Transcat, Inc. · NASDAQ:TRNS
Transcat — Q3 FY2021 Earnings Presentation
16 slides from Transcat's earnings presentation, Feb 2, 2021
Slide 1: Q3 Financial Results Fiscal 2021
Q3 Financial Results Fiscal 2021 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: Q3 FY21 Execution
Q3 FY21 Execution Revenue of $44.1 million up 2% in challenging operating environment Consolidated Gross margin expanded 250 basis points to 25.5% Results Exceeded expectations: generated $2.5M of operating income, up 20% YoY Achieved net income of $1.8M or $0.23 per diluted share 5.9% organic reven
Slide 4: Revenue
Revenue ($ in millions) Q3 Consolidated Q3 Service Segment $24.8 $43.2 $44.1 +12% +2% $22.1 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 Distribution Segment Consolidated revenue up YoY for the first time in fiscal year 2021 $21.1 $19.3 Service increased 12.2% with 5.9% organic growth -9% Distribution decline
Slide 5: Gross Profit and Margin
Gross Profit and Margin ($ in millions) Q3 Consolidated Q3 Service Segment $11.2 $6.9 $9.9 +13% $4.9 22.0% 27.9% 23.0% 25.5% Q3 2020 Q3 2021 Q3 2020 Q3 2021 Consolidated gross profit up 13% and gross margin Q3 Distribution Segment expanded 250 basis points $5.1 Service gross margin of 27.9% expanded
Slide 6: Operating Income
Operating Income ($ in millions) Q3 Service Segment Q3 Consolidated $2.5 $2.0 $2.1 +20% $0.5 2.2% 7.9% 4.8% 5.7% Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 Distribution Segment Consolidated operating income up 20% Service operating margin of 7.9% expanded 570 basis $1.6 points and drove consolidated results
Slide 7: Net Income & Diluted EPS
Net Income & Diluted EPS ($ in millions, except EPS) Net Income Diluted EPS $1.8 +19% $1.5 $0.23 $0.20 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 net income up 19.2% to $1.8 million; Diluted EPS $0.23 vs. $0.20 in prior year Q3 effective tax rate was 23.4%; Expect full fiscal 2021 tax rate to range between
Slide 8: Adjusted EBITDA and Margin
Adjusted EBITDA* and Margin ($ in millions) Q3 Consolidated Q3 Service Segment $4.6 $3.4 $4.1 +12% $1.9 8.4% 13.9% 9.4% 10.4% Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 Distribution Segment Consolidated adjusted EBITDA of $4.6M up 12% Service segment adjusted EBITDA margin expanded $2.2 550 basis points to
Slide 9: Strong Cash Generation
Strong Cash Generation ($ in millions) Nine Months Ended Note: Components may not add to totals due to rounding Dec 26, Dec 28, 2020 2019 Year-to-date net cash provided by operations nearly doubled to $15.6M Net cash provided by operations $15.6 $ 8.2 $27.2M in working capital at end of Q3 FY21 Capi
Slide 10: Balance Sheet Supports Growth Strategy
Balance Sheet Supports Growth Strategy ($ in millions) CAPITALIZATION Note: Components may not add to totals due to rounding Dec 26, March 28, 2020 2020 Total net debt down $6.4M from fiscal Cash and cash equivalents $ 1.0 $ 0.5 2020 year-end Total debt 24.4 30.3 1.24x leverage ratio at quarter-end
Slide 11: Outlook
Outlook* Q4 FY 2021 Expectations (versus last year’s fourth quarter) Service segment: expect solid revenue growth and improvement in gross margin, but not to the same degree experienced in the last two quarters Distribution segment: expect to continue to be negatively impacted by the current operati
Slide 12: Measured and Targeted Approach Driving Results
Measured and Targeted Approach Driving Results ($ in millions) Consolidated Revenue Service segment performance validates strategy $160.9 $173.1 $170.4 Strength of team and long-term strategy provides $143.9 $155.1 $93.0 resiliency and solid Q3 FY 21 TTM results $77.4 $84.0 $97.3 $71.1 Continued to
Slide 13: Conference Call and Webcast Playback
Conference Call and Webcast Playback • Replay Number: 412-317-6671 passcode: 13714787 Telephone replay available through Wednesday, February 10, 2021 • Webcast / Presentation / Replay available at www.transcat.com/investor-relations • Transcript, when available, at www.transcat.com/investor-relation
Slide 14: Supplemental Information
Supplemental Information 14
Slide 15: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Q3 FY21 FY 2017 FY 2018 FY 2019 FY 2020 TTM Net Income $ 4,522 $ 5,922 $ 7,145 $ 8,067 $ 7,076 + Interest Expense 719 1,018 903 934 891 + Other Expense / (Income) 51 60 91 186 232 + Tax Provision 2,642 2,026 2,090 1,663 2,104 Operating Income $ 7,934 $
Slide 16: Segment Adjusted EBITDA Reconciliation
Segment Adjusted EBITDA Reconciliation ($ in thousands) Q3 FY21 FY 2017 FY 2018 FY 2019 FY 2020 TTM Service Operating Income $ 4,769 $ 5,158 $ 5,202 $ 5,672 $ 8,671 +Depreciation & Amortization 4,660 4,397 4,754 4,929 5,382 +Restructuring Expense - - - - 193 +Other (Expense) / Income (55) (61) (69)