Transcat, Inc. · NASDAQ:TRNS
Transcat — Dougherty & Co. Investor Conference 2019
31 slides from Transcat's conference presentation, Sep 5, 2019
Slide 1: Dougherty & Co. Investor Conference
pe, Dougherty & Co. Investor Conference Lee D. Rudow President and CEO Michael J. Tschiderer Chief Financial Officer
Slide 2: Safe Harbor Statement
TRANSCAT ‘Trust in 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 a
Slide 3: A Leader in the Calibration & Laboratory Instrument Service Market
Nasdaq: TRNS TRANSCAT tustin overy moasure A Leader in the Calibration & Laboratory Instrument Service Market and Value-Added Distributor of Test, Measurement & Control Instrumentation v & % S WR Service segment is our primary growth engine Acquisitions will continue to be part of our growth strateg
Slide 4: Service and Distribution & Rental offerings
cn 368 $8 freee ie Our target customers usually operate in regulated environments like Life Sciences and Aerospace where the cost of failure is very high and require calibration services on a regular, recurring basis. © 2019 Transcat Inc. Product Distribution & Rental Key instrument types include te
Slide 5: Two Complementary Segments
Two Complementary Segments Service - Solid organic growth - 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 generation © 2019 Transcat inc
Slide 6: Taking Market Share
Taking Market Share $1.5 Billion Addressable Calibration Services Market" 41% 3 Party Service Providers 34% In-house Laboratories + Estimated Addressable North American Calibration Market 2 Percentage of Revenue (North America), Company estimates © 2019 Transcat inc. TRANSCAT ‘ust very messure Marke
Slide 7: Flexible Service Value Proposition and Locations
TRANSCAT ‘tustin evry messure Flexible Service Value Proposition 21 Locations to Serve Customers in the U.S., Canada and Puerto Rico Flexible Service Delivery Options: Y Client-based lab P ecrians Y Periodic on-site ¥ Mobile v In-house Y Pickup & Delivery ry Denver tos Angsies @ son Digs @ hen Map L
Slide 8: Client-Based Laboratories Locations
TRANSCAT ‘ust very messure Client-Based Laboratories (“CBL’) 20 Locations Serving Customer Tailored Needs, Full Time At Their Location Pharma, ee Pharma oomm Soll = Nawal esis OD rere ‘Map Legend @ Transcat Headquarters @ transcat Client-Based Lab (CBL) © 2019 Transcat inc. Qiete owe Qo “ee mecca on
Slide 9: Broad and Diverse Blue Chip Customer Base
TRANSCAT ‘ust very messure Broad and Diverse Blue Chip Customer Base Percentage of Service Revenue* 6% 7% 10% 13% 18% 4% 42% Chemical/Process Energy/Utilities Aerospace/Defense Services Industrial Other Life Science / FDA-regulated > MERCK EXXON) i tnt. Spanier © 2019 Transcat inc. * Company estimat
Slide 10: Services Distribution
Services Distribution © 2019 Transcat Inc. 10
Slide 11: Financial Results
Financial Results
Slide 12: Record Consolidated Results
TRANSCAT ‘tistin every ‘Measure Record Consolidated Results (Sin millions) Consolidated Revenue Consolidated Operating Income $10.2 $10.2 FY2016 FY2017/«-FY2018 = FY2019 = Q1FY20 FY2016 FY2017_-«-FY2018 = FY2019_ QL FY20 T™M TIM 8 Distribution [ Service © 2019 Transcat inc. ‘CAGR calculated FY 2016—
Slide 13: Strong Service Segment Organic Growth
TRANSCAT ‘ust very messure Strong Service Segment Organic Growth (Sin millions) Service Revenue 34.0 $87.1 $71.1 $77.4 $ 59.2 $36.4 Point FY 2012 Fy 2016 FY2017 FY2018 FY2019 QI1FY20 TM Service Operating Income & Margin $5.2 $5.2 $4.2 $4.8 iz) ae FY 2012 Fy2016 FY2017 FY2018 FY2019 Q1FY20 TM © 2019
Slide 14: Expanded Distribution Margins
TRANSCAT tustin every measure Expanded Distribution Margins (Sin millions) Distribution Sales , z Focus on higher margin end-user $77.7 $76.9 $79.5 customers and rental business $72.8 - (0) Investments in e-commerce capabilities and web-based marketing Fy2016 -FY2017_—«—-FY2018 = FY2019- QU FY20 TM
Slide 15: Diversification Driving Distribution
TRANSCAT ‘ust very messure Diversification Driving Distribution Strong Rental Revenue Growth (Sin millions) Provides higher margin profile Enhances value proposition Excalibur acquisition added incremental rental platform for higher-end electronic equipment ms Used equipment business further complem
Slide 16: Strong Cash Generation and Record Net Income
TRANSCAT ‘ust very messure Strong Cash Generation and Record Net Income (Sin millions) Net Income and Diluted EPS A Tax rate expectations’ Fiscal 2020: 21% to 22% 5.9 $4.5 ° (includes Federal, various state, and Canadian income taxes $4.1 and increased discrete tax accounting windfall associated wit
Slide 17: Financial Flexibility Supports Growth Strategy
TRANSCAT ‘ust very messure Financial Flexibility Supports Growth Strategy (Sin millions) Total Debt $21.7 million available from credit facility % - Debt to Total Capitalization as of June 29, 2019 $27.3 $15.0M term loan replaced in Dec 2018; $22.9 §21.0 extended maturity to Dec 2025 and converted t
Slide 18: Growth Strategy
Growth Strategy
Slide 19: What makes Transcat Unique
TRANSCAT ‘ust very messure 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 * Consulting © 2019
Slide 20: Leverage Technology as a Competitive Advantage
TRANSCAT tustin every measure Leverage Technology as a Competitive Advantage Digital Transformation With industry leading web domain authority Proprietary “C3” Portal for customer asset management Trust in every measure Operational Excellence Productivity focus Lean/best practices Process automation
Slide 21: Drive Double-Digit Service Growth
TRANSAT iustin every messure Drive Double-Digit Service Growth Dominate our local markets Take market share from Organic Growth 3" party providers and OEMs Strategy Outsourcing of in-house labs Expansion of RF microwave and high-end electronics capabilities Expanded fleet of mobile ae calibration la
Slide 22: Executing Acquisition Strategy
TRANSAT iustin every messure Executing Acquisition Strategy Gecalibus Bpamgets foo FY 2017 Fy 2018 FY 2019 FY 2020 NBS Snes @RESSURI Calibrations, Inc. 'S Gauge Repair Service © 2019 Transcat inc. 2
Slide 23: Acquisition Drivers
TRANSCAT ‘rin oer nose Acquisition Drivers Increased Geographic Capabilities and Leveraged Expansion Expertise Infrastructure Infinite Integral Solutions (CalTree software) Gauge Repair Service v v nanan v v v v v NBS Calibrations Excalibur Engineering © 2019 Transcat inc. 23
Slide 24: Calibrated by Transcat
CALIBRATED BY TRANSCAT
Slide 25: Strategic Acquisitions
Strategic Acquisitions ¥ To drive key double-digit service growth Leverage Technology, Processes ie ere piers: & productivity ¥ Automate calibrations v Margin enhancement & People to Improve Productivity Senn ee re Outlook provided as of May 21, 2019
Slide 26: Dougherty & Co. Investor Conference
ScPs’ |Dougherty & Co. Investor Conference
Slide 27: Supplemental Information
Supplemental Information
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (Sin thousands) TRANSCAT ‘ust very messure qu FY20 FY 2016 FY 2017 FY 2018 FY 2019 1. Net Income $ 4124 «$ 4522 -$ 5,922 $7,145 $7,435 + Interest 247 79 1,018 903 941 + Other Expense / (Income) 48 51 60 91 113 +Tax Provision 1,883 2,642 2,026 2,090 1,673 Operating Inco
Slide 29: Segment Adjusted EBITDA Reconciliation
TRANSAT iustin every messure Segment Adjusted EBITDA Reconciliation (Sin thousands) Qi FY20 FY 2016 FY 2017 FY 2018 FY 2019 1™ Service Operating Income $4,155 $ 4,769 $5158 $ 5,202 $ 42872 +Depreciation & Amortization 3,216 4,660 4,397 4,754 4,785 +Other (Expense) / Income (64) (55) (61) (69) 21 +No
Slide 30: Generating Cash to Drive Key Investments
TRANSCAT ‘ust very messure Generating Cash to Drive Key Investments FY 2009 (start of acquisition strategy) to Q1 FY 2020 ($ in millions) $120 $24.0 5139 ($37.1) 1) $100 | $80 $33.2 zg ($54.5) $60 | $44.2 $40 $20 | ($11.3) $0.2 $0.6 $0 — FY2009 Cash & Net D&A and —Financing/Other_—_FX Effect Capital
Slide 31: Seasoned Executive Team Driving Growth
TRANSAT iustin every messure 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, Vice President of “Vice President of Vice President of Service Operations Human Resources