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TRANSCAT INC

TRANSCAT INCTRNS決算レポート

Nasdaq · 産業 · 電気及び電気信号の測定及び試験用機器

Transcat Inc is a leading provider of calibration and measurement compliance solutions, as well as a distributor of professional test and measurement instruments. It serves core sectors including life sciences, aerospace, industrial manufacturing, energy and utilities, with primary operations across the United States and Canada, helping clients meet regulatory and operational accuracy requirements.

What changed in TRANSCAT INC's 10-K — 2024 vs 2025

Top changes in TRANSCAT INC's 2025 10-K

221 paragraphs added · 227 removed · 191 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

52 edited+6 added−8 removed99 unchanged
We provide other services to our customers such as inspection, repair and consulting services, which appeal to customers across all sectors in our customer base. These are generally value-added services and allow us to provide “one-stop shopping” for our customers. 6 Table of Contents Service Value Proposition.
Other Services. We provide other services to our customers such as inspection, repair and consulting services, which appeal to customers across all sectors in our customer base. These are generally value-added services and allow us to provide “one-stop shopping” for our customers. 6 Table of Contents Service Value Proposition.
We differentiate ourselves from our competitors by demonstrating our commitment to quality, expanding upon the largest 17025 scope of accreditation and calibration capabilities of any commercial calibration laboratory that are tailored to the markets we serve, leveraging a geographical footprint that spans North America, Puerto Rico and Ireland providing a comprehensive suite of services that spans many disciplines and hundreds of manufacturers which is not limited to certain product lines or brands.
We differentiate ourselves from our competitors by demonstrating our commitment to quality, expanding upon the largest 17025 scope of accreditation and calibration capabilities of any commercial calibration laboratory that is tailored to the markets we serve, leveraging a geographical footprint that spans North America, Puerto Rico and Ireland, and providing a comprehensive suite of services that spans many disciplines and hundreds of manufacturers which is not limited to certain product lines or brands.
Through our Service segment, we perform recurring periodic calibrations (typically ranging from three-month to twenty-four month intervals) on new and customer-owned instruments. We perform approximately 850,000 calibrations annually and can address a significant majority of the items requested to be calibrated with our in-house capabilities.
Through our Service segment, we perform recurring periodic calibrations (typically ranging from three-month to twenty-four month intervals) on new and customer-owned instruments. We perform approximately 850,000 to 900,000 calibrations annually and can address a significant majority of the items requested to be calibrated with our in-house capabilities.
We believe our calibration services are of the highest technical and quality levels, with broad ranges of accreditation. Our compliance services strategy is to identify and establish long-term relationships with life science research and development and manufacturing customers who require analytical qualifications, validation, remediation and/or preventative maintenance services.
We believe our calibration services are of the highest technical and quality levels, with broad ranges of accreditation. Our compliance services strategy is to identify and establish long-term relationships with life science research and manufacturing customers who require analytical qualifications, validation, remediation and/or preventative maintenance services.
Our calibration services strategy encompasses multiple ways to manage a customer’s calibration and laboratory instrument service needs: ● We offer an “Integrated Calibration Service Solution” that provides a complete wrap-around service, which can be delivered in the following ways: ● in-house services: services are performed at one of our twenty-nine Calibration Service Centers (often accompanied by pick-up and delivery services); ● periodic onsite services: Transcat technicians travel to a customer’s location, including aboard vessels docked at shipyards, and provide bench-top or in-line calibration or laboratory services on predetermined service cycles; ● client-based-laboratory services: Transcat establishes and manages a calibration service program within a customer’s facility; and ● mobile calibration services: services are completed on a customer’s property within one of our mobile calibration units. ● For companies that maintain an internal calibration operation, we can provide: ● calibration of their primary calibration assets, also called “standards”; and ● overflow capability, either onsite or at one of our Calibration Service Centers, during periods of high demand. ● Transcat Cost Control and Optimization Services: ● Calibration – criticality risk assessment; calibration interval analysis; calibration plans/task lists; planning and scheduling. ● Maintenance and Spares – PM optimization; spares/BOM management; PM plans/task lists; planning and scheduling. ● Reliability – asset criticality assessments; asset hierarchy development; PdM plans/task lists; FMECA/RCA. ● CMMS – implementation and migration; data optimization; business intelligence; CMMS KPIs/reporting. ● Quality and Compliance – technical writing; compliance audits; remediation; compliance management. ● CQV – equipment and facility C&Q; cleaning and sterilization validation; process and software validation; warehouse environmental mapping. ● Transcat Single Source Solution: ● Commissioning, Qualification and Validation. ● Data build for the computerized maintenance and calibration system (CMMS). ● Reliability Planning. ● Maintenance & Spares delivery. ● Execution of initial Calibrations. ● Final activities leading to the successful turn-over of the fully completed equipment and systems to the Client in an operationally-ready state.
Our calibration services strategy encompasses multiple ways to manage a customer’s calibration and laboratory instrument service needs: ● We offer an “Integrated Calibration Service Solution” that provides a complete wrap-around service, which can be delivered in the following ways: ● In-house services - services are performed at one of our thirty-three Calibration Service Centers (often accompanied by pick-up and delivery services). ● Periodic onsite services - Transcat technicians travel to a customer’s location, including aboard vessels docked at shipyards, and provide bench-top or in-line calibration or laboratory services on predetermined service cycles. ● Client-based-laboratory services - Transcat establishes and manages a calibration service program within a customer’s facility. ● Mobile calibration services - services are completed on a customer’s property within one of our mobile calibration units. ● For companies that maintain an internal calibration operation, we can provide: ● Calibration of their primary calibration assets, also called “standards”. ● Overflow capability, either onsite or at one of our Calibration Service Centers, during periods of high demand. ● Transcat Solutions Cost Control and Optimization Services: ● Calibration – criticality risk assessment; calibration interval analysis; calibration plans/task lists; planning and scheduling. ● Maintenance and Spares – PM optimization; spares/BOM management; PM plans/task lists; planning and scheduling. ● Reliability – asset criticality assessments; asset hierarchy development; PdM plans/task lists; FMECA/RCA. ● CMMS – implementation and migration; data optimization; business intelligence; CMMS KPIs/reporting. ● Quality and Compliance – technical writing; compliance audits; remediation; compliance management. ● CQV – equipment and facility C&Q; cleaning and sterilization validation; process and software validation; warehouse environmental mapping. ● Transcat Single Source Solution: ● Commissioning, Qualification and Validation. ● Data build for the computerized maintenance and calibration system (CMMS). ● Reliability Planning. ● Maintenance & Spares delivery. ● Execution of initial Calibrations. ● Final activities leading to the successful turn-over of the fully completed equipment and systems to the Client in an operationally-ready state.
To differentiate ourselves from competitors, we offer pre-shipment calibration or performance data reports which allow customers to receive our products and immediately place them into service, saving them downtime and money. Online distributors, including Amazon which typically sells lower price-point products, have become prominent competitors for sales of handheld test and measurement equipment, competing primarily on price.
To differentiate ourselves from competitors, we offer pre-shipment calibration or performance data reports which allow customers to receive our products and immediately place them into service, saving them downtime and money. Online distributors, including Amazon, which typically sell lower price-point products, have become prominent competitors for sales of handheld test and measurement equipment, competing primarily on price.
Transcat’s most recent investment in capability expansion includes ground support equipment ("GSE"), an integral role in aircraft operations. The speed, efficiency, and accuracy of this equipment are crucial factors that help minimize downtime for aircraft before, between, and after flights. At Transcat, we’re proud to offer GSE certification, calibration, maintenance, and repair services for the aviation and aerospace industries.
Transcat’s most recent investment in capability expansion includes ground support equipment ("GSE"), an integral role in aircraft operations. The speed, efficiency, and accuracy of this equipment are crucial factors that help minimize downtime for aircraft before, between, and after flights. At Transcat, we are proud to offer GSE certification, calibration, maintenance, and repair services for the aviation and aerospace industries.
While typically representing approximately 13% to 15% of ou r Service segment revenue, we believe the management of these items is highly valued by our customers and providing this service has enabled us to continue our pursuit of having the broadest calibration offerings in these targeted markets. We regularly review outsourced services to identify opportunities for in-house capability expansion.
While typically representing approximately 13% to 15% of our Service segment revenue, we believe the management of these items is highly valued by our customers and providing this service has enabled us to continue our pursuit of having the broadest calibration offerings in these targeted markets. We regularly review outsourced services to identify opportunities for in-house capability expansion.
We believe that effective purchasing is a key element to maintaining and enhancing our position as a provider of high-quality test and measurement instruments. We frequently evaluate our purchase requirements and suppliers’ offerings to obtain products at the best possible cost. We obtain our products from approximately 450 suppliers of brand name and private-labeled equipment.
We believe that effective purchasing is a key element to maintaining and enhancing our position as a provider of high-quality test and measurement instruments. We frequently evaluate our purchase requirements and suppliers’ offerings to obtain products at the best possible cost. We obtain our products from approximately 400 suppliers of brand name and private-labeled equipment.
We believe our customers do business with us because of our integrity and commitment to quality service, our broad range of product and service offerings, our proprietary asset management system, CalTrak®, and our online customer portal, C3®. In our fiscal years 2024 and 2023, no customer or controlled group of customers accounted for 5% or more of our total revenue.
We believe our customers do business with us because of our integrity and commitment to quality service, our broad range of product and service offerings, our proprietary asset management system, CalTrak®, and our online customer portal, C3®. In our fiscal years 2025 and 2024, no customer or controlled group of customers accounted for 5% or more of our total revenue.
Under our integrated sales model, we have both inside and outside sales teams that seek to acquire new customers in our targeted markets by leveraging our unique value proposition, including our broad geographic footprint and comprehensive suite of services. We target regulated customers with multiple manufacturing operations throughout North America and Europe.
Under our integrated sales model, we have both inside and outside sales teams that seek to acquire new customers in our targeted markets by leveraging our unique value proposition, including our broad geographic footprint and comprehensive suite of services. We target regulated customers with multiple manufacturing operations throughout North America and Ireland.
Our close knowledge of the products we distribute also allows our service staff to consult and advise customers on what products are best suited for their in-house calibration needs. We also believe that our proprietary software is a key differentiator from our competitors.
Our comprehensive knowledge of the products we distribute also allows our service staff to consult and advise customers on what products are best suited for their in-house calibration needs. We also believe that our proprietary software is a key differentiator from our competitors.
By delivering these services, NEXA is able to provide unique value to our end customers in managing their asset portfolios, avoiding asset downtime and helping to accelerate delivery of their life changing products to market, ultimately driving significant cost savings and improved reliability.
By delivering these services, Transcat Solutions is able to provide unique value to our end customers in managing their asset portfolios, avoiding asset downtime and helping to accelerate delivery of their life changing products to market, ultimately driving significant cost savings and improved reliability.
The charts below illustrate Service, Distribution and consolidated revenue over the past five years: 4 Table of Contents SEGMENTS Service Segment Calibration. Calibration is the act of comparing a unit or instrument of unknown value to a standard of known value and reporting the result in some specifically defined form.
The charts below illustrate Service, Distribution and consolidated revenue over the past five years: SEGMENTS Service Segment Calibration. Calibration is the act of comparing a unit or instrument of unknown value to a standard of known value and reporting the result in some specifically defined form.
Customers may place orders via: ● Mail to Transcat, Inc., 35 Vantage Point Drive, Rochester, NY 14624; ● Telephone at 1-800-828-1470; ● Email at sales@transcat.com; ● Online at www.transcat.com; or ● Fax at 1-800-395-0543 11 Table of Contents INFORMATION REGARDING EXPORT SALES In fiscal year 2024, approximatel y 10% of our total revenue resulted from sales to customers outside the United States.
Customers may place orders via: ● Mail to Transcat, Inc., 35 Vantage Point Drive, Rochester, NY 14624; ● Telephone at 1-800-828-1470; ● Email at sales@transcat.com; ● Online at www.transcat.com; or ● Fax at 1-800-395-0543 11 Table of Contents INFORMATION REGARDING EXPORT SALES In fiscal year 2025 , approximately 10% of our total revenue resulted from sales to customers outside the United States.
Fiscal year 2025 which ends on March 29, 2025 (“fiscal year 2025”) will have 52 weeks. 12 Table of Contents ENVIRONMENTAL MATTERS We believe that we are in compliance with federal, state, and local provisions relating to the protection of the environment, and that continued compliance will not have any material effect on our capital expenditures, earnings, or competitive position.
Fiscal year 2026 which ends on March 28, 2026 (“fiscal year 2026”) will have 52 weeks. 12 Table of Contents ENVIRONMENTAL MATTERS We believe that we are in compliance with federal, state, and local provisions relating to the protection of the environment, and that continued compliance will not have any material effect on our capital expenditures, earnings, or competitive position.
We strive to differentiate ourselves within the markets we serve and build barriers to competitive entry by offering a broad range of products and services and by integrating these solutions in a value-added manner to benefit our customers’ operations. During fiscal year 2024, we continued our commitment to capital, people and leadership investments, advancing our “Operational Excellence” initiative.
We strive to differentiate ourselves within the markets we serve and build on our competitive advantages by offering a broad range of products and services and by integrating these solutions in a value-added manner to benefit our customers’ operations. During fiscal year 2025, we continued our commitment to capital, people and leadership investments, advancing our “Operational Excellence” initiative.
NEXA offers six service tracks that support the creation or optimization of our client’s enterprise asset management program. Whether a facility is in preconstruction, operational or decommissioning stage, NEXA’s experienced teams can deliver results in all phases of the asset lifecycle. NEXA’s full suite of services or combination solutions are customizable to meet our customer’s unique needs. Other Services.
Transcat Solutions offers six service tracks that support the creation or optimization of our client’s enterprise asset management program. Whether a facility is in preconstruction, operational or decommissioning stage, Transcat Solutions’ experienced teams can deliver results in all phases of the asset lifecycle. Transcat Solutions' full suite of services or combination solutions are customizable to meet our customers' unique needs.
Through our website, in-house sales team and printed and digital marketing materials, we offer access to more than 150,000 test, measurement and control instruments, including products from approxima tely 450 leading brands. M ost instruments we sell and rent require calibration service to ensure that they maintain the most precise measurements.
Through our website, in-house sales team and printed and digital marketing materials, we offer access to more than 75,000 test, measu rement and control instruments, including products from approxima tely 400 leading brands. M ost instruments we sell and rent require calibration service to ensure that they maintain the most precise measurements.
NEXA provides asset management services to the biopharmaceutical industry by leveraging its six service tracks: (i) calibration, (ii) maintenance and spare, (iii) reliability, (iv) computerized maintenance management systems solu tions (“CMMS”), (v) quality and compliance, and (vi) validation.
Transcat Solutions provides asset management services to the biopharmaceutical industry by leveraging its six service tracks: (i) calibration, (ii) maintenance and spare, (iii) reliability, (iv) computerized maintenance management systems solutions (“CMMS”), (v) quality and compliance, and (vi) validation.
As a result, we might not be able to maintain our domain names or obtain comparable domain names, which could harm our business. SEASONALITY Our business has certain historical seasonal factors. Historically, our fiscal third and fourth quarters have been stronger than our fiscal first and second quarters due to the operating cycles of our industrial sector customers.
As a result, we might not be able to maintain our domain names or obtain comparable domain names, which could harm our business. SEASONALITY Our business has certain historical seasonal factors. Historically, our fiscal fourth quarter has been stronger than our other fiscal quarters due to the operating cycles of our industrial sector customers.
Through our vendor relationships we have access to more th an 150,000 products, wh ich we market to our existing and prospective customers both with and without value-added service options that are unique to Transcat.
Through our vendor relationships we have access to more than 75,000 products, wh ich we market to our existing and prospective customers both with and without value-added service options that are unique to Transcat.
We seek to recruit and hire the most qualified people for our open positions without regard to protected status (age, color, creed, disability, domestic violence victim status, gender identity, genetic predisposition or carrier status, marital status, national origin, pregnancy, race, religion, sex, sexual orientation, status as a protected veteran or as a member of any other protected group or status).
We seek to recruit and hire the most qualified people for our open positions without regard to protected status (age, color, disability, genetic predisposition or carrier status, national origin, race, religion, sex (including pregnancy, sexual orientation, and gender identity), status as a protected veteran or as a member of any other protected group or status). Non-Harassment .
As of the end of our fiscal year ended March 30, 2024 (“fiscal year 2024 ”), we operated twenty-nine calibration service centers (“Calibration Service Centers”) strategically located across the United States, Puerto Rico, Canada and Ireland. We also serve our customers onsite at their facilities for daily, weekly or longer-term periods.
As of the end of our fiscal year 2025, we operated thirty-three calibration service centers (“Calibration Service Centers”) strategically located across the United States, Puerto Rico, Canada and Ireland. We also serve our customers onsite at their facilities for daily, weekly or longer-term periods.
The table below illustrates the strategic drivers for the acquisitions described above: Geographic Expansion Increased Capabilities and Expertise Leveraged Infrastructure Axiom ✓ ✓ SteriQual ✓ ✓ TIC-MS ✓ ✓ Elite ✓ Complete Calibrations ✓ ✓ e2b ✓ ✓ Alliance ✓ ✓ We believe our combined Service and Distribution segment offerings, experience, technical expertise and integrity create a unique and compelling value proposition for our customers, and we intend to continue to grow our business through organic revenue growth and business acquisitions.
The table below illustrates the strategic drivers for the acquisitions described above: Geographic Expansion Increased Capabilities and Expertise Leveraged Infrastructure Martin ✓ ✓ ✓ Becnel ✓ ✓ Axiom ✓ ✓ SteriQual ✓ ✓ TIC-MS ✓ ✓ 4 Table of Contents We believe our combined Service and Distribution segment offerings, experience, technical expertise and focus on quality create a unique and compelling value proposition for our customers, and we intend to continue to grow our business through organic revenue growth and business acquisitions.
Our total backl og was $5.1 million and $8.1 million as of March 30, 2024 and March 25, 2023, respectively. CUSTOMER SERVICE AND SUPPORT Key elements of our customer service approach are our business development sales team, outbound sales team, account management team, inbound sales and customer service organization.
Our total backlog was $3.3 million and $5.1 million as of March 29, 2025 and March 30, 2024 , respectively. CUSTOMER SERVICE AND SUPPORT Key elements of our customer service approach are our business development sales team, outbound sales team, account management team, inbound sales and customer service organization.
Our dedication to quality is highly valued by businesses that operate in the industries we serve, particularly those in life science and other regulated industries, and our accreditations provide our customers with confidence that they will receive a consistent and uniform service, regardless of which of our service centers completes the service. 2 Table of Contents Through our Distribution segment, we sell and rent national and proprietary brand instruments to customers globally.
Our dedication to quality is highly valued by businesses that operate in the industries we serve, particularly those in life science and other regulated industries, and our accreditations provide our customers with confidence that they will receive a consistent and uniform service, regardless of which of our service centers completes the service.
We have adopted an integrated sales model to drive sales and capitalize on the cross-selling opportunities between our two segments, especially leveraging our Distribution relationships to develop new Service relationships.
We have adopted an integrated sales model to drive sales, leverage our industry leading value proposition, which includes Transcat Solutions, and capitalize on the cross-selling opportunities between our two segments, especially leveraging our Distribution relationships to develop new Service relationships.
Prior to fiscal year 2023, the Company acquired Cal OpEx Limited (d/b/a Transcat Ireland) which owns all of the issued and outstanding capital stock of its U.S. based subsidiary, Cal OpEx Inc. (d/b/a NEXA EAM), a Delaware corporation (collectively, "NEXA").
Prior to fiscal year 2024, the Company acquired Cal OpEx Limited (d/b/a Transcat Ireland) which owns all of the issued and outstanding capital stock of its U.S. based subsidiary, Cal OpEx Inc. (d/b/a NEXA EAM), a Delaware corporation (collectively, "NEXA"). During fiscal year 2025, NEXA went through a formal rebranding and is now known as Transcat Solutions.
HUMAN CAPITAL MANAGEMENT As of March 30, 2024, we had 1,104 employees, 976 of whom were employed in the United States and 128 employed outs ide the United States. None of our employees are covered by collective bargaining agreements or work councils.
HUMAN CAPITAL MANAGEMENT As of March 29, 2025, we had 1,245 employees, 1,123 of whom were employed in the United States and 121 employed outside the United States. None of our employees are covered by collective bargaining agreements or work councils.
This NEXA suite of services, combined with the existing Transcat service offerings, provides a very comprehensive and robust value proposition to existing and new customers, which allows us to manage the complexity that is tied to doing business in these highly regulated industries.
This Transcat Solutions suite of services, combined with the existing Transcat service offerings, provides a very comprehensive and robust value proposition to existing and new customers, which allows us to manage the complexity that is tied to doing business in these highly regulated industries. 2 Table of Contents Through our Distribution segment, we sell and rent national and proprietary brand instruments to customers globally.
To reinforce our belief in the importance of calibration quality, we are leveraging a branding campaign for our Service segment that is centered around three simple words – “Calibrated by Transcat®”. We believe we have established a strong, differentiated brand that has a deep and meaningful association with quality, compliance and control.
To reinforce our belief in the importance of calibration quality, we are leveraging a branding campaign for our Service segment that is centered around three simple words – “Calibrated by Transcat®”.
Point of sale rebate programs that are based on year-over-year sales performance on a calendar year basis are recorded as earned, on a quarterly basis, based upon the estimated level of annual achievement. Point of sale rebate programs that are based on year-over-year sales performance on a quarterly basis are recorded as earned in the respective quarter.
Purchase rebates are calculated and recorded quarterly based upon our volume of purchases with specific vendors during the quarter. Point of sale rebate programs that are based on year-over-year sales performance on a calendar year basis are recorded as earned, on a quarterly basis, based upon the estimated level of annual achievement.
In fiscal year 2024 , our top 10 vendors accounted for approximately 58% of our aggregate Distribution sales. We plan our product mix and inventory stock to best serve the anticipated needs of our customers, whose individual purchases vary in size. We can usually ship our top selling products to our customers the same day they are ordered.
In fiscal year 2025 , our top vendor accounted for approximately 20% of our aggregate Distribution sales and our top 10 vendors accounted for approximately 45% of our aggregate Distribution sales. We plan our product mix and inventory stock to best serve the anticipated needs of our customers, whose individual purchases vary in size.
Distribution Vendor Rebates. We have agreements with certain product vendors that provide for rebates based on meeting a specified cumulative level of purchases and/or incremental distribution sales. These rebates are recorded as a reduction of cost of distribution sales. Purchase rebates are calculated and recorded quarterly based upon our volume of purchases with specific vendors during the quarter.
We can usually ship our top selling products to our customers the same day they are ordered. Distribution Vendor Rebates. We have agreements with certain product vendors that provide for rebates based on meeting a specified cumulative level of purchases and/or incremental distribution sales. These rebates are recorded as a reduction of cost of distribution sales.
Of those export sales in fiscal year 2024 , approximately 8% were denominated in U.S. dollars, 67% were denominated in Canadian dollars and 25% were deno minated in Euros.
Of those export sales in fiscal year 2025 , approximately 9% were denominated in U.S. dollars, 73% were denominated in Canadian dollars and 18% were denominated in Euros.
In a 53-week fiscal year, the last quarter is a 14-week period. Fiscal year 2024 consisted of 53 weeks and fiscal year 2023 consisted of 52 weeks.
FISCAL YEAR We operate on a 52/53-week fiscal year, ending the last Saturday in March. In a 52-week fiscal year, each of the four quarters is a 13-week period. In a 53-week fiscal year, the last quarter is a 14-week period. Fiscal year 2025 consisted of 52 weeks and fiscal year 2024 consisted of 53 weeks.
We serve approximately 30,000 customers through our Service and Distribution segments, with approximately 20% to 25% of those customers transacting with us through both of our business segments. Through the Company’s acquisition strategy, we have been focused on building out our business segments by entering adjacent and complimentary markets.
We serve approximately 30,000 customers through our Service and Distribution segments, with approximately 20% to 25% of those customers transacting with us through both of our business segments.
Utilization of such diagnostic instrumentation also allows for continuous improvement processes to be in place, increasing the accuracies of their measurements. The industrial test and measurement instrumentation market, in those geographic areas where we predominately operate, has historically been serviced by broad-based national equipment distributors and niche or specialty-focused organizations such as Transcat.
The industrial test and measurement instrumentation market, in those geographic areas where we predominately operate, has historically been serviced by broad-based national equipment distributors and niche or specialty-focused organizations such as Transcat. We offer value-added services such as calibration/certification of equipment purchases, equipment rentals, used equipment for sale, and equipment kitting.
We expect to continue to grow our Service business organically by taking market share from other third-party providers and original equipment manufacturers (“OEMs”), as well as by targeting the outsourcing of in-house calibration labs as multi-year client-based lab contracts.
Through this integration, we expect to be able to leverage the appropriate resources within the Transcat sales team to ensure appropriate sales pipeline levels and conversions are maintained to support stable and consistent sales growth in the Transcat Solutions business over time. 3 Table of Contents We expect to continue to grow our Service business organically by taking market share from other third-party providers and original equipment manufacturers (“OEMs”), as well as by targeting the outsourcing of in-house calibration labs as multi-year client-based lab contracts.
The Rochester location also fulfills orders for rental equipment, serves as our corporate headquarters, houses our customer service, sales and administrative functions, and is a Calibration Service Center. We also have three smaller warehouse facilities.
Our Distribution operations primarily take place at our 48,500 square-foot facility in Rochester, New York which includes 17,000 square feet of warehouse space. The Rochester location also fulfills orders for rental equipment, serves as our corporate headquarters, houses our customer service, sales and administrative functions, and is a Calibration Service Center. We also have two smaller warehouse facilities.
Our program also incentivizes health and well-being by providing reduced health insurance premiums for employees who complete certain actions that encourage health and wellness. Compensation and Benefits.
Our program includes wellness resources, health education, pharmaceutical cost guidance, and a no-cost Employee Assistance Program, which includes worldwide access to visits with mental health care providers. Our program also incentivizes health and well-being by providing reduced health insurance premiums for employees who complete certain actions that encourage health and wellness. Compensation and Benefits.
Distribution orders include orders for instruments that we routinely stock in our inventory, customized products, and other products ordered less frequently, which we do not stock.
Our Vista, California and Houston, Texas warehouses fulfill orders for used equipment and rental equipment. In fiscal year 2025 , we shipped approximately 30,000 product orders. Distribution Backlog . Distribution orders include orders for instruments that we routinely stock in our inventory, customized products, and other products ordered less frequently, which we do not stock.
Our scopes of accreditation can be found at http://www.transcat.com/calibration-services/accreditation/calibration-lab-certificates. Distribution Segment Distribution Summary. We distribute professional grade test, measurement and control instrumentation throughout North America and internationally. Our customers use test and measurement instruments to ensure that their processes, and ultimately their end products, are within specification.
We continually evaluate when to integrate acquired quality systems with the focus on minimizing business disruptions and disruptions to our customers while maintaining our commitment to quality. Our scopes of accreditation can be found at http://www.transcat.com/calibration-services/accreditation/calibration-lab-certificates. Distribution Segment Distribution Summary. We distribute professional grade test, measurement and control instrumentation throughout North America and internationally.
As part of our growth strategy, we completed three acquisitions during our fiscal year 2024 and four acquisitions during our fiscal year 2023: ● Effective August 8, 2023, Transcat purchased all of the outstanding capital stock of Axiom, a privately-held California rental provider of electronic test equipment to customers across the United States. ● Effective July 12, 2023, Transcat purchased all of the outstanding capital stock of SteriQual, a Florida based provider of expert consulting services to pharmaceutical, biopharmaceutical, medical device and diagnostic equipment manufacturers. ● Effective March 27, 2023, Transcat purchased all of the outstanding capital stock of TIC-MS, a Missouri based provider of calibration services. ● Effective February 2, 2023, Transcat acquired substantially all of the assets of Elite, a California based provider of pipette calibration services. ● Effective September 28, 2022, Transcat purchased all of the outstanding capital stock of Complete Calibrations, an Irish company.
Becnel is an ISO 9001:2015 certified provider of rental tools and services primarily utilized in the decommissioning and maintenance of oil wells. ● Effective August 8, 2023, Transcat purchased all of the outstanding capital stock of Axiom, a privately-held California rental provider of electronic test equipment to customers across the United States. ● Effective July 12, 2023, Transcat purchased all of the outstanding capital stock of SteriQual, a Florida based provider of expert consulting services to pharmaceutical, biopharmaceutical, medical device and diagnostic equipment manufacturers. ● Effective March 27, 2023, Transcat purchased all of the outstanding capital stock of TIC-MS, a Missouri based provider of calibration services.
One focus of our Operational Excellence initiative is to strengthen our acquisition integration process, allowing us to capitalize on acquired sales and cost synergies at a faster pace. 3 Table of Contents Our Distribution segment strategy is to be the premier distributor and rental source of leading test and measurement equipment while also providing cross-selling opportunities for our Service segment.
Our Distribution segment strategy is to be the premier distributor and rental source of leading test and measurement equipment while also providing cross-selling opportunities for our Service segment.
Together, this allows us to meet the most rigorous quality demands of our most highly regulated customers while simultaneously being nimble enough to meet their business needs.
Together, this allows us to meet the most rigorous quality demands of our most highly regulated customers while simultaneously being nimble enough to meet their business needs. During fiscal year 2025, we saw a significant erosion in the Transcat Solutions business, highlighting the need to further integrate that business into our existing sales and marketing infrastructure.
This initiative is resulting in increased productivity and operational efficiency and further differentiation from our competitors as we leverage technology, automation, and process improvements to enhance our effectiveness and our customers’ experiences. We also continued Transcat University’s build-a-tech program. This program attracts fresh talent to the organization and provides training and career advancement opportunities for our existing employees.
We also continued Transcat University’s "build-a-tech" program. This program attracts fresh talent to the organization and provides training and career advancement opportunities for our existing employees. Within the Service segment, our strategy is to drive double-digit revenue growth through both organic expansion and acquisitions.
We want the phrase “Calibrated by Transcat®” to be synonymous with risk reduction and quality compliance. Acquired calibration labs might use other quality registration systems. We continually evaluate when to integrate acquired quality systems with the focus on minimizing business disruptions and disruptions to our customers while maintaining our commitment to quality.
We believe we have established a strong, differentiated brand that has a deep and meaningful association with quality, compliance and control, and that the phrase “Calibrated by Transcat®” will be synonymous with risk reduction and quality compliance. Acquired calibration labs might use other quality registration systems.
Our Operational Excellence initiative is a multi-year, ever-evolving program designed to create an infrastructure that supports our strategic goals over a longer timeframe. Within the Service segment, our strategy is to drive double-digit revenue growth through both organic expansion and acquisitions.
This initiative resulted in increased productivity and operational efficiency and further differentiation from our competitors as we leverage technology, automation, and process improvements to enhance our effectiveness and our customers’ experiences. Our Operational Excellence initiative is a multi-year, ever-evolving program designed to create an infrastructure that supports our strategic goals and organic growth over a longer timeframe.
The Company recorded vendor rebates of $0.6 million in both fiscal years 2024 and 2023, and $1.0 million in fiscal year 2022, respectively, as a reduction of cost of distribution sales. Distribution Operations. Our Distribution operations primarily take place at our 48,500 square-foot facility in Rochester, New York which includes 17,000 square feet of warehouse space.
Point of sale rebate programs that are based on year-over-year sales performance on a quarterly basis are recorded as earned in the respective quarter. The Company recorded vendor rebates of $0.9 million in fiscal year 2025 and $0.6 million in fiscal years 2024 and 2023 , respectively, as a reduction of cost of distribution sales. Distribution Operations.
Diversity and Inclusion. Recognizing and respecting our employees’ backgrounds and experiences, and our international presence, we strive to maintain a diverse workforce and inclusive work environment everywhere we operate. Our diversity and inclusion principles are reflected in our employee training, in particular with respect to our policies against harassment and bullying and the elimination of bias in the workplace. Wellness.
We are committed to maintaining a workplace free from all forms of unlawful harassment and discrimination. Our commitment to a discrimination-free work environment is reflected in our employee training, in particular, with respect to our policies against harassment (including sexual harassment) in the workplace. Wellness. Our Calibrated Wellness Program prioritizes our employees’ well-being and is designed to enhance their health.
Removed
This has been demonstrated by the acquisitions of Axiom Test Equipment, Inc. (“Axiom”), SteriQual, Inc. (“SteriQual”) and TIC-MS, Inc.
Added
Through the Company’s acquisition strategy, we have been focused on building out our business segments, expanding our core calibration business, as well as entering new geographic markets and entering adjacent and complimentary markets. This has been demonstrated by the acquisitions of Martin Calibration, Inc.
Removed
("TIC-MS") in the fiscal year 2024, and Elite Calibration, LLC ("Elite"), Galium Limited (d/b/a Complete Calibrations) ("Complete Calibrations"), e2b Calibration ("e2b"), and Charlton Jeffmont Inc., Raitz Inc. and Toolroom Calibration Inc. d/b/a Alliance Calibration ("Alliance") in our fiscal year ended March 25, 2023 (“fiscal year 2023 ”).
Added
("Martin") and Becnel Rental Tools, LLC ("Becnel") in our fiscal year ended March 29, 2025 ("fiscal year 2025") and Axiom Test Equipment, Inc. (“Axiom”), SteriQual, Inc. (“SteriQual”) and TIC-MS, Inc. ("TIC-MS") in our fiscal year ended March 30, 2024 ("fiscal year 2024").
Removed
We are disciplined in our approach to selecting target companies.
Added
We are disciplined in our approach to selecting target companies. Through our Operational Excellence initiative, we have invested in dedicated resources to focus on strengthening our acquisition integration process, allowing us to capitalize on acquired sales and cost synergies at a faster pace.
Removed
Complete Calibrations is an ISO 17025 accredited calibration company specializing in calibration services for the life sciences industry. ● Effective September 27, 2022, Transcat acquired substantially all of the assets of e2b, an Ohio based provider of calibration services. ● Effective May 31, 2022, Transcat acquired substantially all of the assets of Alliance, an Ohio based provider of calibration services.
Added
As part of our growth strategy, we completed two acquisitions during our fiscal year 2025 and three acquisitions during our fiscal year 2024: ● Effective December 10, 2024, the Company acquired Martin, a privately-held Minnesota-based Midwest regional calibration services company.
Removed
We offer value-added services such as calibration/certification of equipment purchases, equipment rentals, used equipment for sale, and equipment kitting.
Added
Martin's presence in Minneapolis, which is rich in life science and aerospace & defense customers and its reputation for quality and customer service satisfaction, made it a coveted target for Transcat. ● Effective April 15, 2024, the Company acquired Becnel, a privately-held Louisiana limited liability company.
Removed
Our Wisconsin warehouse fulfills orders for certain large industrial scales and our Vista, California and Houston, Texas warehouses fulfill orders for used equipment and rental equipment. In fiscal year 2024 , we shipped approximately 30,000 product orders. Distribution Backlog .
Added
Our customers use test and measurement instruments to ensure that their processes, and ultimately their end products, are within specification. Utilization of such diagnostic instrumentation also allows for continuous improvement processes to be in place, increasing the accuracy of their measurements.
Removed
Our Distribution segment has historically been strongest in our third fiscal quarter while Service has historically been strongest in our fourth fiscal quarter. FISCAL YEAR We operate on a 52/53-week fiscal year, ending the last Saturday in March. In a 52-week fiscal year, each of the four quarters is a 13-week period.
Removed
Our Calibrated Wellness Program prioritizes our employees’ well-being and is designed to enhance their health. Our program includes wellness resources, health education, pharmaceutical cost guidance, and a no-cost Employee Assistance Program, which includes worldwide access to visits with mental health care providers.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

40 edited+9 added−3 removed95 unchanged
If we are unable to achieve and maintain adequate rates for our services, our profit margin and profitability could decline, and our results of operations could be materially adversely affected. If we do not effectively compete in the rental test and measurement equipment market, our operating results may be adversely affected.
If we are unable to achieve and maintain adequate rates for our services, our profit margin and profitability could decline, and our results of operations could be materially adversely affected. If we do not effectively compete in the test and measurement equipment market, our operating results may be adversely affected.
Further, uncertainty resulting from interest rate policy or changes to interest rates in the future could have a negative effect on the securities markets generally which may, in turn, have a material adverse effect on the market price of our common stock.
Further, uncertainty resulting from interest rate policy, trade policy or changes to interest rates in the future could have a negative effect on the securities markets generally which may, in turn, have a material adverse effect on the market price of our common stock.
Failure to adequately forecast the adoption of and demand for equipment may cause us not to meet our customers’ rental equipment requirements and may adversely affect our operating results. If we fail to adapt our technology to meet customer needs and preferences, the demand for our products and services may diminish.
Failure to adequately forecast the adoption of and demand for equipment may cause us not to meet our customers’ equipment requirements and may adversely affect our operating results. If we fail to adapt our technology to meet customer needs and preferences, the demand for our products and services may diminish.
Although we maintain liability insurance for certain legal claims, if one or more of the claims were to greatly exceed our insurance coverage limits or if our insurance policies do not cover a claim, our expenses could increase significantly and management’s focus could be diverted away from our operations, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. 20 Table of Contents Risks Related to our Stock We expect that our quarterly results of operations will fluctuate.
Although we maintain liability insurance for certain legal claims, if one or more of the claims were to greatly exceed our insurance coverage limits or if our insurance policies do not cover a claim, our expenses could increase significantly and management’s focus could be diverted away from our operations, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. 21 Table of Contents Risks Related to our Stock We expect that our quarterly results of operations will fluctuate.
Our failure to keep pace with changes in technology, industry standards and customer preferences in the markets we serve could diminish our ability to retain and attract customers and retain our competitive position, which could adversely impact our business and results of operations. 18 Table of Contents We rely on our CalTrak ®, Application Plus (our enterprise resource planning system ( “ ERP ” )) and other management information systems for inventory management, distribution, workflow, accounting and other functions.
Our failure to keep pace with changes in technology, industry standards and customer preferences in the markets we serve could diminish our ability to retain and attract customers and retain our competitive position, which could adversely impact our business and results of operations. 19 Table of Contents We rely on our CalTrak ®, Application Plus (our enterprise resource planning system ( “ ERP ” )) and other management information systems for inventory management, distribution, workflow, accounting and other functions.
We cannot assure you that these indemnification provisions will protect us fully or at all, and as a result we may face unexpected liabilities that adversely affect our financial results. 16 Table of Contents Operational Risks Cybersecurity incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could negatively impact our business, results of operations or financial condition.
We cannot assure you that these indemnification provisions will protect us fully or at all, and as a result we may face unexpected liabilities that adversely affect our financial results. 17 Table of Contents Operational Risks Cybersecurity incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could negatively impact our business, results of operations or financial condition.
The loss of, or a substantial decrease in the availability of, products from our suppliers or the loss of key supplier arrangements could adversely impact our financial condition, operating results, and cash flows, as well as our ability to benefit from ongoing supply chain initiatives. 19 Table of Contents Our future success may be affected by our current and future indebtedness.
The loss of, or a substantial decrease in the availability of, products from our suppliers or the loss of key supplier arrangements could adversely impact our financial condition, operating results, and cash flows, as well as our ability to benefit from ongoing supply chain initiatives. 20 Table of Contents Our future success may be affected by our current and future indebtedness.
In addition, if the supply of rental equipment available on the market significantly increases, demand for and pricing of our rental products could be adversely impacted, lowering our gross margins on rentals. Further, customers confronting competing budget priorities and more limited resources could lead to less demand for rental equipment and increased pressure on pricing.
In addition, if the supply of equipment available on the market significantly increases, demand for and pricing of our rental and distribution products could be adversely impacted, lowering our gross margins. Further, customers confronting competing budget priorities and more limited resources could lead to less demand for equipment and increased pressure on pricing.
Any alleged or actual violations of these or other relevant regulations may subject us to government scrutiny, severe criminal or civil sanctions and other liabilities and could negatively affect our business, reputation, operating results and financial condition. 22 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Any alleged or actual violations of these or other relevant regulations may subject us to government scrutiny, severe criminal or civil sanctions and other liabilities and could negatively affect our business, reputation, operating results and financial condition. 23 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None.
We compete in the rental market on the basis of a number of factors, including equipment availability, price, service and reliability. Some of our competitors may offer similar equipment for rent at lower prices and may offer more extensive servicing, or financing options.
We compete in the rental and distribution market on the basis of a number of factors, including equipment availability, price, service and reliability. Some of our competitors may offer similar equipment for rent or purchase at lower prices and may offer more extensive servicing, or financing options.
Any return to our shareholders will therefore be limited to the increase, if any, in the price of our common stock. 21 Table of Contents Regulatory Risks Tax rates applicable to us may change. Tax legislation initiatives could adversely affect our net earnings and tax liabilities.
Any return to our shareholders will therefore be limited to the increase, if any, in the price of our common stock. 22 Table of Contents Regulatory Risks Tax rates applicable to us may change. Tax legislation initiatives could adversely affect our net earnings and tax liabilities.
The prices we charge for our services, including the NEXA business, are affected by a number of factors, including: ● Customers’ perception of our ability to add value through our services; ● The market demand for the services we provide; ● Our ability to develop new services and the introduction of new services by competitors; ● The pricing policies of our competitors; ● The extent to which our customers develop in-house or other capabilities to perform the services that they might otherwise purchase from us; and ● General financial and economic conditions.
The prices we charge for our services, including the Transcat Solutions business, are affected by a number of factors, including: ● Customers’ perception of our ability to add value through our services; ● The market demand for the services we provide; ● Our ability to develop new services and the introduction of new services by competitors; ● The pricing policies of our competitors; ● The extent to which our customers develop in-house or other capabilities to perform the services that they might otherwise purchase from us; and ● General financial and economic conditions.
Our utilization rates are affected by a number of factors, including: ● The number, scope and timing of ongoing customer engagements; ● The timing of the commencement, completion and termination of engagements, which in many cases is unpredictable; ● Our ability to continually secure new business engagements; ● Our ability to transition technical service providers promptly from completed projects to new assignments, and to engage newly-hired technical service providers quickly in revenue-generating activities; ● Our ability to forecast demand for our services and thereby maintain appropriate headcount in each of our geographies and workforces; ● Unanticipated changes in the scope of customer engagements; ● Our need to devote time and resources to sales, training, professional development and other non-billable activities; ● Our ability to retain key colleagues and consulting professionals; ● Conditions affecting the industries in which our customers operate; and ● General financial and economic conditions.
Our utilization rates are affected by a number of factors, including: ● The number, scope and timing of ongoing customer engagements; ● The timing of the commencement, completion and termination of engagements, which in many cases is unpredictable and subject to forces beyond our control; ● Our ability to continually secure new business engagements; ● Our ability to transition technical service providers promptly from completed projects to new assignments, and to engage newly-hired technical service providers quickly in revenue-generating activities; ● Our ability to forecast demand for our services and thereby maintain appropriate headcount in each of our geographies and workforces; ● Unanticipated changes in the scope or timing of customer engagements; ● Our need to devote time and resources to sales, training, professional development and other non-billable activities; ● Our ability to retain key colleagues and consulting professionals; ● Conditions affecting the industries in which our customers operate; and ● General financial and economic conditions.
We currently transact a portion of our business in foreign currencies, namely the Canadian dollar and the Euro. During fiscal years 2024 and 2023, approximat ely 10% of our tot al revenues were denominated in Canadian dollars and Euros.
We currently transact a portion of our business in foreign currencies, namely the Canadian dollar and the Euro. During fiscal years 2025 and 2024, approximat ely 10% of our tot al revenues were denominated in Canadian dollars and Euros.
The following factors, among others, may have a significant effect on the market price of our common stock: ● Developments in our relationships with current or future manufacturers of products we distribute; ● Announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; ● Litigation or governmental proceedings or announcements involving us or our industry; ● Economic and other external factors, such as inflation, changes in interest rates, a recession, disasters or other national or global crises; ● Public health issues including pandemics and epidemics, such as the COVID-19 pandemic; ● Sales of our common stock or other securities in the open market; ● Repurchases of our common stock on the open market or in privately-negotiated transactions; ● Period-to-period fluctuations in our operating results; and ● Our ability to satisfy our debt obligations.
The following factors, among others, may have a significant effect on the market price of our common stock: ● Developments in our relationships with significant customers in our service segment; ● Developments in our relationships with current or future manufacturers of products we distribute; ● Announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; ● Litigation or governmental proceedings or announcements involving us or our industry; ● Economic and other external factors, such as inflation, changes in interest rates, a recession, disasters or other national or global crises; ● Public health issues including pandemics and epidemics; ● Sales of our common stock or other securities in the open market; ● Repurchases of our common stock on the open market or in privately-negotiated transactions; ● Period-to-period fluctuations in our operating results; and ● Our ability to satisfy our debt obligations.
Future hurricanes or other extreme weather events could result in damage to certain of our facilities and the equipment located at such facilities, or equipment on rent with customers in those areas. Even if our properties suffer no direct damage from such events, the operations of our customers could be disrupted, and our supply chain impacted.
Future hurricanes, extreme weather events and natural disasters could result in damage to certain of our facilities and the equipment located at such facilities, or equipment on rent with customers in those areas. Even if our properties suffer no direct damage from such events, the operations of our customers could be disrupted, and our supply chain impacted.
If the utilization rate for our technical service providers declines, our revenues, profit margin and profitability could decline, and our results of operations could be materially adversely affected. The profitability of our Service segment, including the NEXA business, depends in part on the prices we are able to charge for our services .
If the utilization rate for our technical service providers declines, our revenues, profit margin and profitability could decline, and our results of operations could be materially adversely affected. The profitability of our Service segment, including the Transcat Solutions business, depends in part on the prices we are able to charge for our services .
If significant existing shareholders sell large numbers of shares of our common stock, our stock price could decline. The market price of our common stock could decline if a large number of our shares are sold in the public market by our existing shareholders or as a result of the perception that such sales could occur.
The market price of our common stock could decline if a large number of our shares are sold in the public market by our existing shareholders or as a result of the perception that such sales could occur.
The profitability of NEXA depends in part on ensuring that our technical service providers maintain adequate utilization rates (i.e., the percentage of our provider’s working hours devoted to billable activities).
The profitability of Transcat Solutions depends in part on ensuring that our technical service providers maintain adequate utilization rates (i.e., the percentage of our provider’s working hours devoted to billable activities).
The loss of services of any member of our senior management team or key employees, and the inability to attract and retain other qualified personnel, especially skilled service technicians, could affect our ability to achieve our stated corporate objectives and could adversely impact our business and results of operations. 17 Table of Contents The profitability of our subsidiary, NEXA, depends to a large extent on our ability to achieve or maintain adequate utilization and pricing rates for our technical service providers.
The loss of services of any member of our senior management team or key employees, and the inability to attract and retain other qualified personnel, especially skilled service technicians, could affect our ability to achieve our stated corporate objectives and could adversely impact our business and results of operations. 18 Table of Contents The profitability of our Transcat Solutions business depends to a large extent on our ability to achieve or maintain adequate utilization and pricing rates for our technical service providers.
In our Service segment our subsidiary, NEXA, provides all of its services in the technical, consulting and staffing solutions market by providing services to improve asset management programs for our customers.
In our Service segment, Transcat Solutions provides all of its services in the technical, consulting and staffing solutions market by providing services to improve asset management programs for our customers.
In the future, we may be unable to compete successfully and competitive pressures may reduce our sales. We face significant competition in our Distribution segment, including from suppliers and web-based distributors, to make product sales and to source products. We may not be able to compete successfully.
In the future, we may be unable to compete successfully and competitive pressures may reduce our sales. 14 Table of Contents We face significant competition in our Distribution segment, including from suppliers and web-based distributors, to make product sales and to source products. We may not be able to compete successfully.
Our market areas include the Gulf Coast and Mid-Atlantic regions of the United States, and Puerto Rico, which are susceptible to hurricanes. Such weather events can disrupt our operations, result in damage to our properties and negatively affect the local economies in which we operate.
Our market areas include the Gulf Coast and Mid-Atlantic regions of the United States, and Puerto Rico, which are susceptible to hurricanes, and the Western United States, which is susceptible to wildfires. Such weather events and natural disasters can disrupt our operations, result in damage to our properties and negatively affect the local economies in which we operate.
Intangible assets (other than goodwill and indefinite-lived intangible assets) are amortized over the useful life of such assets. In addition, we may record goodwill when we acquire or make an investment in a business based on the purchase price and the value of the acquired tangible and intangible assets.
Intangible assets (other than goodwill and indefinite-lived intangible assets) are amortized over the useful life of such assets. In addition, we may record goodwill when we acquire or make an investment in a business based on the purchase price and the value of the acquired tangible and intangible assets. We have significantly increased our goodwill because of our acquisitions.
For example, the additional reporting requirements relating to tracking greenhouse gas emissions and other climate-related disclosure from the SEC, U.S. state regulators, and foreign jurisdictions could significantly increase our accounting, consulting and legal expenses.
For example, the additional reporting requirements relating to tracking greenhouse gas emissions and other climate-related disclosure from various U.S. states and foreign jurisdictions could significantly increase our accounting, consulting and legal expenses.
During fiscal year 2024, the value of the U.S. dollar relative to one Canadian dollar and to one Euro ranged from 1.31 to 1.39 and from 0.89 to 0.96, respectively. We continually utilize short-term foreign exchange forward contracts to reduce the risk that future earnings denominated in Canadian dollars would be adversely affected by changes in currency exchange rates.
During fiscal year 2025 , the value of the U.S. dollar relative to one Canadian dollar and to one Euro ranged from 1.34 to 1.45 and from 0.89 to 0.98, respectively. We continually utilize short-term foreign exchange forward contracts to reduce the risk that future earnings denominated in Canadian dollars would be adversely affected by changes in currency exchange rates.
We are subject to risks arising from adverse changes in general economic market conditions, including supply chain delays or interruptions, labor shortages, wage pressures, the ongoing inflationary environment, changes in interest rates, volatility in the banking industry, geopolitical events, political instability, global health crises, including epidemics and pandemics, such as the COVID-19 pandemic, or interruptions and other force majeure events.
We are subject to risks arising from adverse changes in general economic market conditions, including supply chain delays or interruptions, labor shortages, wage pressures, the ongoing inflationary environment, changes in interest rates, geopolitical events, political instability, global health crises, including epidemics and pandemics, or interruptions and other force majeure events.
The ability to meet our labor needs while controlling costs associated with hiring and training new employees is subject to external factors such as unemployment levels and prevailing wage rates.
The ability to meet our labor needs while controlling costs associated with hiring and training new employees is subject to external factors such as unemployment levels, prevailing wage rates and the available labor pool in locations where we operate.
Successfully integrating acquisitions involves many challenges, including: ● The difficulty of integrating acquired operations and personnel with our existing operations; ● Implementing or remediating controls, procedures, and policies at the acquired company; ● Integrating of the acquired company’s accounting and other administrative systems; ● In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries; ● Currency and regulatory risks associated with operations in foreign countries; ● The difficulty of developing and marketing new products and services; ● Diverting management’s attention while evaluating, negotiating and integrating acquisitions; ● Our exposure to unforeseen liabilities of acquired companies; and ● The potential loss of key employees of an acquired operation.
Successfully integrating acquisitions involves many challenges, including: ● The difficulty of integrating acquired operations and personnel with our existing operations; ● Implementing or remediating controls, procedures, and policies at the acquired company; ● Integrating the acquired company’s accounting, enterprise resource management and other administrative systems; ● In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries; ● Currency and regulatory risks associated with operations in foreign countries; ● The difficulty of developing, marketing and forecasting demand for new products and services; ● Assessing the technology infrastructure and cyber and data security risk profile of the acquired company and integrating its systems into our IT systems, networks and services; ● Diverting management’s attention while evaluating, negotiating and integrating acquisitions; ● Our exposure to unforeseen liabilities of acquired companies; and ● The potential loss of key employees of an acquired operation.
In addition, economic conditions could impact and reduce the number of customers who purchase our products or services as credit becomes more expensive or unavailable. Although interest rates have increased and may continue to increase or remain relatively high for a sustained period, inflation may continue.
In addition, economic conditions could impact and reduce the number of customers who purchase our products or services as credit becomes more expensive or unavailable. Although interest rates may remain relatively high for a sustained period, inflation may continue or prices for goods and energy may rise as a result of the imposition or threatened imposition of tariffs.
We also serve the industrial manufacturing, energy and utilities, chemical manufacturing, aerospace and defense industries. This concentration of our customer base affects our overall risk profile, since a significant portion of our customers would be similarly affected by changes in economic, political, regulatory, and other industry conditions.
The concentration of our customer base affects our overall risk profile, since a significant portion of our customers would be similarly affected by changes in economic, political, regulatory, and other industry conditions.
Under our credit agreement, as of March 30, 2024, we owe d $4.2 mill ion to our secured creditor, a commercial bank, under a $15.0 million term loan to fund acquisitions and provide additional working capital. We may borrow additional funds in the future to support our growth and working capital needs.
Under our credit agreement, as of March 29, 2025 , we owed $32.7 million to our secured creditor, a commercial bank, including $1.8 million borrowed under a $15.0 million term loan to fund acquisitions and provide additional working capital. We may borrow additional funds in the future to support our growth and working capital needs.
Industry consolidation among distributors, the unavailability of products, whether due to our inability to gain access to products or interruptions in supply from manufacturers, or the emergence of new competitors could also increase competition and adversely affect our business or results of operations. 14 Table of Contents In each of the industries in which we compete, some of our competitors have greater financial and other resources than we do, which could allow them to compete more successfully.
Industry consolidation among distributors, the unavailability of products, whether due to our inability to gain access to products or interruptions in supply from manufacturers, or the emergence of new competitors could also increase competition and adversely affect our business or results of operations.
Risk Factors." Risks Related to Acquisitions We may not successfully integrate business acquisitions. We completed three acquisitions during fiscal year 2024 and four acquisitions during fiscal year 2023. We have a robust and diverse acquisition pipeline and may complete additional acquisitions in the future.
We completed two acquisitions during fiscal year 2025 and three acquisitions during fiscal year 2024. We have a robust and diverse acquisition pipeline and may complete additional acquisitions in the future.
If our brand is negatively impacted, we may lose existing customer relationships, which would reduce our sales and negatively impact our results of operations and financial condition, and we may be unable to attract and retain key personnel, which would negatively impact our prospects. 15 Table of Contents The impact of widespread public health crises, pandemics or other epidemics is difficult to predict and could materially and adversely affect our business and results of operations .
If our brand is negatively impacted, we may lose existing customer relationships, which would reduce our sales and negatively impact our results of operations and financial condition, and we may be unable to attract and retain key personnel, which would negatively impact our prospects. 16 Table of Contents Risks Related to Acquisitions We may not successfully integrate business acquisitions.
Although our shares of common stock are listed on the Nasdaq Global Market, we have historically experienced a relatively low trading volume of approximately 43,000 shares a day. If our low trading volume continues in the future, holders of our shares may have difficulty selling shares of our common stock in the manner or at a price that they desire.
Although our shares of common stock are listed on the Nasdaq Global Market, we have historically experienced a relatively low trading volume , averaging approximately 68,000 shares a day in fiscal 2025.
The FCPA generally prohibits companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business.
The FCPA and similar anti-corruption laws generally prohibits companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business. Because of our international operations, we are subject to the anti-bribery laws of non-US jurisdictions where we operate.
Tariffs imposed by the United States and other countries, as well as changing trade relations, regional and international conflicts, and political conditions could have a material adverse effect on our business and results of operations.
Determinations of significant write-offs of goodwill or intangible assets because of an impairment test or any accelerated amortization of other intangible assets could have a material negative impact on our results of operations and financial condition. 15 Table of Contents Tariffs imposed or threatened by the United States and other countries, as well as changing trade relations, regional and international conflicts, and political conditions could have a material adverse effect on our business and results of operations.
Tariffs on certain products can increase our costs of doing business. If we are unable to recover these costs, our profit margins may be negatively impacted. Diminished trade relations, conflicts between the United States and other countries, and any escalation of tariffs could have a material adverse effect on our financial performance and results of operations.
A number of other nations have proposed or instituted similar measures directed at trade with the United States in response. Tariffs on certain products can increase our costs of doing business. If we are unable to recover these costs, our profit margins may be negatively impacted.
Negative publicity and other reputational harm could impact the value of our brand and materially and adversely affect our business and results of operations.
Diminished trade relations, conflicts between the United States and other countries, and any escalation of tariffs could have a material adverse effect on our financial performance and results of operations. Negative publicity and other reputational harm could impact the value of our brand and materially and adversely affect our business and results of operations.
Removed
Future determinations of significant write-offs of goodwill or intangible assets because of an impairment test or any accelerated amortization of other intangible assets could have a material negative impact on our results of operations and financial condition.
Added
In each of the industries in which we compete, some of our competitors have greater financial and other resources than we do, which could allow them to compete more successfully.
Removed
Any adverse widespread public health crises in locations where we conduct business, as well as any measures implemented to control these events, could have a material adverse impact on our business and results of operations. Further, any actions taken to mitigate any health crises could lead to an economic recession.
Added
Federal and state budget pressures and changes in grant allocation policies may result in lower funding for certain of our life science customers, which may cause those customers to delay or halt spending on capital-intensive projects. We also serve the industrial manufacturing, energy and utilities, chemical manufacturing, aerospace and defense industries.
Removed
Such extraordinary events, like the COVID-19 pandemic, and their aftermath can cause investor fear and panic, which could further materially and adversely affect our operations, the economies in which we operate, and the financial markets generally in ways that cannot be predicted, but may amplify many of the other risk factors disclosed elsewhere in this "Item 1A.
Added
In the oil and gas industry, customer demand for our services is sensitive to fluctuations in commodity prices, access to capital, and the regulatory environment, with less demand expected in a deregulatory environment.
Added
For example, the United States has recently instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the United States, economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the United States and other countries.
Added
Similarly, if our customers are negatively impacted by the imposition or threatened imposition of tariffs, it may result in negative sentiment which may negatively impact demand for our products and services, which could negatively impact our results of operations. If our vendors or suppliers are unable to source products we purchase, our Distribution business may be negatively impacted.
Added
In addition, we may seek acquisitions in adjacent or new markets where we have limited experience. Challenges in assessing acquisitions in adjacent or new markets and integrating such acquisitions due to our level of experience in such markets could result in a material adverse impact on our financial condition, operating results and stock price.
Added
For example, the acquisition of NEXA (recently rebranded to Transcat Solutions), a service segment business focused on the technical, consulting and staffing solutions market, expanded the scope of services we offer beyond our traditional calibration services and required more time for us to fully integrate into our operating plan.
Added
For example, in the Transcat Solutions business, our revenue has been negatively impacted in part by delayed starts for customer projects, which has prevented us from fully utilizing all of our technical service providers.
Added
If our low trading volume continues in the future, holders of our shares may have difficulty selling shares of our common stock in the manner or at a price that they desire. If significant existing shareholders sell large numbers of shares of our common stock, our stock price could decline.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+0 added−9 removed11 unchanged
National Institute of Standards and Technology ("NIST") guidelines. We take a risk-based approach to cybersecurity, which begins with the identification and evaluation of cybersecurity risks or threats that could affect our operations, finances, legal or regulatory compliance, or reputation.
We take a risk-based approach to cybersecurity, which begins with the identification and evaluation of cybersecurity risks or threats that could affect our operations, finances, legal or regulatory compliance, or reputation.
This encompasses a range of services, including network monitoring, endpoint protection, vulnerability assessments, and penetration testing. Additionally, we engage cybersecurity consultants, auditors, and other third parties, such as a third-party consulting firm, to rigorously evaluate our cyber processes. This includes a comprehensive assessment of our incident response procedures, ensuring they meet the highest standards of readiness and effectiveness.
Additionally, we engage cybersecurity consultants, auditors, and other third parties, such as a third -party consulting firm, to rigorously evaluate our cyber processes. This includes a comprehensive assessment of our incident response procedures, ensuring they meet the highest standards of readiness and effectiveness.
The content of these updates includes progress on ongoing cybersecurity initiatives, insights from recent threat assessments or incidents, findings and action plans derived from external vulnerability and penetration tests, and key performance metrics aligned with industry standards. Risks from Material Cybersecurity Threats.
The content of these updates includes progress on ongoing cybersecurity initiatives, insights from recent threat assessments or incidents, findings and action plans derived from external vulnerability and penetration tests, and key performance metrics aligned with industry standards. Our CIO and our Chief Financial Officer report risks to the Audit Committee on a quarterly basis. Risks from Material Cybersecurity Threats.
For acquired companies, our integration strategies prioritize establishing comprehensive timelines for harmonizing information security, data privacy, and cybersecurity practices. This includes a strong focus on aligning employee education programs to ensure a seamless transition and uphold security and privacy standards across our entities. Our cybersecurity strategy is based on a multi-layered defense framework, aligned with the U.S.
For acquired companies, our integration strategies prioritize establishing comprehensive timelines for harmonizing information security, data privacy, and cybersecurity practices. This includes a strong focus on aligning employee education programs to ensure a seamless transition and uphold security and privacy standards across our entities.
Supporting this effort, we have a cross-departmental approach to cyber security management. This ensures that our executive leadership team receives comprehensive quarterly updates on cybersecurity from various teams within the organization. Such updates are instrumental in promoting stakeholder engagement across all levels and enhancing management's oversight of cybersecurity.
This ensures that our executive leadership team receives comprehensive quarterly updates on cybersecurity from various teams within the organization. Such updates are instrumental in promoting stakeholder engagement across all levels and enhancing management's oversight of cybersecurity.
Management has implemented robust risk management structures, policies, and procedures, with day-to-day cybersecurity risk management being a core responsibility. Our Chief Financial Officer ("CFO") spearheads the assessment and management of cybersecurity risks on a daily basis, ensuring that our strategies and actions are both proactive and responsive to the evolving cybersecurity landscape.
Management has implemented robust risk management structures, policies, and procedures, with day-to-day cybersecurity risk management being a core responsibility. Our Chief Information Officer ("CIO") spearheads the assessment and management of cybersecurity risks, ensuring that our strategies and actions are both proactive and responsive to the evolving cybersecurity landscape. Supporting this effort, we have a cross-departmental approach to cyber security management.
We conduct regular trainings and simulations to enhance our team's awareness and preparedness against cyber threats. Annual penetration testing and regular assessments by external experts validate the effectiveness of our cybersecurity measures. Our proactive approach to addressing identified vulnerabilities affirms the continuous improvement of our security posture.
We conduct regular trainings and simulations to enhance our team's awareness and preparedness against cyber threats. Our proactive approach to addressing identified vulnerabilities affirms the continuous improvement of our security posture. Use of Consultants and Advisors.
Furthermore, we have established Incident Response as a Service ("IRaaS") to ensure rapid and effective action in the event of a security breach. To maintain a strategic overview of our cybersecurity landscape, we conduct quarterly strategic reporting sessions. These sessions are crucial for reviewing security activity and identifying areas for improvement.
Furthermore, we have established Incident Response as a Service ("IRaaS") to ensure rapid and effective action in the event of a security breach. 25 Table of Contents
This process underscores our commitment to a dynamic and responsive cybersecurity risk management strategy, ensuring the ongoing protection of our systems, data, and operations against emerging threats. Use of Consultants and Advisors. We engage various third-party cybersecurity service providers to assess and enhance our cybersecurity practices and assist with the protection and monitoring of our systems and information.
We engage various third -party cybersecurity service providers to assess and enhance our cybersecurity practices and assist with the protection and monitoring of our systems and information. This encompasses a range of services, including network monitoring, endpoint protection, vulnerability assessments, and penetration testing.
These risk determinations are crucial in driving the level of due diligence and ongoing compliance monitoring required for each service provider. 23 Table of Contents Enhancing our third-party vendor risk management, we have introduced two distinct capabilities to further safeguard our operations and sensitive data: 1.
Following an assessment, we determine and prioritize service provider risk based on potential threat impact and likelihood. These risk determinations are crucial in driving the level of due diligence and ongoing compliance monitoring required for each service provider. 24 Table of Contents Board Oversight and Management ’ s Role.
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To further strengthen our cybersecurity risk management framework, we have instituted an Information Security Management System (“ISMS”) that equips us with advanced risk management capabilities. This system facilitates the development of a detailed risk registry, incorporating impact and likelihood scoring to prioritize risks effectively.
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Additionally, it guides the creation of comprehensive risk treatment plans and sets targets for residual risk, ensuring a strategic approach to risk mitigation. A key feature of our ISMS is a risk management insights dashboard, which provides real-time visibility into the current state of risk within our environment.
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This dashboard is an invaluable tool for our management and key stakeholders, enabling them to track risk exposure and trends accurately. Quarterly reviews are scheduled, during which key stakeholders convene to scrutinize and adjust risk treatment plans in response to the latest threat landscape.
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Following an assessment, we determine and prioritize service provider risk based on potential threat impact and likelihood.
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We leverage a threat intelligence platform watchlist to curate, monitor, alert, and provide a risk rating to third-party vendors. This platform also offers a dashboard and real-time reporting, enabling us to stay ahead of potential threats by providing continuous oversight and actionable intelligence. 2.
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Our ISMS platform encompasses vendor risk management capabilities, facilitating initial due diligence through the collection of vendor security-related artifacts. It applies risk ratings and delivers and analyzes annual security questionnaires, scheduling reviews and tasks to ensure compliance and security standards are met consistently.
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Additionally, our virtual Chief Information Security Officer ("vCISO") compiles a quarterly executive summary of third-party risk, which is presented to both management and the Board. This summary ensures that leadership is informed of the current risk landscape and can make data-driven decisions regarding third-party engagements. Board Oversight and Management ’ s Role.
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Based on these reviews, we develop a Plan of Action and Milestones ("POAM") for remediation or re-architecture as necessary. Although these risks have not yet materially impacted our business, we remain vigilant, continuously monitoring and adapting to evolving cybersecurity threats.
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Our commitment to cybersecurity is integral to our risk management strategy, ensuring the ongoing protection of our systems and the sensitive data they contain. 24 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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PROPERTIES The following table presents the leased and owned properties that are material to our business as of March 30, 2024: Approximate Property Location Square Footage Corporate Headquarters, Calibration Service Center and Distribution Center Rochester, NY 48,500 Calibration Service Center and Headquarters for Canadian Operations Montreal, QC 27,500 Calibration Service Center, Rental and Used Equipment Distribution Center Houston, TX 22,300 Calibration Service Center Denver, CO 19,400 Calibration Service Center Los Angeles, CA 18,200 Calibration Service Center Toronto, ON 16,900 Calibration Service Center Philadelphia, PA 14,000 Calibration Service Center Cleveland, OH 13,800 Calibration Service Center Milford, MA 12,100 Calibration Service Center Dayton, OH 12,000 Rental and Used Equipment Distribution Center Vista, CA 9,900 Calibration Service Center Boston, MA 8,900 Calibration Service Center Indianapolis, IN 7,600 Calibration Service Center Palm Beach, FL 7,600 Calibration Service Center Somerset, PA 7,200 Calibration Service Center Portland, OR 7,000 Calibration Service Center Cincinnati, OH 5,900 Calibration Service Center St.
PROPERTIES The following table presents the leased and owned properties that are material to our business as of March 29, 2025: Approximate Property Location Square Footage Corporate Headquarters, Calibration Service Center and Distribution Center Rochester, NY 48,500 Calibration Service Center and Headquarters for Canadian Operations Montreal, QC 27,500 Calibration Service Center, Rental and Used Equipment Distribution Center Houston, TX 22,300 Calibration Service Center Burnsville, MN 20,000 Calibration Service Center Denver, CO 19,400 Calibration Service Center Los Angeles, CA 18,200 Calibration Service Center Toronto, ON 16,900 Calibration Service Center and Warehouse Paxinos, PA 14,500 Calibration Service Center Philadelphia, PA 14,000 Rental Distribution Center Harvey, LA 14,000 Calibration Service Center Cleveland, OH 13,800 Calibration Service Center Milford, MA 12,100 Calibration Service Center, Rental and Used Equipment Distribution Center Dayton, OH 12,000 Calibration Service Center Vista, CA 9,900 Rental Distribution Center Gray, LA 9,400 Rental Distribution Center Broussard, LA 9,000 Rental Distribution Center Broussard, LA 9,000 Calibration Service Center Boston, MA 8,900 Calibration Service Center Sturtevant, WI 8,000 Calibration Service Center Indianapolis, IN 7,600 Calibration Service Center Palm Beach, FL 7,600 Calibration Service Center Somerset, PA 7,200 Calibration Service Center Portland, OR 7,000 Calibration Service Center Cincinnati, OH 5,900 Calibration Service Center San Diego, CA 5,500 Calibration Service Center Chesterfield, MO 5,500 Corporate Office and Calibration Service Center Cork, Ireland 5,500 Calibration Service Center Tempe, AZ 5,300 Calibration Service Center Charlotte, NC 4,900 Calibration Service Center Chesapeake, VA 4,600 Calibration Service Center Mundelein, IL 4,500 Calibration Service Center Phoenix, AZ 4,200 Calibration Service Center Ottawa, ON 4,000 Calibration Service Center Addison, IL 3,600 Calibration Service Center Burnsville, MN 3,000 Mobile Service Unit and Offices Pittsburgh, PA 2,200 Calibration Service Center Los Alamitos, CA 1,900 Calibration Service Center Decatur, AL 1,700 Calibration Service Center San Juan, PR 1,600 Calibration Service Center Eau Claire, WI 1,200 We believe that our properties are in good condition, are well maintained and are generally suitable and adequate to carry on our business in its current form. 26 Table of Contents
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Louis, MO 5,600 Calibration Service Center San Diego, CA 5,500 Calibration Service Center Chesterfield, MO 5,500 Calibration Service Center Charlotte, NC 4,900 Calibration Service Center Chesapeake, VA 4,600 Calibration Service Center Phoenix, AZ 4,200 Calibration Service Center Ottawa, ON 4,000 Calibration Service Center Decatur, AL 1,700 Calibration Service Center San Juan, PR 1,600 Calibration Service Center Cork, Ireland 1,600 Mobile Service Unit and Offices Pittsburgh, PA 6,300 United Scale & Engineering: Calibration Service Center and Warehouse New Berlin, WI 16,000 Calibration Service Center and Warehouse Madison, WI 6,000 Calibration Service Center Green Bay, WI 3,300 Spectrum Technologies Inc.
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(“STI”): Calibration Service Center and Warehouse Paxinos, PA 14,500 We believe that our properties are in good condition, are well maintained and are generally suitable and adequate to carry on our business in its current form. 25 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Global Market under the symbol “TRNS”. As of May 22, 2024, we had approximat ely 500 sh areholders of record.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Global Market under the symbol “TRNS”. As of May 22, 2025, w e had approximately 500 shareholders of r ecord.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Under the Credit Agreement, we may make restricted payments up to $25.0 million in the aggregate over the term of the Credit Agreement and $10.0 million in any single fiscal year to repurchase shares and pay dividends. 36 Table of Contents Effective July 1, 2023, interest on outstanding borrowings under the revolving credit facility accrue, at our election, at either the variable Daily Simple SOFR or a fixed rate for a designated period at the SOFR corresponding to such period (subject to a 0.25% floor), in each case, plus a margin.
Under the Credit Agreement, we may make restricted payments up to $25.0 million in the aggregate over the term of the Credit Agreement and $10.0 million in any single fiscal year to repurchase shares and pay dividends. 37 Table of Contents Effective July 1, 2023, interest on outstanding borrowings under the revolving credit facility accrue, at our election, at either the variable Daily Simple SOFR or a fixed rate for a designated period at the SOFR corresponding to such period (subject to a 0.25% floor), in each case, plus a margin.
However, unexpected changes or deterioration in economic conditions could materially change these expectations. 28 Table of Contents Inventory. Inventory consists of products purchased for resale and is valued at the lower of cost or net realizable value. Costs are determined using the average cost method of inventory valuation.
However, unexpected changes or deterioration in economic conditions could materially change these expectations. 29 Table of Contents Inventory. Inventory consists of products purchased for resale and is valued at the lower of cost or net realizable value. Costs are determined using the average cost method of inventory valuation.
While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe that our unrecognized tax benefits reflect the most likely outcome. 29 Table of Contents Stock-Based Compensation.
While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe that our unrecognized tax benefits reflect the most likely outcome. 30 Table of Contents Stock-Based Compensation.
A discussion regarding our financial condition and results of operations for the fiscal year ended March 25, 2023 and year-to-year comparisons between fiscal year 2023 and fiscal year 2022, which are not included in this Form 10-K, can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended March 25, 2023 and are incorporated by reference herein.
A discussion regarding our financial condition and results of operations for the fiscal year ended March 30, 2024 and year-to-year comparisons between fiscal year 2024 and fiscal year ended March 25, 2023 ("fiscal year 2023"), which are not included in this Form 10-K, can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2024 and are incorporated by reference herein.
In evaluating our results for fiscal year 2024, investors should consider that we operate on a 52/53-week fiscal year, ending the last Saturday in March. In a 52-week fiscal year, each of the four quarters is a 13-week period. In a 53-week fiscal year, the last quarter is a 14-week period.
In evaluating our results for fiscal year 2025, investors should consider that we operate on a 52/53-week fiscal year, ending the last Saturday in March. In a 52-week fiscal year, each of the four quarters is a 13-week period. In a 53-week fiscal year, the last quarter is a 14-week period.
Accounts receivable represent amounts due from customers in the ordinary course of business. These amounts are recorde d net of the allowance for credit losses and returns in the Consolidated Balance Sheets. The allowance for credit losses is based upon the expected collectability of accounts receivable.
Accounts receivable represents amounts due from customers in the ordinary course of business. These amounts are recorde d net of the allowance for credit losses and returns in the Consolidated Balance Sheets. The allowance for credit losses is based upon the expected collectability of accounts receivable.
The increase in the Distribution segment gross margin was primarily due to increased margins from rental revenue, which now includes Axiom and a favorable mix of higher margin products sold.
The increase in the Distribution segment gross margin was primarily due to increased margins from rental revenue, which now includes Becnel and a favorable mix of higher margin products sold.
The following table presents the source of our Service revenue and the percentage of Service revenue derived from each source for each quarter during fiscal years 2024 and 2023: FY 2024 FY 2023 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 In-House 87.0 % 86.2 % 85.8 % 87.3 % 86.9 % 86.2 % 86.2 % 85.4 % Outsourced 11.9 % 12.6 % 13.0 % 11.6 % 11.9 % 12.6 % 12.6 % 13.2 % Freight Billed to Customers 1.1 % 1.2 % 1.2 % 1.1 % 1.2 % 1.2 % 1.2 % 1.4 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Our Distribution sales accounted for 34.7% and 37.2% of our total revenue in fiscal years 2024 and 2023, respectively.
The following table presents the source of our Service revenue and the percentage of Service revenue derived from each source for each quarter during fiscal years 2025 and 2024: FY 2025 FY 2024 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 In-House 85.6 % 85.1 % 86.6 % 86.9 % 87.0 % 86.2 % 85.8 % 87.3 % Outsourced 13.2 % 13.7 % 12.3 % 12.0 % 11.9 % 12.6 % 13.0 % 11.6 % Freight Billed to Customers 1.2 % 1.2 % 1.1 % 1.1 % 1.1 % 1.2 % 1.2 % 1.1 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Our Distribution sales accounted for 34.8% and 34.7% of our total revenue in fiscal years 2025 and 2024 , respectively.
The increase in segment gross margin was primarily due to increased margins from rental revenue, which now includes Axiom, and a favorable mix of higher margin products sold.
The increase in segment gross margin was primarily due to increased margins from rental revenue, which now includes Becnel, and a favorable mix of higher margin products sold.
We are regularly audited by federal, state and foreign tax authorities, but a number of years may elapse before an uncertain tax position, for which we have unrecognized tax benefits, is audited and finally resolved. From time to time, these audits result in assessments of additional tax.
We have been audited by federal, state and foreign tax authorities, but a number of years may elapse before an uncertain tax position, for which we have unrecognized tax benefits, is audited and finally resolved. From time to time, these audits result in assessments of additional tax.
For a discussion of the newly issued accounting pronouncements see “Recently Adopted Accounting Pronouncements” and "Recent Accounting Guidance Not Yet Adopted" under Note 1 to the Consolidated Financial Statements included in Item 8 of Part II of this report. 30 Table of Contents RESULTS OF OPERATIONS The following table sets forth, for fiscal years 2024 and 2023, the components of our Consolidated Statements of Income.
For a discussion of the newly issued accounting pronouncements see “Recently Adopted Accounting Pronouncements” and "Recent Accounting Guidance Not Yet Adopted" under Note 1 to the Consolidated Financial Statements included in Item 8 of Part II of this report. 31 Table of Contents RESULTS OF OPERATIONS The following table sets forth, for fiscal years 2025 and 2024, the components of our Consolidated Statements of Income.
Financing Activities : During fiscal year 2024, $77.2 million in cash was generated from the issuance of common stock, net of direct costs, inclusive of $75.2 million from the Offering.
During fiscal year 2024, $77.2 million in cash was generated from the issuance of common stock, net of direct costs, inclusive of $75.2 million from the Offering.
Based on the results of our qualitative impairment testing, we have determined that it was more likely than not that the fair values exceeded the carrying values of goodwill for each reporting unit and there were no impairments as of each of March 30, 2024 and March 25, 2023.
Based on the results of our qualitative impairment testing, we have determined that it was more likely than not that the fair values exceeded the carrying values of goodwill for each reporting unit and there were no impairments as of each of March 29, 2025 and March 30, 2024.
A one percentage point decrease in the healthcare cost trend would decrease the accumulated post-retirement benefit obligation and the annual net periodic post-retirement benefit cost by $0.1 million. Recently Issued Accounting Pronouncements .
A one percentage point decrease in the healthcare cost trend would decrease the accumulated post-retirement benefit obligation and the annual net periodic post-retirement benefit cost by $0.1 million. Recently Issued Accounting Pronounce ments .
The following table presents the quarterly historical trend of our Service gross margin as a percent of Service revenue: FY 2024 FY 2023 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Service Gross Margin 35.7% 32.5% 34.0% 32.5% 34.0% 30.0% 32.6% 32.0% Our Distribution gross margin includes net sales less the direct cost of inventory sold and the direct costs of equipment rental revenues, primarily depreciation expense for the fixed assets in our rental equipment pool, as well as the impact of rebates and cooperative advertising income we receive from vendors, freight billed to customers, freight expenses and direct shipping costs.
The following table presents the quarterly historical trend of our Service gross margin as a percent of Service revenue: FY 2025 FY 2024 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Service Gross Margin 36.2% 29.7% 33.1% 34.0% 35.7% 32.5% 34.0% 32.5% Our Distribution gross margin includes net sales less the direct cost of inventory sold and the direct costs of equipment rental revenues, primarily depreciation expense for the fixed assets in our rental equipment pool, as well as the impact of rebates and cooperative advertising income we receive from vendors, freight billed to customers, freight expenses and direct shipping costs.
Our fiscal years 2024 and 2023 Distribution sales growth in relation to prior fiscal year quarter comparisons were as fo llows: FY 2024 FY 2023 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Distribution Sales Growth 8.4% 10.4% 0.9% (0.2)% 5.1% 3.7% 1.6% 2.7% Distribution sales orders include orders for instruments that we routinely stock in our inventory, customized products, and other products ordered less frequently, which we do not stock.
Our fiscal years 2025 and 2024 Distribution sales growth in relation to prior fiscal year quarter comparisons were as follows: FY 2025 FY 2024 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Distribution Sales Growth 3.9% 6.5% 11.1% 10.5% 8.4% 10.4% 0.9% (0.2)% Distribution sales orders include orders for instruments that we routinely stock in our inventory, customized products, and other products ordered less frequently, which we do not stock.
The year-over-year difference is due to timing of income tax payments. 38 Table of Contents Investing Activities: During fiscal year 2024 , we invested $13.3 million in capital expenditures that was used primarily for customer-driven expansion of Service segment capabilities and capacity and our rental business.
The year-over-year difference is due to timing of income tax payments. 39 Table of Contents Investing Activities: During fiscal year 2025 , we invested $13.2 million in capital expenditures that was used primarily for customer-driven expansion of Service segment capabilities and capacity and our rental business.
The business acquisitions that we made have been focused on expanding our service capabilities, increasing our geographic reach and leveraging our Calibration Service Centers and other infrastructure to create operational synergies. 26 Table of Contents Our Service segment revenue growth was 17.0% for fiscal year 2024 from fiscal year 2023.
The business acquisitions that we made have been focused on expanding our service capabilities, increasing our geographic reach and leveraging our Calibration Service Centers and other infrastructure to create operational synergies. 27 Table of Contents Our Service segment revenue growth was 7.0% for fiscal year 2025 from fiscal year 2024.
Unused fees accrue based on the average daily amount of unused credit available on the revolving credit facility. Interest rate margins and unused fees are determined on a quarterly basis based upon our calculated leverage ratio. Our interest rate for the revolving credit facility for fiscal year 2024 ranged from 6.4% to 7.1%.
Unused fees accrue based on the average daily amount of unused credit available on the revolving credit facility. Interest rate margins and unused fees are determined on a quarterly basis based upon our calculated leverage ratio. Our interest rate for the revolving credit facility for fiscal year 2025 ranged from 5.1% to 6.2%.
In general, our Distribution gross margin can vary based upon the mix of products sold, price discounting, the timing of periodic vendor rebates offered and cooperative advertising programs from suppliers. 33 Table of Contents The following table reflects the quarterly historical trend of our Distribution gross margin as a percent of Distribution sales: FY 2024 FY 2023 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Distribution Gross Margin 30.3% 31.5% 28.3% 27.7% 25.2% 26.2% 24.9% 25.0% Distribution segment gross margin incre ased 420 basis poi nts in fiscal year 2024 compared to fiscal year 2023.
In general, our Distribution gross margin can vary based upon the mix of products sold, price discounting, the timing of periodic vendor rebates offered and cooperative advertising programs from suppliers. 34 Table of Contents The following table reflects the quarterly historical trend of our Distribution gross margin as a percent of Distribution sales: FY 2025 FY 2024 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Distribution Gross Margin 28.2% 29.1% 27.9% 33.9% 30.3% 31.5% 28.3% 27.7% Distribution segment gross margin incre ased 20 basis poi nts in fiscal year 2025 compared to fiscal year 2024.
The following table illustrates our days sales outstanding as of March 30, 2024 and March 25, 2023: As of March 30, March 25, 2024 2023 Net Sales, for the last two fiscal months $ 54,871 $ 46,679 Accounts Receivable, net $ 47,779 $ 44,698 Days Sales Outstanding 52 57 ● Inventory: Our inventory strategy includes making appropriate large quantity, high dollar purchases with key manufacturers for various reasons, including maximizing on-hand availability of key products, expanding the number of SKUs stocked in anticipation of customer demand, reducing backorders for products with long lead times and optimizing vendor purchase and sales volume discounts.
The following table illustrates our days sales outstanding as of March 29, 2025 and March 30, 2024 : As of March 29, March 30, 2025 2024 Net Sales, for the last two fiscal months $ 57,565 $ 54,871 Accounts Receivable, net $ 55,941 $ 47,779 Days Sales Outstanding 59 52 ● Inventory: Our inventory strategy includes making appropriate large quantity, high dollar purchases with key manufacturers for various reasons, including maximizing on-hand availability of key products, expanding the number of SKUs stocked in anticipation of customer demand, reducing backorders for products with long lead times and optimizing vendor purchase and sales volume discounts.
During fiscal year 2023 , we invested $9.4 million in capital expenditures that was used primarily for customer-driven expansion of Service segment capabilities and our rental business. During fiscal year 2024 , we used $12.9 million for business acquisitions. During fiscal year 2023 , we used $9.1 million for business acquisitions.
During fiscal year 2024 , we invested $13.3 million in capital expenditures that was used primarily for customer-driven expansion of Service segment capabilities and our rental business. During fiscal year 2025 , we used $87.4 million for business acquisitions. During fiscal year 2024 , we used $12.9 million for business acquisitions.
Fiscal year 2024 consisted of 53 weeks and fiscal year 2023 consisted of 52 weeks.
Fiscal year 2025 consisted of 52 weeks and fiscal year 2024 consisted of 53 weeks.
Transcat expects its income tax rate to range between 24.0% and 26.0% in fiscal 2025. This estimate includes Federal, various state, Canadian and Irish income taxes and reflects the discrete tax accounting associated with share-based payment awards. 39 Table of Contents
Transcat expects its income tax rate to range between 27.0% and 29.0% in fiscal 2026. This estimate includes Federal, various state, Canadian and Irish income taxes and reflects the discrete tax accounting associated with share-based payment awards. 40 Table of Contents
As a result, inventory levels may vary from quarter-to-quarter based on the timing of these large orders in relation to our quarter end. Our inventory balance increas ed $0.5 million du ring fiscal year 2024, inclusive of $1.8 million of inventory acquired during the year. Our inventory balance increased $4.2 million during fiscal year 2023.
As a result, inventory levels may vary from quarter-to-quarter based on the timing of these large orders in relation to our quarter end. Our inventory balance decreased $2.9 million during fiscal year 2025. Our inventory balance during fiscal year 2024 increased $0.5 million inclusive of $1.8 million of inventory acquired during the year .
The increase in Adjusted EBITDA during fiscal year 2024 was primarily driven by the increase in operating income, depreciation and amortization expense, transaction expense and non-cash stock compensation expense. 35 Table of Contents Adjusted Diluted Earnings Per Share: In addition to reporting Diluted Earnings Per Share, a GAAP measure, we present Adjusted Diluted Earnings Per Share (net income plus acquisition related amortization expense, acquisition related transaction expenses, acquisition related stock-based compensation, acquisition amortization of backlog and restructuring expense; divided by the average diluted shares outstanding during the period), which is a non-GAAP measure.
The dollar increase in Adjusted EBITDA during fiscal year 2025 was primarily driven by increases in depreciation and amortization expense offset by lower operating income and lower noncash stock compensation. 36 Table of Contents Adjusted Diluted Earnings Per Share: In addition to reporting Diluted Earnings Per Share, a GAAP measure, we present Adjusted Diluted Earnings Per Share (net income plus acquisition related amortization expense, acquisition related transaction expenses, acquisition related stock-based compensation, contingent consideration, and acquisition amortization of backlog; divided by the average diluted shares outstanding during the period), which is a non-GAAP measure.
This represented an increase of $11.9 million, or 22.9% , compared to fiscal year 2023 . As a percentage of total revenue, operating expenses increased 210 bas is points from 22.6% in fiscal year 2023 to 24.7% in fiscal year 2024.
This represented an increase of $7.6 million, or 11.8% , compared to fiscal year 2024 . As a percentage of total revenue, operating expenses increased 100 bas is points from 24.7% in fiscal year 2024 to 25.7% in fiscal year 2025.
Non-GAAP Financial Measures Adjusted EBITDA: In addition to reporting net income, a GAAP measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, non-cash stock compensation expense, acquisition related transaction expenses, non-cash loss on sale of building, and restructuring expense), which is a non-GAAP measure.
Non-GAAP Financial Measures Adjusted EBITDA: In addition to reporting net income, a GAAP measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, non-cash stock compensation expense, acquisition related transaction expenses, contingent consideration, and certain other expenses), which is a non-GAAP measure.
During fiscal year 2024, accrued compensation and other liabilities increased by $6.5 million, inclusive of $3.1 million from assumed liabilities, contingent consideration and purchase price holdbacks from acquisition transactions.
During fiscal year 2025 , accrued compensation and other liabilities decreased by $1.3 million, inclusive of $1.2 million from assumed liabilities, contingent consideration and purchase price holdbacks from acquisition transactions.
The year-over-year increase in general and administrative expense s was due to incremental expe nses from acquired businesses (including stock expense), increased payroll costs for new employees and continued investments in technology. Net income for fiscal year 2024 was $13.6 million compared with $10.7 million in fiscal year 2023, a $3.0 million increase.
The year-over-year increase in general and administrative expenses was due to incremental expenses from acquired businesses (including stock expense), increased payroll costs for new employees and continued investments in technology. Net income for fiscal year 2025 was $14.5 million compared with $13.6 million in fiscal year 2024 , a $0.9 million increase.
Our fiscal years 2024 and 2023 Service revenue growth in relation to prior fiscal year quarter comparisons, was as follows: FY 2024 FY 2023 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Service Revenue Growth 17.5 % 15.4 % 17.5 % 17.6 % 14.7 % 19.0 % 19.4 % 22.9 % 31 Table of Contents The growth in fiscal year 2024 and fiscal year 2023 reflected both organic growth and acquisitions.
Our fiscal years 2025 and 2024 Service revenue growth in relation to prior fiscal year quarter comparisons, was as follows: FY 2025 FY 2024 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Service Revenue Growth 11.3 % 0.1 % 6.4 % 9.8 % 17.5 % 15.4 % 17.5 % 17.6 % 32 Table of Contents The growth in fiscal year 2025 and fiscal year 2024 reflected both organic growth and acquisitions.
In addition, we used $2.1 million for scheduled repayments of our term loan and $0.4 million for the “net” award of certain share awards to cover tax-withholding obligations for share award activity in the period which are shown as a repurchase of shares of our common stock on our Consolidated Statements of Cash Flows.
In addition, we used $2.3 million for scheduled repayments of our term loan and $3.6 million for the “net” awarding of certain share awards to cover employee tax-withholding obligations for share award and stock option activity in fiscal year 2025 , which is shown as a repurchase of shares of our common stock on our Consolidated Statements of Cash Flows.
Diluted earnings per share for fiscal year 2024 was $1.63 compared with $1.40 for fiscal year 2023, a $0.23 per diluted share increase. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Use of Estimates.
Diluted earnings per share for fiscal year 2025 was $1.57 compared with $1.63 for fiscal year 2024 , a $0.06 per diluted share decrease. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Use of Estimates.
Our Service segment has shown consistent revenue growth over the past several years, ending fiscal year 2024 with its 60th consecutive quarter of year-over-year growth. This segment has benefited from both organic growth as well as acquisitions over those 60 quarters.
Our Service segment has shown consistent revenue growth over the past several years, ending fiscal ye ar 2025 with its 64th consecutive quarter of year-over-year growth. This segment has benef ited from both organic growth as well as acquisitions over those 64 quarters.
Fiscal Year Ended March 30, March 25, 2024 2023 Net Income $ 13,647 $ 10,688 + Amortization of Intangible Assets 5,630 4,454 + Acquisition Amortization of Backlog 67 - + Acquisition Deal Costs 1,651 1,018 + Income Tax Effect @ 25% (1,837 ) (1,368 ) + Acquisition Earn-out Adjustment 529 - Adjusted Net Income 19,687 14,792 Average Diluted Shares Outstanding 8,352 7,645 Diluted Earnings Per Share – GAAP $ 1.63 $ 1.40 Adjusted Diluted Earnings Per Share $ 2.36 $ 1.93 LIQUIDITY AND CAPITAL RESOURCES We expect that foreseeable liquidity and capital resource requirements will be met through cash and cash equivalents, anticipated cash flows from operations and borrowings from our revolving credit facility.
Fiscal Year Ended March 29, March 30, 2025 2024 Net Income $ 14,515 $ 13,647 + Amortization of Intangible Assets 8,422 5,630 + Acquisition Amortization of Backlog 28 67 + Acquisition Deal Costs 1,523 1,651 + Income Tax Effect @ 25% (2,493 ) (1,837 ) + Acquisition Earn-out/Contingent Consideration Adjustment (836 ) 529 Adjusted Net Income 21,159 19,687 Average Diluted Shares Outstanding 9,254 8,352 Diluted Earnings Per Share – GAAP $ 1.57 $ 1.63 Adjusted Diluted Earnings Per Share $ 2.29 $ 2.36 LIQUIDITY AND CAPITAL RESOURCES We expect that foreseeable liquidity and capital resource requirements will be met through cash and cash equivalents, anticipated cash flows from operations and borrowings from our revolving credit facility.
FY 2024 FY 2023 As a Percentage of Total Revenue: Service Revenue 65.3 % 62.8 % Distribution Sales 34.7 % 37.2 % Total Revenue 100.0 % 100.0 % Gross Profit Percentage: Service Gross Profit 33.8 % 32.2 % Distribution Gross Profit 29.5 % 25.3 % Total Gross Profit 32.3 % 29.6 % Selling, Marketing and Warehouse Expenses 11.1 % 10.7 % General and Administrative Expenses 13.6 % 11.9 % Total Operating Expenses 24.7 % 22.6 % Operating Income 7.6 % 7.0 % Interest and Other Expenses, net 0.5 % 1.2 % Income Before Provision for Income Taxes 7.1 % 5.8 % Provision for Income Taxes 1.8 % 1.2 % Net Income 5.3 % 4.6 % FISCAL YEAR ENDED March 30, 2024 COMPARED TO FISCAL YEAR ENDED March 25, 2023 (dollars in thousands): Revenue: Fiscal Year Ended March 30, March 25, Change 2024 2023 $ % Revenue: Service $ 169,525 $ 144,883 $ 24,642 17.0 % Distribution 89,956 85,686 4,270 5.0 % Total $ 259,481 $ 230,569 $ 28,912 12.5 % Total revenue was $259.5 million in fiscal year 2024 compared to $230.6 million in fiscal year 2023, an increase of $28.9 million or 12.5%.
FY 2025 FY 2024 As a Percentage of Total Revenue: Service Revenue 65.2 % 65.3 % Distribution Sales 34.8 % 34.7 % Total Revenue 100.0 % 100.0 % Gross Profit Percentage: Service Gross Profit 33.4 % 33.8 % Distribution Gross Profit 29.7 % 29.5 % Total Gross Profit 32.1 % 32.3 % Selling, Marketing and Warehouse Expenses 12.0 % 11.1 % General and Administrative Expenses 13.7 % 13.6 % Total Operating Expenses 25.7 % 24.7 % Operating Income 6.4 % 7.6 % Interest and Other Expenses, net (0.2 )% 0.5 % Income Before Provision for Income Taxes 6.6 % 7.1 % Provision for Income Taxes 1.4 % 1.8 % Net Income 5.2 % 5.3 % FISCAL YEAR ENDED March 29, 2025 COMPARED TO FISCAL YEAR ENDED March 30, 2024 (dollars in thousands): Revenue: Fiscal Year Ended March 29, March 30, Change 2025 2024 $ % Revenue: Service $ 181,428 $ 169,525 $ 11,903 7.0 % Distribution 96,993 89,956 7,037 7.8 % Total $ 278,421 $ 259,481 $ 18,940 7.3 % Total revenue was $278.4 million in fiscal year 2025 compared to $259.5 million in fiscal year 2024 , an increase of $18.9 million or 7.3% .
The following table presents the trailing twelve-month Service segment revenue for each quarter in fiscal years 2024 and 2023 as well as the trailing twelve-month revenue growth as a comparison to that of the prior fiscal year period: FY 2024 FY 2023 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Trailing Twelve-Month: Service Revenue $ 169,525 $ 162,556 $ 157,024 $ 150,860 $ 144,883 $ 139,787 $ 134,047 $ 128,324 Service Revenue Growth 17.0 % 16.3 % 17.1 % 17.6 % 18.8 % 20.2 % 20.9 % 21.2 % Our strategy has been to focus our investments in the core electrical, temperature, pressure, physical/dimensional and radio frequency/microwave calibration disciplines.
The following table presents the trailing twelve-month Service segment revenue for each quarter in fiscal years 2025 and 2024 as well as the trailing twelve-month revenue growth as a comparison to that of the prior fiscal year period: FY 2025 FY 2024 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Trailing Twelve-Month: Service Revenue $ 181,428 $ 176,054 $ 176,006 $ 173,450 $ 169,525 $ 162,556 $ 157,024 $ 150,860 Service Revenue Growth 7.0 % 8.3 % 12.1 % 15.0 % 17.0 % 16.3 % 17.1 % 17.6 % Our strategy has been to focus our investments in the core electrical, temperature, pressure, physical/dimensional and radio frequency/microwave calibration disciplines.
Management uses pending product shipments and backorders as measures of our future business performance and financial performance within the Distribution segment. 32 Table of Contents Our total pending product shipments decreased $3.0 million, or 37.3%, at th e end of fiscal year 2024 compared to the end of fiscal year 2023.
Management uses pending product shipments and backorders as measures of our future business performance and financial performance within the Distribution segment. 33 Table of Contents Our total pending product shipments decreased $1.8 million, or 34.7%, at the end of fiscal year 2025 compared to the end of fiscal year 2024 .
Cash Flows: The following table is a summary of our Consolidated Statements of Cash Flows (dollars in thousands): Fiscal Year Ended March 30, March 25, 2024 2023 Cash Provided by (Used in): Operating Activities $ 32,616 $ 16,951 Investing Activities $ (41,672 ) $ (18,513 ) Financing Activities $ 27,399 $ 876 37 Table of Contents Operating Activities: Net cash provided by operating activities was $32.6 million during fiscal year 2024 compared to $17.0 million during fiscal year 2023 .
Cash Flows: The following table is a summary of our Consolidated Statements of Cash Flows (dollars in thousands): Fiscal Year Ended March 29, March 30, 2025 2024 Cash Provided by (Used in): Operating Activities $ 38,985 $ 32,616 Investing Activities $ (84,000 ) $ (41,672 ) Financing Activities $ 26,862 $ 27,399 38 Table of Contents Operating Activities: Net cash provided by operating activities was $39.0 million during fiscal year 2025 compared to $32.6 million during fiscal year 2024 .
Accounts receivable increased by a net amount of $5.0 million during fiscal year 2023 , inclusive of $0.8 million of acco unts receivable acquired as part of acquisitions completed during the period. The year-over-year change reflects the timing of collections.
Accounts receivable increased by a net amount of $3.1 million during fiscal year 2024 , inclusive of $2.1 million of accounts receivable acquired as part of three acquisitions completed during the period. The year-over-year change reflects the timing of collections.
As a percentage of revenue, Adjusted EBITDA was 14.9% during fiscal year 2024 versus 13.2% during fisca l year 2023 , a 170 bas is point increase.
As a percentage of revenue, Adjusted EBITDA was 14.3% during fiscal year 2025 versus 14.9% during fisca l year 2024 , a 60 bas is point decrease.
Acc ounts payable decreased $4.4 million during fiscal year 2024 , inclusive of $0.6 million of accounts payable acquired during the year. Accounts payable increased by $1.7 million during fiscal year 2023 , inclusive of $0.1 million of accounts payable acquired during the year.
Accounts payable increased $5.3 million during fiscal year 2025 , inclusive of $0.3 million of accounts payable acquired during the year. Accounts payable decreased by $4.4 million during fiscal year 2024 , inclusive of $0.6 million of accounts payable acquired during the year .
Distribution sales increased $4.3 million, or 5.0% in fiscal year 2024 compared to fiscal year 2023. This year-over-year increase is primarily due to $7.0 million of incremental revenue from the acquisition of Axiom offset by slower demand for our non-ren tal products.
Distribution sales increased $7.0 million, or 7.8% in fiscal year 2025 compared to fiscal year 2024 . This year-over-year increase is primarily due to $7.2 million of incremental revenue from the acquisitions of Becnel and Martin offset by slower demand for our non-rental products.
Provision for Income Taxes: Fiscal Year Ended March 30, March 25, Change 2024 2023 $ % Provision for Income Taxes $ 4,792 $ 2,799 $ 1,993 71.2 % Our effective tax rate for fiscal years 2024 and 2023 was 26.0% and 20.8% , respectiv ely.
Provision for Income Taxes: Fiscal Year Ended March 29, March 30, Change 2025 2024 $ % Provision for Income Taxes $ 3,811 $ 4,792 $ (981 ) (20.5 )% Our effective tax rate for fiscal years 2025 and 2024 was 20.8% and 26.0% , respectiv ely.
Of our Service revenue in fiscal y ear 2024 , 86.6% was generated by our Calibration Service Centers and cost control and optimization services while 12.3% was generated through subcontracted third-party vendors, compared with 86.2% and 12.6% , respectively, in fiscal year 2023 . The remainder of our Service revenue in each pe riod was derived from freight charges.
Of our Service revenue in fiscal year 2025 , 86.0% was generated by our Calibration Service Centers and cost control and optimization services while 12.8% was generated through subcontracted third-party vendors, compared with 86.6% and 12.3% , respectively, in fiscal year 2024 .
The following table presents the percentage of total pending product shipments that were backorders at the end of each quarter in fiscal years 2024 and 2023 and our historical trend of total pending product shipments: FY 2024 FY 2023 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Total Pending Product Shipments $ 5,079 $ 4,652 $ 6,332 $ 7,109 $ 8,101 $ 9,543 $ 9,116 $ 9,034 % of Pending Product Shipments that were Backorders 88.8 % 82.0 % 87.4 % 85.0 % 84.8 % 78.4 % 80.8 % 78.1 % Gross Profit: Fiscal Year Ended March 30, March 25, Change 2024 2023 $ % Gross Profit: Service $ 57,253 $ 46,638 $ 10,615 22.8 % Distribution 26,553 21,717 4,836 22.3 % Total $ 83,806 $ 68,355 $ 15,451 22.6 % Total gross profit in fiscal year 2024 was $83.8 million compared to $68.4 million in fiscal year 2023, an increase of $15.5 million or 22.6%.
The following table presents the percentage of total pending product shipments that were backorders at the end of each quarter in fiscal years 2025 and 2024 and our historical trend of total pending product shipments: FY 2025 FY 2024 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Total Pending Product Shipments $ 3,317 $ 3,992 $ 4,102 $ 4,713 $ 5,079 $ 4,652 $ 6,332 $ 7,109 % of Pending Product Shipments that were Backorders 81.9 % 84.0 % 84.7 % 78.4 % 88.8 % 82.0 % 87.4 % 85.0 % Gross Profit: Fiscal Year Ended March 29, March 30, Change 2025 2024 $ % Gross Profit: Service $ 60,659 $ 57,253 $ 3,406 5.9 % Distribution 28,794 26,553 2,241 8.4 % Total $ 89,453 $ 83,806 $ 5,647 6.7 % Total gross profit in fiscal year 2025 was $89.5 million compared to $83.8 million in fiscal year 2024, an increase of $5.6 million or 6.7%.
There were no intangible asset impairment indicators identified during the years ended March 30, 2024 or March 25, 2023 . Income Taxes. We record deferred income taxes for the effects of timing differences between financial and tax reporting.
There were no intangible asset impairment indicators identified during the years ended March 29, 2025 or March 30, 2024 . Income Taxes. We record deferred income taxes for the effects of timing differences between financial and tax reporting. These differences relate primarily to operating leases, goodwill and intangible assets, depreciation and amortization and stock-based compensation.
As such, we expect our effective tax rate in fiscal year 2025 to be between 24.0% and 26.0% . 34 Table of Contents Net Income: Fiscal Year Ended March 30, March 25, Change 2024 2023 $ % Net Income $ 13,647 $ 10,688 $ 2,959 27.7 % Net income for fiscal year 2024 increased by $3.0 million or 27.7% compared to fiscal year 2023.
As such, we expect our effective tax rate in fiscal year 2026 to be between 27.0% and 29.0% . 35 Table of Contents Net Income: Fiscal Year Ended March 29, March 30, Change 2025 2024 $ % Net Income $ 14,515 $ 13,647 $ 868 6.4 % Net income for fiscal year 2025 increased by $0.9 million or 6.4% compared to fiscal year 2024.
Goodwill represents the excess of the purchase price over the values assigned to the underlying net assets of an acquired business and is not amortized. As of March 30, 2024, we had $105.6 mill ion of recorded goodwill.
Goodwill represents the excess of the purchase price over the values assigned to the underlying net assets of an acquired business and is not amortiz ed. As of March 29, 2025 , we had $176.9 million of recorded goodwill.
During each of fiscal year 2024 and fiscal year 2023, no contingent consideration was paid related to a business acquisition. During fiscal year 2024, $0.8 million of holdback amounts were paid. During fiscal year 2023, no holdback amounts were paid. During fiscal year 2024, we purchased $15.5 million of marketable securities with the proceeds from our stock offering.
During each of fiscal year 2025 and fiscal year 2024, no contingent consideration was paid related to a business acquisition. $0.4 million and $0.8 million of holdback amounts were paid during fiscal year 2025 and fiscal year 2024, respectively. During fiscal year 2025, we sold $15.5 million of marketable securities to partially fund acquisitions.
Backorders at the end of fiscal year 2024 wer e $4.5 million, c ompared to $6.9 million at the end of fiscal year 2023. The year-over-year decrease in pending product shipments and backorders was a result of improved fulfillment of existing orders.
Backorders at the end of fiscal year 2025 were $2.7 million, compared to $4.5 million at the end of fiscal year 2024 . The year-over-year decrease in pending product shipments and backorders was a result of improved fulfillment of existing or ders.
As a percentage of total revenue, total gross margin was 32.3% in fiscal year 2024 compared to 29.6% in fiscal y ear 2023 , a 270 basis point increase. Service gross profit was $57.3 million, an increase of $10.6 million, or 22.8%, from fiscal year 2023 to fiscal year 2024.
As a percentage of total revenue, total gross margin was 32.1% in fiscal year 2025 compared to 32.3% in fiscal y ear 2024 , a 20 basis point decrease. Service gross profit was $60.7 million, an increase of $3.4 million, or 5.9%, from fiscal year 2024 to fiscal year 2025.
Fiscal Year Ended March 30, March 25, 2024 2023 Net Income $ 13,647 $ 10,688 + Interest Expense, net 1,027 2,417 + Other Expense 315 344 + Tax Provision 4,792 2,799 Operating Income 19,781 16,248 + Depreciation & Amortization 13,477 10,955 + Transaction Expense 1,158 185 + Other Expense (315 ) (344 ) + Noncash Stock Compensation 4,512 3,377 Adjusted EBITDA $ 38,613 $ 30,421 During fiscal year 2024, Adjusted EBITDA was $38.6 million, an increase of $8.2 million or 26.9% compared to fiscal year 2023.
Fiscal Year Ended March 29, March 30, 2025 2024 Net Income $ 14,515 $ 13,647 + Interest Expense, net (27 ) 1,027 + Other Expense (425 ) 315 + Tax Provision 3,811 4,792 Operating Income 17,874 19,781 + Depreciation & Amortization 18,567 13,477 + Transaction Expense 1,278 1,158 + Other Expense (1,235 ) (315 ) + Noncash Stock Compensation 3,248 4,512 Adjusted EBITDA $ 39,732 $ 38,613 During fiscal year 2025, Adjusted EBITDA was $39.7 million, an increase of $1.1 million or 2.9% compared to fiscal year 2024.
This represented an increase of $28.9 million or 12.5% versus total revenue of $230.6 million for fiscal year 2023. This increase was primarily due to recently completed acquisitions, strong demand in our Service segment’s highly-regulated end markets and increased rental sales, which includes incremental revenue from an acquisition completed in fiscal year 2024.
Total revenue for fiscal year 2025 was $278.4 million. This represented an increase of $18.9 million or 7.3% versus total revenue of $259.5 million for fiscal year 2024. This increase was primarily due to recently completed acquisitions, and increased rental sales, which includes incremental revenue from an acquisition completed in fiscal year 2025.
We recorded vendor rebates of $0.6 m illion in both fiscal years 2024 and 2023, as a reduction of cost of Distribution sales.
We recorded vendor rebates of $0.9 million in fisca l year 2025 and $0.6 million in fiscal year 2024 , as a reduction of cost of Distribution sales.
In fiscal year 2024, Distribution segment sales increased by 5.0%. This increase in sales primarily due to sales from the acquisition of Axiom. The Distribution segment gross margin in fiscal year 2024 increased by 420 basis points.
In fiscal year 2025, Distribution segment sales increased by 7.8%. This increase in sales primarily due to sales from the acquisition of Becnel and increases in traditional rental products. The Distribution segment gross margin in fiscal year 2025 increased by 20 basis points.
During fiscal year 2023 , accrued compensation and other liabilities decreased by $1.2 million. ● Income Taxes Payable: In any given period, net working capital may be affected by the timing and amount of income tax payments. During fiscal year 2024, income taxes payable increased $2.9 million. During fiscal year 2023, income taxes payable decreas ed by $0.4 milli on.
During fiscal year 2024 , accrued compensation and other liabilities increased by $6.5 million, inclusive of $3.1 million from assumed liabilities, contingent consideration and purchase price holdbacks from acquisition transactions. ● Income Taxes Payable: In any given period, net working capital may be affected by the timing and amount of income tax payments.
We expect to receive certain federal, st ate, Canadian and Irish tax credits in future years. We also expect to receive discrete tax benefits related to share-based compensation awards in fiscal year 2025.
We also expect to receive discrete tax benefits related to share-based compensation awards in fiscal year 2026.
Service revenue was $169.5 million in fiscal year 2024, an increase of $24.6 million or 17.0%. Service revenue accounted for 65.3% of our total revenue during fiscal year 2024.
Service revenue was $181.4 million in fiscal year 2025, an increase of $11.9 million or 7.0%. Service revenue accounted for 65.2% of our total revenue during fiscal year 2025.
The significant working capital fluctuations were as follows: ● Receivables: Accounts receivable increased by a net amount of $3.1 million during fiscal year 2024 , inclusive of $2.1 million of accounts receivable acquired as part of three acquisitions completed during the year.
The year-over-year increase in cash provided by operations is primarily the result of increases in depreciation and amortization. The significant working capital fluctuations were as follows: ● Receivables: Accounts receivable increased by a net amount of $8.2 million during fiscal year 2025 , inclusive of $7.7 million of accounts receivable acquired as part of two acquisitions completed during the year.
The increase in effective tax rate is due to tax expense recognized in fiscal year 2024 associated with executive compensation limitations that resulted from share-based awards. Our provision for income taxes is affected by discrete items that may occur in any given period but are not consistent from year to year.
The decrease in effective tax rate is due to the timing of our discrete items in relation to the timing of our pre-tax net income and due to tax expense recognized in fiscal year 2024 associated with executive compensation limitations that resulted from share-based awards.
Our leverage ratio, as defined in the Credit Agreement, was 0.10 at March 30, 2024, compared with 1.60 at March 25, 2023. We were in compliance with all loan covenants and requirements during fiscal years 2024 and 2023. As of March 30, 2024 , $80.0 million was available for borrowing under the revolving credit facility.
Our leverage ratio, as defined in the Credit Agreeme nt, was 0.78 at March 29, 2025 , compared with 0.10 at March 30, 2024 . We were in comp liance with all loan covenants and requirements during fiscal years 2025 and 2024.
Operating Expenses: Fiscal Year Ended March 30, March 25, Change 2024 2023 $ % Operating Expenses: Selling, Marketing and Warehouse $ 28,710 $ 24,761 $ 3,949 15.9 % General and Administrative $ 35,315 $ 27,346 7,969 29.1 % Total $ 64,025 $ 52,107 $ 11,918 22.9 % Total operating expenses were $64.0 million in fiscal year 2024 compared to $52.1 million in fiscal year 2023 .
Operating Expenses: Fiscal Year Ended March 29, March 30, Change 2025 2024 $ % Operating Expenses: Selling, Marketing and Warehouse $ 33,341 $ 28,710 $ 4,631 16.1 % General and Administrative $ 38,238 $ 35,315 2,923 8.3 % Total $ 71,579 $ 64,025 $ 7,554 11.8 % Total operating expenses were $71.6 million in fiscal year 2025 compared to $64.0 million in fiscal year 2024 .
The year-over-year increase in sell ing, marketing and warehouse expens es was due to increased expenses related to recent acquisitions, especially acquisition related amortization expense, and higher incentive-based employee costs due to higher sales.
Operating income was $17.9 million, or 6.4% of total revenue, in fiscal year 2025 compared with $19.8 million, or 7.6% of total revenue, in fiscal year 2024 . The year-over-year increase in selling, marketing and warehouse expenses was due to increased expenses related to recent acquisitions, especially acquisition related amortization expense, and higher incentive-based employee costs due to higher sales.
The growth in Service segment revenue in fiscal year 2024 includes revenue from TIC-MS and SteriQual. The growth in Service segment revenue in fiscal year 2023 includes revenue from Alliance, e2b and Complete Calibration.
The growth in Service segment revenue in fiscal year 2025 includes revenue from Becnel and Martin. The growth in Service segment revenue in fiscal year 2024 includes revenue from TIC-MS and SteriQual. The lower growth percentages in fiscal year 2025 are due to lower organic revenue growth compared to fiscal year 2024.
The discrete benefits related to share-based compensation activity in fiscal years 2024 and 2023 w ere $0.6 mi llion and $0.4 million, respectively. We continue to evaluate our tax provision on a quarterly basis and adjust, as deemed necessary, our effective tax rate given changes in facts and circumstances expected in the future.
We continue to evaluate our tax provision on a quarterly basis and adjust, as deemed necessary, our effective tax rate given changes in facts and circumstances expected in the future. We expect to receive certain federal, st ate, Canadian and Irish tax credits in future years.
As a percentage of revenue, net income was 5.3% in fiscal year 2024, up f rom 4.6% in fiscal year 2023. This year-over-year change reflects higher operating income discussed, lower interest expense, offset by a higher provision for income taxes.
As a percentage of revenue, net income was 5.2% in fiscal year 2025, down f rom 5.3% in fiscal year 2024. The year-over-year increase in net income was primarily due to lower operating income, offset by lower interest expense, net and higher other income related to the sale of assets related to our United Scale division.
The change in fiscal year 2023 versus fiscal year 2022 was due to increased demand for rental products and was all organic.
The change in fiscal year 2024 versus fiscal year 2023 was due to incremental revenue from the acquisition of Axiom offset by slower demand for our non-rental products.
On September 25, 2023, we closed an underwritten public offering of our common stock for aggregate gross proceeds of $80.5 million (the “Offering”). In the Offering, we sold an aggregate of 847,371 shares at $95.00 per share.
As of March 29, 2025 , $80.0 million was available for borrowing under the revolving credit facility, of which, $30.9 million wa s outstanding. On September 25, 2023, we closed an underwritten public offering of our common stock for aggregate gross proceeds of $80.5 million (the “Offering”).
Service gross margin increas ed by 160 basis poin ts in fiscal year 2024 versus fiscal year 2023. This increase in service gross margin in fiscal year 2024 was the result of increased revenue which allows us to leverage our fixed costs and improved technician productivity.
Service gross margin decreas ed by 40 basis poin ts in fiscal year 2025 versus fiscal year 2024. This decrease in service gross margin in fiscal year 2025 was the result of lower revenue and gross margins from Transcat Solutions.
As of March 30, 2024, there were no amounts outstanding under the revolving credit facility. After the closing of the Offering, we used approximately $50.0 million of the net proceeds to repay in full the amounts outstanding under the revolving credit facility.
In the Offering, we sold an aggregate of 847,371 shares at $95.00 per share for net proceeds of $75.2 million. Af ter the closing of the Offering, we used approximately $50.0 million of the net proceeds to repay in fu ll the amounts outstanding under the revolving credit facility.
The 2018 Term Loan requires total repayments (principal plus interest) of $0.2 million per month through December 2025. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted.
As of March 29, 2025 , $1.8 million was outstanding on the 2018 Term Loan, which was included in current liabilities on the C onsolidated Balance Sheets with the remainder included in long-term debt. The 2018 Term Loan requires total repayments (principal plus interest) of $0.2 million per month through December 2025.
Service gross margin was 33.8% in fiscal year 2024 compared with 32.2% in fiscal year 2023, a 160 basis point in crease. Distribution gross margin was 29.5% in fiscal year 2024 compared with 25.3% in fiscal year 2023, a 420 basis poin t increase.
Total gross margin was 32.1% , which is a 20 basis point decrease versus fiscal year 2024 . Service gross margin was 33.4% in fiscal year 2025 compared with 33.8% in fiscal year 2024 , a 40 basis point decrease.
Operating expenses were $64.0 million, or 24.7% of total revenue, in fiscal year 2024 compared with $52.1 million, or 22.6% of total revenue, in fiscal year 2023. Operating income was $19.8 million, or 7.6% of total revenue, in fiscal year 2024 compared with $16.2 million, or 7.0% of total revenue, in fiscal year 2023.
The increase in the distribution segment gross margin was primarily due to increased margins from rental revenue, which now includes Becnel. Operating expenses were $71.6 million, or 25.7% of total revenue, in fiscal year 2025 compared with $64.0 million, or 24.7% of total revenue, in fiscal year 2024 .
Distribution sales accounted for 34.7% of our total revenue in fiscal year 2024. 27 Table of Contents Sales to domestic customers com prised 92.6% of total Distribution sales in fiscal year 2024 , while 5.9% were to Canadian customers and 1.5% were to customers in other international markets.
Sales to d omestic customers comprised 93.3% of total Distribution sales in fiscal year 2025 , while 5.7% were to Canadian customers and 1.0% were to customers in other international markets. Total gross profit was $89.5 million in fiscal year 2025 compared to $83.8 million in fiscal year 2024 , an increase of $5.6 million or 6.7% .
When normalizing for the extra days from fiscal year 2024’s 53 weeks, the Company estimates that its full year revenue growth was approximately 10.4%. Service revenue, which accounted for 65.3% and 62.8% of our total revenue in fiscal years 2024 and 2023, respective ly, increased $24.6 million, or 17.0% from fiscal year 2023 to fiscal year 2024 .
Service revenue, which accounted for 65.2% and 65.3% of our total revenue in fiscal years 2025 and 2024 , respectively, increased $11.9 million, or 7.0% from fiscal year 2024 to fiscal year 2025 . This year-over-year increase included $10.4 million of incremental revenue from the acquisitions of Becnel and Martin.
During fiscal year 2024 and 2023 we used $12.9 million and $9.1 million, respectively, from the revolving credit facility for business acquisitions. As of March 30, 2024,$4.2 million was outstanding on the 2018 Term Loan, of which $2.3 m illion was included in current liabilities on the Consolidated Balance Sheets with the remainder included in long-term debt.
During fiscal year 2025 and 2024 we used $87.4 million and $12.9 million, respectively, drawn from cash on hand and from the revolving credit facility for business acquisitions.
During fiscal year 2023, $2.8 million was borrowed from the revolving line of credit and $0.7 million in cash was generated from the issuance of our common stock.
During fiscal year 2024, we purchased $15.5 million of marketable securities with the proceeds from the Offering. Financing Activities : During fiscal year 2025 , $30.9 million in cash was generated from the proceeds from our revolving credit facility and $1.9 million from the issuance of common stock from stock option exercises and the Employee Stock Purchase Plan.
This increase in service gross margin in fiscal year 2024 was primarily largely the result of operating leverage on our fixed costs and increased technician productivity. The increase in the distribution segment gross margin was primarily due to increased margins from rental revenue, which now includes Axiom, and a favorable mix of higher margin products sold.
Distribution gross margin was 29.7% in fiscal year 2025 compared with 29.5% in fiscal year 2024 , a 20 basis point increase. This decrease in service gross margin in fiscal year 2025 was primarily largely the result of lower revenue and gross margins for Transcat Solutions.
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This increase was primarily due to recently completed acquisitions and strong organic demand in our highly-regulated end markets. The Service segment gross margin increased by 160 basis poin ts. Service segment gross profit and gross margin increases were primarily due to operating leverage on our fixed costs and increased technician productivity.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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On March 30, 2024, we had no hedging arrangements in place for our revolving credit facility to limit our exposure to upward movements in interest rates. FOREIGN CURRENCY Approximately 90% of our total revenues for each of fiscal years 2024 and 2023 were denominated in U.S. dollars, with the remainder denominated in Canadian dollars and Euros.
On March 29, 2025, we had no hedging arrangements in place for our revolving credit facility to limit our exposure to upward movements in interest rates. FOREIGN CURRENCY Approximately 90% of our total revenues for each of fiscal years 2025 and 2024 were denominated in U.S. dollars, with the remainder denominated in Canadian dollars and Euros.
We do not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a loss of less than $0.1 milli on and a gain of $0.4 million during fiscal year 2024 and 2023, respectively, was recognized as a component of other expense in the Consolidated Statements of Income.
We do not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a gain of $0.2 million and a loss of less than $0.1 million during fiscal year 2025 and 2024 , respectively, was recognized as a component of other expense in the Consolidated Statements of Income.
As of March 30, 2024, $4.2 million was outstanding on the 2018 Term Loan and was included in long-term debt and current portion of long-term debt on the Consolidated Balance Sheets. The 2018 Term Loan requires total (principal and interest) repayments of $0.2 million per month through December 2025.
As of March 29, 2025, $1.8 million was outstanding on the 2018 Term Loan and was included in current portion of long-term debt on the Consolidated Balance Sheets. The 2018 Term Loan requires total (principal and interest) repayments of $0.2 million per month through December 2025.
The change in the fair value of the contracts is offset by the change in fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On March 30, 2024, we had a foreign exchange contract, which matured in April 2024, outstanding in the notional amount of $1.8 milli on.
The change in the fair value of the contracts is offset by the change in fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On March 29, 2025 , we had a foreign exchange contract, which matured in April 2025, outstanding in the notional amount of $1.1 million.
Our interest rate margin is determined on a quarterly basis based upon our calculated leverage ratio. Our interest rate during fiscal year 2024 for our revolving credit facility ranged from 6.4% to 7.1%. Interest on outstanding borrowings on the 2018 Term Loan accrued at a fixed rate of 3.90% over the term of the loan.
Our interest rate margin is determined on a quarterly basis based upon our calculated leverage ratio. Our interest rate during fiscal year 2025 for our revolving c redit facility ranged from 5.1% to 6.2 % . Interest on outstanding borrowings on the 2018 Term Loan accrued at a fixed rate of 3.90% over the term of the loan.
As of March 30, 2024, $80.0 million was available under the revolving credit facility, and there were no amounts outstanding. As described above under “Liquidity and Capital Resources,” we also have a $15.0 million (original principal) term loan. The 2018 Term Loan is considered a fixed interest rate loan.
As of March 29, 2025, $80.0 million was available under the revolving credit facility, of which, $30.9 million was outstanding. As described above under “Liquidity and Capital Resources,” we also have a $15.0 million (original principal) term loan. The 2018 Term Loan is considered a fixed interest rate loan.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our exposure to changes in interest rates results from our borrowing activities. In the event interest rates were to move by 1%, our yearly interest expense would increase or decrease by approximately $0.5 million assuming our average borrowing levels during fiscal year 2024 remained constant.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our exposure to changes in interest rates results from our borrowing activities. In the event interest rates were to move by 1%, our yearly interest expense would increase or decrease by approximately $0.3 million assuming our borrowing levels at March 29, 2025 remained constant.
The foreign exchange contract was renewed in April 2024 and continues to be in place. We do not use hedging arrangements for speculative purposes. 40 Table of Contents
The foreign ex change contract was renewed in April 2025 and continues to be in place. We do not use hedging arrangements for speculative purposes. 41 Table of Contents

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