Transcat reports Q4 EPS 66c, consensus 53c

Reports Q4 revenue $70.9M, consensus $68.6M. “We are extremely pleased with our fourth quarter and full year fiscal 2024 results as double-digit organic Service revenue growth and increased productivity drove Service gross margin expansion while Distribution gross margins soared due to growth in Rentals,” commented Lee D. Rudow, CEO. “Adjusted EBITDA growth of 30% for the fourth quarter reflects our ability to leverage organic Service revenue growth and the successful integration of acquired companies. Fourth quarter Consolidated revenue was up 14% with gross margin expansion of 300 basis points year over year driven by our widened breadth of service offerings, excellent performance in the higher-margin rental business, and execution of automation and process improvement initiatives. Service segment revenue grew 18% in the fourth quarter as demand in highly regulated end markets, including life sciences, remained strong and our differentiated value proposition continues to resonate throughout Transcat’s expanded addressable markets. In the fiscal year we completed three acquisitions, TIC-MS, SteriQual, and Axiom Test Equipment that have expanded our addressable markets, widened the breadth of offerings, and allowed us to leverage our existing infrastructure. The key differentiator of the Transcat acquisition strategy is the effectiveness of our integration processes enabling new acquisitions 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. On a final note, we are extremely excited about our recent rental acquisition, Becnel Rental Tools, which closed just after the end of the fiscal year. Becnel is a well-run business, with great customer relationships, which will differentiate our higher margin rental portfolio and will in time provide significant opportunities for cross-selling of Transcat’s products and services.”