Transcat, Inc. · NASDAQ:TRNS
Transcat — Shareholder Meeting (September 2015)
22 slides from Transcat's shareholder meeting presentation, Sep 9, 2015
Slide 1: Good afternoon – I am Lee Rudow, President and CEO of Transcat
Good afternoon – I am Lee Rudow President and CEO of Transcat
Slide 2: Forward-looking statements
Slide 3 You should know that the presentation you are about to hear contains “forward looking statements.” As you will note on this slide, these statements are made based on management’s knowledge and understanding of our business and the industries we serve. However, there are risks, uncertainties
Slide 3: Senior leadership team
Slide 4 Leadership is fundamental to the success of any company. Before I get started I would like to take this opportunity to thank and acknowledge the members of our senior leadership team. Let me take minute and introduce them to you. Please stand as I call your name.
Slide 4: Fiscal 2015 record year and growth strategy
Slide 5 We continue to be excited about the progress we're making with our growth strategy. Fiscal 2015 was a record year at Transcat as we reported annual revenue of $123.6 million. It was our 11th consecutive year of revenue growth. We have been talking a lot about the inherent leverage in the Ser
Slide 5: Record fiscal 2015 top-line and operating income growth
Slide 6 Our record fiscal 2015 top-line was driven by a combination of increased Service and Distribution business. We had a solid start to this year as our first quarter performance reflects the consistent execution of our plan and our compelling value proposition, both of which enabled us to achie
Slide 6: Service segment results
Slide 7 In fiscal 2015 the Service segment increased 7.5% to $51.8 million and accounted for 42% of our total revenue in the fiscal year. The increase was driven by organic and acquisition-related growth. During the most recent first quarter, we achieved strong growth of 11.5%. This marked our 25th
Slide 7: Distribution segment results and new programs
Slide 8 Distribution segment sales increased 2.1% to $71.8 million in fiscal 2015. We continued to face a soft market, as well as headwinds created by weakness in the oil and gas industry sector. There are, however, a number of new and innovative programs that we have launched to combat these headwi
Slide 8: Distribution programs and margin outlook
We expect it to take some time for these programs to get up to speed and gain traction but we’re confident they will produce results and offset some of the softness in the market. On the margin side, we were negatively impacted from vendor rebates in fiscal 2015. We will not have a rebate issue in f
Slide 9: Adjusted EBITDA and net income growth
Slide 9 Since fiscal 2012, consolidated Adjusted EBITDA has grown at about a 6% compound annual growth rate. Importantly, the Service segment over that same period has achieved a 45% compound annual growth rate. In the recent first quarter, consolidated adjusted EBITDA increased more than 30% to $2
Slide 10: Credit facility and capital expenditures
Slide 10 In fiscal 2015, we increased our credit facility to $30 million. We continue to maintain a strong balance sheet that offers the financial flexibility to facilitate our acquisition strategy, satisfy our working capital requirements, and meet our capital expenditure needs. At the end of the f
Slide 11: Investments, debt and ROIC
Slide 11 This slide illustrates recent key investments and the impact to debt on a trailing 12 month basis. It demonstrates that our current debt is related to the investments made in just the prior 12 months and that our cash flow funded all previous investments. We also noted our return on investe
Slide 12: Market, strategy and outlook
Slide 12 Let me walk you through our market, strategy and outlook.
Slide 13: Calibration services market
Slide 13 The calibration services market is roughly a $1.0 billion market. The market is comprised of 3 components: Approx. 35% of the market is serviced by in-house labs operated by our potential customers Approx. 25% of the market is serviced by Original Equipment Manufacturers (OEMs) Approx
Slide 14: Value proposition and organic growth
But as it relates to organic growth, we believe that our strong value proposition will enable us to take market share from the competition and over the last few years we made significant investments in our sales model, our business development team and our expanded suite of services.
Slide 15: Service model and laboratories
Slide 14 Our Service model is flexible and we cater to our customer’s needs by offering a variety of services and solutions including: Permanent and periodic on-site services Mobile calibration services And pickup and delivery services where the work is performed in one of our 20 laboratories
Slide 16: Customer base and life science opportunity
Slide 15 We continue sell to a diverse base of customers including most Fortune 500 companies. We see the greatest opportunities for growth in the highly regulated Life Science space – that’s where our value proposition resonates the most. It’s important to understand that Transcat can reduce the ri
Slide 17: Organic and acquisition growth strategy
Slide 16 Strategically, we expect to drive double-digit Service segment revenue growth. We expect to grow organically and we expect to grow through acquisition. In the past 5 years we have acquired 8 companies with a clearly demonstrated record of success. There are 3 drivers of our acquisitions str
Slide 18: Expanded addressable markets and services
Slide 17 Historically Transcat has offered calibration services and product distribution. In recent years we have expanded our addressable markets by offering a full suite of services that, in particular, targets the life science industry. With the acquisition of Anacor Compliance in 2012 we are pro
Slide 19: Fiscal 2015 acquisitions
Slide 18 On the acquisition front, we are particularly pleased with the progress we are making. In fiscal 2015 we completed two acquisitions. The Ulrich Metrology acquisition out of Montreal continues to perform very well. In addition to acquiring market share and securing our very strong position i
Slide 20: Calibration Technologies and Anmar acquisitions
In June 2015, we announced the acquisition of Calibration Technologies, a New Jersey based provider of laboratory instrument and consulting services to the life science industry. Services include GMP compliance training and a unique approach to preventative maintenance of analytical instrumentation.
Slide 21: C3 Asset Management software and web platform
Slide 19 Transcat's new C3 Asset Management software provides our customers with much more than a typical database and control program. C3 can improve tracking of instrument compliance, direct tighter instrument control and drive down the cost of managing calibration programs. We have a number of ou
Slide 22: Outlook and closing remarks
Slide 20 As we look forward, we are confident on our direction and how we have positioned Transcat to capitalize on future growth opportunities. We have stepped up our technology game and are successfully leveraging the recent investments in our C3 software and our new e-commerce platform. We still