Transcat Reports Third Quarter Operating Income Increase of 20% on Solid Service Organic Growth and Gross Margin Expansion

• Total revenue of $44.1 million up 2% from prior-year period in an environment that continues to be impacted by the COVID-19 pandemic
• Service segment organic revenue growth of 5.9%; Total Service revenue up 12.2%
• Service segment gross margin expanded 590 basis points to 27.9%

Rochester, NY, February 2, 2021 – Transcat, Inc. (Nasdaq: TRNS) (“Transcat” or the “Company”), a leading provider of accredited calibration, repair, inspection and laboratory instrument services and value-added distributor of professional grade handheld test, measurement and control instrumentation, today reported financial results for its third quarter and nine-month period ended December 26, 2020 (the “third quarter”) of fiscal year 2021, which ends March 27, 2021 (“fiscal 2021”). Results include the previously reported acquisition of TTE Laboratories, Inc. (referred to as “pipettes.com”) effective February 21, 2020 and the acquisition of BioTek Services, Inc. (“BioTek”) effective December 16, 2020.

“In an environment that continues to be significantly impacted by the COVID-19 pandemic, our third quarter results demonstrated the resiliency of our business and effectiveness of our strategy as we delivered better than expected results,” commented Lee D. Rudow, President and CEO. “Our Service segment delivered another excellent quarter, growing revenue 12.2% and increasing gross margin by 590 basis points from the prior-year period. We were certainly encouraged by organic growth of 5.9% as our strategy to capture opportunities in highly-regulated end markets, including Life Sciences, continues to serve us well. Our gross margin improvement was driven by technician productivity, expense reductions, operating leverage on our fixed costs and the strong performance of pipettes.com.”

“Our Distribution segment continues to be negatively impacted by the current market environment but performed in line with our expectations. Overall, our Service segment performance drove third quarter consolidated operating income of $2.5 million, exceeding our expectations and growing 20% from prior year. Year-to-date cash flow from operations of $15.6 million was nearly double from prior year and was used, in part, to fund technology investments and our acquisition strategy”.

He added, “Our pipettes.com business continues to deliver strong results and the recent acquisition of BioTek increases our exposure to the growing pipettes market and broadens our geographic footprint. Additionally, BioTek gives us additional on-site technician capabilities, which is a perfect complement to the largely in-house technician business model at pipettes.com.”

About Transcat

Transcat, Inc. is a leading provider of accredited calibration, repair, inspection and laboratory instrument 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 22 Calibration Service Centers strategically located across the United States, Puerto Rico and Canada, and services at 20 imbedded customer-site 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 the complementary nature of its two operating segments, its comprehensive service capabilities, strong brand, enhanced e-commerce capabilities 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

For More Information Contact: 

Mark A. Doheny, Chief Financial Officer
Phone: (585) 563-5766 
Email: mark.doheny@transcat.com

Deborah K. Pawlowski, Investor Relations
Phone: (716) 843-3908
Email: dpawlowski@keiadvisors.com