8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)	January 30, 2024
Transcat, Inc.
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(Exact name of registrant as specified in its charter)
Ohio	000-03905	16-0874418
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(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
35 Vantage Point Drive, Rochester, New York	14624
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(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code	(585) 352-7777
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value	TRNS	Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02	Results of Operations and Financial Condition.

On January 29, 2024, Transcat, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal year 2024 third quarter ended December 23, 2023. The press release is attached to this Form 8-K as Exhibit 99.1.

In addition, on January 30, 2024, the Company posted slides to the Investor Relations section of its website that will accompany the Company’s earnings conference call and webcast at 11:00 a.m. Eastern Time on January 30, 2024. The slides are attached to this Form 8-K as Exhibit 99.2.

The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under such section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Transcat, Inc. Press Release dated January 29, 2024
99.2	Slides for the January 30, 2024 Earnings Conference Call and Webcast
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		TRANSCAT, INC.
Dated: January 30, 2024	By:	/s/ James M. Jenkins
		James M. Jenkins
		Chief Legal Officer, Corporate Development Officer and Corporate Secretary

ex_611575.htm

Exhibit 99.1

NEWS<br> RELEASE

Transcat, Inc. 35 Vantage Point Drive • Rochester • NY • 14624 • Phone: (585) 352-7777

IMMEDIATE RELEASE

Transcat Reports Strong Third Quarter Results on Service Gross Margin Expansion and Adjusted EBITDA Growth

●	Service gross margin expanded 250 basis points driven by 9.1% Service organic growth
●	Distribution gross margin expands 530 basis points to 31.5% on strength of Rentals
●	Consolidated adjusted EBITDA grew 38.5% with margins expanding 250 basis points
●	Operating Cash Flow of $26.9M year-to-date

ROCHESTER, NY, January 29, 2024 – 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 23, 2023 (the “third quarter”) of fiscal year 2024, which ends March 30, 2024 (“fiscal 2024”).  Results include the previously reported acquisitions of TIC-MS, Inc. ("TIC-MS") effective March 27, 2023, SteriQual, Inc. ("SteriQual"), effective July 12, 2023 and Axiom Test Equipment, Inc. (“Axiom”), effective August 8, 2023.

“We are extremely pleased with our third quarter results as Service gross margin expanded 250 basis points versus prior year driven by strong organic Service revenue growth and increased productivity throughout our network of labs. Adjusted EBITDA growth of 39% for the third quarter reflects our ability to leverage organic Service revenue growth and the successful integration of acquired companies. Consolidated revenue was up 14% with gross margin expansion of 350 basis points year over year driven by our differentiated value proposition, excellent performance in the high-margin rental business, and execution of our automation and process improvement initiatives. Service segment revenue grew 15% as demand in our highly regulated end markets, including life sciences, remained strong and our recent acquisitions continued to perform at a high level” commented Lee D. Rudow, President and CEO. “The Transcat Team continues to deliver strong revenue growth and sustainable gross margin expansion.”

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA Growth

January 29, 2024Page 2 of 14

Mr. Rudow added, “The outstanding performance of recent acquisitions demonstrates we are excellent stewards of capital and can successfully identify, acquire, and integrate dynamic companies. The key differentiator of the Transcat acquisition strategy is the effectiveness of our integration processes that enables new acquisitions, such as the recent deal with Axiom, to very quickly be accretive to the overall company. In addition to strong returns, the acquisitions present compelling cross-sell synergies to drive organic calibration service growth and rental sales into these newly acquired customer bases. Acquisitions allow us to leverage our existing infrastructure, expand addressable markets, and widen the breadth of our service offerings.”

Third Quarter Fiscal 2024 Review

(Results are compared with the third quarter of the fiscal year ended March 25, 2023 (“fiscal 2023”))

( in thousands)		****			****	Change
			FY23 Q3			's	%
Service Revenue	41,509		$	35,977				15.4	%
Distribution Sales	23,657			21,425				10.4	%
Revenue	65,166		$	57,402				13.5	%
Gross Profit	20,936		$	16,400				27.7	%
Gross Margin	32.1	%		28.6	%
Operating Income	4,294		$	3,163				35.8	%
Operating Margin	6.6	%		5.5	%
Net Income	3,348		$	1,601				109.1	%
Net Margin	5.1	%		2.8	%
Adjusted EBITDA*	9,120		$	6,585				38.5	%
Adjusted EBITDA* Margin	14.0	%		11.5	%
Diluted EPS	0.38		$	0.21				81.0	%
Adjusted Diluted EPS*	0.56		$	0.35				60.0	%

All values are in US Dollars.

*See Note 1 on page 5 for a description of these non-GAAP financial measures and pages 10, 11 and 12 for the reconciliation tables.

Consolidated revenue was $65.2 million, an increase of $7.8 million or 13.5%. Consolidated gross profit was $20.9 million, an increase of $4.5 million, or 27.7%, while gross margin expanded 350 basis points due to improvements in both operating segments. Operating expenses were $16.6 million, an increase of $3.4 million, or 25.7%, driven by incremental expenses from acquired businesses (including stock-based compensation expense) and higher incentive-based employee costs due to higher sales. Adjusted EBITDA was $9.1 million which represented an increase of $2.5 million or 38.5%. Net income per diluted share was $0.38 compared to $0.21 last year. Adjusted diluted earnings per share was $0.56 versus $0.35 last year.

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024Page 3 of 14

Service segment delivers strong third quarter results

Represents the accredited calibration, repair, inspection and laboratory instrument services business (63.7% of total revenue for the third quarter of fiscal 2024).

( in thousand)		****			****	Change
			FY23 Q3			's	%
Service Segment Revenue	41,509		$	35,977				15.4	%
Gross Profit	13,494		$	10,793				25.0	%
Gross Margin	32.5	%		30.0	%
Operating Income	2,966		$	1,836				61.5	%
Operating Margin	7.1	%		5.1	%
Adjusted EBITDA*	5,979		$	4,562				31.1	%
Adjusted EBITDA* Margin	14.4	%		12.7	%

All values are in US Dollars.

*See Note 1 on page 5 for a description of this non-GAAP financial measure and pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

Service segment revenue was $41.5 million, an increase of $5.5 million or 15.4%, and included $2.2 million of incremental revenue from acquisitions.  Organic revenue growth was 9.1% and was driven by strong end-market demand and continued market share gains. The segment gross margin increased 250 basis points from prior year primarily due to continued productivity improvements offset by increased start-up costs from new client-based lab implementations.

Distribution segment shows continued margin improvement

Represents the sale and rental of new and used professional grade handheld test, measurement and control instrumentation (36.3% of total revenue for the third quarter of fiscal 2024).

( in thousands)		****			****	Change
			FY23 Q3			's	%
Distribution Segment Sales	23,657		$	21,425				10.4	%
Gross Profit	7,442		$	5,607				32.7	%
Gross Margin	31.5	%		26.2	%
Operating Income	1,328		$	1,327				0.1	%
Operating Margin	5.6	%		6.2	%
Adjusted EBITDA*	3,141		$	2,023				55.3	%
Adjusted EBITDA* Margin	13.3	%		9.4	%

All values are in US Dollars.

*See Note 1 on page 5 for a description of this non-GAAP financial measure and pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

Distribution sales were $23.7 million, which represented an increase of $2.2 million or 10.4%.  These sales included $2.9 million from an acquisition offset by decreases in other channels.  Distribution segment gross margin was 31.5%, an increase of 530 basis points due to a favorable sales mix driven by strength in the Rentals business.

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 4 of 14

Nine Month Review (Results are compared with the first nine months of fiscal 2023)

Total revenue was $188.6 million, an increase of $20.1 million or 11.9%.  Consolidated gross profit was up $10.6 million, or 21.5%, and gross margin expanded to 31.7% or 250 basis points.  Consolidated operating expenses increased $10.4 million, or 26.7%, driven by incremental expenses from acquired businesses, (including stock-based compensation expense), increased intangibles amortization expense, investments in technology and our employee base to support future growth, and a non-cash charge related to the amended NEXA Earn-Out agreement. As a result, consolidated operating income was $10.6 million compared with $10.4 million in last fiscal year’s period.

Adjusted EBITDA was $26.9 million which represented an increase of $5.5 million or 25.7%. Net income per diluted share decreased to $0.83 from $0.92 and adjusted diluted earnings per share was $1.68 versus $1.33 last year. The effective tax rate was 23.5% compared to 18.8% in the prior year, due to the discrete tax treatment of the non-cash charge related to the amended NEXA Earn-Out agreement.

Balance Sheet and Cash Flow Overview

On December 23, 2023, the Company had $80.0 million available for borrowing under its secured revolving credit facility.  Total debt of $4.7 million was down $44.4 million from fiscal 2023 year-end due to cash proceeds from our secondary stock offering.  The Company’s leverage ratio, as defined in the credit agreement, was 0.12 on December 23, 2023, compared with 1.60 on March 25, 2023.

Outlook

Mr. Rudow added concluded, “We are proud of our dedicated team, which has consistently delivered exceptional results through various economic cycles as can be seen over the past decade and a half of profitable growth. For the fiscal year, we expect organic Service revenue growth in the high-single digit to low double-digit range and gross margin expansion. Automation of our calibration processes and overall process improvement will be key enablers to future margin expansion. We believe the Service segment has substantial runway ahead for growth, both organically and through acquisition. Our robust and diverse acquisition pipeline enables strategic, accretive acquisitions that drive synergistic growth opportunities and will be a key component of our go-forward strategy. We believe our unique value proposition fostered by Nexa's Cost, Control and Optimization Services drives a sustainable competitive advantage in the highly regulated markets that we serve, particularly the Life Science, Aerospace, and Defense markets, along with a growing Rentals business. We have a long history of generating sustainable value for our shareholders and providing a dynamic, rewarding workplace for our team.”

Transcat expects its income tax rate to range between 24% and 26% in fiscal 2024. This estimate includes Federal, various state, Canadian and Irish income taxes and reflects the discrete tax accounting associated with share-based payment awards.

Webcast and Conference Call

Transcat will host a conference call and webcast on Tuesday, January 30, 2024 at 11:00 a.m. ET.  Management will review the financial and operating results for the third quarter, as well as the Company’s strategy and outlook.  A question and answer session will follow the formal discussion.  The review will be accompanied by a slide presentation, which will be available at www.transcat.com/investor-relations.  The conference call can be accessed by calling (201) 689-8471.  Alternatively, the webcast can be monitored at www.transcat.com/investor-relations.

A telephonic replay will be available from 2:00 p.m. ET on the day of the call through Tuesday, February 6, 2024. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13742041, access the webcast replay at www.transcat.com/investor-relations, where a transcript will be posted once available.

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 5 of 14

NOTE 1 – Non-GAAP Financial Measures

In addition to reporting net income, a U.S. generally accepted accounting principle (“GAAP”) measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, non-cash stock compensation expense, acquisition related transaction expenses, non-cash loss on sale of building and restructuring expense), which is a non-GAAP measure.  The Company’s management believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the performance of its core operations from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, stock-based compensation expense and other items, which is not always commensurate with the reporting period in which it is included.  As such, the Company uses Adjusted EBITDA as a measure of performance when evaluating its business segments and as a basis for planning and forecasting. Adjusted EBITDA is not a measure of financial performance under GAAP and is not calculated through the application of GAAP. As such, it should not be considered as a substitute for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure.  Adjusted EBITDA, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.  See pages 10 and 11 for the Adjusted EBITDA Reconciliation tables.

In addition to reporting Diluted Earnings Per Share, a GAAP measure, we present Adjusted Diluted Earnings Per Share (net income plus acquisition related amortization expense, acquisition related transaction expenses, acquisition related stock-based compensation, acquisition amortization of backlog and restructuring expense), which is a non-GAAP measure.  Our management believes Adjusted Diluted Earnings Per Share is an important measure of our operating performance because it provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance. Adjusted Diluted Earnings Per Share is not a measure of financial performance under GAAP and is not calculated through the application of GAAP.  As such, it should not be considered as a substitute or alternative for the GAAP measure of Diluted Earnings Per Share and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure.  Adjusted Diluted Earnings Per Share, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.  See page 12for the Adjusted Diluted EPS Reconciliation table.

ABOUT TRANSCAT

Transcat, Inc. is a leading provider of accredited calibration, reliability, maintenance optimization, quality and compliance, validation, Computerized Maintenance Management System (CMMS), and pipette services. The Company is focused on providing best-in-class services and products to highly regulated industries, particularly the Life Science industry, which includes pharmaceutical, biotechnology, medical device, and other FDA-regulated businesses, as well as aerospace and defense, and energy and utilities. Transcat provides periodic on-site services, mobile calibration services, pickup and delivery, in-house services at its 27 Calibration Service Centers strategically located across the United States, Puerto Rico, Canada, and Ireland. In addition, Transcat operates calibration labs in 21 imbedded customer-site locations. The breadth and depth of measurement parameters addressed by Transcat’s ISO/IEC 17025 scopes of accreditation are believed to be the best in the industry.

Transcat also operates as a leading value-added distributor that markets, sells and rents new and used national and proprietary brand instruments to customers primarily in North America. The Company believes its combined Service and Distribution segment offerings, experience, technical expertise, and integrity create a unique and compelling value proposition for its customers.

Transcat’s strategy is to leverage its strong brand and unique value proposition that includes its comprehensive instrument service capabilities, enterprise asset management, and leading distribution platform to drive organic sales growth. The Company will also look to expand its addressable calibration market through acquisitions and capability investments to further realize the inherent leverage of its business model. More information about Transcat can be found at: Transcat.com.

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 6 of 14

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are not statements of historical fact and thus are subject to risks, uncertainties and assumptions.  Forward-looking statements are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “could,” “plans,” “aims” and other similar words.  All statements addressing operating performance, events or developments that Transcat expects or anticipates will occur in the future, including but not limited to statements relating to anticipated revenue, profit margins, the commercialization of software projects, sales operations, capital expenditures, cash flows, operating income, growth strategy, segment growth, potential acquisitions, integration of acquired businesses, market position, customer preferences, outlook and changes in market conditions in the industries in which Transcat operates are forward-looking statements.  Forward-looking statements should be evaluated in light of important risk factors and uncertainties.  These risk factors and uncertainties include those more fully described in Transcat’s Annual Report and Quarterly Reports filed with the Securities and Exchange Commission, including under the heading entitled “Risk Factors.”  Should one or more of these risks or uncertainties materialize or should any of the Company’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated.  In addition, undue reliance should not be placed on the Company’s forward-looking statements, which speak only as of the date they are made.  Except as required by law, the Company disclaims any obligation to update, correct or publicly announce any revisions to any of the forward-looking statements contained in this news release, whether as the result of new information, future events or otherwise.

For more information contact:

Tom Barbato

Phone: (585) 505-6530

Email: Thomas.Barbato@transcat.com

FINANCIAL TABLES FOLLOW.

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 7 of 14

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

	(Unaudited)						(Unaudited)
	Third Quarter Ended						Nine Months Ended
	December 23,			December 24,			December 23,			December 24,
	2023			2022			2023			2022
Service Revenue	$	41,509		$	35,977		$	122,793		$	105,120
Distribution Sales		23,657			21,425			65,775			63,382
Total Revenue		65,166			57,402			188,568			168,502
Cost of Service Revenue		28,015			25,184			82,244			72,005
Cost of Distribution Sales		16,215			15,818			46,553			47,292
Total Cost of Revenue		44,230			41,002			128,797			119,297
Gross Profit		20,936			16,400			59,771			49,205
Selling, Marketing and Warehouse Expenses		7,519			6,595			20,844			18,315
General and Administrative Expenses		9,123			6,642			28,350			20,497
Total Operating Expenses		16,642			13,237			49,194			38,812
Operating Income		4,294			3,163			10,577			10,393
Interest Expense		81			731			1,785			1,651
Interest Income		(347	)		(5	)		(347	)		(15	)
Other Income/Expense		289			313			304			96
Total Interest and Other		23			1,039			1,742			1,732
Income Before Income Taxes		4,271			2,124			8,835			8,661
Provision for Income Taxes		923			523			2,078			1,631
Net Income	$	3,348		$	1,601		$	6,757		$	7,030
Basic Earnings Per Share	$	0.39		$	0.21		$	0.84		$	0.93
Average Shares Outstanding		8,615			7,559			8,060			7,547
Diluted Earnings Per Share	$	0.38		$	0.21		$	0.83		$	0.92
Average Shares Outstanding		8,752			7,666			8,187			7,644

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 8 of 14

TRANSCAT, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts)

			(Audited)
			March 25,
			2023
ASSETS		****			****
Current Assets:
Cash and cash equivalents	35,205		$	1,531
Accounts Receivable, less allowance for credit losses of 579 and 457 as of December 23, 2023 and March 25, 2023, respectively	43,307			44,698
Other Receivables	819			506
Inventory, net	16,178			16,929
Prepaid Expenses and Other Current Assets	3,295			3,935
Total Current Assets	98,804			67,599
Property and Equipment, net	37,222			29,064
Goodwill	105,700			69,360
Intangible Assets, net	21,459			13,799
Right To Use Assets, net	16,834			14,876
Other Assets	1,055			1,051
Total Assets	281,074		$	195,749
LIABILITIES AND SHAREHOLDERS' EQUITY		****			****
Current Liabilities:
Accounts Payable	11,355		$	15,869
Accrued Compensation and Other Current Liabilities	15,683			10,201
Current Portion of Long-Term Debt	2,316			2,248
Total Current Liabilities	29,354			28,318
Long-Term Debt	2,411			46,869
Deferred Tax Liabilities, net	10,855			6,538
Lease Liabilities	14,457			12,960
Other Liabilities	5,527			1,434
Total Liabilities	62,604			96,119
Shareholders' Equity:
Common Stock, par value 0.50 per share, 30,000,000 shares authorized; 8,828,515 and 7,562,604 shares issued and outstanding as of December 23, 2023 and March 25, 2023, respectively	4,414			3,781
Capital in Excess of Par Value	140,382			27,886
Accumulated Other Comprehensive Loss	(691	)		(1,200	)
Retained Earnings	74,365			69,163
Total Shareholders' Equity	218,470			99,630
Total Liabilities and Shareholders' Equity	281,074		$	195,749

All values are in US Dollars.

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 9 of 14

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

	(Unaudited)
	Nine Months Ended
	December 23,			December 24,
	2023			2022
Cash Flows from Operating Activities:
Net Income	$	6,757		$	7,030
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Net Loss on Disposal of Property and Equipment		24			62
Deferred Income Taxes		42			(52	)
Depreciation and Amortization		9,841			8,243
Provision for Accounts Receivable and Inventory Reserves		379			174
Stock-Based Compensation Expense		3,338			2,757
Changes in Assets and Liabilities, net of acquisitions:
Accounts Receivable and Other Receivables		3,819			1,850
Inventory		3,208			(3,589	)
Prepaid Expenses and Other Current Assets		728			1,074
Accounts Payable		(5,194	)		(424	)
Accrued Compensation and Other Current Liabilities		3,947			(3,150	)
Net Cash Provided by Operating Activities		26,889			13,975
Cash Flows from Investing Activities:
Purchases of Property and Equipment		(9,099	)		(7,149	)
Proceeds from Sale of Property and Equipment		-			10
Business Acquisitions, net of cash acquired		(12,932	)		(8,306	)
Net Cash Used in Investing Activities		(22,031	)		(15,445	)
Cash Flows from Financing Activities:
(Repayment of) Proceeds from Revolving Credit Facility, net		(42,713	)		2,286
Repayments of Term Loan		(1,678	)		(1,570	)
Issuance of Common Stock, net of direct costs		75,714			503
Repurchase of Common Stock		(2,247	)		(437	)
Net Cash Provided by Financing Activities		29,076			782
Effect of Exchange Rate Changes on Cash and cash equivalents		(260	)		885
Net Increase in Cash and cash equivalents		33,674			197
Cash and cash equivalents at Beginning of Period		1,531			1,396
Cash and cash equivalents at End of Period	$	35,205		$	1,593

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 10 of 14

TRANSCAT, INC.

Adjusted EBITDA Reconciliation Table

(In thousands)

(Unaudited)

	Fiscal 2024
	Q1			Q2			Q3			Q4		YTD
Net Income	$	2,949		$	460		$	3,348				$	6,757
+ Interest Expense		814			890			(266	)				1,438
+ Other Expense / (Income)		64			(49	)		289					304
+ Tax Provision		813			342			923					2,078
Operating Income	$	4,640		$	1,643		$	4,294		$	-	$	10,577
+ Depreciation & Amortization		2,790			3,269			3,783					9,842
+ Transaction Expense		185			328			78					591
+ Acquisition Earn-Out Adjustment		-			2,800			87					2,887
+ Other (Expense) / Income		(64	)		49			(289	)				(304	)
+ Noncash Stock Compensation		930			1,241			1,167					3,338
Adjusted EBITDA	$	8,481		$	9,330		$	9,120		$	-	$	26,931
Segment Breakdown
Service Operating Income	$	3,192		$	742		$	2,966				$	6,900
+ Depreciation & Amortization		2,226			2,325			2,362					6,913
+ Transaction Expense		185			76			30					291
+ Acquisition Earn-Out Adjustment		-			2,800			87					2,887
+ Other (Expense) / Income		(47	)		29			(203	)				(221	)
+ Noncash Stock Compensation		676			826			737					2,239
Service Adjusted EBITDA	$	6,232		$	6,798		$	5,979		$	-	$	19,009
Distribution Operating Income	$	1,448		$	901		$	1,328				$	3,677
+ Depreciation & Amortization		564			944			1,421					2,929
+ Transaction Expense		-			252			48					300
+ Other (Expense) / Income		(17	)		20			(86	)				(83	)
+ Noncash Stock Compensation		254			415			430					1,099
Distribution Adjusted EBITDA	$	2,249		$	2,532		$	3,141		$	-	$	7,922

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 11 of 14

TRANSCAT, INC.

Adjusted EBITDA Reconciliation Table

(In thousands)

(Unaudited)

	Fiscal 2023
	Q1			Q2			Q3			Q4			YTD
Net Income	$	3,072		$	2,357		$	1,601		$	3,658		$	10,688
+ Interest Expense		360			550			726			781			2,417
+ Other Expense / (Income)		(204	)		(13	)		313			248			344
+ Tax Provision		376			732			523			1,168			2,799
Operating Income	$	3,604		$	3,626		$	3,163		$	5,855		$	16,248
+ Depreciation & Amortization		2,641			2,778			2,824			2,712			10,955
+ Transaction Expense		30			-			96			59			185
+ Other (Expense) / Income		204			13			(313	)		(248	)		(344	)
+ Noncash Stock Compensation		828			1,114			815			620			3,377
Adjusted EBITDA	$	7,307		$	7,531		$	6,585		$	8,998		$	30,421
Segment Breakdown
Service Operating Income	$	2,532		$	2,507		$	1,836		$	4,547		$	11,422
+ Depreciation & Amortization		2,139			2,246			2,268			2,147			8,800
+ Transaction Expense		30			-			96			59			185
+ Other (Expense) / Income		134			3			(214	)		(170	)		(247	)
+ Noncash Stock Compensation		638			793			576			456			2,463
Service Adjusted EBITDA	$	5,473		$	5,549		$	4,562		$	7,039		$	22,623
Distribution Operating Income	$	1,072		$	1,119		$	1,327		$	1,308		$	4,826
+ Depreciation & Amortization		502			532			556			565			2,155
+ Other (Expense) / Income		70			10			(99	)		(78	)		(97	)
+ Noncash Stock Compensation		190			321			239			164			914
Distribution Adjusted EBITDA	$	1,834		$	1,982		$	2,023		$	1,959		$	7,798

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 12 of 14

TRANSCAT, INC.

Adjusted Diluted EPS Reconciliation Table

(In Thousands, Except Per Share Amounts)

(Unaudited)

	Fiscal 2024
	Q1			Q2			Q3			Q4			YTD
Net Income	$	2,949		$	460		$	3,348					$	6,757
+ Amortization of Intangible Assets		1,093			1,416			1,674						4,183
+ Acquisition Amortization of Backlog		-			19			24						43
+ Acquisition Deal Costs		367			602			343						1,312
+ Income Tax Effect at 25%		(365	)		(509	)		(532	)					(1,406	)
+ Acquisition Earn-Out Adjustment		-			2,800			87						2,887
Adjusted Net Income	$	4,044		$	4,788		$	4,944		$	-		$	13,776
Average Diluted Shares Outstanding		7,762			7,948			8,752						8,187
Diluted Earnings Per Share	$	0.38		$	0.06		$	0.38		$	-		$	0.83
Adjusted Diluted Earnings Per Share	$	0.52		$	0.60		$	0.56		$	-		$	1.68
	Fiscal 2023
	Q1			Q2			Q3			Q4			YTD
Net Income	$	3,072		$	2,357		$	1,601		$	3,658		$	10,688
+ Amortization of Intangible Assets		1,084			1,147			1,180			1,043			4,454
+ Acquisition Deal Costs		299			239			254			226			1,018
+ Income Tax Effect at 25%		(346	)		(346	)		(359	)		(317	)		(1,368	)
Adjusted Net Income	$	4,109		$	3,397		$	2,676		$	4,610		$	14,792
Average Diluted Shares Outstanding		7,629			7,646			7,666			7,688			7,645
Diluted Earnings Per Share	$	0.40		$	0.31		$	0.21		$	0.48		$	1.40
Adjusted Diluted Earnings Per Share	$	0.54		$	0.44		$	0.35		$	0.60		$	1.93

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 13 of 14

TRANSCAT, INC.

Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

			****			****	Change
SERVICE	FY 2024 Q3			FY 2023 Q3			's		%
Service Revenue	$	41,509		$	35,977					15.4	%
Cost of Revenue		28,015			25,184					11.2	%
Gross Profit	$	13,494		$	10,793					25.0	%
Gross Margin		32.5	%		30.0	%
Selling, Marketing & Warehouse Expenses	$	4,202		$	4,230			)		(0.7	)%
General and Administrative Expenses		6,326			4,727					33.8	%
Operating Income	$	2,966		$	1,836					61.5	%
% of Revenue		7.1	%		5.1	%

All values are in US Dollars.

			****			****	Change
DISTRIBUTION	FY 2024 Q3			FY 2023 Q3			's	%
Distribution Sales	$	23,657		$	21,425				10.4	%
Cost of Sales		16,215			15,818				2.5	%
Gross Profit	$	7,442		$	5,607				32.7	%
Gross Margin		31.5	%		26.2	%
Selling, Marketing & Warehouse Expenses	$	3,317		$	2,365				40.3	%
General and Administrative Expenses		2,797			1,915				46.1	%
Operating Income	$	1,328		$	1,327				0.1	%
% of Sales		5.6	%		6.2	%

All values are in US Dollars.

			****			****	Change
TOTAL	FY 2024 Q3			FY 2023 Q3			's	%
Total Revenue	$	65,166		$	57,402				13.5	%
Total Cost of Revenue		44,230			41,002				7.9	%
Gross Profit	$	20,936		$	16,400				27.7	%
Gross Margin		32.1	%		28.6	%
Selling, Marketing & Warehouse Expenses	$	7,519		$	6,595				14.0	%
General and Administrative Expenses		9,123			6,642				37.4	%
Operating Income	$	4,294		$	3,163				35.8	%
% of Revenue		6.6	%		5.5	%

All values are in US Dollars.

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Transcat Reports Strong Third Quarter Results on Service Gross Margin expansion and Adjusted EBITDA GrowthJanuary 29, 2024

Page 14 of 14

TRANSCAT, INC.

Additional Information - Business Segment Data

(Dollars in thousands)

(Unaudited)

			****			****	Change
	FY 2024			FY 2023					****
SERVICE	YTD			YTD			's		%
Service Revenue	$	122,793		$	105,120			16.8	%
Cost of Revenue		82,244			72,005			14.2	%
Gross Profit	$	40,549		$	33,115			22.4	%
Gross Margin		33.0	%		31.5	%
Selling, Marketing & Warehouse Expenses	$	12,452		$	11,604			7.3	%
General and Administrative Expenses		21,197			14,636			44.8	%
Operating Income	$	6,900		$	6,875			0.4	%
% of Revenue		5.6	%		6.5	%

All values are in US Dollars.

			****			****	Change
	FY 2024			FY 2023				****		****
DISTRIBUTION	YTD			YTD			's			%
Distribution Sales	$	65,775		$	63,382				3.8	%
Cost of Sales		46,553			47,292			)	(1.6	)%
Gross Profit	$	19,222		$	16,090				19.5	%
Gross Margin		29.2	%		25.4	%
Selling, Marketing & Warehouse Expenses	$	8,392		$	6,711				25.0	%
General and Administrative Expenses		7,153			5,861				22.0	%
Operating Income	$	3,677		$	3,518				4.5	%
% of Sales		5.6	%		5.6	%

All values are in US Dollars.

			****			****	Change
	FY 2024			FY 2023					****
TOTAL	YTD			YTD			's		%
Total Revenue	$	188,568		$	168,502			11.9	%
Total Cost of Revenue		128,797			119,297			8.0	%
Gross Profit	$	59,771		$	49,205			21.5	%
Gross Margin		31.7	%		29.2	%
Selling, Marketing & Warehouse Expenses	$	20,844		$	18,315			13.8	%
General and Administrative Expenses		28,350			20,497			38.3	%
Operating Income	$	10,577		$	10,393			1.8	%
% of Revenue		5.6	%		6.2	%

All values are in US Dollars.

Image Exhibit

Exhibit 99.2

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