SOURCE: Transcat, Inc.

July 19, 2005 17:40 ET

Transcat Announces Fiscal Year 2006 First Quarter Results; Revenues Rise 6.4%

ROCHESTER, NY -- (MARKET WIRE) -- July 19, 2005 -- Transcat, Inc. (NASDAQ: TRNS), a leading global distributor of professional grade test, measurement, and calibration instruments and a provider of calibration and repair services, today announced financial results for the fiscal year 2006 first quarter ended June 25, 2005.

Fiscal Year 2006 First Quarter Highlights

--  Net sales increased 6.4% to $14.1 million in the fiscal year 2006
    first quarter.
--  Gross profit ratio for the fiscal year 2006 first quarter increased
    2.0 points to 25.6% over the fiscal year 2005 first quarter.
--  Operating income for the fiscal year 2006 first quarter increased $0.6
    million to $0.3 million from a $0.3 million operating loss in the fiscal
    year 2005 first quarter.
--  Net income for the fiscal year 2006 first quarter increased $0.6
    million to $0.2 million, or $0.02 per diluted share, from a net loss of
    $0.4 million, or $0.07 per diluted share, in the fiscal year 2005 first
    quarter.
--  Distribution Products - Net sales increased 5.9% to $9.4 million in
    the fiscal year 2006 first quarter from $8.9 million in the fiscal year
    2005 first quarter.  Distribution Products gross profit ratio for the
    fiscal year 2006 first quarter increased 1.1 points over the fiscal year
    2005 first quarter to 24.1%.
--  Calibration Services - Net sales increased 7.4% to $4.7 million in the
    fiscal year 2006 first quarter from $4.4 million in the fiscal year 2005
    first quarter.  Calibration Services gross profit ratio increased 3.9
    points over the fiscal year 2005 first quarter to 28.8%.
    
Operations Review

Commenting on the fiscal year 2006 first quarter results, Carl E. Sassano, Chairman of the Board, President and Chief Executive Officer, stated: "I am pleased to report that our strong performance at the close of fiscal year 2005 has continued into the fiscal year 2006 first quarter.

"During the quarter, we continued to add new customers who chose to outsource their calibration services functions to Transcat. Additionally, we acquired new customers for our broad range of professional grade test, measurement and calibration instruments through our targeted sales programs and direct mail efforts.

"In our Calibration Services business, our principal strategy remains focused on targeting potential customers who can outsource their calibration services to Transcat. As a result, our success has produced a 7.4% increase in sales for the fiscal year 2006 first quarter which is within the overall range contemplated by our strategic plan.

"In our Distribution Products business, we will continue to use our proven formula for success in increasing our sales and market penetration. As a result of our targeted sales programs and direct mail campaigns, we achieved a 5.9% growth in sales in the fiscal year 2006 first quarter, consistent with our strategic plan. We will also evaluate and add new product lines, when appropriate, to meet our customers' needs."

Looking Ahead

Mr. Sassano continued: "For the remainder of fiscal year 2006, we are committed to continuing our program of structured and orderly growth. We will continue to acquire new customers in our targeted industry segments with a focus on building value-driven relationships.

"As we look ahead, we are confident that we have the strategies and resources in place that will win us greater recognition in our markets and generate increased demand for our services and products. We will also continue to improve our operating efficiencies with a goal of achieving a substantial increase in operating income by the close of fiscal year 2006.

"I believe the interests of our shareholders, customers and employees have been well served by the strategic initiatives we have been implementing over the past several quarters and I expect this to continue in the future."

Fiscal Year 2006 First Quarter Financial Highlights

For the fiscal year 2006 first quarter, net sales were $14.1 million, an increase of $0.8 million or 6.4%, compared with net sales of $13.2 million for the fiscal year 2005 first quarter. Distribution Products net sales for the fiscal year 2006 first quarter were $9.4 million, an increase of $0.5 million or 5.9%, compared with net sales of $8.9 million for the fiscal year 2005 first quarter. Calibration Services net sales for the fiscal year 2006 first quarter were $4.7 million, an increase of $0.3 million or 7.4%, compared with net sales of $4.4 million for the fiscal year 2005 first quarter.

Net income for the fiscal year 2006 first quarter was $0.2 million, or $0.02 per diluted share, as compared with a net loss of $0.4 million, or $0.07 per diluted share, for the fiscal year 2005 first quarter.

About Transcat, Inc.

Transcat, Inc. is a leading global distributor of professional grade test, measurement and calibration instruments and an accredited provider of calibration and repair services primarily to the process, life science and manufacturing industries.

Through the Company's Calibration Services segment, Transcat offers precise, reliable, fast calibration services through eleven Calibration Centers of Excellence strategically located across the United States and Canada to approximately 8,000 customers. To support the Company's customers' calibration service needs, Transcat delivers the industry's highest quality calibration services and repairs. Each of the calibration laboratories is ISO-9001: 2000 registered with Underwriter's Laboratories, Inc. and the scope of accreditation to ISO/IEC 17025 is the widest in the industry.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements, which are subject to various risks and uncertainties. The Company's actual results could differ from those anticipated in such forward-looking statements as a result of numerous factors that may be beyond the Company's control.


                              -Statistical Tables Follow -

                              Transcat, Inc.
                   Consolidated Statements of Operations
                  (In Thousands, Except Per Share Amounts)


                                                        (Unaudited)
                                                    First Quarter Ended

                                                       June         June
                                                    25, 2005     26, 2004
                                                  -----------   ----------

Product Sales                                     $     9,385  $     8,864

Service Sales                                           4,680        4,358
                                                  -----------   ----------
  Net Sales                                            14,065       13,222
                                                  -----------   ----------


Cost of Products Sold                                   7,126        6,824

Cost of Services Sold                                   3,334        3,272
                                                  -----------   ----------
   Total Cost of Products and Services Sold            10,460       10,096
                                                  -----------   ----------


Gross Profit                                            3,605        3,126
                                                  -----------   ----------


Selling, Marketing, and Warehouse Expenses              2,093        2,104

Administrative Expenses                                 1,182        1,294
                                                  -----------   ----------
   Total Operating Expenses
                                                        3,275        3,398
                                                  -----------   ----------


Operating Income                                          330         (272)
                                                  -----------   ----------


Interest Expense                                          114           72

Other Expense                                              42           83
                                                  -----------   ----------
   Total Other Expense                                    156          155
                                                  -----------   ----------


Income (Loss) Before Income Taxes                         174         (427)

Benefit for Income Taxes                                    -            -
                                                  -----------   ----------


Net Income (Loss)                                 $       174  $      (427)
                                                  ===========   ==========


Basic Earnings (Loss) Per Share                   $      0.03  $     (0.07)

Average Shares Outstanding (in thousands)               6,536        6,321


Diluted Earnings (Loss) Per Share                 $      0.02  $     (0.07)

Average Shares Outstanding (in thousands)               7,233        6,321


Certain reclassifications of prior year financial information
 have been made to conform to current presentation.

                                  Transcat, Inc.
                           Consolidated Balance Sheets
                    (In Thousands, Except Share and Per Share Amounts)


                                                 (Unaudited)
                                                     June           March
                                                   26, 2005       26, 2005
                                                  -----------   ----------
ASSETS
Current Assets:
   Cash                                                 $63           $106

   Accounts Receivable, less
    allowance for doubtful accounts of $96
    and $56 as of June 26, 2005 and
    March 26, 2005, respectively                      7,115          8,089

    Other Receivables                                   427            313

   Finished Goods Inventory, net                      5,180          5,902

   Prepaid Expenses and Deferred Charges                775            630
                                                  -----------   ----------

     Total Current Assets                            13,560         15,040


Property, Plant and Equipment, net                    2,067          1,984

Capital Leases, net                                      98            115

Goodwill                                              2,524          2,524

Prepaid Expenses and Deferred Charges                   165            188

Other Assets                                            261            261
                                                  -----------   ----------
   Total Assets                                     $18,675        $20,112
                                                  ===========   ==========


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts Payable                                  $3,529         $4,544
   Accrued Payrolls, Commissions, and Other           1,092          1,993
   Income Taxes Payable                                 100            100
   Deposits                                               9             38
   Current Portion of Term Loan                         758            758
   Current Portion of Capital Lease Obligations          68             66
   Revolving Line of Credit                           5,851          5,498
                                                  -----------   ----------

     Total Current Liabilities                       11,407         12,997


Term Loan, less current portion                         853          1,020

Capital Lease Obligations, less current portion          39             56

Deferred Compensation                                   206            181

Deferred Gain on TPG Divestiture                      1,544          1,544
                                                  -----------   ----------
   Total Liabilities                                 14,049         15,798
                                                  -----------   ----------


Stockholders' Equity:
   Common Stock, par value $0.50 per share,
    30,000,000 shares authorized;
    6,809,989 and 6,700,505 shares issued
    as of June 25, 2005 and March 26, 2005,
    respectively; 6,562,725 and 6,453,241 shares
    outstanding as of June 25, 2005
    and March 26, 2005, respectively                  3,405          3,350
   Capital in Excess of Par Value                     4,084          3,995
   Warrants                                             430            430
   Unearned Compensation                                 (4)           (17)
   Accumulated Other Comprehensive Gain                  77             96
   Accumulated Deficit                               (2,528)        (2,702)
   Less:  Treasury Stock, at cost, 247,264
    shares as of June 25, 2005 and
    March 26, 2005, respectively                       (838)          (838)
                                                  -----------   ----------
      Total Stockholders' Equity                      4,626          4,314
                                                  -----------   ----------
      Total Liabilities and Stockholders' Equity    $18,675        $20,112
                                                  ===========   ==========

                                     Transcat, Inc.
                         Consolidated Statements of Cash Flows
                                     (In Thousands)


                                                      Three Months Ended
                                                      June          June
                                                   25, 2005       26, 2004
                                                  -----------   ----------

Cash Flows from Operating Activities:
   Net Income (Loss)                                 $  174        $  (427)
   Adjustments to Reconcile Net
    Income (Loss) to Net Cash
     (Used in) Provided by Operating Activities:
       Depreciation and Amortization                    288            355
       Provision for Doubtful Accounts Receivable        40             (5)
       Provision for Returns                             11              -
       Amortization of Unearned Compensation             13             77
   Changes in Assets and Liabilities:
     Accounts Receivable and Other Receivables          809          1,464
     Inventories                                        722            338
     Prepaid Expenses, Deferred Charges, and Other     (215)          (151)
     Accounts Payable                                (1,015)          (436)
     Accrued Payrolls, Commissions, and Other          (901)          (300)
     Deposits                                           (29)             -
     Deferred Compensation                               25             10
                                                  -----------   ----------
       Net Cash (Used in) Provided by
        Operating Activities                            (78)           925
                                                  -----------   ----------

Cash Flows from Investing Activities:
   Purchase of Property, Plant and Equipment           (261)          (183)
                                                  -----------   ----------
       Net Cash Used in Investing Activities           (261)          (183)
                                                  -----------   ----------
Cash Flows from Financing Activities:
   Revolving Line of Credit, net                        353         (1,031)
   Payments on Term Loans                              (167)          (126)
   Payments on Capital Leases                           (15)           (15)
   Issuance of Common Stock                             144              8
                                                  -----------   ----------
       Net Cash Provided by (Used in)
        Financing Activities                            315         (1,164)
                                                  -----------   ----------

Effect of Exchange Rate Changes on Cash                 (19)           (28)
                                                  -----------   ----------

Net Decrease in Cash                                    (43)          (450)
Cash at Beginning of Period                             106            547
                                                  -----------   ----------
Cash at End of Period                                $   63         $   97
                                                  ===========   ==========
 

Contact Information

  • Contact:

    Charles P. Hadeed
    COO, VP Finance & CFO
    Transcat, Inc.
    585-352-7777

    Van Negris / Lexi Terrero
    Van Negris & Company, Inc.
    212-759-0290

    Corporate Offices
    35 Vantage Point Drive
    Rochester, New York 14624
    Telephone: 585-352-7777
    Fax: 585-352-7788