Transcat, Inc. · NASDAQ:TRNS
Transcat — Stifel Cross Sector Insight Conference 2020
32 slides from Transcat's conference presentation, Jun 8, 2020
Slide 1: Stifel Cross Sector Insight Conference
wonso” | Stifel Cross Sector Insight Conference Lee D. Rudow President and CEO Michael J. Tschiderer Chief Financial Officer
Slide 2: Safe Harbor Statement
TRANSCAT ‘tustin every Measure 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 ass
Slide 3: Leader in Calibration & Laboratory Instrument Service Market
Nasdaq: TRNS TRANSCAT rst very neasre _ Aeader in the Calibration & Laboratory Instrument Service Market and Value-Added Distributor of Test, Measurement & Control Instrumentation Service segment is our primary growth engine Leverage technology to increase productivity Long-term operating earnings e
Slide 4: Decisive Action to COVID-19 Pandemic
TRANSCAT stin evry noasure Decisive Action to COVID-19 Pandemic Health & Safety * Established cross-functional COVID-19 response team * Standardized practices, enhanced safety and hygiene processes * Restricting travel, implemented social distancing and remote working Cost Containment * Leveraging n
Slide 5: Two Complementary Segments
Two Complementary Segments Service - Solid organic growth with a focus on Life Science - Recurring revenue stream - Driven by regulation and the high cost of failure - Strong operating leverage Distribution - New test equipment - Rentals and used equipment - Leads for Service segment - Strong cash g
Slide 6: Flexible Service Value Proposition Locations to Serve Customers
Flexible Service Value Proposition 22 Locations to Serve Customers in the U.S., Canada and Puerto Ri ate Flexible Service wa a Delivery Options: ¥ Client-based lab Prenint Y Periodic on-site y¥ Mobile rewane @ 7 Inhowse Boe fod Pickup & Delivery ° aed crane tos Anges @ sanciego® haenie ‘Map Legend t
Slide 7: Client-Based Laboratories Locations Serving Customer Tailored Needs
TRANSCAT ‘tno nese Client-Based Laboratories (“CBL”) 20 Locations Serving Customer Tailored Needs, Full Time At 7 fies Oar. ae metic vevce @ @ Prams nae . ) ‘Aerospace & Defense. alae OY Serer (eres es Map Legend Medial Device @ Transcat Headquarters q © Transcat Client-Based Lab (CBL) @ veticat.8%c
Slide 8: Broad and Diverse Blue Chip Customer Base
TRANSCAT stin evry noasure Broad and Diverse Blue Chip Customer Base Percentage of Service Revenue* 6% 7% 11% 13% 16% 4% 43% Chemical/Process Energy/Utilities Aerospace/Defense Services Industrial Other Life Science / FDA-regulated MERCK Goier> EERTB LECONMED ofohnondfotinen © 2020 Transcat Inc. * C
Slide 9: Taking Market Share
Taking Market Share $1.6 Billion Addressable Calibration Services Market" 41% 3" Party Service Providers 34% In-house Laboratories 1 Estimated Addressable North American Calibration Market 2 Percentage of Revenue (North America), Company estimates © 2020 Transcat Inc. TRANSCAT ustinovry noasure Mark
Slide 10: Financial Results
Financial Results
Slide 11: Record Consolidated Results
TRANSCAT rstn vy nscus Record Consolidated Results (S in millions) Consolidated Revenue Consolidated Operating Income 9% CAGR $160.9 $173.1 155.1 guaz9 S155 $122.2 $7.9 $6.3 FY2016 FY2017_ -FY2018 = FY2019 ~—- FY 2020 FY2016 FY2017_ -FY2018 += FY2019_—- FY 2020 i Distribution [J Service © 2020 Trans
Slide 12: Service Segment: Years of Quarter-over-Quarter Growth
TRANSCAT ust very messue Service Segment: 11 Years of Quarter-over-Quarter Growth ($ in millions) Service Revenue $93.0 Taking market share in Life Sciences and adding new multi- year client-based labs $84.0 $71.1 $77.4 $59.2 $36.4 & Incremental revenue from TTE Laboratories (acquired Feb 21, 2020)
Slide 13: Diversification Driving Distribution
TRANSCAT stinovry noasure Diversification Driving Distribution (S in millions) Distribution Sales srg 377-7 $76.9 S20 aGiil “wv 2016 = FY2017_««-FY2018 = FY2019_~—s FY 2020 Distribution Operating Income & Margin $5.0 $5.2 an FY2016 FY2017_ -FY2018 «= FY2019 = FY 2020 © 2020 Transcat Inc. Segment per
Slide 14: Strong Cash Generation and Record Net Income
Strong Cash Generation and Record Net Income ($ in millions) Net Income and Diluted EPS A 19% Net Income CAGR $71 $8.1 ean S52 Tax rate expectations? Fiscal 2021: 24% to 25% a 64 $1.08 (includes Federal, various state, and Canadian income taxes ind increased discrete tax accounting windfall associat
Slide 15: Financial Flexibility Supports Growth Strategy
Financial Flexibility Supports Growth Strategy ($ in millions) Total Di Loe to eet ‘Capitalization + $12.3 million available from credit facility as of March 28, 2020 + 1.53x leverage ratio at year-end $27.3 $30.3 (Total debt to TTM Adjusted EBITDA’) a 1 $22.9 919 + Funded net $13.8 million of acqui
Slide 16: Growth Strategy
Growth Strategy
Slide 17: What Makes Transcat Unique
TRANSCAT stinovry noasure What makes Transcat Unique Why We Win... Rental & Used Instruments Lead Generation For Service Segment Core Distribution 50 years — Strong Brands and Name Recognition Certifications of New Equipment Service Growth * Calibration * Validation & Analytical © 2020 Transcat Inc.
Slide 18: Leverage Technology as a Competitive Advantage
TRANSCAT ‘rte nese Leverage Technology as a Competitive Advantage Digital Transformation With industry leading web domain authority Proprietary “C3” Portal for customer asset management TRANSCAT Trust in every measure 7; —s A Operational - : 5 > Excellence Productivity focus Lean/best practices Proc
Slide 19: Drive Double-Digit Service Growth
TRANSCAT ‘rrstin every measure Drive Double-Digit Service Growth Our focus on life science sector Organic Growth Dominate our local markets Strategy Take market share from 3 party providers and OEMs Outsourcing of in-house labs Continued expansion of RF microwave and high-end ee Geographic expansion
Slide 20: Acquisition of TTE Laboratories
—_ ; TRANSCAT ‘rte nese Acquisition of TTE Laboratories Expands Life Science Offerings ; tte laboratories” Metrology-Driven Pipette Calibration ¥ $8 million of annual revenue v Increased presence in New England region (#1 Life Science cluster’) v Adds new Service capabilities, especially in pipettes
Slide 21: Acquisition Drivers
TRANSCAT rusts nn esse Acquisition Drivers Increased Geographic Capabilities and Leveraged Expansion Expertise Infrastructure TTE Laboratories Y Infinite Integral Solutions (CalTree software) v icamensonware) om v v v v Angel’s Y Instrumentation NBS Calibrations © 2020 Transcat Inc. 21
Slide 22: Calibrated
CALIBRATED
Slide 23: FY 2021 Outlook
TRANSCAT stin evry noasure FY 2021 Outlook* Near Term: Believe we are in strong position to navigate this challenging environment Expect Q1 FY21 to be low point: anticipate being in range of breaking even on consolidated operating income basis in Q1 We believe highly-regulated Life Science and other
Slide 24: Stifel Cross Sector Insight Conference
“etsg” | Stifel Cross Sector Insight Conference
Slide 25: Supplemental Information
Supplemental Information
Slide 26: Our C3 Advantage
Our C3 Advantage TRANSCAT stin evry noasure Dashboard Default 14764 mike PUREE | Assots Due in2 Month 3 Months © 2020 Transcat Inc. Proprietary “C3” Portal for customer asset management 84 26
Slide 27: Executing Acquisition Strategy
TRANSCAT tis 1 ness Executing Acquisition Strategy Ceca ity Angel's nts /oteara enuineering Instrumentation, Ine, FY 2017 FY 2018 FY 2019 FY 2020 : NBS oD 1 Calibrations, Inc. Gauge Repair Service ; SH } tte laboratories © 2020 Transcat Inc.
Slide 28: Strong Rental Revenue Growth
Strong Rental Revenue Growth (Sin millions) Provides higher margin profile Enhances value proposition and customer options Used equipment business further complements and diversifies Fy 2016 FY2017/««-FY2018 = FY2019—s FY 2020 © 2020 Transcat Inc. 28
Slide 29: Generating Cash to Drive Key Investments
TRANSCAT ustinovry noasure Generating Cash to Drive Key Investments FY 2009 (start of acquisition strategy) to FY 2020 (3 in millions) $140 5 ~ g333 $22 ($42.3) g120 + — $100 ~ $37.5 ($68.4) $80 - cco $50.6 $40 | $20 | ($12.7) $0.2 $0.5 so . _ . | FY2009 Cash & Net D&A and —Financing/Other FX Effect
Slide 30: Seasoned Executive Team Driving Growth
TRANSCAT ‘tno nese Seasoned Executive Team Driving Growth Lee D. Rudow = 30+ years of industry experience President and = Demonstrated growth record Chief Executive Officer = Joined Transcat in 2011 = 30+ years of = Comprehensive = Proven ability to = 15+ years of B2B = Public company, PE operations
Slide 31: Adjusted EBITDA Reconciliation
TRANSCAT tis 1 ness Adjusted EBITDA Reconciliation (Sin thousands) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Net Income $ 4124 $ 4522 $ 5,922 $ 7,145 $ 8,067 + Interest Expense 247 719 1,018 903 934 + Other Expense / (Income) 48 51 60 a1 186 +Tax Provision 1,883 2,642 2,026 2,090 1,663 Operating Incom
Slide 32: Segment Adjusted EBITDA Reconciliation
TRANSCAT tis 1 ness Segment Adjusted EBITDA Reconciliation (Sin thousands) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Service Operating Income $ 4,155 $ 4,769 $ 5158 $ 5,202 $ 5,672 +Depreciation & Amortization 3,216 4,660 4,397 4,754 4,929 +Other (Expense) / Income (64) (55) (61) (69) (20) +Noncash St
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