Transcat shares dip after Q3 profit drops

 - 1/29/2013 3:18:26 PM

Shares of Transcat Inc. were down Tuesday afternoon after the company reported an increase in revenue, but a drop in profit for the fiscal third quarter.

Transcat’s stock (Nasdaq: TRNS) was trading at $6.99 mid-afternoon Tuesday, down 11 cents from Monday’s close.

The Ogden-based service provider and distributor of calibration and measurement instruments on Monday reported a net income of $800,000, or 10 cents a diluted share, compared with $1 million, or 13 cents a diluted share, a year ago.

Transcat reported revenues of $29.3 million for the quarter, up 3 percent from $28.5 million.

Total operating expenses for the third quarter were $5.4 million, an increase of more than 5 percent. The company said the operating expenses included upfront costs related to its deployment of Operating income for the quarter was $1.2 million, down $400,000 from the same period last year.

Transcat’s product segment revenue remained consistent during the third quarter, while its service segment revenue increased nearly 9 percent, totaling close to $10 million.

“The third-quarter service segment revenue growth can largely be attributed to furthering our reach into the targeted life sciences industry with our recent acquisition of Anacor,” said Lee Rudow, president and chief operating officer, in a statement. “While we have made strides in growing with acquisitions, we intend to further increase our focus on organic growth as well, which we expect will lead to enhanced operating leverage and strong cash flow generation.”

Last week, Transcat announced its acquisition of Cal-Matrix Metrology Inc., a Canadian provider of calibrations and coordinate measurement inspection services. Transcat CEO Charles Hadeed said the acquisition will expand Transcat’s geographic reach.

“We have completed six acquisitions in the last three years,” said Hadeed, in a statement. “In combination with our organic growth initiatives, we expect to continue to acquire high quality calibration labs that further expand our geographic footprint and capabilities.”

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