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Dec 23, 2023
Transcat Q3 2024 Earnings Report
Transcat reported strong third quarter results driven by service gross margin expansion and adjusted EBITDA growth.
Key Takeaways
Transcat reported a consolidated revenue increase of 13.5% to $65.2 million, with a gross profit increase of 27.7% to $20.9 million. The service segment revenue grew by 15.4%, and the distribution segment sales increased by 10.4%. Adjusted EBITDA increased by 38.5% to $9.1 million, and net income per diluted share was $0.38 compared to $0.21 last year.
Service gross margin expanded 250 basis points versus prior year due to strong organic Service revenue growth and increased productivity.
Adjusted EBITDA growth of 39% reflects the ability to leverage organic Service revenue growth and successful integration of acquired companies.
Consolidated revenue was up 14% with gross margin expansion of 350 basis points year over year.
Distribution gross margin expanded 530 basis points to 31.5% on strength of Rentals.
Transcat
Transcat
Transcat Revenue by Segment
Revenue by Segment
Service Revenue
CapyFin.comDistribution Revenue
CapyFin.com Forward Guidance
Transcat expects organic Service revenue growth in the high-single digit to low double-digit range and gross margin expansion for the fiscal year. Automation of calibration processes and process improvement will be key enablers to future margin expansion. The company anticipates its income tax rate to range between 24% and 26% in fiscal 2024.
Positive Outlook
- Expects organic Service revenue growth in the high-single digit to low double-digit range
- Anticipates gross margin expansion.
- Automation of calibration processes will enable future margin expansion.
- Robust acquisition pipeline enables strategic, accretive acquisitions.
- Believes its unique value proposition drives a sustainable competitive advantage.
Revenue & Expenses
Visualization of income flow from segment revenue to net income