Transcat, Inc. · NASDAQ:TRNS
Transcat — Investor Presentation (March 2014)
23 slides from Transcat's investor presentation, March 2014
Slide 1: Investor Presentation March 2014
Investor Presenta,on March 2014 Lee D. Rudow John J. Zimmer President and CEO Sr. Vice President of Finance and CFO
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presenta2on contains forward-‐looking statements within the meaning of the Private Securi2es Li2ga2on Reform Act of 1995. Forward-‐looking statements are subject to risks, uncertain2es and assump2ons and are iden2fied by words such as “expects,” “es2mates,” “projects,” “a
Slide 3: Leader in Fragmented Calibration & Compliance Service Market
Leader in Fragmented Calibra4on & Compliance Service Market and Distributor of Test, Measurement and Control Instrumenta4on 1. Built Infrastructure and Value Posi7on Over 10 Years 2. Reached Inflec7on Point – Expect Opera7ng Earnings to Grow Faster than Revenue 3. New Leadership in Place to Drive Com
Slide 4: Two Business Segments: Distribution
Two Business Segments Distribu4on -‐ $72MM (TTM) • Test Equipment used in R&D and Manufacturing (Temperature, Pressure and Electrical…) • 40 Year Old Core Business – Market Leader • Strong Cash Generator • Supports Service Segment Growth 4
Slide 5: Two Business Segments: Service
Two Business Segments Service -‐ $47MM (TTM) • Calibra7on is Cri7cal to Quality – Ensures Test Instruments Perform to Manufacture Specifica7on • Unique Value Proposi7on • Achieved Cri7cal Mass • Double Digit Growth 5
Slide 6: Record Revenue & Operating Income
Record Revenue & Opera4ng Income ($ in millions) Consolidated Revenue Opera4ng Income % C AGR 11 AGR $119.2 31% C $110.0 $112.3 $91.2 $6.7 $81.0 $5.4 $5.9 $4.6 $2.4 FY2010 FY2011 FY2012 FY2013 Q3 FY2014 FY2010 FY2011 FY2012 FY2013 Q3 FY2014 TTM TTM Services Distribu7on Services Distribu7on 6
Slide 7: Critical Mass – Service Inflection Point
Cri4cal Mass – Service Inflec4on Point Distribu4on Service Now Inflec7on Point $ Revenu e $ Cost Cost Volume Volume Moving forward opera7ng income should grow at a faster rate than revenue 7
Slide 8: Calibration Services Market
Calibra4on Services Market Expanded Addressable Market¹ #2 in Market Share by Revenue for 3rd Party Service Providers2 29% 41% 24.5% 22.9% 30% 2.8% 2.9% Transcat 3.2% 13.7% 3.4% 7.0% 10.4% OEMs 9.2% 3rd Party Service Providers Tektronix SE Laboratories In-‐house Laboratories Transcat Technical Main
Slide 9: Unique Service Value Proposition
Unique Service Value Proposi4on Fully Accredited Calibra4on Provider with Highest Quality in the Industry Service Models: Onsite Pickup & Delivery Outsourcing Solu7on 9
Slide 10: Broad and Diverse Blue Chip Customer Base
Broad and Diverse Blue Chip Customer Base Percentage of Service Revenue * Other; 21% Life Sciences & Chemical, 8% Pharmaceu4cal, 34% Energy; 16% Industrial, 21% *Revenue and Percentages as of the end of FY2013, March 31, 2013 ($40.7 million) 10
Slide 11: Growth Strategy
Growth Strategy 11
Slide 12: Expandable Life Science Market
Expandable Life Science Market Typical Suite of Services Percentage of Service Revenue Life Science Company 3% 9% Other; 21% 17% 4% Chemical, 8% Life Sciences & Pharmaceu4cal, 34% Energy; 16% Industrial, 21% 67% Highly regulated Industry Calibra7on Standards Process Calibra7on Quality oriented V
Slide 13: Service Growth Strategy
Service Growth Strategy Organic Growth Strategy Acquisi4on Strategy Outsourcing of Internal Labs Integrated Sales Model – Enterprise Sale Geographic Expansion Leveraging Distribu7on Segment Increased Capabili7es /Exper7se Bolt-‐On -‐ Leverage Infrastructure 13
Slide 14: Successful Acquisition Strategy
Successful Acquisi4on Strategy Westcon, Inc. United Scale & Engineering ACA Tmetrix Inc. Lab in Canada Wind Turbine Tools Inc. August 2008 Corp. Jan 2010 Nov 2010 Jan 2011 CMC Instrument Services, Inc. Newark Calibra4on Services Anacor Compliance Services Cal-‐Matrix Metrology Inc. April 2011 Sep 2
Slide 15: Seasoned Executive Team Driving Growth
Seasoned Execu4ve Team Driving Growth Lee Rudow • 26 Years Industry Experience President & CEO • Demonstrated Growth Record • Started with Transcat 2011 Rob Flack Scoj Sujer John Zimmer Vice President of Vice President Senior VP, Finance and CFO Business Development of Sales Joined Transcat in 2006
Slide 16: Strong Cash Generation
Strong Cash Genera4on ($ in millions) EBITDA* $9.6 $8.6 Achieved a 25% $8.2 consolidated $6.7 $1.7 $3.0 $4.2 EBITDA CAGR¹ $1.6 $4.2 Service Segment’s $1.2 $6.5 CAGR¹ was 40% $5.1 $5.6 $5.4 $3.0 Strengthened earnings power 2 2 FY 2010 FY 2011 FY 2012 FY 2013 Q3 FY 2014 TTM Distribu4on Segment S
Slide 17: Strong Performance
Strong Performance EPS Return on Assets $0.55 $0.49 $0.43 7.8% 7.6% 7.4% $0.37 7.2% $0.19 4.5% FY 2010 FY 2011 FY 2012 FY 2013 Q3 FY 2014 TTM FY 2010 FY 2011 FY 2012 FY 2013 Q3 FY 2014 TTM *FY2010 – Q3 FY2014 TTM 17
Slide 18: Flexible Balance Sheet
Flexible Balance Sheet Long-‐Term Debt Equity $31.7 $27.4 $28.1 $10.6 $23.3 $20.3 $8.0 $5.3 $2.5 $3.4 FY2010 FY2011 FY2012 FY2013 Q3 FY2010 FY2011 FY2012 FY2013 Q3 FY2014 FY2014 Stock Repurchases: 100,000 Shares @ $7.00 per share – July 2013 700,000 Shares @ $8.10 per share – October 2013 18
Slide 19: FY2014 YTD Results
FY2014 YTD Results ($ in millions) Revenue Gross Profit Opera4ng Income $88.1 $21.2 $3.8 $18.9 $3.0 $81.2 FY13YTD FY14YTD FY13YTD FY14YTD FY13YTD FY14YTD 19
Slide 20: Why Invest In Transcat?
Why Invest In Transcat? Scalable Business Model with Opera4ng Leverage Expanded Addressable Markets by Ver4cally Integra4ng Service Segment Capabili4es Flexible Balance Sheet and Strong Cash Flow Experienced Management Team – Demonstrated Track Record 20
Slide 21: Investor Presentation
Investor Presentation
Slide 22: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 23: EBITDA Reconciliation
EBITDA Reconcilia4on ($ in thousands) Q3 FY2014 FY10 FY11 FY12 FY2013 TTM Service Operating Income $ 94 $ 192 $ (175) $ 1,311 $ 2,127 +Depreciation & Amortization $ 1,136 $ 1,377 $ 1,959 $ 1,740 $ 2,151 +Other (Expense) / Income - - $ (37) $ (84) $ (122) Service EBITDA $ 1,230 $ 1,569 $ 1,747 $ 2,96