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Transcat reports dip in Q4 sales, but record revenue for year

Rochester Business Journal
May 21, 2014

Transcat Inc. reported declines in its fiscal fourth quarter net income and revenues, but still posted record revenues for the full-year.

Fourth-quarter net income dipped to $1.7 million, or 24 cents a diluted share, compared with $1.8 million, 24 cents a diluted share, in the fiscal fourth quarter 2012. Transcat repurchased some 800,000 shares of its common stock for $6.4 million in fiscal 2014.

The company logged sales of $30 million, down 2.2 percent from $31 million the same period a year ago.

Transcat calibrates, repairs, inspects, distributes and ensures compliance of instrumentation. It grew its service segment by 10.3 percent to $1.3 million, offset by a 10.3 percent decline in distribution segment sales. The decrease reflected reduced demand in the alternative energy industry and the impact of the severe winter weather, the company said.

Operating income remained relatively flat at $2.9 million. Operating expenses increased by 6.1 percent to $2.7 million mostly because of higher selling expenses.

“We continued to execute on our strategic plan,” said Lee Rudow, president and CEO. “Fiscal 2014 was a good year at Transcat. We leveraged our two business segments, driving growth and building momentum while achieving both top-line and earnings growth, and delivering solid operating margin performance and healthy cash flow.”

The company’s net income was $4 million, or 54 cents a diluted share, in fiscal 2014, compared with $3.7 million, or 49 cents a diluted share, in fiscal 2013.  

Transcat’s total revenue increased to a record $118.5 million in fiscal 2014, up 5.5 percent from total revenue of $112.3 million in fiscal 2013.  

As of March 29, the company had $23,000 in cash compared with $406,000 in cash on March 30, 2013.

The company’s results included the acquisitions of Anacor Compliance Services Inc. on July 16, 2012, and Cal-Matrix Metrology Inc., on Jan. 25, 2013.

“Fiscal 2014 revenue and gross margin continued to expand as a result of the strong execution of our strategic operating plan,” Rudow said. “We expect to continue to grow our service segment at a double-digit rate, driven by our expanded addressable market and strong organic sales growth.”

Shares of Transcat’s stock (Nasdaq: TRNS) dropped more than 2 percent Wednesday afternoon to $9.16, down from Tuesday’s close of $9.39.

(c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.


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