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Transcat Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 11, 2013 04:11PM

Transcat Inc. (TRNS) filed Quarterly Report for the period ended 2012-12-29. Transcat, Inc. has a market cap of $44.9 million; its shares were traded at around $6.01 with a P/E ratio of 13.9 and P/S ratio of 0.4. Transcat, Inc. had an annual average earning growth of 13.8% over the past 10 years.



Highlight of Business Operations:

Service revenue increased to $9.9 million in the third quarter of fiscal year 2013, a $0.8 million, or 8.9% increase, when compared to $9.1 million in the third quarter of fiscal year 2012. The growth during the quarter is primarily attributed to incremental revenue associated with our recent Anacor acquisition, partially offset by a $0.2 million loss of low margin revenue from services we were outsourcing for a customer that were not repeated in fiscal year 2013.

Service segment gross profit increased $0.3 million, or 16.5%, from the third quarter of fiscal year 2012 to the third quarter of fiscal year 2013. Service segment gross margin increased 140 basis points over the same time period. While this increase demonstrates margin expansion, it was somewhat constrained by acquisition-related revenue growth and the associated incremental costs. Because the timing of calibration orders and segment expenses can vary on a quarter-to-quarter basis, we believe a trailing twelve month trend provides a better indication of the progress of this segment. Service segment gross profit for the twelve months ended December 29, 2012 was $9.4 million, up 11.8% when compared with $8.4 million for the twelve months ended December 24, 2011, due to increased revenue. Service segment gross margin was 24.0% and 24.3% for the twelve months ended December 29, 2012 and December 24, 2011, respectively. The following table reflects the quarterly historical trend of our calibration services gross margin as a percent of service revenues:

Service segment gross profit increased $0.3 million, or 16.5%, from the third quarter of fiscal year 2012 to the third quarter of fiscal year 2013. Service segment gross margin increased 140 basis points over the same time period. While this increase demonstrates margin expansion, it was somewhat constrained by acquisition-related revenue growth and the associated incremental costs. Because the timing of calibration orders and segment expenses can vary on a quarter-to-quarter basis, we believe a trailing twelve month trend provides a better indication of the progress of this segment. Service segment gross profit for the twelve months ended December 29, 2012 was $9.4 million, up 11.8% when compared with $8.4 million for the twelve months ended December 24, 2011, due to increased revenue. Service segment gross margin was 24.0% and 24.3% for the twelve months ended December 29, 2012 and December 24, 2011, respectively. The following table reflects the quarterly historical trend of our calibration services gross margin as a percent of service revenues:

Product segment gross profit declined $0.5 million, or 9.3%, in the third quarter of fiscal year 2013 compared to the third quarter of fiscal year 2012. As a percentage of product sales, gross profit decreased to 23.2% in the third quarter of fiscal year 2013 compared with 25.6% in the third quarter of fiscal year 2012. Our product gross profit includes a point-of-sale rebate program with a key vendor that is based on Product segment sales growth on a calendar year-over-year basis. We experienced a decrease in our annual rebates which caused declines in our Product segment gross profit and gross margin. The following table reflects the quarterly historical trend of our product gross margin:

Our product sales accounted for 65.0% and 67.6% of our total revenue in the first nine months of fiscal years 2013 and 2012, respectively. For the first nine months of fiscal year 2013, product sales decreased $0.8 million, or 1.5%, compared with the first nine months of fiscal year 2012. Sales to both direct and reseller customers declined, reflecting general softness in the test and measurement equipment market.

Read the The complete Report



Stocks Discussed: TRNS,
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