Hot Stock under Review: Transcat Inc. (NASDAQ: TRNS)

ROCHESTER, N.Y., October 25, 2019 – Shares of Transcat Inc. (NASDAQ: TRNS) surged 11.08% to $29.18. The stock grabbed the investor’s attention and traded 67.056K shares as compared to its average daily volume of 26.57K shares. The stock’s institutional ownership stands at 64.80%.

Transcat, Inc. (TRNS) achieved record quarterly revenue of $44.49M, up 4.8% even with one less week in fiscal 2019. Revenue on a normalized basis increased 12.9%, as strong U.S. sales more than offset continued softness in Canada. Higher gross profit and margin helped to offset continued investments to support growth as operating expenses were up $0.49M, or 7.0%. As a result, operating income increased $0.10M. The effective tax rate was 20.7% for the quarter compared with 25.2% for the previous fiscal year’s fourth quarter.

Full-Year Fiscal 2019 Review (Results compared with fiscal 2018)

Consolidated revenue of $160.90M was up 6.2% on a normalized basis. Excluding acquired revenue from Angel’s, the Company’s organic Service revenue increased 6.1% or 8.6% on a normalized basis. As a percentage of revenue, consolidated operating expenses were 18.1%, down 20 basis points. As a result, operating income increased $1.20M, or 13.3%, to $10.20M, and operating margin expanded 60 basis points.

Transcat achieved record net income of $7.10M or diluted earnings per share of $0.95, up $0.14 or 17.3%. Adjusted EBITDA improved 8.9% to $17.80M and as a percent of total revenue was up 50 basis points to 11.1%.

Balance Sheet and Cash Flow Overview:

Net cash provided by operating activities increased 27.2% to $12.60M. Capital expenditures were $7.00M for fiscal 2019, with investments focused on customer-driven expansion of Service segment capabilities and the Company’s growing rental business.

At March 30, 2019, the Company had total debt of $21.00M, with $23.50M available under its secured revolving credit facility. Total debt at fiscal year-end was down $1.80M from the prior fiscal year end. The Company’s leverage ratio, as defined in its credit agreement, was 1.12 at March 30, 2019, compared with 1.40 at fiscal 2018 year-end.

Outlook:

The Company anticipates total capital expenditures to be approximately $7.80M to $8.20M in fiscal 2020, with the majority of the incremental capital expenditures in excess of fiscal 2019 spend levels planned for growth-oriented opportunities within both of its operating segments. Maintenance/existing asset replacements are expected to be consistent with fiscal 2019 at approximately $1.00M to $1.50M.

TRNS has a market value of $210.97M while its EPS was booked as $0.99 in the last 12 months. The stock has 7.23M shares outstanding. In the profitability analysis, the company has gross profit margin of 24.20% while net profit margin was 4.50%. Beta value of the company was 0.79; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 1.00.

About the Author

Donna Pate
Donna Pate
I am Donna Pate and I give “News Description” an insight into the most recent news hitting the “Technology” sector in Wall Street. I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicize valuable information for shareholder community. Address: 4140 Shadowmar Drive Metairie, LA 70006, USA Phone: (+1) 504-779-3428 Email: [email protected]

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