10-K · May 27, 2026
Transcat, Inc. reported FY 2026 results with total revenue growing 19.2% to $331.9 million, primarily driven by acquisitions and increased rental sales. However, net income fell sharply by 63% to $5.4 million due to…
Earnings analysis · 10-Q
TRNS earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Transcat delivered strong top-line growth in its fiscal 2027 first quarter, with revenue up 21.6% to $92.945 million and Service organic revenue up 12.8%, supported by acquisitions and demand in regulated end markets.…
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Transcat delivered strong top-line growth in its fiscal 2027 first quarter, with revenue up 21.6% to $92.945 million and Service organic revenue up 12.8%, supported by acquisitions and demand in regulated end markets. However, consolidated gross margin slipped 70 basis points and operating margin contracted 300 basis points to 4.0% as acquisition, stock-compensation and executive-transition costs rose, driving GAAP EPS down to $0.14 from $0.35. Cash conversion improved substantially, but acquisition-funded debt rose to $110.4 million and management continues to report unremediated material weaknesses in internal controls.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.14
What stood out
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Revenue grew 21.6% to $92.9M
Revenue reached $92.945 million, increasing $16.521 million, or 21.6%, from $76.424 million in the prior-year quarter. Growth was driven by $6.930 million of acquired revenue and 12.8% Service organic growth.
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Service growth and margin improved
Service revenue increased $13.415 million, or 27.3%, to $62.559 million, while Service gross margin expanded 90 basis points to 33.9% from 33.0%. Management attributed organic growth to client-based labs and calibration services for biomedical customers.
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Distribution sales increased 11.4%
Distribution revenue rose $3.106 million, or 11.4%, to $30.386 million, supported by rentals and product sales. Pending product shipments were $6.678 million, up $2.496 million from $4.182 million a year earlier.
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Cash generation turned materially positive
Operating cash flow increased to $8.817 million from $3.623 million, and operating free cash flow was $4.835 million versus negative $0.975 million. Capital expenditures declined to $3.982 million from $4.598 million.
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Adjusted EBITDA increased 18.6%
Adjusted EBITDA rose $2.188 million, or 18.6%, to $13.956 million, although adjusted EBITDA margin edged down to 15.0% from 15.4%.
What to watch
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Expense growth compressed operating margin
Operating margin fell 300 basis points to 4.0% from 7.0%, as operating expenses increased $6.532 million, or 31.9%, to $27.015 million. More than $2.5 million of incremental costs related to SCM and Essco, including amortization, acquisition costs, stock compensation and executive-transition costs.
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GAAP earnings declined sharply
GAAP diluted EPS decreased to $0.14 from $0.35 and net income declined $1.931 million, or 59.2%, to $1.331 million. Interest expense increased by $1.075 million to $1.515 million following acquisition-related borrowing.
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Distribution mix pressured gross margin
Distribution gross margin declined 380 basis points to 31.4% from 35.2%, causing Distribution gross profit to decrease $0.057 million to $9.556 million despite an 11.4% revenue increase. Management cited a greater mix of lower-margin product sales relative to rentals.
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Leverage and floating-rate exposure increased
Credit-facility borrowings outstanding were $110.4 million as of June 27, 2026, and the leverage ratio increased to 2.21 from 2.03 at March 28, 2026. A 1% interest-rate move would change annual interest expense by approximately $1.1 million; the quarterly weighted-average credit-facility rate was 5.2%.
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Material control weaknesses remain unremediated
Management concluded disclosure controls were ineffective as of June 27, 2026 because material weaknesses previously reported in the March 28, 2026 Form 10-K had not been fully remediated. The filing reports ongoing remediation rather than a newly identified risk-factor change.
Management's outlook
Management maintained its expectation for high-single-digit Service organic revenue growth in fiscal 2027, assuming a stable broader economy. It expects a 30% to 32% full-year fiscal 2027 income-tax rate. No consolidated revenue or EPS guidance range was provided in the 10-Q.
Earlier filings 4
10-Q · February 3, 2026
Transcat reported Q3 revenue of $83,856,000, up from $66,754,000 in the prior-year quarter, driven by service and distribution growth. Despite the top-line increase, operating income collapsed to $88,000 and the company…
10-Q · November 5, 2025
Transcat reported second quarter revenue of $82,272 (in thousands), up 21.3% year-over-year and up ~7.4% sequentially, driven by growth in both Service and Distribution. Gross margin was 32.5% while operating margin…
10-Q · February 5, 2025
Transcat reported third-quarter revenue of $66,754,000, up $1,588,000 (+2.4%) versus the prior-year quarter, but gross profit declined to $19,679,000 (gross margin ~29.5%) and operating income fell to $2,100,000…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.