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Q1 revenues rise, net income dips at Transcat

Transcat Inc. this week reported an increase in first-quarter revenue, but a drop in net income.

Transcat posted revenue for the quarter ended June 24 of $36.3 million, up more than 9 percent from $33.1 million in the first quarter last year. Net income for the quarter was $836,000, down from $906,000 a year ago.

Diluted earnings per share for the quarter were 12 cents, down from 13 cents.

The Gates company’s service revenue for the first quarter was $18.5 million, up from $17.2 million. Distribution sales were $17.8 million, up more than 11 percent from roughly $16 million a year ago.

Transcat president and CEO Lee Rudow said higher sales were driven by market share gains complemented by improved industrial markets in the U.S.

“Our service segment began the year with solid momentum. A healthy backlog of orders entering the quarter and a robust business pipeline resulted in a nearly 8 percent revenue growth,” Rudow said in a statement. “We ramped up new labor resources that impacted productivity but laid the groundwork for the rest of the year.”

The company’s growth is a result increased market share through new enterprise customers and added capabilities, he added.

Transcat’s core distribution and growing rental business benefits from investments in its e-commerce capabilities, web-based marketing and improved domain authority and web placement, Rudow said.

“We continue to be encouraged with the prospects of both segments and the progress we have made as we advance our strategy,” Rudow said, noting the company has added lab technicians as a result of its added service capabilities. “We fully expect to see expansion in our segment margins as sales begin to flow through our new and existing calibration capabilities, and as the number and productivity of newly-hired technicians improves.”

Follow Velvet Spicer on Twitter: @Velvet_Spicer

(c) 2017 Rochester Business Journal. To obtain permission to reprint this article, call 585-363-7269 or email [email protected].

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