Open the filing on EDGARTranscat Reports Strong Fiscal Second Quarter 2027 Financial Results with Double-Digit Service Organic Revenue* Growth and Significant Service Gross Margin Expansion
- Q2’27 Service Revenue Increased 23% to $64.8 Million
- Q2'27 Service Gross Margin Expanded 220 Basis Points to 34%
- Q2’27 Distribution Revenue Grew 10% to $32.3 Million on Strong Demand for Rentals
- Q2'27 Total Revenue Increased 18% to $97.1 Million
- Management to Host Conference Call Today at 4:30 p.m. Eastern Time
ROCHESTER, NY, November 3, 2026 - Transcat, Inc. (Nasdaq: TRNS) (“Transcat” or the “Company”), a leader in test, measurement, control and calibration, has reported its financial and operational results for its fiscal second quarter ended September 26, 2026 (the “second quarter”) of fiscal year 2027.
Management Commentary
"Our fiscal second quarter results demonstrate strong execution across each pillar of our core strategy: driving strong Service organic revenue growth, expanding Service gross margins, executing strategic acquisitions, and growing Rentals consistently,” said Jaime Irick, President and CEO. “Fiscal second quarter 2027 marked our seventieth consecutive quarter of Service revenue growth. Strength in our Calibration business lifted Service revenue 23%, including 16% Service organic revenue* growth, and drove 220 bps of year over year Service gross margin expansion, up from 90 bps in the first quarter. Distribution revenue grew 10%, fueled by continued strength in Rentals and Product sales.
“Revenue momentum, combined with productivity gains, enabled a 23% increase in adjusted EBITDA* and 70 bps of Adjusted EBITDA margin* expansion. We believe we are gaining market share in calibration services through organic growth, disciplined M&A and a more productive sales organization, further widening our already substantial competitive moat.
“Our August acquisition of Southeastern Biomedical advances our strategy of building scale in regulated, high cost-of-failure end markets, where accredited calibrations are mission-critical to patient safety and regulatory compliance. Southeastern is known for its quality and customer-first approach in supporting hospital networks across the southeastern United States and beyond. That reputation builds on our established leadership in biomedical calibration and extends our reach to a much larger geography, with the same focus on quality and timely service for customers in these critical end markets.
“Looking ahead, we remain optimistic about the Service segment’s momentum, supported by high customer retention, conversion of new business wins into revenue, and continued strong demand in life sciences, aerospace and defense, and the other regulated end markets we serve. For the full fiscal year 2027, assuming the broader economic environment remains stable, we now expect Service organic revenue growth in the low double digits, up from our prior outlook of high single digits, along with Service gross margin expansion. We expect year-over-year Service gross margin expansion of at least 100 bps in the second half, driven by initiatives to continuously improve customer-facing business processes by applying proven Lean principles, optimizing business mix and pricing, and utilizing technology, including AI, to improve productivity and deliver greater value to customers. These initiatives are beginning to deliver results, reinforcing our confidence in continued progress as we create repeatable levers to expand margins and support sustained growth. These initiatives are beginning to deliver results, reinforcing our confidence in continued progress. Together, they advance our vision for Transcat to be as well known for operational excellence as we have historically been for growth,” concluded Mr. Irick.
*See Note 1 for a description of the non-GAAP financial measures and the accompanying tables for reconciliations.
Second Quarter Fiscal 2027 Results
(Results are compared with the second quarter of the fiscal year ended March 28, 2026 (“fiscal 2026”))
| FY27 Q2 | FY26 Q2 | $ | % |
|---|
| ($ in thousands) | | | Change |
| Service Revenue | $64,770 | $52,836 | $11,934 | 22.6% |
| Distribution Revenue | 32,320 | 29,436 | 2,884 | 9.8% |
| Revenue | $97,090 | $82,272 | $14,818 | 18.0% |
| Gross Profit | $32,630 | $26,762 | $5,868 | 21.9% |
| Gross Margin | 33.6% | 32.5% | | |
| Operating Income | $5,033 | $3,505 | $1,528 | 43.6% |
| Operating Margin | 5.2% | 4.3% | | |
| Net Income | $2,413 | $1,269 | $1,144 | 90.1% |
| Net Margin | 2.5% | 1.5% | | |
| Adjusted Net Income* | $6,086 | $4,155 | $1,931 | 46.5% |
| Adjusted Net Margin* | 6.3% | 5.1% | | |
| Adjusted EBITDA* | $14,909 | $12,115 | $2,794 | 23.1% |
| Adjusted EBITDA* Margin | 15.4% | 14.7% | | |
| Diluted EPS | $0.25 | $0.14 | $0.11 | 78.6% |
| Adjusted Diluted EPS* | $0.64 | $0.44 | $0.20 | 45.5% |
Consolidated revenue was $97.1 million, an increase of $14.8 million, or 18.0%, driven by growth in both service and distribution segments. Consolidated gross profit was $32.6 million, an increase of $5.9 million, or 21.9%, while gross margin increased 110 bps when compared to the prior year period.
Operating expenses were $27.6 million, an increase of $4.3 million, or 18.7%, driven by incremental expenses from acquired businesses, including intangible assets amortization expense, increased stock-based compensation expense, and executive transition costs.
Net income was $2.4 million, and Adjusted EBITDA* was $14.9 million, which represented an increase of $2.8 million, or 23.1%, primarily driven by strong revenue growth. Diluted earnings per share was $0.25 compared to diluted earnings per share of $0.14 in the same quarter last year. Adjusted Diluted Earnings Per Share* was $0.64 versus $0.44 last year.
*See Note 1 for a description of the non-GAAP financial measures and the accompanying tables for reconciliations.
Service Segment Second Quarter Results
Represents the accredited calibration, repair, inspection and laboratory instrument services business (66.7% of total revenue for the second quarter of fiscal 2027).
| FY 2027 Q2 | FY 2026 Q2 | $ | % |
|---|
| ($ in thousands) | | | Change |
| Service Segment Revenue | $64,770 | $52,836 | $11,934 | 22.6% |
| Gross Profit | $22,272 | $16,993 | $5,279 | 31.1% |
| Gross Margin | 34.4% | 32.2% | | |
| Operating Income | $3,672 | $920 | $2,752 | 299.1% |
| Operating Margin | 5.7% | 1.7% | | |
| Adjusted Operating Income* | $10,564 | $7,279 | $3,285 | 45.1% |
| Adjusted Operating Margin* | 16.3% | 13.8% | | |
* See Note 1 for a description of the non-GAAP financial measures and the accompanying tables for reconciliations.
Service segment revenue was $64.8 million, an increase of $11.9 million, or 22.6%, and included $3.5 million of incremental revenue from acquisitions. The segment gross margin was 34.4%, an increase of 220bps from the prior year.
Distribution Segment Second Quarter Results
Represents the sale and rental of new and used professional grade handheld test, measurement and control instrumentation (33.3% of total revenue for the second quarter of fiscal 2027).
| FY 2027 Q2 | FY 2026 Q2 | $ | % |
|---|
| ($ in thousands) | | | Change |
| Distribution Segment Revenue | $32,320 | $29,436 | $2,884 | 9.8% |
| Gross Profit | $10,358 | $9,769 | $589 | 6.0% |
| Gross Margin | 32.0% | 33.2% | | |
| Operating Income | $1,361 | $2,585 | $(1,224) | (47.3%) |
| Operating Margin | 4.2% | 8.8% | | |
| Adjusted Operating Income* | $4,614 | $5,048 | $(434) | (8.6%) |
| Adjusted Operating Margin* | 14.3% | 17.1% | | |
*See Note 1 for a description of the non-GAAP financial measures and the accompanying tables for reconciliations.
Distribution segment revenue was $32.3 million, which represented an increase of $2.9 million, or 9.8%. The revenue increase was driven by continued strength in rentals and product sales. Distribution segment gross margin was 32.0%, which is an increase over the first quarter of fiscal 2027 but a decrease of 120bps compared to the prior year period. The decrease is primarily driven by lower-margin used equipment sales that enable reinvestment in our rental asset portfolio.
Balance Sheet and Cash Flow Overview
On September 26, 2026, the Company had $5.8 million in cash and cash equivalents on hand and $33.1 million available for borrowing, subject to covenant restrictions, under its secured revolving credit facility. Net cash provided by operations for the six months ended September 26, 2026 and September 27, 2025 was $19.0 million and $16.5 million, respectively. Operating free cash flow* for the six months ended September 26, 2026 was $10.9 million.
Total long-term debt as of September 26, 2026 was $116.9 million versus $99.9 million on March 28, 2026.
Tom Barbato, Transcat’s Chief Financial Officer, added, “Transcat delivered excellent fiscal second quarter results, with total revenue increasing 18%, translating into gross profit growth of 22%, operating income growth of 44%, and net income growth of 90%. Gross margin expanded 110 bps to 33.6% and Adjusted EBITDA* margin expanded 70 bps to 15.4%, reflecting strong profit flow-through and operating leverage. Fiscal year-to-date operating free cash flow has grown 46% year over year, further strengthening our financial position. Our cash generation and strong balance sheet will provide greater flexibility to accelerate investment in organic growth initiatives while pursuing strategic M&A opportunities. Moreover, our continued momentum with financial performance and line of sight to new large customer wins enables the Company to increase our full-year Service organic revenue* growth outlook to low double digits.”
*See Note 1 for a description of the non-GAAP financial measures and the accompanying tables for reconciliations.
Fiscal Second Quarter 2027 Results Webcast and Conference Call
Transcat will host a conference call and webcast on Tuesday, November 3, 2026, at 4:30 p.m. ET. Management will review the financial and operating results for the second 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 (833) 419-0865. Alternatively, the webcast can be monitored at www.transcat.com/investor-relations.
Tuesday, November 3, 2026
4:30 p.m. Eastern Time
Dial-in - Toll-Free US / Canada: 1-833-419-0865
Dial-in - Toll / International: 1-785-838-9333
Conference ID: TRANSCAT (THIS CONFERENCE ID WILL BE REQUIRED FOR ENTRY)
Webcast and accompanying slide presentation:
https://viavid.webcasts.com/starthere.jsp?ei=1778889&tp_key=13ef016dde
A telephonic replay will be available from 8:30 p.m. ET on the day of the conference call through Tuesday, November 17, 2026. To listen to the archived call, dial 1-844-512-2921 from the US or Canada, or 1-412-317-6671 from international locations, and enter conference ID number 11162777 or access the webcast replay at https://www.transcat.com/investor-relations, where a transcript will be posted once available.
NOTE 1 - Non-GAAP Financial Measures
In addition to reporting service revenue, net income, operating income, diluted earnings per share, net cash provided by operating activities and long-term debt, which are U.S. generally accepted accounting principle ("GAAP") measures, we present service organic revenue, adjusted net income, adjusted EBITDA, adjusted EBITDA margin, adjusted operating income, adjusted diluted earnings per share, operating free cash flow and net debt, which are non-GAAP measures. Management uses these non-GAAP measures as indicators to better assess comparability between periods and as a basis for planning and forecasting because management believes these non-GAAP measures reflect our core business operations. These non-GAAP measures are not calculated through the application of U.S. GAAP and are not required forms of disclosure by the SEC. As such, they should not be considered a substitute for the corresponding GAAP measures and, therefore, they should not be used in isolation, but in conjunction with the GAAP measures. The use of any non-GAAP measure 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 the accompanying tables for reconciliations.
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 sciences 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 Calibration Service Centers strategically located across the United States and Internationally. In addition, Transcat operates calibration labs in 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, Cost, Control and Optimizations services, 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.
Safe Harbor Statement
Forward-looking statements notice
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 relate to expectations, estimates, beliefs, assumptions and predictions of future events and are identified by words such as “anticipate,” “assuming,” “believe,” “can,” “continue,” “expect,” “focus,” “looking ahead,” “may,” “opportunity,” “outlook,” “potential,” “strategy,” "vision," “will,” 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, 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.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
| Second Quarter Ended | Six Months Ended |
|---|
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 |
|---|
| Service Revenue | $64,770 | | $52,836 | | $127,329 | | $101,980 | |
| Distribution Revenue | 32,320 | | 29,436 | | 62,706 | | 56,716 | |
| Total Revenue | 97,090 | | 82,272 | | 190,035 | | 158,696 | |
| Cost of Service Revenue | 42,498 | | 35,843 | | 83,879 | | 68,778 | |
| Cost of Distribution Revenue | 21,962 | | 19,667 | | 42,792 | | 37,335 | |
| Total Cost of Revenue | 64,460 | | 55,510 | | 126,671 | | 106,113 | |
| Gross Profit | 32,630 | | 26,762 | | 63,364 | | 52,583 | |
| Selling, Marketing and Warehouse Expenses | 11,751 | | 10,627 | | 23,125 | | 20,142 | |
| General and Administrative Expenses | 15,846 | | 12,630 | | 31,487 | | 23,598 | |
| Total Operating Expenses | 27,597 | | 23,257 | | 54,612 | | 43,740 | |
| Operating Income | 5,033 | | 3,505 | | 8,752 | | 8,843 | |
| Interest Expense | 1,586 | | 1,269 | | 3,157 | | 1,720 | |
| Interest Income | (2) | | (5) | | (5) | | (16) | |
| Other Expense | 269 | | 212 | | 235 | | 545 | |
| Total Interest and Other Expense, net | 1,853 | | 1,476 | | 3,387 | | 2,249 | |
| Income Before Provision for Income Taxes | 3,180 | | 2,029 | | 5,365 | | 6,594 | |
| Provision for Income Taxes | 767 | | 760 | | 1,621 | | 2,064 | |
| Net Income | $2,413 | | $1,269 | | $3,744 | | $4,530 | |
| Basic Earnings Per Share | $0.26 | | $0.14 | | $0.40 | | $0.49 | |
| Basic Average Shares Outstanding | | 9,390 | | 9,321 | | 9,361 | | 9,319 |
| Diluted Earnings Per Share | $0.25 | | $0.14 | | $0.40 | | $0.48 | |
| Diluted Average Shares Outstanding | | 9,547 | | 9,399 | | 9,470 | | 9,392 |
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
| September 26, 2026 | March 28, 2026 |
|---|
| ASSETS | | |
| Current Assets: | | |
| Cash and Cash Equivalents | $5,758 | $4,942 |
| Accounts Receivable, less allowance for credit losses of $986 and $851 as of September 26, 2026 and March 28, 2026, respectively | 70,287 | 65,170 |
| Other Receivables | 1,539 | 672 |
| Inventory | 14,859 | 13,705 |
| Prepaid Expenses and Other Current Assets | 7,438 | 7,973 |
| Total Current Assets | 99,881 | 92,462 |
| Property and Equipment, net | 58,588 | 57,801 |
| Goodwill | 233,961 | 218,185 |
| Intangible Assets, net | 79,789 | 77,706 |
| Right to Use Assets | 32,926 | 32,365 |
| Other Assets | 1,911 | 1,968 |
| Total Assets | $507,056 | $480,487 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | |
| Current Liabilities: | | |
| Accounts Payable | $21,125 | $17,931 |
| Accrued Compensation and Other Current Liabilities | 17,770 | 21,697 |
| Total Current Liabilities | 38,895 | 39,628 |
| Long-Term Debt | 116,885 | 99,885 |
| Deferred Tax Liabilities, net | 11,545 | 10,167 |
| Lease Liabilities | 29,387 | 29,000 |
| Other Liabilities | 1,168 | 1,188 |
| Total Liabilities | 197,880 | 179,868 |
| Commitments and Contingencies (Note 6) | | |
| Shareholders' Equity: | | |
| Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 9,404,380 and 9,333,953 shares issued and outstanding as of September 26, 2026 and March 28, 2026, respectively | 4,702 | 4,670 |
| Capital in Excess of Par Value | 204,620 | 199,115 |
| Accumulated Other Comprehensive Loss | (931) | (923) |
| Retained Earnings | 100,785 | 97,757 |
| Total Shareholders' Equity | 309,176 | 300,619 |
| Total Liabilities and Shareholders' Equity | $507,056 | $480,487 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| Six Months Ended |
|---|
| September 26, 2026 | September 27, 2025 |
|---|
| Cash Flows from Operating Activities: | | |
| Net Income | $3,744 | $4,530 |
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | | |
| Net Loss on Disposal of Property and Equipment | 237 | 77 |
| Noncash Lease Expense | 3,176 | 2,034 |
| Deferred Income Taxes | 184 | 11 |
| Depreciation and Amortization | 13,803 | 12,092 |
| Amortization of Deferred Financing Costs | 77 | 26 |
| Provision for Accounts Receivable and Inventory Reserves | 209 | 258 |
| Stock-Based Compensation Expense | 4,194 | 2,970 |
| Changes in Assets and Liabilities, net of acquisitions: | | |
| Accounts Receivable and Other Receivables | (4,721) | (3,550) |
| Inventory | 1,162 | 1,798 |
| Prepaid Expenses and Other Assets | 645 | 1,039 |
| Accounts Payable | 2,436 | (1,573) |
| Accrued Compensation and Other Current Liabilities | (3,189) | (3,035) |
| Lease Liabilities | (2,992) | (722) |
| Net Cash Provided by Operating Activities | 18,965 | 16,504 |
| Cash Flows from Investing Activities: | | |
| Purchase of Property and Equipment | (8,070) | (9,030) |
| Business Acquisitions, net of Cash Acquired | (25,878) | (82,526) |
| Net Cash Used in Investing Activities | (33,948) | (91,556) |
| Cash Flows from Financing Activities: | | |
| Proceeds from Revolving Credit Facility, net of Lender Fees | 37,345 | 131,036 |
| Repayment of Revolving Credit Facility | (20,345) | (50,042) |
| Repayments of Term Loan | - | (1,816) |
| Payments of Deferred Financing Costs | - | (366) |
| Issuance of Common Stock, net of Direct Costs | 2,120 | 491 |
| Repayment of Financing Leases | (190) | - |
| Taxes Paid Related to Net Share Settlement of Equity Awards | (3,140) | (110) |
| Net Cash Provided by Financing Activities | 15,790 | 79,194 |
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | 9 | (576) |
| Net Increase in Cash and Cash Equivalents | 816 | 3,565 |
| Cash and Cash Equivalents at Beginning of Period | 4,942 | 1,517 |
| Cash and Cash Equivalents at End of Period | $5,758 | $5,082 |
Adjusted EBITDA Reconciliation Table
(In thousands)
| Fiscal 2027 |
|---|
| Q1 | Q2 | Q3 | Q4 | YTD |
|---|
| Net Income | $1,331 | | $2,413 | | $- | $- | $3,744 | |
| Interest Expense, Net | 1,568 | | 1,584 | | - | - | 3,152 | |
| Tax Provision | 854 | | 767 | | - | - | 1,621 | |
| Depreciation & Amortization | 6,914 | | 6,889 | | - | - | 13,803 | |
| Executive Transition Costs | 736 | | 568 | | - | - | 1,304 | |
| Transaction Expenses | 628 | | 472 | | - | - | 1,100 | |
| Non-cash Stock Compensation | 1,978 | | 2,216 | | - | - | 4,194 | |
| Adjusted EBITDA* | $14,009 | | $14,909 | | $- | $- | $28,918 | |
| Adjusted EBITDA Margin # | | 15.1% | | 15.4% | | | | 15.2% |
| Fiscal 2026 |
|---|
| Q1 | Q2 | Q3 | Q4 | YTD |
|---|
| Net Income (Loss) | $3,261 | | $1,269 | | $(1,101) | | $1,947 | | $5,376 | |
| Interest Expense, Net | 440 | | 1,264 | | 1,500 | | 1,375 | | 4,579 | |
| Tax Provision | 1,304 | | 760 | | (338) | | 887 | | 2,613 | |
| Depreciation & Amortization | 5,605 | | 6,487 | | 7,130 | | 6,950 | | 26,172 | |
| Executive Transition Costs | - | | - | | 771 | | 935 | | 1,706 | |
| Transaction Expenses | 28 | | 496 | | 45 | | 175 | | 744 | |
| Non-cash Stock Compensation | 1,130 | | 1,839 | | 2,061 | | 2,519 | | 7,549 | |
| Adjusted EBITDA* | $11,768 | | $12,115 | | $10,068 | | $14,788 | | $48,739 | |
| Adjusted EBITDA Margin # | | 15.4% | | 14.7% | | 12.0% | | 16.6% | | 14.7% |
# Calculated by dividing Adjusted EBITDA* by Revenue.
Operating Income Reconciliation Table
(In thousands)
| Fiscal 2027 |
|---|
| Segment Breakdown | Q1 | Q2 | Q3 | Q4 | YTD |
| Service Operating Income | $2,280 | $3,672 | $- | - | 5,952 |
| Depreciation & Amortization | 5,005 | 4,953 | - | - | 9,958 |
| Executive Transition Costs | 491 | 379 | - | - | 870 |
| Transaction Expenses | 524 | 349 | - | - | 873 |
| Non-cash Stock Compensation | 1,328 | 1,211 | - | - | 2,539 |
| Service Adjusted Operating Income* | $9,628 | $10,564 | $- | $- | $20,192 |
| Distribution Operating Income | $1,439 | $1,361 | $- | - | 2,800 |
| Depreciation & Amortization | 1,909 | 1,936 | - | - | 3,845 |
| Executive Transition Costs | 245 | 189 | - | - | 434 |
| Transaction Expenses | 104 | 123 | - | - | 227 |
| Non-cash Stock Compensation | 650 | 1,005 | - | - | 1,655 |
| Distribution Adjusted Operating Income* | $4,346 | $4,614 | $- | $- | $8,961 |
| Fiscal 2026 |
|---|
| Segment Breakdown | Q1 | Q2 | Q3 | Q4 | YTD |
| Service Operating Income (Loss) | $2,566 | $920 | $(2,052) | $3,508 | $4,943 |
| Depreciation & Amortization | 3,763 | 4,562 | 5,175 | 5,143 | 18,643 |
| Executive Transition Costs | - | - | 519 | 630 | 1,149 |
| Transaction Expenses | 28 | 496 | 45 | 175 | 744 |
| Non-cash Stock Compensation | 801 | 1,301 | 1,459 | 1,746 | 5,307 |
| Service Adjusted Operating Income* | $7,159 | $7,279 | $5,146 | $11,202 | $30,786 |
| Distribution Operating Income | $2,772 | $2,585 | $2,140 | $824 | $8,320 |
| Depreciation & Amortization | 1,842 | 1,925 | 1,955 | 1,807 | 7,529 |
| Executive Transition Costs | - | - | 252 | 305 | 557 |
| Transaction Expenses | - | - | - | - | - |
| Non-cash Stock Compensation | 329 | 538 | 602 | 773 | 2,242 |
| Distribution Adjusted Operating Income* | $4,942 | $5,048 | $4,949 | $3,709 | $18,648 |
Adjusted Net Income and Diluted EPS Reconciliation Table
| Fiscal 2027 |
|---|
| (In Thousands, Except Per Share Amounts) | Q1 | Q2 | Q3 | Q4 | YTD |
| Net Income | $1,331 | $2,413 | $- | $- | $3,744 |
| Amortization Expense | 3,598 | 3,602 | - | - | 7,201 |
| Executive Transition Costs | 736 | 568 | - | - | 1,304 |
| Transaction Expenses | 628 | 472 | - | - | 1,100 |
| Acquisition Stock Expense | 186 | 197 | - | - | 383 |
| Income Tax Effect | (1,627) | (1,166) | - | - | (3,016) |
| Adjusted Net Income* | $4,852 | $6,086 | $- | $- | $10,716 |
| Diluted Average Shares Outstanding | 9,473 | 9,547 | | - | 9,470 |
| Diluted Earnings Per Share | $0.14 | $0.25 | $- | $- | $0.40 |
| Amortization Expense | 0.38 | 0.38 | - | - | 0.76 |
| Executive Transition Costs | 0.08 | 0.06 | - | - | 0.14 |
| Transaction Expenses | 0.06 | 0.05 | - | - | 0.11 |
| Acquisition Stock Expense | 0.02 | 0.02 | - | - | 0.04 |
| Income Tax Effect | (0.17) | (0.12) | - | - | (0.32) |
| Adjusted Diluted Earnings Per Share* | $0.51 | 0.64 | - | - | $1.13 |
| Fiscal 2026 |
| Q1 | Q2 | Q3 | Q4 | YTD |
| Net Income (Loss) | $3,261 | $1,269 | $(1,101) | $1,947 | $5,376 |
| Amortization Expense | 2,844 | 3,461 | 3,977 | 3,488 | 13,770 |
| Executive Transition Costs | - | - | 771 | 935 | 1,706 |
| Transaction Expenses | 28 | 496 | 45 | 175 | 744 |
| Acquisition Stock Expense | 145 | 226 | 291 | 290 | 952 |
| Income Tax Effect | (754) | (1,297) | (1,601) | (1,598) | (5,251) |
| Adjusted Net Income* | $5,524 | $4,155 | $2,382 | $5,237 | $17,297 |
| Diluted Average Shares Outstanding | 9,389 | 9,399 | 9,329 | 9,398 | 9,380 |
| Diluted Earnings (Loss) Per Share | $0.35 | $0.14 | $(0.12) | $0.21 | $0.57 |
| Amortization Expense | 0.30 | 0.37 | 0.43 | 0.37 | 1.47 |
| Executive Transition Costs | - | - | 0.08 | 0.10 | 0.18 |
| Transaction Expenses | - | 0.05 | - | 0.02 | 0.08 |
| Acquisition Stock Expense | 0.02 | 0.02 | 0.03 | 0.03 | 0.10 |
| Income Tax Effect | (0.08) | (0.14) | (0.17) | (0.17) | (0.56) |
| Adjusted Diluted Earnings Per Share* | $0.59 | $0.44 | $0.26 | $0.56 | $1.84 |
# Calculated by dividing Adjusted EBITDA* by Revenue.
Stock compensation expense incurred that is related to grants to employees that were acquired with recent acquisitions.
Additional Information - Business Segment Data
(Dollars in thousands)
| | | Change |
|---|
| SERVICE | FY 2027 Q2 | FY 2026 Q2 | $ | % |
| Service Revenue | $64,770 | $52,836 | $11,934 | 22.6% |
| Cost of Revenue | 42,498 | 35,843 | 6,655 | 18.6% |
| Gross Profit | $22,272 | $16,993 | $5,279 | 31.1% |
| Gross Margin | 34.4% | 32.2% | | |
| Selling, Marketing & Warehouse Expenses | $7,421 | $6,825 | $596 | 8.7% |
| General and Administrative Expenses | 11,179 | 9,248 | 1,931 | 20.9% |
| Operating Income | $3,672 | $920 | $2,752 | 299.1% |
| % of Revenue | 5.7% | 1.7% | | |
| | | Change |
|---|
| DISTRIBUTION | FY 2027 Q2 | FY 2026 Q2 | $ | % |
| Distribution Revenue | $32,320 | $29,436 | $2,884 | 9.8% |
| Cost of Revenue | 21,962 | 19,667 | 2,295 | 11.7% |
| Gross Profit | $10,358 | $9,769 | $589 | 6.0% |
| Gross Margin | 32.0% | 33.2% | | |
| Selling, Marketing & Warehouse Expenses | $4,330 | $3,803 | $527 | 13.9% |
| General and Administrative Expenses | 4,667 | 3,381 | 1,286 | 38.0% |
| Operating Income | $1,361 | $2,585 | $(1,224) | (47.3%) |
| % of Revenue | 4.2% | 8.8% | | |
| | | Change |
|---|
| TOTAL | FY 2027 Q2 | FY 2026 Q2 | $ | % |
| Total Revenue | $97,090 | $82,272 | $14,818 | 18.0% |
| Total Cost of Revenue | 64,460 | 55,510 | 8,950 | 16.1% |
| Gross Profit | $32,630 | $26,762 | $5,868 | 21.9% |
| Gross Margin | 33.6% | 32.5% | | |
| Selling, Marketing & Warehouse Expenses | $11,751 | $10,627 | $1,124 | 10.6% |
| General and Administrative Expenses | 15,846 | 12,630 | 3,216 | 25.5% |
| Operating Income | $5,033 | $3,505 | $1,528 | 43.6% |
| % of Revenue | 5.2% | 4.3% | | |
Service Organic Revenue, Operating Free Cash Flow, and Net Debt
(Dollars in thousands)
| Second Quarter Ended | | |
|---|
| September 26, | September 27, | Change |
|---|
| 2026 | 2025 | $ | % |
|---|
| Service Organic Revenue |
| Service Revenue | $64,770 | | $52,836 | | $11,934 | 23% |
| Less: Acquired Revenue | (3,514) | | - | | | |
| Less: Freight Billed to Customer | (881) | | (706) | | | |
| Service Organic Revenue * | $60,375 | | $52,130 | | $8,245 | 16% |
| Six Months Ended |
|---|
| September 26, | September 27, |
|---|
| 2026 | 2025 |
|---|
| Operating Free Cash Flow |
| Net cash provided by operations | $18,965 | | $16,504 | |
| Capital Expenditures | (8,070) | | (9,030) | |
| Operating Free Cash Flow* | $10,895 | | $7,474 | |
| September 26, | March 28, |
|---|
| 2026 | 2026 |
|---|
| Net Debt |
| Long-Term Debt | $116,885 | | $99,885 | |
| Less: Cash and Cash Equivalents | (5,758) | | (4,942) | |
| Net Debt * | $111,127 | | $94,943 | |
Contacts
Transcat, Inc. 35 Vantage Point Drive • Rochester • NY • 14624 • Phone: (585) 352-7777
Chris Tyson
Executive Vice President
MZ Group - MZ North America
Phone: (949) 491-8235
TRNS@mzgroup.us www.mzgroup.us
FINANCIAL TABLES FOLLOW.