Transcat, Inc. · NASDAQ:TRNS
Transcat — 2022 Southwest IDEAS Investor Conference
21 slides from Transcat's conference presentation, Nov 16, 2022
Slide 1: Transcat at 2022 Southwest IDEAS Investor Conference
TRANSGT = | D EAS 2022 SOUTHWEST IDEAS = __ INVESTOR CONFERENCES INVESTOR CONFERENCE November 16, 2022 Lee Rudow Chief Executive Officer Tom Barbato Chief Financial Officer CALIBRATED sy TRANSCAT
Slide 2: Transcat Company Overview
TRANSCAT COMPANY OVERVIEW i 54 27 GLOBAL FOUNDED NASDAQ:TRNS RECOGNIZED ONEECOMIVE COMMERCIAL. SR RaT oR IN 1964 METROLOGY QUARTERS LABS Over 55 Years of Te coe pe Aecreditedto of Test and Calibration "Calbretonaes of YOY Organic ISO/IEC Measurement Experience alllevetitany La Service Revenue 47025:
Slide 3: A Leader in the Calibration Service Market
A Leader in the Calibration Service Market, provider of Enterprise Asset Management Services and Value-add Distributor of Test, Measurement & Control Instrumentation Y Service segment is our primary growth engine Y Target highly-regulated Life Science markets with recurring revenue streams v NEXA As
Slide 4: Industry Attributes and Differentiators
INDUSTRY Attributes TRANSGAT Differentiators wz Ke van = f at Differentiators Driven by Regulation & High Cost of Failure Distribution as Source of Service Leads and Cash Flow Nexa Enterprise Asset Management Services Highly Regulated Life Science Target Market 9 Acquisitions to Expand Geography and
Slide 5: Service & Product Offering
v VALIDATION SERVICES =_— EQUIPMENT REPAIR SERVICES A F CALIBRATION NEW TEST & SER IC ES MEASUREMENT EQUIPMENT ) SERVICE & PRODUCT OFFERING D Ld USED TEST & MEASUREMENT WS) EQUIPMENT NEXA | EAM ENTERPRISE ASSET MANAGEMENT PIPETTES.COM CALIBRATED sy TRANSCAT
Slide 6: Double-Digit Service Growth Drivers
Double-Digit Service Growth Drive New Business New Business Grow NEXA Current Current Customers § New Customers N) & New Customers (Leverage Nexa) (Leverage Nexa) (Expanded Market) Grow Pipette Acquisitions to Expand Execute Sales Business Geographic Footprint, Synergies on Capabilities, Markets Acq
Slide 7: Strategic Vertical Markets
Strategic Vertical Markets A Government/ Defense What: Military, Missile Defense Why: FDA, OSHA, CPSC, DOD FTC, FCC, EEOC, FDIC 4 Life Science Aerospace What: research, development, and manufacture of flight vehicles Why: DOD, FAA, NASA, EPA What: Pharmaceuticals, Medical Device Why: FDA, WHO, ICH y
Slide 8: Broad and Diverse Blue Chip Customer Base
Broad and Diverse Blue Chip Customer Base Percentage of Service Revenue* 2% Other 4% Chemical/Process 5% Energy/Utilities 7% Services 10% Aerospace/Defense 12% Industrial 60% Life Science / FDA- regulated
Slide 9: Flexible Service Value Proposition and Locations
Flexible Service Value Proposition 50 Locations to Serve Customers in the U.S., Canada and Puerto Rico Flexible Service Delivery More! @ Medical Device Options: ortawa® @ Pharma Medical Milford vY Client-based lab e 4 Boston Portland Toronto Device Medical Device of Hi Rochester Pharma Periodic on-s
Slide 10: Acquisition Drivers (recent acquisitions)
Acquisition Drivers (recent acquisitions) Increased Leveraged Geographic Capabilities and Infrastructure Expansion Expertise (Bolt-on) e2b Calibration Y v Alliance Calibration v Y Tangent Labs v v NEXA EAM (Enterprise Asset Management) v v Upstate Metrology v ioTek Sais Inc. Y Y v
Slide 11: Enterprise Asset Management
= ENTERPRISE ASSET MANAGEMENT With offices in both the U.S. and Ireland, NEXA | EAM delivers world-class enterprise asset management services to enable world-class production for the life sciences industry, delivered through five service tracks. Maintenance = & Spares Quality SERVICE & Compliance TR
Slide 12: Addressable Market Expansion with Addition of NEXA
Addressable Market Expansion with Addition of NEXA Enterprise Asset Management Traditional Transcat Traditional Transcat, Calibration plus NEXA Asset Mgmt 1 Estimated Addressable North American Calibration Market 2 Estimated Addressable Market for North American Calibration, plus Global Markets for
Slide 13: Consolidated Results
Consolidated Results ($ in millions) Revenue Operating Income $205 $173. $173 $55 «S161 FY 2012 Fy2017FY2018 = FY20I9 © FY2020-©=— FY 2021 «FY 2022
Slide 14: Service Segment Driving Strong Results
Service Segment Driving Strong Results ($ in millions) Service Revenue $122.0 Service Gross Margin % 30.3% 31.9% Capturing share in highly regulated end markets, including life sciences NEXA enterprise asset management acquired august 31, 2021 Enhanced gross margin profile: Driven by operating lever
Slide 15: Distribution and Rentals Supports Growth Strategy
Distribution and Rentals Supports Growth Strategy ($ in millions) ributi : $en0 Stable performance over last 5 years, in line $77.7 $76.9 $80.1 with our strategy to support service $721 segment growth i Improved order trends from covid-impacted oro Fan, Faas, rvaeci rv3008 PY... but supply chain lea
Slide 16: FY23 Q2 Revenue
FY23 Q2 Revenue ($ in millions) Q2 Consolidated Qz2 Service Segment $56.4 $35.3 ene $29.5 Q2 FY22 02 FY23 arr a2rva3 2 Distribution Segment Consolidated revenue up 12% on Service segment strength @ G and modest growth in Distribution $20.8 np Service total revenue growth of 19%; organic growth remai
Slide 17: Gross Profit and Margin
Gross Profit and Margin ($ in millions) Q2 Consolidated Q2 Service Segment $16.8 $14.6 $11.5 $9.7 Bees 29.7% 32.9% 32.6% cana cana ann cana Q2 Distribution Segment Consolidated gross margin expanded 70 basis points $4.9 3 Service gross margin of 32.6% contracted 30 basis points primarily due to incr
Slide 18: Adjusted EBITDA and Margin
Adjusted EBITDA* and Margin (S in millions) Q2 Consolidated Qz2 Service Segment 6 $7.5 $5.5 $5.5 7.1 14.0% 13.3% SOEs 15.7% cara ana are cares Q2 Distribution Segment Consolidated adjusted EBITDA of $7.5 million up 6% $2.0 Service segment adjusted EBITDA of $5.5 million up 5 2% from PY Distribution
Slide 19: Financial Flexibility Supports Growth Strategy
Financial Flexibi ($ in millions) ity Supports Growth Strategy Total Debt 1.81x leverage ratio at quarter-end % - Debt to Total (Total debt to TTM Adjusted EBITDA*) $474 Capitalization $36.7 available from credit facility at quarter-end FY23 CapEx expect to be $9 to $10 million $273 $503 kil $210 s0
Slide 20: Strong Cash Generation
Strong Cash Generation ($ in millions) Net Income and Diluted EPS Net income improvement driven by improved operating performance Adjusted EPS* $e $71 bai s78 $5.9 Fv2017—«FY2018 Fv2019—«FY2020—~—~—C«FY 2001 FY 2022 Fy 2021 Fv 2022 Tax rate expectations” Adjusted EBITDA? and Margin Fiscal 2023: 22%
Slide 21: Questions & Answers
CALIBRATED ey TRANSCAT Questions & Answers