Transcat Reports Strong Fiscal First Quarter 2026 Financial Results with Double-Digit Revenue & Gross Profit Growth

• Q1'26 Adjusted EBITDA Increased 15% to $11.8 Million Driven by Double-Digit Revenue Growth

• Q1'26 Service Revenue Increased 12% to $49.1 Million

• Q1'26 Distribution Revenue Grew 19% to $27.3 Million on Increased Demand for Rentals

• Q1'26 Distribution Gross Margins Expanded 130 Basis Points to a Record 35.2%

• Acquisition of Essco Calibration Laboratory with $22 Million in Annual, Margin-Accretive Revenue

• Management to Host Conference Call Tomorrow at 11:00 a.m. Eastern Time

Transcat, Inc. (NASDAQ:TRNS) ("Transcat" or the "Company"), a leader in test measurement, control and calibration, has reported its financial and operational results for its first quarter ended June 28, 2025 (the "first quarter") of fiscal year 2026.

Management Commentary

"The Transcat team delivered solid revenue and adjusted EBITDA performance in the fiscal first quarter highlighted by double-digit service revenue growth and better-than-expected demand in our distribution segment," commented Lee D. Rudow, President and CEO. "Distribution revenue grew 19% in the quarter with a record 35% gross margin driven primarily by strong rentals performance. Our talented team's execution paired with robust revenue growth enabled us to deliver 15% adjusted EBITDA growth."

"Acquisitions continue to be a cornerstone of our growth strategy. We are extremely excited about the recent acquisition of Essco Calibration, the largest deal in Transcat history, supported by our new, larger credit facility. Essco is a perfect fit in our calibration service portfolio and creates a dominant presence for Transcat in the New England market, a market defined by a large concentration of highly regulated life science and Aerospace & defense manufacturers. With the Essco deal following the acquisition of Martin Calibration in December, Transcat has acquired two leading regional calibration providers in an 8-month period, which reflects the investment in acquisition infrastructure we have made in the past couple of years. This continues to differentiate Transcat and demonstrates our ability to attract and acquire highly sought-after calibration companies, the best of the best, to expand our capabilities and geographic reach, while increasing market share. Martin Calibration had another strong quarter in the Midwest, driven by sales synergies with Transcat. The integration of Martin is ahead of schedule as we deploy our integration playbook."

"Looking forward, the macro environment continues to be a challenge, but our diversified portfolio of products and services along with a strong financial profile will continue to differentiate Transcat in fiscal 2026 and beyond. We expect continued service revenue growth, benefiting from our new strength in the Midwest, larger presence in the New England market, and progressively improving Service organic revenue. We are confident in a return to high single-digit Service organic revenue growth in the second half of Fiscal 2026, barring any further economic uncertainty. The inherent operating leverage in our Service model, along with automation of our calibration processes and focus on productivity, remain key enablers of Service margin expansion. We believe strong execution combined with the differentiation of our portfolio, positions us well to drive sustainable, long-term shareholder value."

First Quarter Fiscal 2026 Review

(Results are compared with the first quarter of the fiscal year ended March 29, 2025 ("fiscal 2025"))

*See Note 1 on page 5 for a description of these non-GAAP financial measures and pages 10, 11 and 12 for the reconciliation tables.

Consolidated revenue was $76.4 million, an increase of $9.7 million or 14.6%, driven by growth in both service and distribution segments. Consolidated gross profit was $25.8 million, an increase of $3.2 million, or 14.0%, while gross margin decreased 20 basis points.

Operating expenses were $20.5 million, an increase of $2.9 million, or 16.7%, driven by incremental expenses from acquired businesses (including stock-based compensation expense), increased intangibles amortization expense, and higher sales-based incentives.

Adjusted EBITDA was $11.8 million, which represented an increase of $1.6 million or 15.2%, driven by strong revenue growth. Net income per diluted share was $0.35 compared to $0.48 last year. Adjusted diluted earnings per share were $0.59 versus $0.68 last year.

Service segment first quarter results

Represents the accredited calibration, repair, inspection and laboratory instrument services business (64.3% of total revenue for the first quarter of fiscal 2026).

*See Note 1 on page 5 for a description of this non-GAAP financial measure and pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

Service segment revenue was $49.1 million, an increase of $5.4 million or 12.3%, and included $6.4 million of incremental revenue from acquisitions. Despite economic volatility in the first quarter, total Service revenue growth of 12% and was in line with expectations. The segment gross margin was 33.0%, a decrease of 100 basis points from the prior year.

Distribution segment second quarter results

Represents the sale and rental of new and used professional grade handheld test, measurement and control instrumentation (35.7% of total revenue for the second quarter of fiscal 2025).

*See Note 1 on page 5 for a description of this non-GAAP financial measure and pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

Distribution revenue was $27.2 million, which represented an increase of $4.4 million or 19.0%, driven by growth in rentals and products. Distribution segment gross margin was 35.2%, an increase of 130 basis points due to strong performance in higher margin rentals.

Balance Sheet and Cash Flow Overview

On June 28, 2025, the Company had $1.9 million in cash and cash equivalents on hand and $46.8 million available for borrowing under its secured revolving credit facility. Total debt was $34.4 million versus $32.7 million on March 29, 2025. The Company's leverage ratio, as defined in the credit agreement, was 0.82 on June 28, 2025, compared with 0.78 on March 29, 2025. On July 29, 2025, Transcat announced a new 5-Year $150 Million syndicated secured credit facility with M&T Bank and included additional lenders, Wells Fargo Bank, N.A. and Bank of America, replacing its existing $80 million credit facility with M&T and payoff of the term debt.

Tom Barbato, Transcat's Chief Financial Officer, added, "First quarter adjusted EBITDA grew 15% as both segments experienced double-digit revenue growth. Our balance sheet remains strong with a 0.82x leverage ratio at quarter-end. We recently closed a new 5-Year $150 Million syndicated secured credit facility that supported the acquisition of the premier Calibration Services provider in the New England market, Essco Calibration Laboratory. The increased credit capacity now provides capital resources to execute on our proven acquisition and growth strategies. Moreover, this facility with America's top lenders nearly doubles our access to available capital and provides significant financial flexibility. Given our expanded balance sheet and diversified portfolio, we are well-positioned to capture increased market share in the test and measurement, control and calibration markets with future profitable growth."

Fiscal First Quarter 2026 Results Webcast and Conference Call

Transcat will host a conference call and webcast on Thursday, August 7, 2025, at 11:00 a.m. ET. Management will review the financial and operating results for the first quarter, as well as the Company's strategy and outlook. A question-and-answer session will follow the formal discussion. The review will be accompanied by a slide presentation, which will be available at www.transcat.com/investor-relations. The conference call can be accessed by calling (201) 689-8471. Alternatively, the webcast can be monitored at www.transcat.com/investor-relations.

A telephonic replay will be available from 3:00 p.m. ET on the day of the conference call through Thursday, August 14, 2025. To listen to the archived call, dial (844) 512-2921 from the US or Canada, or (412) 317-6671 from international locations, and enter conference ID number 11159645 or access the webcast replay at https://www.transcat.com/investor-relations, where a transcript will be posted once available.

NOTE 1 – Non-GAAP Financial Measures

In addition to reporting net income, a U.S. generally accepted accounting principle ("GAAP") measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, non-cash stock compensation expense, and acquisition related transaction expenses, which is a non-GAAP measure. The Company's management believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the performance of its core operations from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, stock-based compensation expense and other items, which is not always commensurate with the reporting period in which it is included. As such, the Company uses Adjusted EBITDA as a measure of performance when evaluating its business segments and as a basis for planning and forecasting. Adjusted EBITDA is not a measure of financial performance under GAAP and is not calculated through the application of GAAP. As such, it should not be considered as a substitute for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. Adjusted EBITDA, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies. See pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

In addition to reporting Diluted Earnings Per Share, a GAAP measure, we present Adjusted Diluted Earnings Per Share (net income plus acquisition related amortization expense, acquisition related transaction expenses, acquisition related stock-based compensation, and acquisition amortization of backlog; divided by the average diluted shares outstanding during the period), which is a non-GAAP measure. Our management believes Adjusted Diluted Earnings Per Share is an important measure of our operating performance because it provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance. Adjusted Diluted Earnings Per Share is not a measure of financial performance under GAAP and is not calculated through the application of GAAP. As such, it should not be considered as a substitute or alternative for the GAAP measure of Diluted Earnings Per Share and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. Adjusted Diluted Earnings Per Share, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies. See page 12 for the Adjusted Diluted EPS Reconciliation table.

About Transcat

Transcat, Inc. is a leading provider of accredited calibration, reliability, maintenance optimization, quality and compliance, validation, Computerized Maintenance Management System (CMMS), and pipette services. The Company is focused on providing best-in-class services and products to highly regulated industries, particularly the Life Science industry, which includes pharmaceutical, biotechnology, medical device, and other FDA-regulated businesses, as well as aerospace and defense, and energy and utilities. Transcat provides periodic on-site services, mobile calibration services, pickup and delivery, in-house services at its 33 Calibration Service Centers strategically located across the United States, Puerto Rico, Canada, and Ireland. Inclusive of customer embedded locations and other field offices, we operate out of more than 50 locations. The breadth and depth of measurement parameters addressed by Transcat's ISO/IEC 17025 scopes of accreditation are believed to be the best in the industry.

Transcat also operates as a leading value-added distributor that markets, sells and rents new and used national and proprietary brand instruments to customers primarily in North America. The Company believes its combined Service and Distribution segment offerings, experience, technical expertise, and integrity create a unique and compelling value proposition for its customers.

Transcat's strategy is to leverage its strong brand and unique value proposition that includes its comprehensive instrument service capabilities, enterprise asset management, and leading distribution platform to drive organic sales growth. The Company will also look to expand its addressable calibration market through acquisitions and capability investments to further realize the inherent leverage of its business model. More information about Transcat can be found at: Transcat.com.

Safe Harbor Statement

This news release 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 statements relate to expectations, estimates, beliefs, assumptions and predictions of future events and are identified by words such as "aim," "anticipates," "believes," "can," "could," "designed," "estimates," "expects," "focus," "goal," "intends," "may," "plan," "outlook," "potential," "seek," "strategy," "strive," "target," "will," "would," and other similar words. All statements addressing operating performance, events or developments that Transcat expects or anticipates will occur in the future, including but not limited to statements relating to anticipated revenue, profit margins, the commercialization of software projects, sales operations, capital expenditures, cash flows, operating income, growth strategy, segment growth, potential acquisitions, integration of acquired businesses, market position, customer preferences, outlook and changes in market conditions in the industries in which Transcat operates are forward-looking statements. Forward-looking statements should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties include those more fully described in Transcat's Annual Report and Quarterly Reports filed with the Securities and Exchange Commission, including under the heading entitled "Risk Factors." Should one or more of these risks or uncertainties materialize or should any of the Company's underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on the Company's forward-looking statements, which speak only as of the date they are made. Except as required by law, the Company disclaims any obligation to update, correct or publicly announce any revisions to any of the forward-looking statements contained in this news release, whether as the result of new information, future events or otherwise.

FINANCIAL TABLES FOLLOW.