Transcat Reports Strong Fiscal First Quarter 2026 Financial Results
Transcat, Inc., a leader in test measurement, control, and calibration, has released its financial and operational results for the first quarter of fiscal year 2026, ending June 28, 2025. The company reported significant growth in both revenue and gross profit, driven by strong performance in its service and distribution segments.
Financial Highlights
Transcat reported a consolidated revenue of $76.4 million for the first quarter, marking a 14.6% increase from the same period last year. The company's gross profit rose by 14.0% to $25.8 million, although the gross margin slightly decreased by 20 basis points. Adjusted EBITDA increased by 15.2% to $11.8 million, driven by robust revenue growth. However, net income per diluted share decreased to $0.35 from $0.48 in the previous year, and adjusted diluted earnings per share were $0.59 compared to $0.68 last year.
Business and Operational Highlights
The service segment, which includes accredited calibration, repair, inspection, and laboratory instrument services, saw a revenue increase of 12.3% to $49.1 million. This growth included $6.4 million of incremental revenue from acquisitions. The distribution segment, which deals with the sale and rental of professional-grade handheld test, measurement, and control instrumentation, reported a 19.0% increase in revenue to $27.3 million, driven by higher demand for rentals and products.
Strategic Initiatives and Corporate Developments
Transcat completed the acquisition of Essco Calibration Laboratory, adding $22 million in annual, margin-accretive revenue. This acquisition, the largest in Transcat's history, enhances the company's presence in the New England market, particularly in the life sciences and aerospace & defense sectors. The company also announced a new 5-Year $150 million syndicated secured credit facility, replacing its previous $80 million facility, to support future acquisitions and growth strategies.
Management's Perspective
Lee D. Rudow, President and CEO, highlighted the company's strong performance in the first quarter, emphasizing the double-digit growth in service revenue and the record gross margin in the distribution segment. Rudow also noted the strategic importance of acquisitions in driving growth and expanding market presence. CFO Tom Barbato added that the company's balance sheet remains strong, with a leverage ratio of 0.82x at quarter-end, and the new credit facility provides significant financial flexibility for future growth.
Future Outlook
Looking ahead, Transcat expects continued service revenue growth, benefiting from its strengthened presence in the Midwest and New England markets. The company anticipates a return to high single-digit service organic revenue growth in the second half of fiscal 2026, barring any further economic uncertainty. Management remains confident in the company's ability to drive sustainable, long-term shareholder value through strong execution and a diversified portfolio of products and services.
SEC Filing: TRANSCAT INC [ TRNS ] - 8-K - Aug. 07, 2025