trns20230911

trns20230911_10q.htm

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________

FORM 10-Q

(Mark one)

☑ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: September 23, 2023

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 000-03905

TRANSCAT, INC.

(Exact name of registrant as specified in its charter)

Ohio	16-0874418
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

35 Vantage Point Drive, Rochester, New York 14624

(Address of principal executive offices) (Zip Code)

(585) 352-7777

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value	TRNS	Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☑
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes No ☑

The number of shares of common stock, par value $0.50 per share, of the registrant outstanding as of October 27, 2023 was 8,826,324.

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		Page(s)
PART I.	FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements:

	Statements of Income for the Second Quarter and Six Months Ended September 23, 2023 and September 24, 2022	1

	Statements of Comprehensive Income for the Second Quarter and Six Months Ended September 23, 2023 and September 24, 2022	2

	Balance Sheets as of September 23, 2023 and March 25, 2023	3

	Statements of Cash Flows for the Six Months Ended September 23, 2023 and September 24, 2022	4

	Statements of Changes in Shareholders' Equity for the Second Quarter and Six Months Ended September 23, 2023 and September 24, 2022	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33

Item 4.	Controls and Procedures	33

PART II.	OTHER INFORMATION

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	34

Item 6.	Exhibits	35

SIGNATURES		37

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PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

	(Unaudited)				(Unaudited)
	*Second Quarter Ended*				*Six Months Ended*
	*September 23,*		*September 24,*		*September 23,*		*September 24,*
	*2023*		*2022*		*2023*		*2022*

Service Revenue	$	41,431	$	35,267	$	81,284	$	69,143
Distribution Sales		21,373		21,172		42,118		41,957
Total Revenue		62,804		56,439		123,402		111,100

Cost of Service Revenue		27,347		23,780		54,229		46,821
Cost of Distribution Sales		15,332		15,892		30,338		31,474
Total Cost of Revenue		42,679		39,672		84,567		78,295

Gross Profit		20,125		16,767		38,835		32,805

Selling, Marketing and Warehouse Expenses		6,856		5,900		13,325		11,720
General and Administrative Expenses		11,626		7,241		19,227		13,855
Total Operating Expenses		18,482		13,141		32,552		25,575

Operating Income		1,643		3,626		6,283		7,230

Interest and Other Expense, net		841		537		1,719		693

Income Before Income Taxes		802		3,089		4,564		6,537
Provision for Income Taxes		342		732		1,155		1,108

Net Income	$	460	$	2,357	$	3,409	$	5,429

Basic Earnings Per Share	$	0.06	$	0.31	$	0.44	$	0.72
Average Shares Outstanding		7,819		7,550		7,732		7,542

Diluted Earnings Per Share	$	0.06	$	0.31	$	0.43	$	0.71
Average Shares Outstanding		7,948		7,646		7,840		7,635

See accompanying notes to consolidated financial statements.

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TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

	(Unaudited)						(Unaudited)
	*Second Quarter Ended*						*Six Months Ended*
	*September 23,*			*September 24,*			*September 23,*		*September 24,*
	*2023*			*2022*			*2023*		*2022*
Net Income	$	460		$	2,357		$	3,409	$	5,429

Other Comprehensive Income (Loss):
Currency Translation Adjustment		(352	)		(831	)		124		(1,271	)
Other, net of tax effects of $2 and $(2) for the second quarter ended September 23, 2023 and September 24, 2022, respectively; and $4 and $(6) for the six months ended September 23, 2023 and September 24, 2022, respectively		6			(7	)		12		(20	)
Total Other Comprehensive Income (Loss)		(346	)		(838	)		136		(1,291	)

Comprehensive Income	$	114		$	1,519		$	3,545	$	4,138

See accompanying notes to consolidated financial statements.

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TRANSCAT, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts)

	(Unaudited)		(Audited)
	*September 23,*		*March 25,*
	*2023*		*2023*
ASSETS
Current Assets:
Cash	$	1,246	$	1,531
Accounts Receivable, less allowance for credit losses of $614 and $457 as of September 23, 2023 and March 25, 2023, respectively		44,382		44,698
Other Receivables		335		506
Inventory, net		15,685		16,929
Prepaid Expenses and Other Current Assets		3,525		3,935
Total Current Assets		65,173		67,599
Property and Equipment, net		35,648		29,064
Goodwill		106,366		69,360
Intangible Assets, net		23,156		13,799
Right To Use Assets, net		16,784		14,876
Other Assets		1,083

SEC Form 10-Q filed by Transcat Inc.