Transcat, Inc. · NASDAQ:TRNS
Transcat — Marcum MicroCap Conference 2017
26 slides from Transcat's conference presentation, Jun 15, 2017
Slide 1: Marcum MicroCap Conference
June 15, 2017 Marcum MicroCap Conference Michael J. Tschiderer 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: A Leader in a Fragmented Calibration & Laboratory Instrument Service Market
A Leader in a Fragmented Calibration & Laboratory Instrument Service Market Value-Added Distributor of Test, Measurement & Control Instrumentation Service segment is our primary growth engine Achieved critical revenue mass in the Service segment Long-term operating earnings to grow faster than
Slide 4: Two Complementary Segments
Two Complementary Segments Service Distribution Double-digit growth New test equipment Recurring revenue stream Rentals Strong operating leverage Used equipment Driven by regulation Strong cash generation FY 2017 Revenue: $143.9M (Service 49%, Distribution 51%) Unique value proposition Leverage
Slide 5: Taking Market Share
Taking Market Share $1.0 Billion Addressable #2 in Market Share by Revenue for Calibration Services Market¹ 3rd Party Service Providers2 22% 25% 40% 20% OEMs 3rd Party Service Transcat Providers 18% 19% 35% 11% In-house 10% Laboratories Tektronix Transcat Regionals ($5mm-$15mm) Trescal Others (highl
Slide 6: Unique Service Value Proposition
Unique Service Value Proposition 22 Locations to Serve Customers in the U.S., Canada and Puerto Rico Flexible Service Delivery Options: Permanent on-site Periodic on-site Mobile In-house Pickup & Delivery © 2017 Transcat Inc. 6
Slide 7: Broad and Diverse Blue Chip Customer Base
Broad and Diverse Blue Chip Customer Base Percentage of Service Revenue* Other 18% Aerospace & Defense Life Science / 5% FDA-regulated Chemical 43% 6% Energy/Utilities Industrial 7% 21% * Company estimates © 2017 Transcat Inc. 7
Slide 8: Full Suite of Products and Services
Full Suite of Products and Services Unique Among Competition Validation Product New Distribution Calibration & Instrument and Rental Services Laboratory Calibration (New & Used Services Equipment) Superior Quality Serve an expanded Life Science market Mission critical services © 2017 Transcat Inc. 8
Slide 9: Financial Results
Financial Results TRANSCAT Trust in ever} 'y measure
Slide 10: Record Consolidated Results
Record Consolidated Results ($ in millions) Consolidated Revenue Consolidated Operating Income $143.9 $7.9 $118.5 $123.6 $122.2 $6.7 $6.8 $112.3 $6.3 $5.9 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Distribution Service © 2017 Transcat Inc. *FY 2013 – FY 2017 10
Slide 11: Service Segment Continues to Deliver
Service Segment Continues to Deliver ($ in millions) Service Revenue $71.1 Solid organic revenue growth $59.2 $48.2 $51.8 and acquisitions drove segment $40.7 32 consecutive quarters of YOY revenue growth FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Service Operating Income Revenue: +20% (FY17 vs FY16) &
Slide 12: Distribution Sales Up Double Digits
Distribution Sales Up Double Digits ($ in millions) Distribution Sales Diversification strategy drives 16% sales growth $71.6 $70.3 $71.8 $72.8 $63.0 Incremental Excalibur sales Expansion of used equipment and rental business Organic growth: alternative FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 energy
Slide 13: Strong Cash Generation and Bottom-Line
Strong Cash Generation and Bottom-Line ($ in millions) Adjusted EBITDA¹ $14.5 +38% Consolidated Adjusted EBITDA $10.0 $10.3 $10.6 +28% Service $8.9 $9.6 $3.1 $4.6 $6.1 +60% Distribution $7.5 $5.8 $5.4 $4.1 $4.9 $3.1 Margin expanded 150 bps to 10.1% FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Distributio
Slide 14: Financial Flexibility Supports Growth Strategy
Financial Flexibility Supports Growth Strategy ($ in millions) Acquisitions Total Debt $13.9 million in FY16 $27.3 $7.0 million in FY17 $19.1 $12.2 Strong cash generation of $7.5M in FY17 $8.0 $7.6 $11.4 million available on credit facility as of March 25, 2017 FY 2013 FY 2014 FY 2015 FY 2016 FY 201
Slide 15: Generating Cash to Drive Key Investments
Generating Cash to Drive Key Investments FY 2009 (start of acquisition strategy) to FY 2017 ($ in millions) $90 $2.1 $27.4 ($23.0) $80 $70 ($50.6) $60 $24.7 $50 $40 $29.5 $30 $20 ($9.3) $10 $0.2 $0.8 $0 FY2009 Cash & Net D&A and Financing/Other FX Effect Capital Business Repurchase of FY 2017 Invest
Slide 16: Growth Strategy and Outlook
Growth Strategy and Outlook 16
Slide 17: Diversification Driving Distribution
Diversification Driving Distribution Why the pivot in strategy? Great synergies between Distribution and Service segments Leverage of current infrastructure Higher gross margins on used and rental equipment Well indexed web domain Differentiation through “value add” © 2017 Transcat Inc. 17
Slide 18: Drive Double-Digit Service Growth
Drive Double-Digit Service Growth “Operational Excellence” Dominate our local markets with integrated sales/ operations focus Organic Growth Strategy Take market share from 3rd party providers and OEMs Capture outsourcing of Geographic expansion internal labs Increased capabilities Continually enhan
Slide 19: Executing Acquisition Strategy
Executing Acquisition Strategy Calibration Excalibur Technologies Engineering CMC Anacor ACA Instrument Compliance Ulrich Spectrum Westcon Tmetrix Services Services Metrology Technologies FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2015 FY 2016 FY 2017 United Wind Newark Cal-Matrix Apex Dispersion Sc
Slide 20: Recent Acquisition Drivers
Recent Acquisition Drivers Increased Geographic Capabilities Leveraged Expansion and Expertise Infrastructure Excalibur Engineering Dispersion Laboratory Spectrum Technologies Anmar Metrology Calibration Technologies © 2017 Transcat Inc. 20
Slide 21: Outlook -- Strong Momentum
Outlook* -- Strong Momentum Continued emphasis on improving Operational Excellence Improve customer experiences, expand organic growth potential, and strengthen our acquisition integration process Fortifying structure with technology, people and processes Expect solid organic growth in the Service s
Slide 22: Marcum MicroCap Conference
June 15, 2017 Marcum MicroCap Conference 22
Slide 23: Supplemental Information
Supplemental Information 23
Slide 24: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Net Income $ 3,704 $ 3,984 $ 4,026 $ 4,124 $ 4,522 + Interest 117 130 234 247 719 + Other Expense / (Income) 111 129 111 48 51 + Tax Provision 2,014 2,462 2,397 1,883 2,642 Operating Income $ 5,946 $ 6,705 $ 6,76
Slide 25: Segment Adjusted EBITDA Reconciliation
Segment Adjusted EBITDA Reconciliation ($ in thousands) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Service Operating Income (loss) $ 1,311 $ 2,379 $ 3,693 $ 4,155 $ 4,769 +Depreciation & Amortization 1,740 2,144 2,362 3,216 4,660 +Other (Expense) / Income (84) (141) (138) (64) (55) +Noncash Stock Comp
Slide 26: Seasoned Executive Team Driving Growth
Seasoned Executive Team Driving Growth Lee D. Rudow More than 31 years of industry experience President and Demonstrated growth record Chief Executive Officer Joined Transcat in 2011 Ben Hawley Rob A. Flack Jennifer J. Nelson Mike W. West Michael J. Tschiderer Vice President Vice President of