Transcat, Inc. · NASDAQ:TRNS
Transcat — Q2 FY2022 Earnings Presentation
16 slides from Transcat's earnings presentation, Nov 2, 2021
Slide 1: Q2 Financial Results Fiscal 2022
Q2 Financial Results Fiscal 2022 Lee D. Rudow President and CEO Mark A. Doheny Chief Financial Officer 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation 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 state
Slide 3: Q2 FY22 Summary
Q2 FY22 Summary Revenue up 21.1% to second quarter record $50.4M Consolidated Gross margin expanded 140 basis points to 29.0% Results Adjusted EBITDA increased 36% from prior year to $7.1 million Net income of $3.0M or $0.40 per diluted share 14.0% organic revenue growth; total revenue up 20.3% Serv
Slide 4: Revenue
Revenue ($ in millions) Q2 Consolidated Q2 Service Segment $50.4 $29.5 $41.6 +20% +21% $24.6 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 Distribution Segment Consolidated revenue up 21.1% with broad-based strength across both operating segments $20.8 $17.1 +22% Service organic growth remained strong at 14.0%
Slide 5: Gross Profit and Margin
Gross Profit and Margin ($ in millions) Q2 Consolidated Q2 Service Segment $9.7 $14.6 $11.5 $7.9 +27% 32.2% 32.9% 27.6% 29.0% Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 Distribution Segment Consolidated gross margin expanded 140 basis points Service gross margin of 32.9% expanded 70 basis points $4.9 largel
Slide 6: Operating Income
Operating Income ($ in millions) Q2 Consolidated Q2 Service Segment $3.6 $3.0 $3.1 +16% $2.6 12.1% 9.0% 7.4% 7.1% Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 Distribution Segment Consolidated operating income of $3.6 million, up 16% from prior year Consolidated and Service operating income impacted by $0.8 m
Slide 7: Net Income & Diluted EPS
Net Income & Diluted EPS ($ in millions, except EPS) Net Income Diluted EPS $3.0 +49% $2.0 $0.40 $0.27 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 FY22 included discrete tax benefits due to tax accounting associated with stock option activity Now expect full fiscal 2022 tax rate to range between 14% and 15%*
Slide 8: Adjusted EBITDA and Margin
Adjusted EBITDA* and Margin ($ in millions) Q2 Consolidated Q2 Service Segment $7.1 $5.2 +36% $5.5 $4.5 12.6% 14.0% 18.2% 18.5% Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 Distribution Segment Consolidated adjusted EBITDA of $7.1M up 36% Service segment adjusted EBITDA margin expanded 30 basis points to 18.5
Slide 9: Operating Free Cash Flow
Operating Free Cash Flow ($ in millions) Six Months Ended Note: Components may not add to totals due to rounding Sep 25, Sep 26, 2021 2020 Cash flow in line with expectations on Net cash provided by operations $7.5 $12.5 working capital increase to support growth Capital expenditures focused on tech
Slide 10: Balance Sheet Supports Growth Strategy
Balance Sheet Supports Growth Strategy ($ in millions) CAPITALIZATION Note: Components may not add to totals due to rounding Sep 25, March 27, 2021 2021 Cash and cash equivalents $ 2.6 $ 0.6 1.54x leverage ratio at quarter-end Total debt 43.0 19.5 (Total debt to TTM Adjusted EBITDA*) Total net debt
Slide 11: NEXA Enterprise Asset Management
NEXA Enterprise Asset Management • NEXA Enterprise Asset Management acquired on August 31, 2021 • One-time transaction costs of $0.8 million included in FY22 Q2 operating expenses • Acquisition purchase accounting impact in first 12 months of ownership (Year 1) include $1.6M of intangibles amortizat
Slide 12: Outlook
Outlook* Q3 FY 2022 Service segment: expect revenue growth to be similar to the second quarter of FY22, with roughly half of the growth to come organically and the other half coming from acquisition. We expect gross margin to expand over the prior year third quarter, similar to the level of year- ov
Slide 13: Conference Call and Webcast Playback
Conference Call and Webcast Playback • Replay Number: 412-317-6671 passcode: 13724485 Telephone replay available through Wednesday, November 10, 2021 • Webcast / Presentation / Replay available at www.transcat.com/investor-relations • Transcript, when available, at www.transcat.com/investor-relation
Slide 14: Supplemental Information
Supplemental Information 14
Slide 15: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Q1 FY 2022 Q2 Net Income $ 4,522 $ 5,922 $ 7,145 $ 8,067 $ 7,791 $ 3,688 $ 3,015 +Interest Expense 719 1,018 903 934 850 189 169 +Other (Expense) / Income 51 60 91 186 241 6 81 +Tax Provision 2,642 2,026
Slide 16: Segment Adjusted EBITDA Reconciliation
Segment Adjusted EBITDA Reconciliation ($ in thousands) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Q1 FY 2022 Q2 Service Operating Income $ 4,769 $ 5,158 $ 5,202 $ 5,672 $ 10,441 $ 2,974 $ 2,647 +Depreciation & Amortization 4,660 4,397 4,754 4,929 5,597 1,488 1,634 +Restructuring Expense - - -