Transcat, Inc. · NASDAQ:TRNS
Transcat — Shareholder Meeting (August 2007)
48 slides from Transcat's shareholder meeting presentation, Aug 21, 2007
Slide 1: Transcat, Inc. Annual Meeting
Transcat, Inc. Annual Meeting Comparison of Cumulative Five Year Total Return $500 $450 $400 August 21, 2007 $350 Charles P. Hadeed $300 $250 $200 $150 $100 President and $50 Chief Executive Officer $0 Mar02 Mar03 Mar04 Mar05 Mar06 Mar07 “Safe Harbor” Statement under the Private Securities Litigatio
Slide 2: Bob Klimasewski: 25 Years of Service
Bob Klimasewski 25 Years of Service Copyright © 2006 - All Rights Reserved. 2
Slide 3: 2003-2007 In Retrospect
2003-2007 In Retrospect Copyright © 2006 - All Rights Reserved. 3
Slide 4: Net Sales: FY03 – FY07
Net Sales: FY03 – FY07 (in millions) 70 60 50 40 30 20 10 0 FY03 FY04 FY05 FY06 FY07 Net Sales Copyright © 2006 - All Rights Reserved. 4
Slide 5: Operating Income: FY03 – FY07
Operating Income: FY03 – FY07 (in millions) 5 4 3 2 1 0 FY03 FY04 FY05 FY06 FY07 Operating Income TPG Gain Copyright © 2006 - All Rights Reserved. 5
Slide 6: Debt: FY02 – FY07
Debt: FY02 – FY07 (in millions) 12 10 8 6 4 2 0 FY02 FY03 FY04 FY05 FY06 FY07 Debt Copyright © 2006 - All Rights Reserved. 6
Slide 7: Shareholders Equity: FY03 – FY07
Shareholders Equity: FY03 – FY07 (in millions) 12 10 8 6 4 2 0 FY03 FY04 FY05 FY06 FY07 Shareholders Equity Copyright © 2006 - All Rights Reserved. 7
Slide 8: Stock Price: FY03 – FY07
Stock Price: FY03 – FY07 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- FY03 FY04 FY05 FY06 FY07 TRNS Copyright © 2006 - All Rights Reserved. 8
Slide 9: Strategic Direction
Strategic Direction We are an accredited provider of calibration and repair services and a distributor of test and measurement equipment Target Companies that Value Quality Systems Target Regulated Industries Acquire New Customers Copyright © 2006 - All Rights Reserved. 9
Slide 10: Credo
Credo Customers: Quality, Service and Value. Employees: Positive Environment. Shareholders: Fair Return on Investment. Copyright © 2006 - All Rights Reserved. 10
Slide 11: Corporate Culture
Corporate Culture Ethics and Quality Accountability Reward and Recognition Teamwork Copyright © 2006 - All Rights Reserved. 11
Slide 12: Carl E. Sassano, CEO 2003-2007
Carl E. Sassano CEO 2003-2007 Copyright © 2006 - All Rights Reserved. 12
Slide 13: Another Year of Strong Returns
Another Year of Revenue and Operating Incom e 50 2.5 Strong Returns 45 40 2 35 In Fiscal Year 2007, we Delivered 30 1.5 Significant Value to our 25 Shareholders as Pre-Tax Earnings 20 1 15 Were Almost Double the Pre-Tax 10 0.5 Earnings of Fiscal Year 2006, 5 Exclusive of a One-Time Gain. 0 0 FY05 FY
Slide 14: Management Team
Management Team John Zimmer: VP Finance, CFO Jay Woychick: VP Marketing Andy Weir: VP Field Sales John De Voldre: VP Human Resources Rainer Stellrecht: VP Calibration Laboratory Operations Copyright © 2006 - All Rights Reserved. 14
Slide 15: Management Team
Management Team Derek Hurlburt: Corporate Controller Lori Drescher: Sr. Director, Inside Sales and Customer Service Frank Lucas: Sr. Director, Business Services Copyright © 2006 - All Rights Reserved. 15
Slide 16: Commitment to Strategy
Commitment to Strategy Sell Newest and Best Instruments Focus on Process, Utility, Pharmaceutical and Electrical Markets Provide Quality Accredited Calibrations and Repairs Increase “Dual” Customers Provide Superior Customer Service Copyright © 2006 - All Rights Reserved. 16
Slide 17: FY 2007 Financial Highlights
FY 2007 Financial Highlights (in millions) FY 2007 FY 2006 Distribution Products Sales $ 45.4 $ 40.8 Calibration Services Sales 21.1 19.7 Net Sales 66.5 60.5 Gross Profit 16.7 15.1 Operating Expenses 14.3 13.6 Gain on TPG Divestiture 1.5 - Operating Income 3.9 1.5 Net Income 2.1 3.6 Diluted Earnings
Slide 18: Net Sales: FY06 – FY07
Net Sales: FY06 – FY07 (in millions) 80 70 60 50 40 30 20 10 0 FY06 FY07 Product Calibration Copyright © 2006 - All Rights Reserved. 18
Slide 19: Gross Profit: FY06 – FY07
Gross Profit: FY06 – FY07 (in millions) 20 15 10 5 0 FY06 FY07 Gross Profit Copyright © 2006 - All Rights Reserved. 19
Slide 20: Operating Income: FY06 – FY07
Operating Income: FY06 – FY07 (in millions) 5 4 3 2 1 0 FY06 FY07 Operating Income With TPG Gain Copyright © 2006 - All Rights Reserved. 20
Slide 21: Accounts Receivable: FY06 – FY07
Accounts Receivable: FY06 – FY07 (in millions) 10 130 9 120 8 Accounts Receivable 110 7 100 6 90 DSO 5 80 4 70 3 60 2 50 1 40 0 30 FY06/Q1 FY06/Q2 FY06/Q3 FY06/Q4 FY07/Q1 FY07/Q2 FY07/Q3 FY07/Q4 DSO A/R Balance Copyright © 2006 - All Rights Reserved. 21
Slide 22: Quarterly Debt: FY06 – FY07
Quarterly Debt: FY06 – FY07 (in millions) 8 7 -$1.4M Reduction 6 5 4 3 2 1 0 FY06/Q1 FY06/Q2 FY06/Q3 FY06/Q4 FY07/Q1 FY07/Q2 FY07/Q3 FY07/Q4 Debt Copyright © 2006 - All Rights Reserved. 22
Slide 23: Quarterly Inventory: FY06 – FY07
Quarterly Inventory: FY06 – FY07 (in millions) 6 5 4 3 2 1 0 FY06/Q1 FY06/Q2 FY06/Q3 FY06/Q4 FY07/Q1 FY07/Q2 FY07/Q3 FY07/Q4 Inventory Copyright © 2006 - All Rights Reserved. 23
Slide 24: Quarterly Cash Flow: FY06 – FY07
Quarterly Cash Flow: FY06 – FY07 (in millions) 1.2 1.0 0.8 0.6 0.4 0.2 0.0 FY06/Q1 FY06/Q2 FY06/Q3 FY06/Q4 FY07/Q1 FY07/Q2 FY07/Q3 FY07/Q4 Cash Flow Copyright © 2006 - All Rights Reserved. 24
Slide 25: Focus on Providing Integrated Services for Targeted Industries
Focus on Providing Integrated Services for Targeted Industries One Third of Sales with Fortune 500 Companies Distribution Products and Calibration Services Vendor Consolidation Single Source Solution Copyright © 2006 - All Rights Reserved. 25
Slide 26: Focus on Providing Integrated Services for Targeted Industries
Focus on Providing Integrated Services for Targeted Industries Distribution Products: Core Strength Calibration Services: Growth Opportunity Copyright © 2006 - All Rights Reserved. 26
Slide 27: Product Segment Gross Profit Model
Product Segment Gross Profit Model $'s Revenue Costs of Goods Sold Volume Copyright © 2006 - All Rights Reserved. 27
Slide 28: Calibration Segment Gross Profit Model
Calibration Segment Gross Profit Model $'s Gross Profit Revenue Break-Even Variable Costs Fixed Costs Copyright © 2006 - All Rights Reserved. Volume 28
Slide 29: Distribution Products
Distribution Products Copyright © 2006 - All Rights Reserved. 29
Slide 30: Distribution Products: Business & Marketing Strategy
Distribution Products: Business & Marketing Strategy Offer the Best Brands and Latest Technology 250 Leading Market Share Manufacturers New Manufacturer: Starrett Inventory what our Customers Need Same Day Service = Competitive Advantage Copyright © 2006 - All Rights Reserved. 30
Slide 31: Distribution Products: Business & Marketing Strategy
Distribution Products: Business & Marketing Strategy Retain and Grow Existing Customers Master Catalog • Reinvigorate with New Products and Brands That Will Meet Customers’ Needs • 65,000 Mailed in September • >100 New Product Pages in 2008 Vendor Specific Short-Form Mini-Catalogs Superior C
Slide 32: Distribution Products: Business & Marketing Strategy
Distribution Products: Business & Marketing Strategy Acquire New Customers Target Prospects who Match Current Customer Profile Supplemental Catalogs: >600,000 / year Enhance Database Internet Marketing Copyright © 2006 - All Rights Reserved. 32
Slide 33: Distribution Products: World-Class Internet Presence
Distribution Products: World-Class Internet Presence Copyright © 2006 - All Rights Reserved. 33
Slide 34: Distribution Products: World-Class Internet Presence
Distribution Products: World-Class Internet Presence www.transcat.com Key Marketing Channel to Promote Distribution Products and Calibration Services Information Portal Place Orders Search Engine Optimization Strategy Traffic Doubled in Last 6 Months Copyright © 2006 - All Rights Reserve
Slide 35: Distribution Products: Focus on Steady Organic Growth
Distribution Products: Focus on Steady Organic Growth Master Catalog New Vendors and Products Added, as Appropriate Cross-sell Calibration Services Frequent Targeted Direct Mail Programs Superior Customer Service & Application Assistance Calibrate What We Sell Copyright © 2006 - All Righ
Slide 36: Calibration Services
Calibration Services We Offer our Customers Expert Calibration and Repair Services for all Types of Test and Measurement Instruments to Assure Complete Compliance to the Standards That Affect Their Industries Copyright © 2006 - All Rights Reserved. 36
Slide 37: Calibration Services: Business & Marketing Strategy
Calibration Services: Business & Marketing Strategy Quality Process and Culture Accreditation = Independent Verification Target Companies That Value Quality Target Companies That Operate in Regulated Environments Target Process, Utility, Pharmaceutical and Electrical Markets Copyright © 20
Slide 38: Calibration Services: Business & Marketing Strategy
Calibration Services: Business & Marketing Strategy 11 Centers of Calibration Excellence Serving 8,000 Customers ISO 9000 Registered With UL and Accredited Under the ISO 17025 Regulation Compete Nationally Across Wide Array of Disciplines Copyright © 2006 - All Rights Reserved. 38
Slide 39: Calibration Providers
Calibration Providers Regional Regional National National Local Local *Figures are for illustration purposes only Copyright © 2006 - All Rights Reserved. 39
Slide 40: Fragmented Calibration Market Customer Profile
Fragmented Calibration Market Customer Profile Customer Profile Price Only Growth Price Only Opportunity Quality Focused Growth Opportunity Quality Focused *Figures are for illustration purposes only Copyright © 2006 - All Rights Reserved. 40
Slide 41: Calibration Services: Solid Results in FY07 & FY08/Q1
Calibration Services: Solid Results in FY 07 & FY 08/Q1 FY 2006 Æ 2 Strategic Acquisitions Hilton Engineering’s Calibration Services in San Juan, Puerto Rico Calibration Business is up 37% Acquired N.W. Calibration Inspection, Inc. in Fort Wayne, Indiana Expanding Capabilities to Include 3
Slide 42: Building Our Distribution Products & Calibration Services Businesses in Fiscal 2008
Transcat, Inc. Building Our Distribution Products & Calibration Services Businesses in Fiscal 2008 Copyright © 2006 - All Rights Reserved. 42
Slide 43: FY 2008 / Q1 Financial Highlights
FY 2008 / Q1 Financial Highlights (in millions) Q1/FY 2008 Q1/FY 2007 Distribution Products Sales $ 10.9 $ 10.5 Calibration Services Sales 5.3 5.0 Net Sales 16.2 15.5 Gross Profit 4.2 3.8 Operating Expenses 3.8 3.5 Operating Income 0.4 0.3 Net Income 0.2 0.1 Diluted Earnings Per Share $ 0.03 $ 0.02
Slide 44: Debt & Cash Flow: FY07 – FY08
Debt & Cash Flow: FY07 – FY08 (in millions) 4 3 2 1 0 FY07/Q4 FY08/Q1 Debt 1.0 0.8 0.6 0.4 0.2 0.0 FY07/Q1 FY08/Q1 Cash Flow Copyright © 2006 - All Rights Reserved. 44
Slide 45: FY 2008 Outlook
FY 2008 Outlook Focus on Calibration Growth to Leverage Investment Bundle Product and Calibration Sales Increase Gross Margin Ratio Increase Operating and Net Income Increase Cash Flow Copyright © 2006 - All Rights Reserved. 45
Slide 46: Expanding Our Market Penetration in FY 2008
Expanding Our Market Penetration in FY 2008 Distribution Products: Carry the Products That our Customers Need Carry the Best Products in the Industry Provide Superior Customer Service Focus on Marketing to New Customers Copyright © 2006 - All Rights Reserved. 46
Slide 47: Expanding Our Market Penetration in FY 2008
Expanding Our Market Penetration in FY 2008 Calibration Services: Target Companies That Value Quality Identify Outsourcing Opportunities Focus on Cross-Selling to Product Customers Copyright © 2006 - All Rights Reserved. 47
Slide 48: For Additional Information
For Additional Information To receive additional information about Transcat, please contact: Charles P. Hadeed Van Negris President and CEO Van Negris & Co., Inc. Transcat, Inc. 1120 Avenue of the 35 Vantage Point Drive Americas - Suite 4100 Rochester, NY 14624 New York, NY 10036 Tel: 585-352-7777 T