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Transcat, Inc. 35 Vantage Point Drive • Rochester • NY • 14624 • Phone: (585) 352-7777
Transcat Reports Record Third Quarter Revenue in Fiscal 2019
Achieved 9.2% Service segment revenue growth with solid U.S. Service organic growth of 6.9% offsetting soft results of Canada operations
Service margins impacted by short-term productivity challenges of its technical work force
Distribution segment gross margin increased 180 basis points on gross profit growth due to strategic optimization of customer channel mix and pricing
Generated $7.2 million in cash from year-to-date operations, up 25%
ROCHESTER, NY, February 4, 2019 – 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 ended December 29, 2018 (the “third quarter”) of fiscal year 2019, which ends March 30, 2019 (“fiscal 2019”). Reported results include the acquisition of substantially all of the assets of Angel’s Instrumentation, Inc. (“Angel’s”), effective August 31, 2018.
Lee D. Rudow, President and CEO, commented, “From a sales perspective, we continued to capture market share in our Service segment and are winning more business from large customer-based labs, where our operations are embedded for the long term. We are also encouraged by the way the last part of the quarter improved in the U.S. over the start of the quarter. Unfortunately, Canada continues to be a soft market, given the global trade and tariff uncertainties there that have muted our U.S. results. That said, we are encouraged by the early read into our fourth quarter and the solid pulse we sense in both our segments, especially in the U.S.
“While our Service segment continues to grow, especially in the life sciences sector, in the third quarter we faced short-term productivity challenges. This included the timing of those customer-based lab contracts which we won in the quarter resulting in incurred ramp-up costs, such as hiring and training technicians, in advance of the contract official start date. This, combined with the expansion of our lab technician staffing to support our traditional growth, has created a degree of inefficiency that we are working through. As we continue to develop our people, processes and technology, especially automation, we expect productivity to improve.
“We are particularly pleased with the Distribution segment’s continued ability to migrate away from lower-margin business while delivering on our stated goals to generate higher gross profit and margins. In addition, Distribution continues to provide us differentiation in our markets and to be a significant lead source for our Service segment.”
The following information was filed by Transcat Inc (TRNS) on Tuesday, February 5, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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