Transcat, Inc. · NASDAQ:TRNS
Transcat — Shareholder Meeting (September 2013)
25 slides from Transcat's shareholder meeting presentation, Sep 10, 2013
Slide 1: Call to order, introductions, matters for vote
Formal script: Call to order, introductions, matters for vote. 1
Slide 2: Welcome and thanks to Charlie
Good morning and thank you for joining us today. As most of you know, this is my first annual meeting as CEO and needless to say y it’s veryy exciting g to be p part of the Transcat Team and have an opportunity to lead a great company as we embark upon what I think will be an exciting future. I woul
Slide 3: Forward-looking statements
Before I get started, you should know that the presentation you are about to hear contains “forward looking statements”. As you will note on this slide, these statements are made based on management’s knowledge and understanding of our business and the industries we serve. However, there are risks,
Slide 4: Introduction of executive team
Fundamental to our success in recent years and certainly key to our future success is our leadership team, our managers and our entire dedicated staff. Allow me to take a moment to introduce the members of our executive team that are here with us today. If you could kindly stand when I call your nam
Slide 5: Agenda for today
Our agenda for today will start with a review of Fiscal 2013 results lt – followed f ll dbby a review i off our strategy t t and d outlook, tl k and then we will conclude with a brief update on the Fiscal 2014 first quarter results. At the end of the formal presentation we will open the floor for Q&
Slide 6: Revenue and operating income
So let’s get started – Although the Revenue & Operating Income graph only shows five years, in Fiscal 2013, we posted our 9th consecutive year of record annual revenue growth. The 112 million dollars plus in revenue was driven by organic growth in the Service segment (which I will expand upon later)
Slide 7: EBITDA
EBITDA, which is a non-GAAP measure we use to evaluate our business and is indicative of cash generation, has been strong t as well. ll On a consolidated basis, EBITDA has grown 18% since fiscal 2009 and is driven by strong Service segment performance. Just four years ago our Service segment was onl
Slide 8: EPS and return on assets
As profitability increased - EPS increased 14% to $0.49 per share. We also maintained a strong return on assets of 7.4%. We track ROI on assets as a key measure of THE success of our capital investment programs, including acquisitions. But recognize however that not all of our investments are accret
Slide 9: Service segment
As you can see in the Service segment slide, in fiscal 2013 our strategy to grow the Service segment drove much of our record results. Service Segment revenue has grown AT A 14.2% compound annual growth rate since 2009. Demonstrated by the operating income generated in the year - from a volume persp
Slide 10: Distribution segment
The Distribution business contracted slightly in fiscal 2013 to revenue of $71.6 million. We attribute the contraction to both increased competition and a very slow economic recovery. We anticipate that pricing pressures will continue but without question we will defend our strong market position po
Slide 11: Overview of strategy and outlook
Lets move to an overview of our strategy and outlook. 11
Slide 12: Building enterprise accounts
In Fiscal 2013, we heightened our focus on building a portfolio of larger, blue chip customers. We generally refer to them as enterprise accounts – and while often times they REQUIRE a longer sales cycle, the resulting relationship is far more integrated and the opportunity to embed the customer int
Slide 13: Strategic acquisitions
In addition to a robust organic sales engine – strategic acquisitions will continue to play an important role in our goal to achieve consistent double digit growth in our Service Segment. g g In the past 4 years we have acquired 7 companies and done so with a great deal of demonstrated success. When
Slide 14: Value proposition: footprint, quality, capability
In total, Transcat now operates 18 service laboratories throughout North America and Puerto Rico. Our national presence is one of three key elements contributing to our unique value proposition. The second key element of our value proposition is our quality. Transcat continues to be recognized as pr
Slide 15: Life science market opportunity
Because the Life Science market is highly regulated and compliance is critical, our quality oriented value proposition resonates well, making it an ideal market for Transcat. In addition we also believe that the demographics of our society addition, are going to drive more opportunity in this market
Slide 16: Distribution segment strategy
Looking at our Distribution segment With the ever-increasing reach of the internet, and specifically business to business web commerce, we p will continue to encounter competitive challenges g in this segment. Having said that; our strategy moving forward is to defend our market share. The strategy
Slide 17: Distribution and Service synergies
Each business day whether by phone or web we interact with thousands of Distribution customers – a high percentage of which are potential Service customers. Everyy interaction is an opportunity, pp y, or “entre” if you will, into a Service conversation. Every time we sell a “calibration” to go with
Slide 18: Summary of growth opportunity
In Summary, we believe there is real opportunity to continue to expand our market reach through a combination of organic growth and strategic acquisitions which increase our capabilities and/or geographic footprint. g business Combined with a continued focus on recruiting development expertise and s
Slide 19: Fiscal 2014 first quarter
Let’s conclude the presentation today with a quick look at our Fiscal 2014 first quarter which really got off to a great start. 19
Slide 20: First quarter revenue growth
We started the year strong with first quarter revenue growth of 14% over the prior-year g y period. The increase was driven by a 34.4% increase in service revenue during the quarter. The Service segment results were driven by both organic and acquisition activities. 20
Slide 21: First quarter gross profit
We successfully leveraged this revenue growth and realized a 16% increase in g gross profit, as we continued to capitalize on the investment in our quality-driven infrastructure and years of process improvements. The result is a gross profit growth rate higher than our revenue growth rate. As you wi
Slide 22: First quarter operating income
First quarter operating income grew 94% from the prior year. While the Distribution segment g experienced p a slight g decline in that segment’s operating income, the strength of the Service business combined with cost discipline more than offset that decrease. We are optimistic about our ability to
Slide 23: Closing remarks and questions
We are executing on our strategic plan and are confident that the strong business fundamentals that exist within Transcat will continue to provide opportunities for growth and increased profitability. Again, we acknowledge Charlie Hadeed for his vision and leadership He’s leadership. He s provided T
Slide 24: Supplemental information
SUPPLEMENTAL INFORMATION 24
Slide 25: Total EBITDA reconciliation
Total EBITDA $4516 $4426 848 8.278 “The Company believes that when used in conjuncth n with GAAP measures, EBITDA. or eamings before interest, taxes and depreciation and amortization, whi h is a non-GAAP measure investors to view its performance in a manner ad by management and provides additional i