Transcat, Inc. · NASDAQ:TRNS
Transcat — Investor Presentation (February 2025)
27 slides from Transcat's investor presentation, February 2025
Slide 1: Investor Presentation February 2025
INVESTOR PRESENTATION February 2025
Slide 2: Safe Harbor Statement
Safe Harbor Statement This investor presentation may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. All statements other than statements of historical fact are “forwar
Slide 3: A Leader in the Calibration Service Market
A Leader in the Calibration Service Market, Provider of Cost, Control & Optimization Services and Value-add Distributor of Test, Measurement & Control Instrumentation ✓ Service segment, consisting of high levels of recurring revenue streams, is our primary growth engine ✓ Distribution segment, inclu
Slide 4: Seasoned Executive Management Team
Seasoned Executive Management Team Lee D. Rudow Thomas Barbato Michael W. West President & Chief Executive Officer and Director Chief Financial Officer & Treasurer Chief Operating Officer ▪ 33+ years of experience in calibration, distribution ▪ 20+ years of corporate finance experience in ▪ 15+ year
Slide 5: Company Overview
Company Overview Industry leading provider of mission critical, accredited calibration services and equipment FOUNDED IN 1964 DISTRIBUTOR AND FOOTPRINT AND 28 COMMERCIAL TRANSCAT 60 CONSECUTIVE NASDAQ:TRNS NEXA COST, OVER 59 YEARS PUBLICLY-TRADED RENTAL OF TEST SCALE TO LABS QUARTERS OF YOY UNIVERSI
Slide 6: Building a Services Engine
Building a Services Engine 61 Consecutive Quarters of YOY Service Revenue Growth History Axiom 275,000 GM% Accelerating NEXA Cost, Rental Control and Growth 1964-1982 Optimization 35% 225,000 Manufacturing Transcat Rentals Heavily Regulated Industry Focus 175,000 Lee Rudow 1982-2005 Joins Transcat D
Slide 7: Service Segment: Consistent Performance and Growth
Service Segment: Consistent Performance and Growth Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Service Revenue $ 36.4 $ 40.7 $ 48.2 $ 51.8 $ 59.2 $ 71.1 $ 77.4 $ 84.0 $ 93.0 $ 101.3 $ 122.0 $ 144.9 $ 169.5 Service GM% 23.7% 25.3% 26.6% 27.2% 26.3% 26.8% 25.7% 24.9% 2
Slide 8: Complementary Business Segments
Complementary Business Segments Strong cross-selling opportunities from distribution to calibration services OPPORTUNITY FOR ACCELERATED GROWTH AND MARGIN EXPANSION u e w s en Pr F l o Su ev i p p R sh m Ca or ng ar ts ng yG rri G ro Recu St r o rowth Driver Calibration Distribution / Quality Lead G
Slide 9: Competitive Landscape and Differentiators
Competitive Landscape and Differentiators Calibration Industry – Industry Attributes Competitive Landscape Driven by Recurring Service Growing Service Regulation and Revenue Streams Market 5 National Players High Cost of Failure Transcat Trescal Tektronics Simco Electronics Applied Technical Service
Slide 10: Strategic, Regulated Vertical Markets
Strategic, Regulated Vertical Markets • Provider of premium, mission critical services to regulated, high cost of failure industries that require long qualification cycles • High switching costs deeply entrench customers on Transcat service platform; high barrier to entry that results in recurring,
Slide 11: Double-Digit Service Growth Drivers
Double-Digit Service Growth Drivers (Leverage NEXA) (Leverage NEXA) Acquisitions Expand Geographic Footprint, Capabilities, Markets 11
Slide 12: Locations Serving the U.S., Canada, Ireland and Puerto Rico
50 Locations Serving the U.S., Canada, Ireland and Puerto Rico Flexible Service Delivery Options: ✓ Client-based lab Montreal ✓ Periodic on-site Ottawa Medical Animal Device Health Medical Bosto Pharma ✓ Mobile Device n Portland Toronto Milford Medical Device Milwaukee Testing Medical Rochester ✓ In
Slide 13: Broad and Diverse Blue Chip Customer Base
Broad and Diverse Blue Chip Customer Base Percentage of Service Revenue * Servicing the Fortune 500 Manufacturers: 4% Other Pharmaceuticals 5% Energy/Utilities Medical Devices: Orthopedics Endoscopy 7% Services/Consumer Goods Surgical Tools 8% Aerospace/Defense Defense Systems Aerospace 16% Industri
Slide 14: Recent Acquisition Drivers
Recent Acquisition Drivers Geographic Increased Leveraged Year Target Capabilities and Infrastructure Expansion Expertise (Bolt-on) FY24 FY2024 FY24 FY24 FY2023 FY23 FY22 FY2022 FY22 FY22 FY2021 FY21 FY21 14
Slide 15: Acquisition and Integration Differentiators
Acquisition and Integration Differentiators Transcat’s Proven Integration Process Drives Consistent Long-Term Value Capture and Returns Diligence and Decision Making Acquirer of Choice Disciplined approach with high emphasis on Sellers consistently chose Transcat, often at a cultural fit lower price
Slide 16: Martin Calibration – Expanding Presence in Upper Midwest
Martin Calibration – Expanding Presence in Upper Midwest ✓ $79 million purchase price; $10 million in Company stock and $69 million in cash ✓ Existing leadership and staff retained ✓ Establishes Transcat presence in the highly coveted Minneapolis area, as well as other locations in the Upper Midwest
Slide 17: Financial Overview
FINANCIAL OVERVIEW Note: Amounts shown in the graphs that follow may be rounded. Therefore, totals shown in the graphs may not be equal to the sum of the segments
Slide 18: Fiscal Year 2025 Q3 Performance
Fiscal Year 2025 Q3 Performance $ millions Consolidated Service Distribution $66.8M $41.6M $25.2M Revenue +2% vs. flat vs +7% vs. prior year prior year prior year 35.7% Automation 30.6% Utilization – Hit FY23 Targets $19.7M $12.4M $7.3M Gross Profit Decreased 6% Decreased 8% Decreased 2% from PY fro
Slide 19: Consolidated Historical Results
Consolidated Historical Results ($ in millions) Revenue Adjusted EBITDA $231 $259 $205 $38.6 $173 $173 35% $155 $161 $30.4 28% $144 $110 $26.3 $20.6 67% $16.4 $17.8 $18.4 65% $8.3 $14.5 72% 72% 33% FY 2012 FY 2017FY 2018FY 2019 FY FY 2021 FY FY FY FY 2012 FY FY FY FY FY FY FY FY 2020 2022 2023 2024
Slide 20: Service Segment Driving Strong Results
Service Segment Driving Strong Results ($ in millions) Service Revenue • Capturing share in highly regulated end $169.5 $144.9 markets, including life sciences and $122.0 Aerospace & Defense $101.3 $93.0 $77.4 $84.0 • NEXA enterprise asset management acquired on August 31, 2021 FY FY FY FY FY FY FY
Slide 21: Distribution Supports Growth Strategy
Distribution Supports Growth Strategy ($ in millions) Distribution and Rental Sales $90.0 $85.7 $83.0 • Stable performance, which is in line $72.1 with our strategy to drive service segment growth FY 2021 FY 2022 FY 2023 FY 2024 Distribution Gross Margin % 29.5% • Gross margin percentage has 25.3% i
Slide 22: Operating Free Cash Flow and Cap Table
Operating Free Cash Flow and Cap Table ($ in millions) Operating Free Cash Flow Capitalization Supports Growth Strategy Full Year Capitalization Note: Components may not add to totals March 30, March 25, March 30, March 25, Note: Components may not add to totals due to rounding due to rounding 2024
Slide 23: Questions & Answers
CALIBRATED BY T Questions & Answers CALIBRATED
Slide 24: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Net Income $ 4,522 $ 5,922 $ 7,145 $ 8,067 $ 7,791 $ 11,380 $ 10,688 +Interest Expense 719 1,018 903 934 850 810 2,417 +Other (Expense) / Income 51 60 91 186 241 143 344 +Tax Provision 2,642 2,026
Slide 25: Segment Adjusted EBITDA Reconciliation
Segment Adjusted EBITDA Reconciliation ($ in thousands) FY 2012 FY 2023 Service Operating Income $ (175) $ 11,422 + Depreciation & Amortization $ 1,959 $ 8,800 + Transaction Expense $ 185 + Other (Expense) / Income $ (37) $ (247) + Noncash Stock Compensation $ 263 $ 2,463 Service Adjusted EBITDA $ 2
Slide 26: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) FY 2024 FY 2025 FY 2025 Q3 Q3 Q3 TTM Net Income $ 3,348 $ 2,357 $ 16,941 + Interest Expense / (Income), net (266) (20) (901) + Other Expense / (Income) 289 (1,009) (635) + Tax Provision 923 772 4,733 Operating Income $ 4,294 $ 2,100 $ 20,138 + Deprecia
Slide 27: Segment Adjusted EBITDA Reconciliation
Segment Adjusted EBITDA Reconciliation ($ in thousands) FY 2024 Q3 FY 2025 Q3 Service Operating Income $ 2,966 $ 1,412 + Depreciation & Amortization 2,362 2,451 + Transaction Expense 30 778 + Acquisition Earn-Out Adjustment 87 - + Other (Expense) / Income (203) 94 + Noncash Stock Compensation 737 18