Rochester’s Transcat Inc., a supplier of accredited calibration, repair, inspection and laboratory instrument services, on Tuesday reported a drastically improved second-quarter, beating analyst estimates.
For the second quarter ended Sept. 25, Transcat reported sales of $50.3 million, up 21 percent from $41.6 million in the year-ago quarter. Net income for the quarter was $3.01 billion, up 49 percent from $2.02 billion in the same quarter of 2020. On a per-share basis, earnings were up from 27 cents in the year-ago quarter to 40 cents in the second quarter this year.
“Our excellent second-quarter results were driven by broad-based revenue strength and solid operational execution across both of our operating segments,” said President and CEO Lee Rudow. “Our Service segment revenue grew 20.3 percent and gross margin increased 70 basis points to a second-quarter record of 32.9 percent. We reported 14 percent organic revenue growth as demand in our highly regulated end markets, including life sciences, remained strong. We are pleased with the continued expansion of our gross margin, which was largely driven by operating leverage on our fixed costs from organic growth.”
Results included the previously reported acquisitions of BioTek Services Inc. on Dec. 16, 2020, Upstate Metrology on April 29, 2021, and Cal OpEx Ltd., dba NEXA, on Aug. 31, 2021.
“We are excited with the early progress made on our recent acquisition of NEXA Enterprise Asset Management. NEXA expands our reach into the attractive market for asset management services and its unique capabilities around managing cost, efficiency and the reliability components of life science companies’ instrumentation programs is a natural complement to our core calibration offerings,” Rudow said. “We are confident this enhances our overall value proposition to current and future customers and the NEXA and Transcat teams have already worked together to identify several synergistic growth opportunities.”
Service revenue in the second quarter grew more than 20 percent to $29.5 million, while distribution sales grew more than 22 percent to $20.8 million. Organic revenue growth was 14 percent and was driven by improvement in end-market conditions, continued market share gains and an easier comparison over the prior-year quarter, which was impacted by the pandemic, officials said.
Shares of company stock (Nasdaq: TRNS) opened Tuesday at $76.42 and by midmorning Wednesday had climbed to $80.87.