TRANSCAT, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________

FORM 10-Q

(Mark one)
☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: September 25, 2021

or

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

	For the transition period from __________ to __________

Commission File Number: 000-03905

TRANSCAT, INC.

(Exact name of registrant as specified in its charter)

Ohio		16-0874418
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

35 Vantage Point Drive, Rochester, New York 14624
(Address of principal executive offices) (Zip Code)

(585) 352-7777 (Registrant’s telephone number, including area code)

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: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐			Accelerated filer ☒
	Non-accelerated filer ☐			Smaller reporting company ☒
	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock, par value $0.50 per share, of the registrant outstanding as of October 29, 2021 was 7,518,798.

Table of Contents

	Page(s)
PART I.FINANCIAL INFORMATION
Item 1.Consolidated Financial Statements:
Statements of Income for the Second Quarter and Six Months Ended September 25, 2021 and September 26, 2020	1
Statements of Comprehensive Income for the Second Quarter and Six Months Ended September 25, 2021 and September 26, 2020	2
Balance Sheets as of September 25, 2021 and March 27, 2021	3
Statements of Cash Flows for the Six Months Ended September 25, 2021 and September 26, 2020	4
Statements of Shareholders’ Equity for the Second Quarter and Six Months Ended September 25, 2021 and September 26, 2020	5
Notes to Consolidated Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3. Quantitative and Qualitative Disclosures about Market Risk	25
Item 4. Controls and Procedures	26
PART II. OTHER INFORMATION
Item 1A. Risk Factors	26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 6. Exhibits	27
SIGNATURES	29

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

	(Unaudited)				(Unaudited)
	Second Quarter Ended				Six Months Ended
	September 25,		September 26,		September 25,		September 26,
	2021		2020		2021		2020
Service Revenue	$	29,544	$	24,554	$	57,101	$	47,521
Distribution Sales		20,843		17,053		41,076		32,990
Total Revenue		50,387		41,607		98,177		80,511

Cost of Service Revenue		19,832		16,654		38,637		33,552
Cost of Distribution Sales		15,944		13,459		31,409		26,056
Total Cost of Revenue		35,776		30,113		70,046		59,608

Gross Profit		14,611		11,494		28,131		20,903

Selling, Marketing and Warehouse Expenses		4,974		4,291		9,971		8,365
General and Administrative Expenses		6,059		4,125		10,893		8,496
Total Operating Expenses		11,033		8,416		20,864		16,861

Operating Income		3,578		3,078		7,267		4,042

Interest and Other Expense, net		250		317		445		560

Income Before Income Taxes		3,328		2,761		6,822		3,482
Provision for Income Taxes		313		737		119		660

Net Income	$	3,015	$	2,024	$	6,703	$	2,822

Basic Earnings Per Share	$	0.40	$	0.27	$	0.90	$	0.38
Average Shares Outstanding		7,482		7,417		7,473		7,405

Diluted Earnings Per Share	$	0.40	$	0.27	$	0.88	$	0.38
Average Shares Outstanding		7,595		7,549		7,578		7,525

See accompanying notes to consolidated financial statements.

Table of Contents

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

	(Unaudited)					(Unaudited)
	Second Quarter Ended					Six Months Ended
	September 25,			September 26,		September 25,			September 26,
	2021			2020		2021			2020
Net Income	$	3,015		$	2,024	$	6,703		$	2,822

Other Comprehensive (Loss) Income:
Currency Translation Adjustment		(242	)		128		(81	)		253
Other, net of tax effects		9			37		30			75
Total Other Comprehensive (Loss) Income		(233	)		165		(51	)		328

Comprehensive Income	$	2,782		$	2,189	$	6,652		$	3,150

See accompanying notes to consolidated financial statements.

Table of Contents

TRANSCAT, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts)

	(Unaudited) September 25,			(Audited) March 27,
	2021			2021
ASSETS
Current Assets:
Cash	$	2,551		$	560
Accounts Receivable, less allowance for doubtful accounts of $698 and $526 as of September 25, 2021 and March 27, 2021, respectively		36,464			33,950
Other Receivables		448			428
Inventory, net		10,205			11,636
Prepaid Expenses and Other Current Assets		4,105			2,354
Total Current Assets		53,773			48,928
Property and Equipment, net		23,034			22,203
Goodwill		59,441			43,272
Intangible Assets, net		12,753			7,513
Right To Use Asset, net		8,393			9,392
Other Assets		919			808
Total Assets	$	158,313		$	132,116

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable	$	10,983		$	12,276
Accrued Compensation and Other Liabilities		8,455			10,417
Income Taxes Payable		-			382
Current Portion of Long-Term Debt		2,134			2,067
Total Current Liabilities		21,572			25,142
Long-Term Debt		40,917			17,494
Deferred Tax Liabilities		4,914			3,201
Lease Liabilities		6,705			7,958
Other Liabilities		3,461			3,243
Total Liabilities		77,569			57,038

Shareholders' Equity:
Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 7,518,159 and 7,458,251 shares issued and outstanding as of September 25, 2021 and March 27, 2021, respectively		3,759			3,729
Capital in Excess of Par Value		22,713			19,287
Accumulated Other Comprehensive Loss		(502	)		(451

SEC Form 10-Q filed by Transcat, Inc.