Transcat, Inc. · NASDAQ:TRNS
Transcat — Shareholder Meeting (September 2015)
23 slides from Transcat's shareholder meeting presentation, Sep 9, 2015
Slide 1: Annual Meeting of Shareholders
Sep 9, 2015 Annual Meeting of Shareholders 1
Slide 2: Annual Meeting of Shareholders
Sep 9, 2015 Annual Meeting of Shareholders Lee D. Rudow President and CEO 2
Slide 3: 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 that often are identif
Slide 4: Senior Management Team
Senior Management Team Lee D. Rudow President and Chief Executive Officer John J. Zimmer Senior Vice President of Finance and Chief Financial Officer Robert A. Flack Vice President of Operations Jennifer J. Nelson Vice President of Human Resources Rainer Stellrecht Vice President of Operational Syst
Slide 5: Strategy Delivered Record Results
Strategy Delivered Record Results • Record annual revenue of $123.6 million in fiscal 2015 – 11th consecutive year of revenue growth • Strong Service segment operating leverage – Segment operating income up 55% on 7.5% revenue growth • Growth-focused investments – Expanded Service capabilities – Rel
Slide 6: Executing our Strategy
Executing our Strategy Growing Revenue & Operating Income ($ in millions) Consolidated Revenue Consolidated Operating Income $118.5 $123.6 $124.2 $110.0 $112.3 $6.7 $6.8 $7.0 $5.4 $5.9 FY 2012 FY 2013 FY 2014 FY 2015 Q1 FY 2016 FY 2012 FY 2013 FY 2014 FY 2015 Q1 FY 2016 TTM TTM Distribution Service
Slide 7: Service Segment Operating Leverage
Service Segment Operating Leverage ($ in millions) Service Revenue $48.2 $51.8 $53.2 • Revenue increase driven by $36.4 $40.7 organic and acquisition-related growth • 25 consecutive quarters of year-over-year growth FY 2012 FY 2013 FY 2014 FY 2015 Q1 FY 2016 TTM • FY 2015 Service operating Service O
Slide 8: Leveraging Distribution to Drive Growth
Leveraging Distribution to Drive Growth ($ in millions) Distribution Sales $73.6 • Maintaining market share $71.6 $70.3 $71.8 $71.0 • Soft oil and gas market impacted sales • Lower vendor rebates hit gross FY 2012 FY 2013 FY 2014 FY 2015 Q1 FY 2016 TTM margin (no impact expected in Distribution Oper
Slide 9: Strong Cash Generation and Bottom-Line
Strong Cash Generation and Bottom-Line ($ in millions) Adjusted EBITDA* $10.3 $10.7 $8.8 $8.9 $10.0 • Consolidated Adjusted EBITDA $2.0 $3.1 $4.6 $6.1 $6.7 CAGR of 6% $6.8 • Service: +45% CAGR $5.8 $5.4 $4.1 $4.0 • Distribution segment generates FY 2012 FY 2013 FY 2014 FY 2015 Q1 FY 2016 Distributio
Slide 10: Balance Sheet Supports Acquisition Strategy
Balance Sheet Supports Acquisition Strategy ($ in millions) Long Term Debt $12.2 • Revolving credit facility: $11.5 $8.0 $18.0 million available $7.6 $3.4 • FY 2016 CapEx – Increasing lab capabilities – Adding lab capacity FY 2012 FY 2013 FY 2014 FY 2015 Q1 FY 2016 – Assets for rental business • Fin
Slide 11: Generating Cash to Drive Key Investments
Generating Cash to Drive Key Investments Historical Trailing 12 Month Key Investments and Current Quarter Debt Balance ($ in thousands) $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 ROIC (TTM) 10.6
Slide 12: Market, Strategy and Outlook
MARKET, STRATEGY AND OUTLOOK 12
Slide 13: Calibration Services Market
Calibration Services Market $1.0 Billion Addressable Market¹ #2 in Market Share by Revenue for 3rd Party Service Providers2 25% 25% 22% 40% 40% Transcat 20% 13% 35% 35% 10% 10% OEMs Tektronix Transcat Regionals ($5mm-$15mm) 3rd Party Service Providers Trescal Others (highly fragmented; In-house Labo
Slide 14: Unique Service Value Proposition
Unique Service Value Proposition Fully Accredited Calibration Provider with Highest Quality in the Industry Flexible Service Delivery Options: • Permanent on-site • Periodic on-site • Mobile • In-house • Pickup & Delivery Headquarters NVLAP AccreditedFacilities Other Accredited Requirements 14
Slide 15: Broad and Diverse Blue Chip Customer Base
Broad and Diverse Blue Chip Customer Base Percentage of Service Revenue * Industrial Life Science / 29% FDA-regulated 32% Energy / Utilities 8% Other Chemical 24% 7% *Revenue and Percentages as of FY 2015 15
Slide 16: Service Growth Strategy
Service Growth Strategy Organic Growth Strategy Acquisition Strategy • Expanding addressable market • Taking market share • Geographic Expansion • Outsourcing of Internal Labs • Increased Capabilities /Expertise • Integrated Sales Model – Enterprise Sales • Bolt-On - Leverage Infrastructure • Levera
Slide 17: Full Suite of Products and Services
Full Suite of Products and Services Calibration Services New Instrument A Total Product Calibration Solution Distribution & Rental Validation & Analytical Services 17
Slide 18: Executing Acquisition Strategy
Executing Acquisition Strategy Ulrich Metrology Inc. • Extends market reach in Montreal and Ottawa; further solidifies our Canadian market position Apex Metrology Solutions • Added a Midwest lab to better support our growing customer base in the region Calibration Technologies, Inc. • Deepens presen
Slide 19: Investments to Drive Growth
Investments to Drive Growth C3 Asset Management Software • Customizable, web-based software • Meets the critical needs of highly regulated manufacturing environments • Strengthened value proposition • Positive customer reaction to software capabilities Web 3.0 – new e-commerce and CMS platform • Fle
Slide 20: Long-term Objectives
Long-term Objectives • Service Segment − Double-digit segment revenue growth − Acquisitions − Leverage e-commerce platform and C3 Asset Management Software − Life science market expanding − Enterprise sales strategy is working • Distribution segment − Capture market share − Expanding number of produ
Slide 21: Annual Meeting of Shareholders
Sep 9, 2015 Annual Meeting of Shareholders 21
Slide 22: Supplemental Information
SUPPLEMENTAL INFORMATION 22
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Q1 FY 2016 FY 2012 FY 2013 FY 2014 FY 2015 TTM Service Operating Income (loss) $ (175) $ 1,311 $ 2,379 $ 3,693 $ 4,072 +Depreciation & Amortization 1,959 1,740 2,144 2,362 2,554 +Other (Expense) / Income (37) (84) (141) (138) (162) +Noncash Stock Comp