">7,115</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0">6,984</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left">Effect of Dilutive Common Stock Equivalents</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 1pt solid">177</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 1pt solid">194</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 1pt solid">158</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 1pt solid">177</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left; background-color: #c0c0c0">Average Shares Outstanding – Diluted</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double; background-color: #c0c0c0">7,319</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double; background-color: #c0c0c0">7,204</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double; background-color: #c0c0c0">7,273</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double; background-color: #c0c0c0">7,161</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left">Anti-dilutive Common Stock Equivalents</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double">-</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double">-</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double">-</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double">-</td></tr></table>

Foreign Currency Translation and Transactions: The accounts of Transcat Canada Inc., a wholly-owned subsidiary of the Company, are maintained in the local currency (Canadian dollars) and have been translated to U.S. dollars. Accordingly, the amounts representing assets and liabilities have been translated at the period-end rates of exchange and related revenue and expense accounts have been translated at an average rate of exchange during the period. Gains and losses arising from translation of Transcat Canada Inc.’s financial statements into U.S. dollars are recorded directly to the accumulated other comprehensive loss component of shareholders’ equity. Transcat records foreign currency gains and losses on its Canadian business transactions. The net foreign currency loss was less than $0.1 million during the first nine months of each of fiscal years 2018 and 2017. The Company continually utilizes short-term foreign exchange forward contracts to reduce the risk that its earnings will be adversely affected by changes in currency exchange rates. The Company does not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a loss of $0.1 million during the first nine months of fiscal year 2018 and a gain of $0.1 million during the first nine months of fiscal year 2017, was recognized as a component of other expense in the Consolidated Statements of Income. The change in the fair value of the contracts is offset by the change in fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On December 23, 2017, the Company had a foreign exchange contract, which matured in January 2018, outstanding in the notional amount of $5.4 million. The foreign exchange contract was renewed in January 2018 and continues to be in place. The Company does not use hedging arrangements for speculative purposes.

Stock-Based Compensation: The Company measures the cost of services received in exchange for all equity awards granted, including stock options and restricted stock units, based on the fair market value of the award as of the grant date. The Company records compensation expense related to unvested equity awards by recognizing, on a straight-line basis, the unamortized grant date fair value over the remaining service period of each award. In 2016, FASB issued ASU 2016-09 to simplify certain aspects of the accounting for share-based payment transactions to employees. The Company elected to early adopt this ASU in the fourth quarter of fiscal year 2017. Upon adoption, excess tax benefits for share-based award activity are reflected in the statement of income as a component of the provision for income taxes. Excess tax benefits are realized benefits from tax deductions for exercised awards in excess of the deferred tax asset attributable to stock-based compensation costs for such awards. The Company did not capitalize any stock-based compensation costs as part of an asset. The Company estimates forfeiture rates based on its historical experience. During the first nine months of the fiscal year ending March 31, 2018 (“fiscal year 2018”) and fiscal year 2017, the Company recorded non-cash stock-based compensation expense of $0.9 million and $0.3 million, respectively, in the Consolidated Statements of Income.

Fair Value of Financial Instruments: Transcat has determined the fair value of debt and other financial instruments using a valuation hierarchy. The hierarchy, which prioritizes the inputs used in measuring fair value, consists of three levels. Level 1 uses observable inputs such as quoted prices in active markets; Level 2 uses inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which is defined as unobservable inputs in which little or no market data exists, requires the Company to develop its own assumptions. The carrying amount of debt on the Consolidated Balance Sheets approximates fair value due to variable interest rate pricing, and the carrying amounts for cash, accounts receivable and accounts payable approximate fair value due to their short-term nature. Investment assets, which fund the Company’s non-qualified deferred compensation plan, consist of mutual funds and are valued based on Level 1 inputs. At December 23, 2017 and March 25, 2017, investment assets totaled $0.8 million and $0.7 million, respectively and are included as a component of other assets (non-current) on the Consolidated Balance Sheets.

Basis of Presentation: Transcat’s unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8-03 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation (consisting of normal recurring adjustments) have been included. The results for the interim periods are not necessarily indicative of what the results will be for the fiscal year. The accompanying Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended March 25, 2017 (“fiscal year 2017”) contained in the Company’s 2017 Annual Report on Form 10-K filed with the SEC.

Description of Business:Transcat, Inc. (“Transcat” or the “Company”) is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement and control instrumentation. The Company is focused on providing services and products to highly regulated industries, particularly the life science industry, which includes pharmaceutical, biotechnology, medical device and other FDA-regulated businesses. Additional industries served include industrial manufacturing; energy and utilities, including oil and gas; chemical manufacturing; FAA-regulated businesses, including aerospace and defense and other industries that require accuracy in their processes, confirmation of the capabilities of their equipment, and have a high cost of failure.

The average shares outstanding used to compute basic and diluted earnings per share are as follows: <table cellspacing="0" cellpadding="0" border="0" style="width: 100%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td colspan="3" nowrap="nowrap" style="width: 3%; text-align: center; border-bottom: #000000 1pt solid">Third Quarter Ended</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td colspan="3" nowrap="nowrap" style="width: 3%; text-align: center; border-bottom: #000000 1pt solid">Nine Months Ended</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 23,</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 24,</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 23,</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 24,</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 1%; text-align: center; border-bottom: #000000 1pt solid">2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 1%; text-align: center; border-bottom: #000000 1pt solid">2016</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 1%; text-align: center; border-bottom: #000000 1pt solid">2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 1%; text-align: center; border-bottom: #000000 1pt solid">2016</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left; background-color: #c0c0c0">Average Shares Outstanding – Basic</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0">7,142</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0">7,010</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0">7,115</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0">6,984</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left">Effect of Dilutive Common Stock Equivalents</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 1pt solid">177</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 1pt solid">194</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 1pt solid">158</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 1pt solid">177</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left; background-color: #c0c0c0">Average Shares Outstanding – Diluted</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double; background-color: #c0c0c0">7,319</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double; background-color: #c0c0c0">7,204</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double; background-color: #c0c0c0">7,273</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double; background-color: #c0c0c0">7,161</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left">Anti-dilutive Common Stock Equivalents</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double">-</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double">-</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double">-</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: right; border-bottom: #000000 2pt double">-</td></tr></table>

The following table summarizes the non-vested performance-based restricted stock units outstanding as of December 23, 2017: <table cellspacing="0" cellpadding="0" border="0" style="width: 100%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 18%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">Total</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td colspan="2" nowrap="nowrap" style="width: 18%; text-align: center">Grant Date</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 17%; text-align: center">Estimated</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 18%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">Number</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td colspan="2" nowrap="nowrap" style="width: 18%; text-align: center">Fair</td> <td nowrap="nowrap" style="width: 1%; text-align: center"> </td> <td nowrap="nowrap" style="width: 17%; text-align: center">Level of</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center">Date</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">Measurement</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">of Units</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td colspan="2" nowrap="nowrap" style="width: 18%; text-align: center">Value</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 17%; text-align: center">Achievement at</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center; border-bottom: #000000 1pt solid">Granted</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 18%; text-align: center; border-bottom: #000000 1pt solid">Period</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 18%; text-align: center; border-bottom: #000000 1pt solid">Granted</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td colspan="2" nowrap="nowrap" style="width: 18%; text-align: center; border-bottom: #000000 1pt solid">Per Unit</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="width: 17%; text-align: center; border-bottom: #000000 1pt solid">December 23, 2017</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center; background-color: #c0c0c0">April 2015</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 18%; text-align: center; background-color: #c0c0c0">April 2015 - March 2018</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 18%; text-align: center; background-color: #c0c0c0">63</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: left; background-color: #c0c0c0">$     </td> <td nowrap="nowrap" style="width: 17%; text-align: right; background-color: #c0c0c0">9.59</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 17%; text-align: center; background-color: #c0c0c0">50% of target level</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center">April 2016</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">April 2016 - March 2019</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">84</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 17%; text-align: right">10.13</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 17%; text-align: center">115% of target level</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center; background-color: #c0c0c0">April 2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 18%; text-align: center; background-color: #c0c0c0">April 2017 – March 2020</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 18%; text-align: center; background-color: #c0c0c0">77</td> <td nowrap="nowrap" style="width: 1%; text-align: right; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 1%; text-align: left; background-color: #c0c0c0">$</td> <td nowrap="nowrap" style="width: 17%; text-align: right; background-color: #c0c0c0">12.90</td> <td nowrap="nowrap" style="width: 1%; text-align: center; background-color: #c0c0c0"></td> <td nowrap="nowrap" style="width: 17%; text-align: center; background-color: #c0c0c0">100% of target level</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 24%; text-align: center">June 2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">July 2017 – June 2020</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 18%; text-align: center">3</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 17%; text-align: right">12.00</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 17%; text-align: center">Time Vested</td></tr></table>

The following table summarizes the Company’s options as of and for the first nine months of fiscal year 2018: <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style="width: 80%; line-height: 14pt; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" style="text-align: center">Weighted</td> <td style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Weighted</td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" style="text-align: center">Average</td> <td style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Average</td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="text-align: center"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Number</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" style="text-align: center">Exercise</td> <td style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Remaining</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Aggregate</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Of</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" style="text-align: center">Price Per</td> <td style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Contractual</td> <td nowrap="nowrap" style="text-align: center"></td> <td colspan="2" nowrap="nowrap" style="text-align: center">Intrinsic</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">       </td> <td colspan="2" nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: center">Shares </td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: center">Share</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: center">Term (in years)</td> <td nowrap="nowrap" style="text-align: center">       </td> <td colspan="2" nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: center">Value</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="width: 80%; text-align: left">Outstanding as of March 25, 2017</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 3%; text-align: right">            241</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left">$</td> <td nowrap="nowrap" style="width: 3%; text-align: right">       7.48</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="width: 3%; text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: right"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td> <td nowrap="nowrap" style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Granted</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">165</td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">12.00</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Exercised</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">(89</td> <td nowrap="nowrap" style="text-align: left">)</td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">7.29</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Forfeited</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right">(15</td> <td nowrap="nowrap" style="text-align: left">)</td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: right">7.36</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="text-align: left; padding-left: 15pt">Redeemed</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid">(20</td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 1pt solid">)</td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left; border-bottom: Black 1pt solid"></td> <td nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid">7.72</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="text-align: left">Outstanding as of December 23, 2017</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">282</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left">$</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">10.17</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" colspan="2" style="text-align: center; border-bottom: Black 1pt solid"> 5</td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left">$         </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">1,167</td></tr> <tr style="vertical-align: bottom; background-color: Silver"> <td nowrap="nowrap" style="text-align: left">Exercisable as of December 23, 2017</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">282</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left"></td> <td nowrap="nowrap" style="text-align: left"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left">$</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">10.17</td> <td nowrap="nowrap" style="text-align: right"></td> <td nowrap="nowrap" colspan="2" style="text-align: center; border-bottom: Black 1pt solid"> 5</td> <td nowrap="nowrap" style="text-align: center"></td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: left">$</td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; text-align: right">1,167</td></tr></table></div>

Recently Issued Accounting Pronouncements:In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, Compensation—Stock Compensation (Topic 718). This ASU provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This ASU is effective for annual reporting periods beginning after December 15, 2017 and should be applied prospectively. Early adoption of this ASU is permitted. The Company does not expect adoption of this ASU to have a material impact on its Consolidated Financial Statements.

NOTE 1 – GENERAL Description of Business: Transcat, Inc. (“Transcat” or the “Company”) is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement and control instrumentation. The Company is focused on providing services and products to highly regulated industries, particularly the life science industry, which includes pharmaceutical, biotechnology, medical device and other FDA-regulated businesses. Additional industries served include industrial manufacturing; energy and utilities, including oil and gas; chemical manufacturing; FAA-regulated businesses, including aerospace and defense and other industries that require accuracy in their processes, confirmation of the capabilities of their equipment, and have a high cost of failure. Basis of Presentation: Transcat’s unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8-03 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation (consisting of normal recurring adjustments) have been included. The results for the interim periods are not necessarily indicative of what the results will be for the fiscal year. The accompanying Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended March 25, 2017 (“fiscal year 2017”) contained in the Company’s 2017 Annual Report on Form 10-K filed with the SEC. Revenue Recognition: Distribution sales are recorded when an order’s title and risk of loss transfers to the customer. The Company recognizes the majority of its Service revenue based upon when the calibration or other activity is performed and then shipped and/or delivered to the customer. Some Service revenue is generated from managing customers’ calibration programs in which the Company recognizes revenue in equal amounts at fixed intervals. The Company generally invoices its customers for freight, shipping, and handling charges. Provisions for customer returns are provided for in the period the related revenue is recorded based upon historical data. In 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09 to provide specific guidance on how entities should recognize revenue derived from contracts with customers. Transcat is required to adopt ASU 2014-09 in its fiscal year ending March 30, 2019 (“fiscal year 2019”). This new standard supercedes previous guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures. We are continuing to evaluate certain contracts to determine their treatment under ASU 2014—09. The Company does not expect the adoption of this ASU to have a material impact on the Consolidated Financial Statements. Fair Value of Financial Instruments: Transcat has determined the fair value of debt and other financial instruments using a valuation hierarchy. The hierarchy, which prioritizes the inputs used in measuring fair value, consists of three levels. Level 1 uses observable inputs such as quoted prices in active markets; Level 2 uses inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which is defined as unobservable inputs in which little or no market data exists, requires the Company to develop its own assumptions. The carrying amount of debt on the Consolidated Balance Sheets approximates fair value due to variable interest rate pricing, and the carrying amounts for cash, accounts receivable and accounts payable approximate fair value due to their short-term nature. Investment assets, which fund the Company’s non-qualified deferred compensation plan, consist of mutual funds and are valued based on Level 1 inputs. At December 23, 2017 and March 25, 2017, investment assets totaled $0.8 million and $0.7 million, respectively and are included as a component of other assets (non-current) on the Consolidated Balance Sheets. Stock-Based Compensation: The Company measures the cost of services received in exchange for all equity awards granted, including stock options and restricted stock units, based on the fair market value of the award as of the grant date. The Company records compensation expense related to unvested equity awards by recognizing, on a straight-line basis, the unamortized grant date fair value over the remaining service period of each award. In 2016, FASB issued ASU 2016-09 to simplify certain aspects of the accounting for share-based payment transactions to employees. The Company elected to early adopt this ASU in the fourth quarter of fiscal year 2017. Upon adoption, excess tax benefits for share-based award activity are reflected in the statement of income as a component of the provision for income taxes. Excess tax benefits are realized benefits from tax deductions for exercised awards in excess of the deferred tax asset attributable to stock-based compensation costs for such awards. The Company did not capitalize any stock-based compensation costs as part of an asset. The Company estimates forfeiture rates based on its historical experience. During the first nine months of the fiscal year ending March 31, 2018 (“fiscal year 2018”) and fiscal year 2017, the Company recorded non-cash stock-based compensation expense of $1.1 million and $0.3 million, respectively, in the Consolidated Statements of Income.  Foreign Currency Translation and Transactions: The accounts of Transcat Canada Inc., a wholly-owned subsidiary of the Company, are maintained in the local currency (Canadian dollars) and have been translated to U.S. dollars. Accordingly, the amounts representing assets and liabilities have been translated at the period-end rates of exchange and related revenue and expense accounts have been translated at an average rate of exchange during the period. Gains and losses arising from translation of Transcat Canada Inc.’s financial statements into U.S. dollars are recorded directly to the accumulated other comprehensive loss component of shareholders’ equity. Transcat records foreign currency gains and losses on its Canadian business transactions. The net foreign currency loss was less than $0.1 million during the first nine months of each of fiscal years 2018 and 2017. The Company continually utilizes short-term foreign exchange forward contracts to reduce the risk that its earnings will be adversely affected by changes in currency exchange rates. The Company does not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a loss of $0.1 million during the first nine months of fiscal year 2018 and a gain of $0.1 million during the first nine months of fiscal year 2017, was recognized as a component of other expense in the Consolidated Statements of Income. The change in the fair value of the contracts is offset by the change in fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On December 23, 2017, the Company had a foreign exchange contract, which matured in January 2018, outstanding in the notional amount of $5.4 million. The foreign exchange contract was renewed in January 2018 and continues to be in place. The Company does not use hedging arrangements for speculative purposes. Earnings Per Share: Basic earnings per share of common stock are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock reflect the assumed conversion of stock options and unvested restricted stock units using the treasury stock method in periods in which they have a dilutive effect. In computing the per share effect of assumed conversion, funds which would have been received from the exercise of options and unvested restricted stock units and the related tax benefits are considered to have been used to purchase shares of common stock at the average market prices during the period, and the resulting net additional shares of common stock are included in the calculation of average shares of common stock outstanding. For the third quarter of fiscal year 2018 the net additional common stock equivalents had a $0.01 effect on the calculation of diluted earnings per share. For the third quarter of fiscal year 2017, the net additional common stock equivalents had no effect on the calculation of dilutive earnings per share. For each of the first nine months of fiscal year 2018 and fiscal year 2017, the net additional common stock equivalents had a $0.01 effect on the calculation of diluted earnings per share. The average shares outstanding used to compute basic and diluted earnings per share are as follows: <table cellspacing="0" cellpadding="0" border="0" style="line-height: 14pt; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td colspan="3" nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 3%; text-align: center">Third Quarter Ended</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td colspan="3" nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 3%; text-align: center">Nine Months Ended</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 23,</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 24,</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 23,</td> <td nowrap="nowrap" style="width: 1%; text-align: center"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">December 24,</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left"></td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 1%; text-align: center">2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 1%; text-align: center">2016</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 1%; text-align: center">2017</td> <td nowrap="nowrap" style="width: 1%; text-align: center">     </td> <td nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 1%; text-align: center">2016</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 92%; text-align: left">Average Shares Outstanding – Basic</td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right"></td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right">7,142</td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right"></td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right">7,010</td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right"></td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right">7,115</td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right"></td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right">6,984</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left">Effect of Dilutive Common Stock Equivalents</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 1%; text-align: right">177</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 1%; text-align: right">194</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 1%; text-align: right">158</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 1pt solid; width: 1%; text-align: right">177</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 92%; text-align: left">Average Shares Outstanding – Diluted</td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 2pt double; background-color: #c0c0c0; width: 1%; text-align: right">7,319</td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 2pt double; background-color: #c0c0c0; width: 1%; text-align: right">7,204</td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 2pt double; background-color: #c0c0c0; width: 1%; text-align: right">7,273</td> <td nowrap="nowrap" style="background-color: #c0c0c0; width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 2pt double; background-color: #c0c0c0; width: 1%; text-align: right">7,161</td></tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="width: 92%; text-align: left">Anti-dilutive Common Stock Equivalents</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 2pt double; width: 1%; text-align: right">-</td> <td nowrap="nowrap" style="width: 1%; text-align: left"></td> <td nowrap="nowrap" style="border-bottom: #000000 2pt double; width: 1%; text-align: right">-</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 2pt double; width: 1%; text-align: right">-</td> <td nowrap="nowrap" style="width: 1%; text-align: right"></td> <td nowrap="nowrap" style="border-bottom: #000000 2pt double; width: 1%; text-align: right">-</td></tr></table> Recently Issued Accounting Pronouncements: In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, Compensation—Stock Compensation (Topic 718). This ASU provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This ASU is effective for annual reporting periods beginning after December 15, 2017 and should be applied prospectively. Early adoption of this ASU is permitted. The Company does not expect adoption of this ASU to have a material impact on its Consolidated Financial Statements.

Revenue Recognition: Distribution sales are recorded when an order’s title and risk of loss transfers to the customer. The Company recognizes the majority of its Service revenue based upon when the calibration or other activity is performed and then shipped and/or delivered to the customer. Some Service revenue is generated from managing customers’ calibration programs in which the Company recognizes revenue in equal amounts at fixed intervals. The Company generally invoices its customers for freight, shipping, and handling charges. Provisions for customer returns are provided for in the period the related revenue is recorded based upon historical data. In 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09 to provide specific guidance on how entities should recognize revenue derived from contracts with customers. Transcat is required to adopt ASU 2014-09 in its fiscal year ending March 30, 2019 (“fiscal year 2019”). This new standard supercedes previous guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures. We are continuing to evaluate certain contracts to determine their treatment under ASU 2014—09. The Company does not expect the adoption of this ASU to have a material impact on the Consolidated Financial Statements.

NOTE 2 – LONG-TERM DEBT Description: On October 30, 2017, the Company entered into an Amended and Restated Credit Agreement (the “2017 Agreement”), which amended and restated our prior credit facility agreement. The 2017 Agreement extended the term of the Company’s $30.0 million revolving credit facility (the Revolving Credit Facility) to October 29, 2021. As of December 23, 2017, $30.0 million was available under the Revolving Credit Facility, of which $11.6 million was outstanding and included in long-term debt on the Consolidated Balance Sheet. The 2017 Agreement also increased the amount of the Company’s outstanding term loan to $15.0 million (the “2017 Term Loan”), replacing the previous term loan. As of December 23, 2017, $14.6 million was outstanding on the 2017 Term Loan, of which $2.1 million was included in current liabilities on the Consolidated Balance Sheet with the remainder included in long-term debt. The 2017 Term Loan requires principal repayments of $0.2 million per month plus interest through September 2022 with a $4.3 million repayment required on October 29, 2022. Under the 2017 Agreement, borrowings that may be used for business acquisitions are limited to $20.0 million per fiscal year. During the first nine months of fiscal year 2018, no borrowings were used for business acquisitions. The allowable leverage ratio under the 2017 Agreement remains at a maximum multiple of 3.0 of total debt outstanding compared to earnings before income taxes, depreciation and amortization, and non-cash stock-based compensation expense for the preceding four consecutive fiscal quarters. The excess funds of the 2017 Term Loan over the previous term loan were used to repay amounts outstanding under the Revolving Credit Facility. Previously, on March 31, 2016, the Company entered into Amendment 3 (“Amendment 3”) to the prior credit agreement. Under Amendment 3, borrowings that could be used for business acquisitions were limited to $15.0 million in fiscal years 2018 and 2019. Amendment 3 also provided the Company with a $10.0 million term loan. The term loan required principal repayments of $0.1 million per month plus interest. Total annual repayment amounts of $1.4 million were required in fiscal years 2017 through 2021 with a $3.0 million repayment required in fiscal year 2022. Amendment 3 also increased the allowable leverage ratio to a maximum of 3.0 from 2.75. As described above, in the third quarter of fiscal year 2018, we entered into the 2017 Agreement that amended and restated the prior credit agreement, including Amendment 3. Interest and Other Costs: Interest on outstanding borrowings of the Revolving Credit Facility and term loan accrue, at Transcat’s election, at either the variable one-month London Interbank Offered Rate (“LIBOR”) or a fixed rate for a designated period at the LIBOR corresponding to such period, in each case, plus a margin. Commitment fees accrue based on the average daily amount of unused credit available on the Revolving Credit Facility. Interest rate margins and commitment fees are determined on a quarterly basis based upon the Company’s calculated leverage ratio, as defined in the 2017 Agreement. The one-month LIBOR at December 23, 2017 was 1.6%. The Company’s interest rate for the first nine months of fiscal year 2018 ranged from 3.2% to 3.4%. Covenants: The 2017 Agreement has certain covenants with which the Company has to comply, including a fixed charge coverage ratio covenant and a leverage ratio covenant. The Company was in compliance with all loan covenants and requirements during the third quarter of fiscal year 2018. Other Terms: The Company has pledged all of its U.S. tangible and intangible personal property, the equity interests of its U.S.-based subsidiaries, and a majority of the common stock of Transcat Canada Inc. as collateral security for the loans made under the Revolving Credit Facility.

NOTE 6 – INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (H.R. 1), the tax reform bill (the "Act"), was signed into law. The Act includes numerous changes to existing tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%. Since the Company is a fiscal year taxpayer, the lower corporate income tax rate will be phased in and the U.S. federal tax rate recorded is a blended rate of the old rates and the new rates for fiscal year 2018. The result was a $0.1 million reduction of the Companys provision for income taxes in the third quarter of fiscal year 2018. The Company has concluded that the Act will cause the Company’s U.S. deferred tax assets and liabilities to be revalued. Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their reported basis in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are revalued and any change is adjusted through the provision for income tax expense in the reporting period of the enactment. The Act required the Company to do such a revaluation and record a reduction in its net deferred tax liability of approximately $0.2 million, which reduced the provision for income taxes during the third quarter of fiscal year 2018. In addition, the Act provides for a one-time “deemed repatriation” of accumulated foreign earnings. The Company has estimated the additional provision for income tax expense on the repatriation to be less than $0.1 million. The Company will pay any amounts owed over eight years. The reduction in the Company’s provision for income taxes due to the Act in the third quarter of fiscal year 2018 was approximately $0.3 million or $0.04 per share. The impact of the Act may differ from this estimate, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the Act.

Operating expense allocations between segments are based on actual amounts, a percentage of revenues, headcount and management's estimates.

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Total Other Comprehensive (Loss) Income Comprehensive Income Unrecognized Prior Service Cost, tax (expense) benefit Other, tax expense (benefit) Statement of Financial Position [Abstract] ASSETS Current Assets: Cash Accounts Receivable, less allowance for doubtful accounts of $270 and $210 as of December 23, 2017 and March 25, 2017, respectively Other Receivables Inventory, net Prepaid Expenses and Other Current Assets Total Current Assets Property and Equipment, net Goodwill Intangible Assets, net Deferred Tax Assets Other Assets Total Assets LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable Accrued Compensation and Other Liabilities Income Taxes Payable Current Portion of Long-Term Debt Total Current Liabilities Long-Term Debt Deferred Tax Liabilities Other Liabilities Total Liabilities Shareholders' Equity: Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 7,144,475 and 7,043,754 shares issued and outstanding as of December 23, 2017 and March 25, 2017, respectively Capital in Excess of Par Value Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity Accounts Receivable, allowance for doubtful accounts (in Dollars) Common Stock, par value per share (in Dollars per share) Common Stock, shares authorized Common Stock, shares issued Common Stock, shares outstanding Statement of Cash Flows [Abstract] Cash Flows from Operating Activities: Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities: Net Loss on Disposal of Property and Equipment Deferred Income Taxes Depreciation and Amortization Provision for Accounts Receivable and Inventory Reserves Stock-Based Compensation Expense Changes in Assets and Liabilities: Accounts Receivable and Other Receivables Inventory Prepaid Expenses and Other Assets Accounts Payable Accrued Compensation and Other Liabilities Income Taxes Payable Net Cash Used in Operating Activities Cash Flows from Investing Activities: Purchases of Property and Equipment, net Proceeds from Sale of Property and Equipment Business Acquisitions Net Cash Used in Investing Activities Cash Flows from Financing Activities: Repayment of Revolving Credit Facility, net Proceeds from Term Loan Repayment of Term Loan Payment of Contingent Consideration and Holdbacks Related to Business Acquisitions Issuance of Common Stock Repurchase of Common Stock Stock Option Redemption Net Cash (Used in) Provided by Financing Activities Effect of Exchange Rate Changes on Cash Net Decrease in Cash Cash at Beginning of Period Cash at End of Period Supplemental Disclosure of Cash Flow Activity: Cash paid during the period for: Interest Income Taxes, net Supplemental Disclosure of Non-Cash Investing and Financing Activities: Contingent Consideration Related to Business Acquisitions Holdback Amounts Related to Business Acquisitions Statement [Table] Statement [Line Items] Balance Balance (in Shares) Issuance of Common Stock Issuance of Common Stock (in Shares) Retirement of Treasury Stock Repurchase of Common Stock Repurchase of Common Stock (in Shares) Stock-Based Compensation Stock-Based Compensation (in Shares) Redemption of Stock Options Tax Benefit from Stock-Based Compensation Other Comprehensive Loss Balance Balance (in Shares) Accounting Policies [Abstract] GENERAL Debt Disclosure [Abstract] LONG-TERM DEBT Disclosure of Compensation Related Costs, Share-based Payments [Abstract] STOCK-BASED COMPENSATION Segment Reporting [Abstract] SEGMENT INFORMATION Business Combinations [Abstract] BUSINESS ACQUISITIONS Income Tax Disclosure [Abstract] INCOME TAXES Description of Business Basis of Presentation Revenue Recognition Fair Value of Financial Instruments Stock-Based Compensation Foreign Currency Translation and Transactions Earnings Per Share Recently Issued Accounting Pronouncements Subsequent Events Schedule of Goodwill [Table Text Block] Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] Schedule of Weighted Average Number of Shares Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity EX-101.PRE 10 trns-20171223_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT XML 11 R1.htm IDEA: XBRL DOCUMENT

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Dec. 23, 2017	Feb. 01, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	TRANSCAT INC
Entity Central Index Key	0000099302
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--03-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Trading Symbol	TRNS
Document Fiscal Year Focus	2018
Document Period End Date	Dec. 23, 2017
Amendment Flag	false
Entity Common Stock, Shares Outstanding		7,152,764

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CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 23, 2017	Dec. 24, 2016	Dec. 23, 2017	Dec. 24, 2016
Income Statement [Abstract]
Service Revenue	$ 18,769	$ 17,455	$ 55,490	$ 51,577
Distribution Sales	21,714	20,358	57,199	53,868
Total Revenue	40,483	37,813	112,689	105,445
Cost of Service Revenue	14,070	13,149	41,835	38,402
Cost of Distribution Sales	16,712	15,749	44,308	41,855
Total Cost of Revenue	30,782	28,898	86,143	80,257
Gross Profit	9,701	8,915	26,546	25,188
Selling, Marketing and Warehouse Expenses	4,150	4,159	12,247	12,612
General and Administrative Expenses	2,897	2,403	8,776	7,207
Total Operating Expenses	7,047	6,562	21,023	19,819
Operating Income	2,654	2,353	5,523	5,369
Interest and Other Expense, net	311	188	854	547
Income Before Income Taxes	2,343	2,165	4,669	4,822
Provision for Income Taxes	512	895	1,201	1,729
Net Income	$ 1,831	$ 1,270	$ 3,468	$ 3,093
Basic Earnings Per Share	$ 0.26	$ 0.18	$ 0.49	$ 0.44
Average Shares Outstanding	7,142	7,010	7,115	6,984
Diluted Earnings Per Share	$ 0.25	$ 0.18	$ 0.48	$ 0.43
Average Shares Outstanding	7,319	7,204	7,273	7,161

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 23, 2017	Dec. 24, 2016	Dec. 23, 2017	Dec. 24, 2016
Statement of Comprehensive Income [Abstract]
Net Income	$ 1,831	$ 1,270	$ 3,468	$ 3,093
Other Comprehensive Income (Loss):
Currency Translation Adjustment	(151)	(114)	227	(88)
Other, net of tax effects of $(28) and $(13) for the third quarters ended December 23, 2017 and December 24, 2016, respectively; and $(44) and $(27) for the nine months ended December 23, 2017 and December 24, 2016, respectively.	1	21	26	43
Total Other Comprehensive (Loss) Income	(150)	(93)	253	(45)
Comprehensive Income	$ 1,681	$ 1,177	$ 3,721	$ 3,048

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 23, 2017	Dec. 24, 2016	Dec. 23, 2017	Dec. 24, 2016
Statement of Comprehensive Income [Abstract]
Other, tax expense (benefit)	$ (28)	$ (13)	$ (44)	$ (27)

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 23, 2017	Mar. 25, 2017
Current Assets:
Cash	$ 504	$ 842
Accounts Receivable, less allowance for doubtful accounts of $270 and $210 as of December 23, 2017 and March 25, 2017, respectively	22,700	22,049
Other Receivables	1,535	1,227
Inventory, net	11,144	10,278
Prepaid Expenses and Other Current Assets	988	1,193
Total Current Assets	36,871	35,589
Property and Equipment, net	17,478	15,568
Goodwill	32,823	32,520
Intangible Assets, net	5,984	7,519
Other Assets	1,079	901
Total Assets	94,235	92,097
Current Liabilities:
Accounts Payable	11,478	11,615
Accrued Compensation and Other Liabilities	4,524	5,907
Income Taxes Payable	468	805
Current Portion of Long-Term Debt	2,143	1,429
Total Current Liabilities	18,613	19,756
Long-Term Debt	24,103	25,883
Deferred Tax Liabilities	955	1,134
Other Liabilities	1,960	1,923
Total Liabilities	45,631	48,696
Shareholders' Equity:
Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 7,144,475 and 7,043,754 shares issued and outstanding as of December 23, 2017 and March 25, 2017, respectively	3,572	3,522
Capital in Excess of Par Value	14,553	12,996
Accumulated Other Comprehensive Loss	(161)	(414)
Retained Earnings	30,640	27,297
Total Shareholders' Equity	48,604	43,401
Total Liabilities and Shareholders' Equity	$ 94,235	$ 92,097

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 23, 2017	Mar. 25, 2017
Statement of Financial Position [Abstract]
Accounts Receivable, allowance for doubtful accounts (in Dollars)	$ 270	$ 210
Common Stock, par value per share (in Dollars per share)	$ 0.50	$ 0.50
Common Stock, shares authorized	30,000,000	30,000,000
Common Stock, shares issued	7,144,475	7,043,754
Common Stock, shares outstanding	7,144,475	7,043,754

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Dec. 23, 2017	Dec. 24, 2016
Cash Flows from Operating Activities:
Net Income	$ 3,468	$ 3,093
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities:
Net Loss on Disposal of Property and Equipment	57	6
Deferred Income Taxes	11	121
Depreciation and Amortization	4,527	4,667
Provision for Accounts Receivable and Inventory Reserves	341	243
Stock-Based Compensation Expense	1,095	316
Changes in Assets and Liabilities:
Accounts Receivable and Other Receivables	(1,009)	(3,168)
Inventory	(612)	(3,967)
Prepaid Expenses and Other Assets	(29)	(341)
Accounts Payable	(137)	3,378
Accrued Compensation and Other Liabilities	(1,325)	(454)
Income Taxes Payable	(570)	(20)
Net Cash Used in Operating Activities	5,817	3,874
Cash Flows from Investing Activities:
Purchases of Property and Equipment, net	(5,084)	(4,104)
Proceeds from Sale of Property and Equipment	11	29
Business Acquisitions		(6,977)
Net Cash Used in Investing Activities	(5,073)	(11,052)
Cash Flows from Financing Activities:
Repayment of Revolving Credit Facility, net	(7,018)	(1,924)
Proceeds from Term Loan	7,143	10,000
Repayment of Term Loan	(1,190)	(952)
Payment of Contingent Consideration and Holdbacks Related to Business Acquisitions		(339)
Issuance of Common Stock	821	384
Repurchase of Common Stock	(344)	(98)
Stock Option Redemption	(90)	(137)
Net Cash (Used in) Provided by Financing Activities	(678)	6,934
Effect of Exchange Rate Changes on Cash	(404)	162
Net Decrease in Cash	(338)	(82)
Cash at Beginning of Period	842	641
Cash at End of Period	504	559
Cash paid during the period for:
Interest	765	488
Income Taxes, net	1,783	1,595
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Holdback Amounts Related to Business Acquisitions		$ 735

XML 18 R8.htm IDEA: XBRL DOCUMENT

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - 9 months ended Dec. 23, 2017 - USD ($) $ in Thousands	Common Stock [Member]	Capital In Excess of Par Value [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Earnings [Member]	Total
Balance at Mar. 25, 2017	$ 3,522	$ 12,996	$ (414)	$ 27,297	$ 43,401
Balance (in Shares) at Mar. 25, 2017	7,044,000				7,043,754
Issuance of Common Stock	$ 51	770			$ 821
Issuance of Common Stock (in Shares)	102
Repurchase of Common Stock	$ (14)	(205)		(125)	(344)
Repurchase of Common Stock (in Shares)	(27)
Stock-Based Compensation	$ 13	1,082			1,095
Stock-Based Compensation (in Shares)	25
Redemption of Stock Options		(90)			(90)
Other Comprehensive Loss			253		253
Net Income				3,468	3,468
Balance at Dec. 23, 2017	$ 3,572	$ 14,553	$ (161)	$ 30,640	$ 48,604
Balance (in Shares) at Dec. 23, 2017	7,144,000				7,144,475

XML 19 R9.htm IDEA: XBRL DOCUMENT

GENERAL

9 Months Ended

Dec. 23, 2017

Accounting Policies [Abstract]

GENERAL

NOTE 1 – GENERAL

	Third Quarter Ended		Nine Months Ended
	December 23,	December 24,	December 23,	December 24,
	2017	2016	2017	2016
Average Shares Outstanding – Basic	7,142	7,010	7,115	6,984
Effect of Dilutive Common Stock Equivalents	177	194	158	177
Average Shares Outstanding – Diluted	7,319	7,204	7,273	7,161
Anti-dilutive Common Stock Equivalents	-	-	-	-

XML 20 R10.htm IDEA: XBRL DOCUMENT

LONG-TERM DEBT

9 Months Ended

Dec. 23, 2017

Debt Disclosure [Abstract]

LONG-TERM DEBT

NOTE 2 – LONG-TERM DEBT

XML 21 R11.htm IDEA: XBRL DOCUMENT

STOCK-BASED COMPENSATION

9 Months Ended

Dec. 23, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

NOTE 3 – STOCK-BASED COMPENSATION

		Total	Grant Date		Estimated
		Number	Fair		Level of
Date	Measurement	of Units	Value		Achievement at
Granted	Period	Granted	Per Unit		December 23, 2017
April 2015	April 2015 - March 2018	63	$	9.59	50% of target level
April 2016	April 2016 - March 2019	84	$	10.13	115% of target level
April 2017	April 2017 – March 2020	77	$	12.90	100% of target level
June 2017	July 2017 – June 2020	3	$	12.00	Time Vested

The following table summarizes the Company’s options as of and for the first nine months of fiscal year 2018:

			Weighted		Weighted
			Average		Average
	Number		Exercise		Remaining	Aggregate
	Of		Price Per		Contractual	Intrinsic
	Shares		Share		Term (in years)	Value
Outstanding as of March 25, 2017	241		$	7.48

Granted	165			12.00
Exercised	(89	)		7.29
Forfeited	(15	)		7.36
Redeemed	(20	)		7.72
Outstanding as of December 23, 2017	282		$	10.17	5	$	1,167
Exercisable as of December 23, 2017	282		$	10.17	5	$	1,167

XML 22 R12.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION

9 Months Ended

Dec. 23, 2017

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 4 – SEGMENT INFORMATION

	Third Quarter Ended				Nine Months Ended
	December 23,		December 24,		December 23,		December 24,
	2017		2016		2017		2016
Revenue:
Service	$	18,769	$	17,455	$	55,490	$	51,577
Distribution		21,714		20,358		57,199		53,868
Total		40,483		37,813		112,689		105,445

Gross Profit:
Service		4,699		4,306		13,655		13,175
Distribution		5,002		4,609		12,891		12,013
Total		9,701		8,915		26,546		25,188

Operating Expenses:
Service (1)		3,636		3,365		10,917		10,399
Distribution (1)		3,411		3,197		10,106		9,420
Total		7,047		6,562		21,023		19,819

Operating Income:
Service		1,063		941		2,738		2,776
Distribution		1,591		1,412		2,785		2,593
Total		2,654		2,353		5,523		5,369

Unallocated Amounts:
Interest and Other Expense, net		311		188		854		547
Provision for Income Taxes		512		895		1,201		1,729
Total		823		1,083		2,055		2,276

Net Income	$	1,831	$	1,270	$	3,468	$	3,093

(1)	Operating expense allocations between segments were based on actual amounts, a percentage of revenues, headcount, and management’s estimates.

XML 23 R13.htm IDEA: XBRL DOCUMENT

BUSINESS ACQUISITIONS

9 Months Ended

Dec. 23, 2017

Business Combinations [Abstract]

BUSINESS ACQUISITIONS

NOTE 5 – BUSINESS ACQUISITIONS

		FY 2017
Goodwill		$	3,455
Intangible Assets – Customer Base			1,990
Intangible Assets – Covenant Not to Compete			100
			5,545
Plus:	Current Assets		973
	Non-Current Assets		1,652
Less:	Current Liabilities		(606	)
Total Purchase Price		$	7,564

	(Unaudited)
	Nine Months
	Ended
	December 24,
	2016
Total Revenue	$	105,595
Net Income	$	3,013
Basic Earnings Per Share	$	0.43
Diluted Earnings Per Share	$	0.42

XML 24 R14.htm IDEA: XBRL DOCUMENT

INCOME TAXES

9 Months Ended

Dec. 23, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 6 – INCOME TAXES

The reduction in the Company’s provision for income taxes due to the Act in the third quarter of fiscal year 2018 was approximately $0.3 million or $0.04 per share.

XML 25 R15.htm IDEA: XBRL DOCUMENT

GENERAL (Policies)

9 Months Ended

Dec. 23, 2017

Accounting Policies [Abstract]

Description of Business

Description of Business:Transcat, Inc. (“Transcat” or the “Company”) is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement and control instrumentation. The Company is focused on providing services and products to highly regulated industries, particularly the life science industry, which includes pharmaceutical, biotechnology, medical device and other FDA-regulated businesses. Additional industries served include industrial manufacturing; energy and utilities, including oil and gas; chemical manufacturing; FAA-regulated businesses, including aerospace and defense and other industries that require accuracy in their processes, confirmation of the capabilities of their equipment, and have a high cost of failure.

Basis of Presentation

Revenue Recognition

Fair Value of Financial Instruments

Stock-Based Compensation

Stock-Based Compensation: The Company measures the cost of services received in exchange for all equity awards granted, including stock options and restricted stock units, based on the fair market value of the award as of the grant date. The Company records compensation expense related to unvested equity awards by recognizing, on a straight-line basis, the unamortized grant date fair value over the remaining service period of each award. In 2016, FASB issued ASU 2016-09 to simplify certain aspects of the accounting for share-based payment transactions to employees. The Company elected to early adopt this ASU in the fourth quarter of fiscal year 2017. Upon adoption, excess tax benefits for share-based award activity are reflected in the statement of income as a component of the provision for income taxes. Excess tax benefits are realized benefits from tax deductions for exercised awards in excess of the deferred tax asset attributable to stock-based compensation costs for such awards. The Company did not capitalize any stock-based compensation costs as part of an asset. The Company estimates forfeiture rates based on its historical experience. During the first nine months of the fiscal year ending March 31, 2018 (“fiscal year 2018”) and fiscal year 2017, the Company recorded non-cash stock-based compensation expense of $0.9 million and $0.3 million, respectively, in the Consolidated Statements of Income.

Foreign Currency Translation and Transactions

Earnings Per Share

	Third Quarter Ended		Nine Months Ended
	December 23,	December 24,	December 23,	December 24,
	2017	2016	2017	2016
Average Shares Outstanding – Basic	7,142	7,010	7,115	6,984
Effect of Dilutive Common Stock Equivalents	177	194	158	177
Average Shares Outstanding – Diluted	7,319	7,204	7,273	7,161
Anti-dilutive Common Stock Equivalents	-	-	-	-

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements:In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, Compensation—Stock Compensation (Topic 718). This ASU provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This ASU is effective for annual reporting periods beginning after December 15, 2017 and should be applied prospectively. Early adoption of this ASU is permitted. The Company does not expect adoption of this ASU to have a material impact on its Consolidated Financial Statements.

XML 26 R16.htm IDEA: XBRL DOCUMENT

GENERAL (Tables)

9 Months Ended

Dec. 23, 2017

Accounting Policies [Abstract]

Schedule of Weighted Average Number of Shares

The average shares outstanding used to compute basic and diluted earnings per share are as follows:

	Third Quarter Ended		Nine Months Ended
	December 23,	December 24,	December 23,	December 24,
	2017	2016	2017	2016
Average Shares Outstanding – Basic	7,142	7,010	7,115	6,984
Effect of Dilutive Common Stock Equivalents	177	194	158	177
Average Shares Outstanding – Diluted	7,319	7,204	7,273	7,161
Anti-dilutive Common Stock Equivalents	-	-	-	-

XML 27 R17.htm IDEA: XBRL DOCUMENT

STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Dec. 23, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Restricted Stock Units Award Activity

The following table summarizes the non-vested performance-based restricted stock units outstanding as of December 23, 2017:

		Total	Grant Date		Estimated
		Number	Fair		Level of
Date	Measurement	of Units	Value		Achievement at
Granted	Period	Granted	Per Unit		December 23, 2017
April 2015	April 2015 - March 2018	63	$	9.59	50% of target level
April 2016	April 2016 - March 2019	84	$	10.13	115% of target level
April 2017	April 2017 – March 2020	77	$	12.90	100% of target level
June 2017	July 2017 – June 2020	3	$	12.00	Time Vested

Schedule of Stock Options Activity

The following table summarizes the Company’s options as of and for the first nine months of fiscal year 2018:

			Weighted		Weighted
			Average		Average
	Number		Exercise		Remaining	Aggregate
	Of		Price Per		Contractual	Intrinsic
	Shares		Share		Term (in years)	Value
Outstanding as of March 25, 2017	241		$	7.48

Granted	165			12.00
Exercised	(89	)		7.29
Forfeited	(15	)		7.36
Redeemed	(20	)		7.72
Outstanding as of December 23, 2017	282		$	10.17	5	$	1,167
Exercisable as of December 23, 2017	282		$	10.17	5	$	1,167

XML 28 R18.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION (Tables)

9 Months Ended

Dec. 23, 2017

Segment Reporting [Abstract]

Schedule of Segment Information

The following table presents segment information for the third quarter and first nine months of fiscal years 2018 and 2017:

	Third Quarter Ended				Nine Months Ended
	December 23,		December 24,		December 23,		December 24,
	2017		2016		2017		2016
Revenue:
Service	$	18,769	$	17,455	$	55,490	$	51,577
Distribution		21,714		20,358		57,199		53,868
Total		40,483		37,813		112,689		105,445

Gross Profit:
Service		4,699		4,306		13,655		13,175
Distribution		5,002		4,609		12,891		12,013
Total		9,701		8,915		26,546		25,188

Operating Expenses:
Service (1)		3,636		3,365		10,917		10,399
Distribution (1)		3,411		3,197		10,106		9,420
Total		7,047		6,562		21,023		19,819

Operating Income:
Service		1,063		941		2,738		2,776
Distribution		1,591		1,412		2,785		2,593
Total		2,654		2,353		5,523		5,369

Unallocated Amounts:
Interest and Other Expense, net		311		188		854		547
Provision for Income Taxes		512		895		1,201		1,729
Total		823		1,083		2,055		2,276

Net Income	$	1,831	$	1,270	$	3,468	$	3,093

(1)	Operating expense allocations between segments were based on actual amounts, a percentage of revenues, headcount, and management’s estimates.

XML 29 R19.htm IDEA: XBRL DOCUMENT

BUSINESS ACQUISITIONS (Tables)

9 Months Ended

Dec. 23, 2017

Business Combinations [Abstract]

Schedule of Purchase Price Allocation

The following is a summary of the purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of assets and liabilities acquired during the period presented:

		FY 2017
Goodwill		$	3,455
Intangible Assets – Customer Base			1,990
Intangible Assets – Covenant Not to Compete			100
			5,545
Plus:	Current Assets		973
	Non-Current Assets		1,652
Less:	Current Liabilities		(606	)
Total Purchase Price		$	7,564

Schedule of Pro Forma Information

The following unaudited pro forma information presents the Company’s results of operations as if the acquisition of Excalibur had occurred at the beginning of fiscal year 2017. The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transaction had occurred at the beginning of the period presented or what the Company’s operating results will be in future periods.

	(Unaudited)
	Nine Months
	Ended
	December 24,
	2016
Total Revenue	$	105,595
Net Income	$	3,013
Basic Earnings Per Share	$	0.43
Diluted Earnings Per Share	$	0.42

XML 30 R20.htm IDEA: XBRL DOCUMENT

GENERAL (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Dec. 23, 2017	Dec. 24, 2016	Dec. 23, 2017	Dec. 24, 2016	Mar. 25, 2017
Accounting Policies [Abstract]
Investments	$ 0.8		$ 0.8		$ 0.7
Allocated Share-based Compensation Expense			1.1	$ 0.3
Foreign Currency Transaction Gain (Loss), Realized			(0.1)	(0.1)
Foreign Currency Transaction Gain (Loss), Unrealized			(0.1)	$ 0.1
Derivative Asset, Notional Amount	$ 5.4		$ 5.4
Dilutive Securities Effect Per Share on Earnings (in Dollars per share)	$ 0.01	$ 0.00	$ 0.01	$ 0.01

XML 31 R21.htm IDEA: XBRL DOCUMENT

GENERAL (Average Shares Outstanding Used to Compute Basic and Diluted Earnings per Share) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Dec. 23, 2017	Dec. 24, 2016	Dec. 23, 2017	Dec. 24, 2016
Accounting Policies [Abstract]
Average Shares Outstanding - Basic	7,142	7,010	7,115	6,984
Effect of Dilutive Common Stock Equivalents	177	194	158	177
Average Shares Outstanding - Diluted	7,319	7,204	7,273	7,161
Anti-dilutive Common Stock Equivalents

XML 32 R22.htm IDEA: XBRL DOCUMENT

LONG-TERM DEBT (Details) $ in Thousands	9 Months Ended
LONG-TERM DEBT (Details) $ in Thousands	Dec. 23, 2017 USD ($)	Mar. 25, 2017 USD ($)
Debt Instrument [Line Items]
Current portion of loan outstanding	$ 2,143	$ 1,429
Allowable leverage ratio	3.00	2.75
Loans Payable [Member]
Debt Instrument [Line Items]
Principal amount of loan	$ 15,000
Loan outstanding	14,600
Current portion of loan outstanding	2,100
Monthly principal payments	2,000
Annual payments	20,000
Amount due in 2022	4,300
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 30,000
Debt Instrument, Interest Rate, Stated Percentage	1.60%
Maturity date	Oct. 29, 2021
Amount available	$ 30,000
Amount outstanding	$ 11,600
Revolving Credit Facility [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Interest rate for period	3.20%
Revolving Credit Facility [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Interest rate for period	3.40%
Revolving Credit Facility [Member] \| Borrowings for Business Acquisitions [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 15,000	$ 15,000
Principal amount of loan	10,000
Monthly principal payments	1,000
Annual payments	1,400
Amount due in 2022	$ 3,000

XML 33 R23.htm IDEA: XBRL DOCUMENT

STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) shares in Thousands, $ in Millions	9 Months Ended
	Dec. 23, 2017	Dec. 24, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 1.1	$ 0.3
2003 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)	1,100
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock or Unit Expense	$ 0.6	0.2
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	1.2
Allocated Share-based Compensation Expense	$ 0.1
Performance Shares [Member] \| Performance Based Restricted Stock Awards Granted In 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of Target Level Achieved	50.00%
Number of Shares Issued	25
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock or Unit Expense	$ 0.4	0.1
Allocated Share-based Compensation Expense	$ 0.0	$ 0.0
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 0.0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 0.6
Proceeds from Stock Options Exercised	$ 0.6
Employee Stock Option [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years

XML 34 R24.htm IDEA: XBRL DOCUMENT

STOCK-BASED COMPENSATION (Non-Vested Performance-Based Restricted Stock Units) (Details) - Performance Shares [Member] shares in Thousands	9 Months Ended
	Dec. 23, 2017 $ / shares shares
Performance Based Restricted Stock Awards Granted In 2015 [Member]
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items]
Total Number of Units Granted \| shares	63
Grant Date Fair Value Per Unit (in Dollars per share) \| $ / shares	$ 9.59
Estimated Level of Achievement	50.00%
Performance Based Restricted Stock Awards Granted In 2016 [Member]
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items]
Total Number of Units Granted \| shares	84
Grant Date Fair Value Per Unit (in Dollars per share) \| $ / shares	$ 10.13
Estimated Level of Achievement	115.00%
Performance Based Restricted Stock Awards Granted In 2017 [Member]
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items]
Total Number of Units Granted \| shares	77
Grant Date Fair Value Per Unit (in Dollars per share) \| $ / shares	$ 12.90
Estimated Level of Achievement	100.00%
Performance Based Restricted Stock Awards Granted In June 2017 [Member]
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items]
Total Number of Units Granted \| shares	3
Grant Date Fair Value Per Unit (in Dollars per share) \| $ / shares	$ 12.00

XML 35 R25.htm IDEA: XBRL DOCUMENT

STOCK-BASED COMPENSATION (Stock Options) (Details) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Dec. 23, 2017 USD ($) $ / shares shares
Number of Shares
Outstanding, beginning balance \| shares	241
Granted \| shares	165
Exercised \| shares	(89)
Forfeited \| shares	(15)
Redeemed \| shares	(20)
Outstanding, ending balance \| shares	282
Exercisable \| shares	282
Weighted Average Exercise Price Per Share
Outstanding, beginning balance \| $ / shares	$ 7.48
Granted \| $ / shares	12.00
Exercised \| $ / shares	7.29
Forfeited \| $ / shares	7.36
Redeemed \| $ / shares	7.72
Outstanding, ending balance \| $ / shares	10.17
Exercisable \| $ / shares	$ 10.17
Weighted Average Remaining Contractual Term (in Years)
Outstanding	5 years
Exercisable	5 years
Aggregate Intrinsic Value
Outstanding \| $	$ 1,167
Exercisable \| $	$ 1,167

XML 36 R26.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION (Details) - item	9 Months Ended
SEGMENT INFORMATION (Details) - item	Dec. 23, 2017	Dec. 24, 2016
Segment Reporting [Abstract]
Number of Reportable Segments	2	2

XML 37 R27.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Dec. 23, 2017

Dec. 24, 2016

Dec. 23, 2017

Dec. 24, 2016

Revenue:

Revenue

$ 40,483

$ 37,813

$ 112,689

$ 105,445

Gross Profit:

Gross Profit

9,701

8,915

26,546

25,188

Operating Expenses:

Operating Expenses

7,047

6,562

21,023

19,819

Operating Income:

Operating Income

2,654

2,353

5,523

5,369

Unallocated Amounts:

Interest and Other Expense, net

311

188

854

547

Provision for Income Taxes

512

895

1,201

1,729

Net Income

1,831

1,270

3,468

3,093

Service Segment [Member]

Revenue:

Revenue

18,769

17,455

55,490

51,577

Gross Profit:

Gross Profit

4,699

4,306

13,655

13,175

Operating Expenses:

Operating Expenses

^[1]

3,636

3,365

10,917

10,399

Operating Income:

Operating Income

1,063

941

2,738

2,776

Distribution [Member]

Revenue:

Revenue

21,714

20,358

57,199

53,868

Gross Profit:

Gross Profit

5,002

4,609

12,891

12,013

Operating Expenses:

Operating Expenses

^[1]

3,411

3,197

10,106

9,420

Operating Income:

Operating Income

1,591

1,412

2,785

2,593

Segment Reconciling Items [Member]

Unallocated Amounts:

Interest and Other Expense, net

311

188

854

547

Provision for Income Taxes

512

895

1,201

1,729

Unallocated Amounts

$ 823

$ 1,083

$ 2,055

$ 2,276

[1]	Operating expense allocations between segments are based on actual amounts, a percentage of revenues, headcount and management's estimates.

XML 38 R28.htm IDEA: XBRL DOCUMENT

BUSINESS ACQUISITIONS (Narrative) (Details) $ in Millions	9 Months Ended
BUSINESS ACQUISITIONS (Narrative) (Details) $ in Millions	Dec. 23, 2017 USD ($) item	Mar. 25, 2017 USD ($)
Business Acquisition [Line Items]
Business Combination, Contingent Consideration, Liability, Current	$ 0.0	$ 0.0
Other holdback amounts unpaid, current	0.0	$ 0.0
Business Combination, Acquisition Related Costs	$ 0.1
Fiscal 2017 Acquisitions [Member]
Business Acquisition [Line Items]
Number of Businesses Acquired \| item	1
Finite-Lived Intangible Asset, Useful Life	10 years
Business Combination, Consideration Transferred	$ 7.6
Cash Acquired from Acquisition	$ 0.1

XML 39 R29.htm IDEA: XBRL DOCUMENT

BUSINESS ACQUISITIONS (Purchase Price Paid for Businesses Acquired) (Details) - USD ($) $ in Thousands	Dec. 23, 2017	Mar. 25, 2017
Allocation of Purchase Price:
Goodwill	$ 32,823	$ 32,520
Fiscal 2017 Acquisitions [Member]
Allocation of Purchase Price:
Goodwill	3,455
Total	5,545
Plus: Current Assets	973
Non-Current Assets	1,652
Less: Current Liabilities	(606)
Total Purchase Price	7,564
Fiscal 2017 Acquisitions [Member] \| Customer Base [Member]
Allocation of Purchase Price:
Intangible Assets	1,990
Fiscal 2017 Acquisitions [Member] \| Covenant Not to Compete [Member]
Allocation of Purchase Price:
Intangible Assets	$ 100

XML 40 R30.htm IDEA: XBRL DOCUMENT

BUSINESS ACQUISITIONS (Proforma Information for Business Acquisitions) (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Dec. 24, 2016 USD ($) $ / shares
Business Combinations [Abstract]
Total Revenue \| $	$ 105,595
Net Income \| $	$ 3,013
Basic Earnings Per Share \| $ / shares	$ 0.43
Diluted Earnings Per Share \| $ / shares	$ 0.42

XML 41 R31.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Details) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
INCOME TAXES (Details) $ / shares in Units, $ in Thousands	Dec. 23, 2017 USD ($) $ / shares	Dec. 23, 2017 USD ($) $ / shares
Deferred tax liability	$ 200	$ 200
Additional provision for income tax expense		$ 100
Reduction in Provision for Income Taxes	$ 300
Pay any amounts owed over period		8 Years
Share price \| $ / shares	$ 0.01	$ 0.01
Minimum [Member]
Statutory U.S. federal income tax rate		35.00%
Maximum [Member]
Statutory U.S. federal income tax rate		21.00%

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