8-K

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

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 22, 2023

Transcat, Inc.

(Exact name of registrant as specified in its charter)

Ohio	000-03905	16-0874418
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

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

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

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value	TRNS	Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

Item 2.02 Results of Operations and Financial Condition.

On May 22, 2023, Transcat, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal fourth quarter and year ended March 25, 2023. The press release is attached to this Form 8-K as Exhibit 99.1.

In addition, on May 23, 2023, the Company posted slides to the Investor Relations section of its website that will accompany the Company’s earnings conference call and webcast at 11:00 a.m. Eastern Time on May 23, 2023. The slides are attached to this Form 8-K as Exhibit 99.2.

The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under such section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Transcat, Inc. Press Release dated May 22, 2023
99.2	Slides for the May 23, 2023 Earnings Conference Call and Webcast
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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 hereunto duly authorized.

		TRANSCAT, INC.
Dated: May 22, 2023	By:	/s/ James M. Jenkins
		James M. Jenkins
		General Counsel and VP of Corporate Development

EX-99.1

Exhibit 99.1

NEWS
RELEASE

Transcat, Inc. 35 Vantage Point Drive • Rochester • NY • 14624 • Phone: (585) 352-7777

IMMEDIATE RELEASE

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023

● Fourth Quarter Service revenue up 14.7%, Service organic revenue growth of 10.0%

● Fourth Quarter Service gross profit increased 17.9%, Service gross margin expanded 90 basis points

● Fourth Quarter consolidated adjusted EBITDA grew 17.6% with margins expanding 80 basis points

ROCHESTER, NY, May 22, 2023 – Transcat, Inc. (Nasdaq: TRNS) (“Transcat” or the “Company”), a leading provider of accredited calibration, repair, inspection and laboratory instrument services and value-added distributor of professional grade handheld test, measurement and control instrumentation, today reported financial results for its fourth quarter and fiscal year ended March 25, 2023 (“fiscal 2023”).  Results include the previously reported acquisitions of Upstate Metrology, Inc. ("Upstate Metrology") effective April 29, 2021, Cal OpEx Limited (d/b/a NEXA Enterprise Asset Management) (“NEXA”) effective August 31, 2021, Tangent Labs, LLC (“Tangent”) effective December 31, 2021, Charlton Jeffmont Inc., Raitz Inc. and Toolroom Calibration Inc. (d/b/a Alliance Calibration) (“Alliance”) effective May 31, 2022, e2b Calibration ("e2b"), effective September 27, 2022, and Galium Limited (d/b/a Complete Calibrations) ("Complete Calibrations"), effective September 28, 2022.

“Despite macroeconomic headwinds and uncertainty, Transcat delivered strong performance across our entire business portfolio again in Fiscal 2023. The year was highlighted by record revenue and gross margins in the Service segment as well as on a consolidated basis. We are especially pleased with our Service revenue growth of 19%, which included 10% organic Service growth” commented Lee D. Rudow, President and CEO. “Service margins benefited from our differentiated value proposition, which continued to resonate throughout our expanded addressable markets. The expansion of NEXA's suite of professional services has been well received throughout the U.S. and Ireland and for the first time, we opportunistically performed work in various parts of Europe including the Netherlands, Switzerland, and Germany. Adjusted EBITDA growth of 16% for the fiscal year is a testament to the successful execution of our automation and process improvement productivity initiatives.”

Mr. Rudow added, “In the fiscal year we completed three acquisitions, Alliance Calibration in Cincinnati, e2B Calibration in Cleveland and Complete Calibrations in Ireland that have expanded our addressable markets, widened the breadth of our service offerings, and allowed us to leverage our existing infrastructure. Our acquisition strategy continues to be a differentiator as a result of the effectiveness of our integration processes, which has resulted in all of these recent long-term strategic investments meeting or exceeding our expectations to date.”

“On a final note, our rental business once again delivered strong performance versus prior year. Since being launched seven years ago, the high margin Rental business has experienced tremendous growth that we expect to continue.”

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 2 of 14

Fourth Quarter Fiscal 2023 Review
(Results are compared with the fourth quarter of the fiscal year ended March 26, 2022 ("fiscal 2022"))

($ in thousands)							Change
	FY23 Q4			FY22 Q4			$'s		%
Service Revenue	$	39,763		$	34,667		$	5,096		14.7	%
Distribution Sales		22,304			21,213			1,091		5.1	%
Revenue	$	62,067		$	55,880		$	6,187		11.1	%
Gross Profit	$	19,150		$	16,672		$	2,478		14.9	%
Gross Margin		30.9	%		29.8	%
Operating Income	$	5,855		$	4,515		$	1,340		29.7	%
Operating Margin		9.4	%		8.1	%
Net Income	$	3,658		$	3,048		$	610		20.0	%
Net Margin		5.9	%		5.5	%
Adjusted EBITDA*	$	8,998		$	7,652		$	1,346		17.6	%
Adjusted EBITDA* Margin		14.5	%		13.7	%
Diluted EPS	$	0.48		$	0.40		$	0.08		20.0	%
Adjusted Diluted EPS*	$	0.60		$	0.54		$	0.06		11.1	%

*See Note 1 on page 5 for a description of these non-GAAP financial measures and pages 10, 11 and 12 for the reconciliation tables.

Consolidated revenue was $62.1 million, an increase of 11.1%. Consolidated gross profit was $19.2 million, an increase of $2.5 million, or 14.9%, while gross margin expanded 110 basis points due to margin improvements in both operating segments. Operating expenses were $13.3 million, an increase of $1.1 million, or 9.4%, driven by incremental expenses from acquired businesses (including stock-based compensation expense), increased intangibles amortization expense, and higher incentive-based employee costs due to higher sales. Adjusted EBITDA was $9.0 million which represented an increase of $1.3 million or 17.6%. Net income per diluted share of $0.48 was up from $0.40 and adjusted diluted earnings per share increased to $0.60 versus $0.54 last year.

Service segment delivers record fourth quarter results

Represents the accredited calibration, repair, inspection and laboratory instrument services business (64.1% of total revenue for the fourth quarter of fiscal 2023).

($ in thousand)							Change
	FY23 Q4			FY22 Q4			$'s		%
Service Segment Revenue	$	39,763		$	34,667		$	5,096		14.7	%
Gross Profit	$	13,523		$	11,474		$	2,049		17.9	%
Gross Margin		34.0	%		33.1	%
Operating Income	$	4,547		$	3,532		$	1,015		28.7	%
Operating Margin		11.4	%		10.2	%
Adjusted EBITDA*	$	7,039		$	6,028		$	1,011		16.8	%
Adjusted EBITDA* Margin		17.7	%		17.4	%

*See Note 1 on page 5 for a description of this non-GAAP financial measure and pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 3 of 14

Service segment revenue was $39.8 million, an increase of $5.1 million or 14.7% and included $1.6 million of incremental revenue from acquisitions.  Organic revenue growth was 10.0% and was driven by strong end market demand and continued market share gains. The segment gross margin increased 90 basis points from prior year primarily due to continued productivity improvements offset by increased start-up costs from new client-based lab implementations.

Distribution segment shows continued margin improvement

Represents the sale and rental of new and used professional grade handheld test, measurement and control instrumentation (35.9% of total revenue for the fourth quarter of fiscal 2023).

($ in thousands)							Change
	FY23 Q4			FY22 Q4			$'s		%
Distribution Segment Sales	$	22,304		$	21,213		$	1,091		5.1	%
Gross Profit	$	5,627		$	5,198		$	429		8.3	%
Gross Margin		25.2	%		24.5	%
Operating Income	$	1,308		$	983		$	325		33.1	%
Operating Margin		5.9	%		4.6	%
Adjusted EBITDA*	$	1,959		$	1,624		$	335		20.6	%
Adjusted EBITDA* Margin		8.8	%		7.7	%

*See Note 1 on page 5 for a description of this non-GAAP financial measure and pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

Distribution sales were $22.3 million, an increase of 5.1% on improved end market demand and strength in our Rentals business.  Distribution segment gross margin was 25.2%, an increase of 70 basis points due to a favorable sales mix driven by strength in the Rentals business.

Full-Year Fiscal 2023 Review
(Results are compared with full-year fiscal 2022)

($ in thousands)							Change
	FY 2023			FY 2022			$'s			%
Service Revenue	$	144,883		$	122,005		$	22,878			18.8	%
Distribution Sales		85,686			82,954			2,732			3.3	%
Revenue	$	230,569		$	204,959		$	25,610			12.5	%
Gross Profit	$	68,355		$	58,439		$	9,916			17.0	%
Gross Margin		29.6	%		28.5	%
Operating Income	$	16,248		$	14,143		$	2,105			14.9	%
Operating Margin		7.0	%		6.9	%
Net Income	$	10,688		$	11,380		$	(692	)		(6.1	)%
Net Margin		4.6	%		5.6	%
Adjusted EBITDA*	$	30,421		$	26,307		$	4,114			15.6	%
Adjusted EBITDA* Margin		13.2	%		12.8	%
Diluted EPS	$	1.40		$	1.50		$	(0.10	)		(6.7	)%
Adjusted Diluted EPS*	$	1.93		$	2.03		$	(0.10	)		(4.9	)%

*See Note 1 on page 5 for a description of these non-GAAP financial measures and pages 10, 11 and 12 for the reconciliation tables.

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 4 of 14

Total revenue was $230.6 million, an increase of $25.6 million or 12.5%.  Consolidated gross profit was $68.4 million, up $9.9 million, or 17.0%, and gross margin expanded to 29.6% or 110 basis points.  Consolidated operating expenses were $52.1 million, an increase of $7.8 million, or 17.6%, driven by incremental expenses from acquired businesses (including stock-based compensation expense), increased intangibles amortization expense, and investments in technology and our employee base to support future growth. As a result, consolidated operating income was $16.2 million compared with $14.1 million in last fiscal year’s period, an increase of 14.9%.

Adjusted EBITDA was $30.4 million which represented an increase of $4.1 million or 15.6%. Net income per diluted share decreased to $1.40 from $1.50 and adjusted diluted earnings per share was $1.93 versus $2.03 last year. The effective tax rate was 20.8% compared to 13.7% in the prior year, which benefited significantly from share-based payments and stock option activity. The increase in the tax rate had an unfavorable impact of $0.12 per diluted earnings per share and adjusted diluted earnings per share when compared to the prior year.

Balance Sheet and Cash Flow Overview

At March 25, 2023, the Company had $37.3 million available for borrowing under its secured revolving credit facility.  Total debt of $49.1 million was up $0.7 million from fiscal 2022 year-end due to the acquisitions of Alliance, Complete Calibrations, e2b and Elite during the current fiscal year.  The Company’s leverage ratio, as defined in the credit agreement, was 1.60 at March 25, 2023, compared with 1.74 at March 26, 2022.

Outlook

Mr. Rudow concluded, “We are proud of our dedicated team, which has consistently delivered exceptional results through various economic cycles as can be seen over the past 10 plus years of profitable growth. As we think ahead into fiscal 2024, despite macroeconomic uncertainty that looms over the business world, we expect another year of growth and margin expansion across our Service channels. Our business continues to benefit from a predominately life science-oriented market, driven by high levels of regulation and recurring revenue streams, along with a growing Rentals business that tends to perform well throughout various economic cycles including more challenged economic environments. In the year ahead, we expect organic Service revenue growth in the high single-digits and gross margin improvement to continue. We are investing in our high-growth NEXA business as well as new client-based labs, which will support additional organic revenue growth and margin expansion in the second half of the year but will temporarily weigh on year-over-year gross margin expansion in the first quarter of FY24.

Accretive acquisitions that strengthen our fundamental value proposition will be a key component of our go-forward strategy. Our robust and diverse acquisition pipeline enables opportunities for Transcat to expand addressable markets and increase our capabilities like we did with NEXA and the pipettes business.

Transcat has generated consistent margin improvement over the past several years and we believe the improvement will continue. Automation of our calibration processes and overall process improvement will be key enablers to future margin expansion. We anticipate demonstrating more selling, general and administrative expense leverage in the second half of fiscal 2024. We believe the Service segment has substantial runway ahead for growth, both organically and through acquisition. We have a long history of generating sustainable value for our shareholders and providing a dynamic, rewarding workplace for our team.”

Transcat expects its income tax rate to range between 21% and 23% in fiscal 2024. This estimate includes Federal, various state, Canadian and Irish income taxes and reflects the discrete tax accounting associated with share-based payment awards.  Although the tax rate is consistent with recent years, there will be a difference in calendarization of the tax benefit from vesting of share-based payments in fiscal 2024.   These benefits are normally realized in the fiscal first quarter, but in fiscal 2024, we will see the benefit in quarter two, due to a timing difference of when the awards were made.  In the first quarter of fiscal 2023, this benefit positively impacted the tax rate by approximately 13% and we would expect a similar impact in second quarter of fiscal 2024.

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 5 of 14

Webcast and Conference Call

Transcat will host a conference call and webcast on Tuesday, May 23, 2023 at 11:00 a.m. ET.  Management will review the financial and operating results for the fourth quarter and full fiscal year, as well as the Company’s strategy and outlook. A question and answer session will follow the formal discussion. The review will be accompanied by a slide presentation, which will be available at www.transcat.com/investor-relations. The conference call can be accessed by calling (201) 689-8471. Alternatively, the webcast can be monitored at www.transcat.com/investor-relations.

A telephonic replay will be available from 2:00 p.m. ET on the day of the call through Tuesday, May 30, 2023. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13738813, access the webcast replay at www.transcat.com/investor-relations, where a transcript will be posted once available.

NOTE 1 – Non-GAAP Financial Measures

In addition to reporting net income, a U.S. generally accepted accounting principle (“GAAP”) measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, non-cash stock compensation expense, acquisition related transaction expenses, non-cash loss on sale of building and restructuring expense), which is a non-GAAP measure.  The Company’s management believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the performance of its core operations from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, stock-based compensation expense and other items, which is not always commensurate with the reporting period in which it is included.  As such, the Company uses Adjusted EBITDA as a measure of performance when evaluating its business segments and as a basis for planning and forecasting. Adjusted EBITDA is not a measure of financial performance under GAAP and is not calculated through the application of GAAP. As such, it should not be considered as a substitute for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure.  Adjusted EBITDA, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.  See pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

In addition to reporting Diluted Earnings Per Share, a GAAP measure, we present Adjusted Diluted Earnings Per Share (net income plus acquisition related amortization expense, acquisition related transaction expenses, acquisition related stock-based compensation, acquisition amortization of backlog and restructuring expense), which is a non-GAAP measure.  Our management believes Adjusted Diluted Earnings Per Share is an important measure of our operating performance because it provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance. Adjusted Diluted Earnings Per Share 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 Diluted Earnings Per Share and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure.  Adjusted Diluted Earnings Per Share, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.  See page 12 for the Adjusted Diluted EPS Reconciliation table.

ABOUT TRANSCAT

Transcat, Inc. is a leading provider of accredited calibration, reliability, maintenance optimization, quality and compliance, validation, Computerized Maintenance Management System (CMMS), and pipette services. The Company is focused on providing best-in-class services and products to highly regulated industries, particularly the Life Science industry, which includes pharmaceutical, biotechnology, medical device, and other FDA-regulated businesses, as well as aerospace and defense, and energy and utilities. Transcat provides periodic on-site services, mobile calibration services, pickup and delivery, in-house services at its 27 Calibration Service Centers strategically located across the United States, Puerto Rico, Canada, and Ireland. In addition, Transcat operates calibration labs in 21 imbedded customer-site locations. The breadth and depth of measurement parameters addressed by Transcat’s ISO/IEC 17025 scopes of accreditation are believed to be the best in the industry.

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023

May 22, 2023
Page 6 of 14

Transcat also operates as a leading value-added distributor that markets, sells and rents new and used national and proprietary brand instruments to customers primarily in North America. The Company believes its combined Service and Distribution segment offerings, experience, technical expertise, and integrity create a unique and compelling value proposition for its customers.

Transcat’s strategy is to leverage its strong brand and unique value proposition that includes its comprehensive instrument service capabilities, enterprise asset management, and leading distribution platform to drive organic sales growth. The Company will also look to expand its addressable calibration market through acquisitions and capability investments to further realize the inherent leverage of its business model. More information about Transcat can be found at: Transcat.com.

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are not statements of historical fact and thus are subject to risks, uncertainties and assumptions.  Forward-looking statements are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “could,” “plans,” “aims” and other similar words.  All statements addressing operating performance, events or developments that Transcat expects or anticipates will occur in the future, including but not limited to statements relating to anticipated revenue, profit margins, the commercialization of software projects, sales operations, capital expenditures, cash flows, operating income, growth strategy, segment growth, potential acquisitions, integration of acquired businesses, market position, customer preferences, outlook and changes in market conditions in the industries in which Transcat operates are forward-looking statements.  Forward-looking statements should be evaluated in light of important risk factors and uncertainties.  These risk factors and uncertainties include those more fully described in Transcat’s Annual Report and Quarterly Reports filed with the Securities and Exchange Commission, including under the heading entitled “Risk Factors.”  Should one or more of these risks or uncertainties materialize or should any of the Company’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated.  In addition, undue reliance should not be placed on the Company’s forward-looking statements, which speak only as of the date they are made.  Except as required by law, the Company disclaims any obligation to update, correct or publicly announce any revisions to any of the forward-looking statements contained in this news release, whether as the result of new information, future events or otherwise.

For more information contact:

Tom Barbato
Phone: (585) 505-6530
Email: Thomas.Barbato@transcat.com

FINANCIAL TABLES FOLLOW.

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 7 of 14

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

	(Unaudited)				(Unaudited)
	Fourth Quarter Ended				Fiscal Year Ended
	March 25,		March 26,		March 25,		March 26,
	2023		2022		2023		2022
Service Revenue	$	39,763	$	34,667	$	144,883	$	122,005
Distribution Sales		22,304		21,213		85,686		82,954
Total Revenue		62,067		55,880		230,569		204,959
Cost of Service Revenue		26,240		23,193		98,245		83,084
Cost of Distribution Sales		16,677		16,015		63,969		63,436
Total Cost of Revenue		42,917		39,208		162,214		146,520
Gross Profit		19,150		16,672		68,355		58,439
Selling, Marketing and Warehouse Expenses		6,446		5,627		24,761		20,649
General and Administrative Expenses		6,849		6,530		27,346		23,647
Total Operating Expenses		13,295		12,157		52,107		44,296
Operating Income		5,855		4,515		16,248		14,143
Interest and Other Expense, net		1,029		372		2,761		953
Income Before Income Taxes		4,826		4,143		13,487		13,190
Provision for Income Taxes		1,168		1,095		2,799		1,810
Net Income	$	3,658	$	3,048	$	10,688	$	11,380
Basic Earnings Per Share	$	0.48	$	0.41	$	1.42	$	1.52
Average Shares Outstanding		7,562		7,523		7,551		7,496
Diluted Earnings Per Share	$	0.48	$	0.40	$	1.40	$	1.50
Average Shares Outstanding		7,688		7,636		7,645		7,589

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 8 of 14

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

	(Unaudited)			(Audited)
	March 25,			March 26,
	2023			2022
ASSETS
Current Assets:
Cash	$	1,531		$	1,396
Accounts Receivable, less allowance for doubtful accounts of $457 and $460 as of March 25, 2023 and March 26, 2022, respectively		44,698			39,737
Other Receivables		506			558
Inventory, net		16,929			12,712
Prepaid Expenses and Other Current Assets		3,935			5,301
Total Current Assets		67,599			59,704
Property and Equipment, net		29,064			26,439
Goodwill		69,360			65,074
Intangible Assets, net		13,799			14,692
Right To Use Assets, net		14,876			11,026
Other Assets		1,051			827
Total Assets	$	195,749		$	177,762
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable	$	15,869		$	14,171
Accrued Compensation and Other Current Liabilities		10,201			11,378
Current Portion of Long-Term Debt		2,248			2,161
Total Current Liabilities		28,318			27,710
Long-Term Debt		46,869			46,291
Deferred Tax Liabilities, net		6,538			6,724
Lease Liabilities		12,960			9,194
Other Liabilities		1,434			1,667
Total Liabilities		96,119			91,586
Shareholders' Equity:
Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 7,562,604 and 7,529,078 shares issued and outstanding as of March 25, 2023 and March 26, 2022, respectively		3,781			3,765
Capital in Excess of Par Value		27,886			23,900
Accumulated Other Comprehensive Loss		(1,200	)		(233	)
Retained Earnings		69,163			58,744
Total Shareholders' Equity		99,630			86,176
Total Liabilities and Shareholders' Equity	$	195,749		$	177,762

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 9 of 14

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

	(Unaudited)
	Fiscal Year Ended
	March 25,			March 26,
	2023			2022
Cash Flows from Operating Activities:
Net Income	$	10,688		$	11,380
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Net Loss on Disposal of Property and Equipment		88			88
Deferred Income Taxes		(186	)		559
Depreciation and Amortization		10,955			9,567
Provision for Accounts Receivable and Inventory Reserves		74			34
Stock-Based Compensation Expense		3,377			2,329
Changes in Assets and Liabilities, net of acquisitions:
Accounts Receivable and Other Receivables		(5,226	)		(3,392	)
Inventory		(3,377	)		(122	)
Prepaid Expenses and Other Current Assets		1,119			(2,960	)
Accounts Payable		1,600			1,901
Accrued Compensation and Other Current Liabilities		(2,161	)		(1,113	)
Income Taxes Payable		-			(653	)
Net Cash Provided by Operating Activities		16,951			17,618
Cash Flows from Investing Activities:
Purchases of Property and Equipment		(9,414	)		(10,152	)
Proceeds from Sale of Property and Equipment		10			109
Business Acquisitions, net of cash acquired		(9,109	)		(29,808	)
Net Cash Used in Investing Activities		(18,513	)		(39,851	)
Cash Flows from Financing Activities:
Proceeds from Revolving Credit Facility, net		2,786			31,005
Repayments of Term Loan		(2,121	)		(2,114	)
Issuance of Common Stock		658			1,486
Repurchase of Common Stock		(447	)		(6,683	)
Net Cash Provided by Financing Activities		876			23,694
Effect of Exchange Rate Changes on Cash		821			(625	)
Net Increase in Cash		135			836
Cash at Beginning of Period		1,396			560
Cash at End of Period	$	1,531		$	1,396

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 10 of 14

TRANSCAT, INC.
Adjusted EBITDA Reconciliation Table
(In thousands)
(Unaudited)

	Fiscal 2023
	Q1			Q2			Q3			Q4			YTD
Net Income	$	3,072		$	2,357		$	1,601		$	3,658		$	10,688
+ Interest Expense		360			550			726			781			2,417
+ Other Expense / (Income)		(204	)		(13	)		313			248			344
+ Tax Provision		376			732			523			1,168			2,799
Operating Income	$	3,604		$	3,626		$	3,163		$	5,855		$	16,248
+ Depreciation & Amortization		2,641			2,778			2,824			2,712			10,955
+ Transaction Expense		30			-			96			59			185
+ Other (Expense) / Income		204			13			(313	)		(248	)		(344	)
+ Noncash Stock Compensation		828			1,114			815			620			3,377
Adjusted EBITDA	$	7,307		$	7,531		$	6,585		$	8,998		$	30,421
Segment Breakdown
Service Operating Income	$	2,532		$	2,507		$	1,836		$	4,547		$	11,422
+ Depreciation & Amortization		2,139			2,246			2,268			2,147			8,800
+ Transaction Expense		30			-			96			59			185
+ Other (Expense) / Income		134			3			(214	)		(170	)		(247	)
+ Noncash Stock Compensation		638			793			576			456			2,463
Service Adjusted EBITDA	$	5,473		$	5,549		$	4,562		$	7,039		$	22,623
Distribution Operating Income	$	1,072		$	1,119		$	1,327		$	1,308		$	4,826
+ Depreciation & Amortization		502			532			556			565			2,155
+ Other (Expense) / Income		70			10			(99	)		(78	)		(97	)
+ Noncash Stock Compensation		190			321			239			164			914
Distribution Adjusted EBITDA	$	1,834		$	1,982		$	2,023		$	1,959		$	7,798

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 11 of 14

TRANSCAT, INC.
Adjusted EBITDA Reconciliation Table
(In thousands)
(Unaudited)

	Fiscal 2022
	Q1			Q2			Q3			Q4			YTD
Net Income	$	3,688		$	3,015		$	1,629		$	3,048		$	11,380
+ Interest Expense		189			169			194			258			810
+ Other Expense / (Income)		6			81			(58	)		114			143
+ Tax Provision		(194	)		313			596			1,095			1,810
Operating Income	$	3,689		$	3,578		$	2,361		$	4,515		$	14,143
+ Depreciation & Amortization		1,990			2,141			2,368			2,578			9,077
+ Transaction Expense		-			821			55			26			902
+ Other (Expense) / Income		(6	)		(81	)		58			(114	)		(143	)
+ Noncash Stock Compensation		437			620			624			647			2,328
Adjusted EBITDA	$	6,110		$	7,079		$	5,466		$	7,652		$	26,307
Segment Breakdown
Service Operating Income	$	2,974		$	2,647		$	1,661		$	3,532		$	10,814
+ Depreciation & Amortization		1,488			1,634			1,861			2,070			7,053
+ Transaction Expense		-			821			55			26			902
+ Other (Expense) / Income		(2	)		(56	)		36			(82	)		(104	)
+ Noncash Stock Compensation		261			414			475			482			1,632
Service Adjusted EBITDA	$	4,721		$	5,460		$	4,088		$	6,028		$	20,297
Distribution Operating Income	$	715		$	931		$	700		$	983		$	3,329
+ Depreciation & Amortization		502			507			507			508			2,024
+ Other (Expense) / Income		(4	)		(25	)		22			(32	)		(39	)
+ Noncash Stock Compensation		176			206			149			165			696
Distribution Adjusted EBITDA	$	1,389		$	1,619		$	1,378		$	1,624		$	6,010

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 12 of 14

TRANSCAT, INC.
Adjusted Diluted EPS Reconciliation Table
(In Thousands, Except Per Share Amounts)
(Unaudited)

	Fiscal 2023
	Q1			Q2			Q3			Q4			YTD
Net Income	$	3,072		$	2,357		$	1,601		$	3,658		$	10,688
+ Amortization of Intangible Assets		1,084			1,147			1,180			1,043			4,454
+ Acquisition Amortization of Backlog		-			-			-			-			-
+ Acquisition Deal Costs		299			239			254			226			1,018
+ Income Tax Effect at 25%		(346	)		(346	)		(359	)		(317	)		(1,368	)
Adjusted Net Income	$	4,109		$	3,397		$	2,676		$	4,610		$	14,792
Average Diluted Shares Outstanding		7,629			7,646			7,666			7,688			7,645
Diluted Earnings Per Share	$	0.40		$	0.31		$	0.21		$	0.48		$	1.40
Adjusted Diluted Earnings Per Share	$	0.54		$	0.44		$	0.35		$	0.60		$	1.93
	Fiscal 2022
	Q1			Q2			Q3			Q4			YTD
Net Income	$	3,688		$	3,015		$	1,629		$	3,048		$	11,380
+ Amortization of Intangible Assets		620			729			947			1,098			3,394
+ Acquisition Amortization of Backlog		-			100			300			90			490
+ Acquisition Deal Costs		-			900			293			265			1,458
+ Income Tax Effect at 25%		(155	)		(432	)		(385	)		(363	)		(1,335	)
Adjusted Net Income	$	4,153		$	4,312		$	2,784		$	4,138		$	15,387
Average Diluted Shares Outstanding		7,593			7,595			7,653			7,636			7,589
Diluted Earnings Per Share	$	0.49		$	0.40		$	0.21		$	0.40		$	1.50
Adjusted Diluted Earnings Per Share	$	0.55		$	0.57		$	0.36		$	0.54		$	2.03

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 13 of 14

TRANSCAT, INC.
Additional Information - Business Segment Data
(Dollars in thousands)
(Unaudited)

							Change
SERVICE	FY 2023 Q4			FY 2022 Q4			$'s		%
Service Revenue	$	39,763		$	34,667		$	5,096		14.7	%
Cost of Revenue		26,240			23,193			3,047		13.1	%
Gross Profit	$	13,523		$	11,474		$	2,049		17.9	%
Gross Margin		34.0	%		33.1	%
Selling, Marketing & Warehouse Expenses	$	4,121		$	3,490		$	631		18.1	%
General and Administrative Expenses		4,855			4,452			403		9.1	%
Operating Income	$	4,547		$	3,532		$	1,015		28.7	%
% of Revenue		11.4	%		10.2	%

							Change
DISTRIBUTION	FY 2023 Q4			FY 2022 Q4			$'s			%
Distribution Sales	$	22,304		$	21,213		$	1,091			5.1	%
Cost of Sales		16,677			16,015			662			4.1	%
Gross Profit	$	5,627		$	5,198		$	429			8.3	%
Gross Margin		25.2	%		24.5	%
Selling, Marketing & Warehouse Expenses	$	2,325		$	2,137		$	188			8.8	%
General and Administrative Expenses		1,994			2,078			(84	)		(4.0	)%
Operating Income	$	1,308		$	983		$	325			33.1	%
% of Sales		5.9	%		4.6	%

							Change
TOTAL	FY 2023 Q4			FY 2022 Q4			$'s		%
Total Revenue	$	62,067		$	55,880		$	6,187		11.1	%
Total Cost of Revenue		42,917			39,208			3,709		9.5	%
Gross Profit	$	19,150		$	16,672		$	2,478		14.9	%
Gross Margin		30.9	%		29.8	%
Selling, Marketing & Warehouse Expenses	$	6,446		$	5,627		$	819		14.6	%
General and Administrative Expenses		6,849			6,530			319		4.9	%
Operating Income	$	5,855		$	4,515		$	1,340		29.7	%
% of Revenue		9.4	%		8.1	%

Transcat Reports Record Revenue and Gross Margins for Fourth Quarter and Full Year 2023
May 22, 2023
Page 14 of 14

TRANSCAT, INC.
Additional Information - Business Segment Data
(Dollars in thousands)
(Unaudited)

							Change
	FY 2023			FY 2022
SERVICE	YTD			YTD			$'s		%
Service Revenue	$	144,883		$	122,005		$	22,878		18.8	%
Cost of Revenue		98,245			83,084			15,161		18.2	%
Gross Profit	$	46,638		$	38,921		$	7,717		19.8	%
Gross Margin		32.2	%		31.9	%
Selling, Marketing & Warehouse Expenses	$	15,725		$	12,047		$	3,678		30.5	%
General and Administrative Expenses		19,491			16,060			3,431		21.4	%
Operating Income	$	11,422		$	10,814		$	608		5.6	%
% of Revenue		7.9	%		8.9	%

							Change
	FY 2023			FY 2022
DISTRIBUTION	YTD			YTD			$'s		%
Distribution Sales	$	85,686		$	82,954		$	2,732		3.3	%
Cost of Sales		63,969			63,436			533		0.8	%
Gross Profit	$	21,717		$	19,518		$	2,199		11.3	%
Gross Margin		25.3	%		23.5	%
Selling, Marketing & Warehouse Expenses	$	9,036		$	8,602		$	434		5.0	%
General and Administrative Expenses		7,855			7,587			268		3.5	%
Operating Income	$	4,826		$	3,329		$	1,497		45.0	%
% of Sales		5.6	%		4.0	%

							Change
	FY 2023			FY 2022
TOTAL	YTD			YTD			$'s		%
Total Revenue	$	230,569		$	204,959		$	25,610		12.5	%
Total Cost of Revenue		162,214			146,520			15,694		10.7	%
Gross Profit	$	68,355		$	58,439		$	9,916		17.0	%
Gross Margin		29.6	%		28.5	%
Selling, Marketing & Warehouse Expenses	$	24,761		$	20,649		$	4,112		19.9	%
General and Administrative Expenses		27,346			23,647			3,699		15.6	%
Operating Income	$	16,248		$	14,143		$	2,105		14.9	%
% of Revenue		7.0	%		6.9	%

EX-99.2

Exhibit 99.2

XML

Document And Entity Information	May 22, 2023
Document Information [Line Items]
Entity, Registrant Name	Transcat, Inc.
Document, Type	8-K
Document, Period End Date	May 22, 2023
Entity, Incorporation, State or Country Code	OH
Entity, File Number	000-03905
Entity, Tax Identification Number	16-0874418
Entity, Address, Address Line One	35 Vantage Point Drive
Entity, Address, City or Town	Rochester
Entity, Address, State or Province	NY
Entity, Address, Postal Zip Code	14624
City Area Code	585
Local Phone Number	352-7777
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	TRNS
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000099302