TRANSCAT INC Segments Disclosure

NOTE 7 – SEGMENT AND GEOGRAPHIC DATA

 

An operating segment is a component of the Company that engages in business activities from which it may recognize revenues and incur expenses whose operating results are regularly reviewed by the public entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.  Once operating segments were identified, the Company determined which of those operating segments are required to be presented as reportable segments based on the quantitative thresholds.

 

Transcat has two reportable segments: Service and Distribution. Through its Service segment, the Company offers calibration, repair, inspection, analytical qualifications, preventative maintenance, consulting and other related services. Through its Distribution segment, the Company sells and rents national and proprietary brand instruments to customers globally. There are no intersegment revenues.

 

The Company's CODM is the President & Chief Executive Officer. Both of the Company's reportable segments are regularly reviewed by the CODM through monthly revenue, operating income and consolidated financial forecast updates and through regular and monthly meetings with the executive leadership team. The primary financial measures used by the CODM for the Company's reportable segments are revenue and operating income (loss). These measures are used by the CODM to make decisions on resource allocation, assess the performance of the business, and monitor budget versus actual results. Significant expenses that are regularly reviewed by the CODM include segment cost of revenue, segment selling, general and administrative expenses and various items affecting comparability, which are primarily related to the Company's acquisitive nature. The primary drivers of segment cost of revenue include labor, product and facilities costs, and the primary drivers of segment selling, general and administrative expenses include payroll, benefit and incentive costs. Items affecting comparability include depreciation, amortization, executive transition costs, transaction expenses and non-cash stock compensation.

 

The CODM does not review assets or other balance sheet information in evaluating the results of the Company's segments, and therefore, such information is not presented.

 

Year Ended March 28, 2026:
	Distribution	Service	Total
Revenue	$ 114,668	$ 217,209	$ 331,877
Less Significant Segment Expenses
Cost of Revenue	76,896	146,677
Selling, Marketing & Warehouse Expenses	15,073	27,692
General and Administrative Expenses	14,379	37,897
Operating Income	$ 8,320	$ 4,943	$ 13,263
Reconciliation of Segment Operating Income to Income Before Taxes
Interest Expense			4,602
Interest Income			(23)
Other Expense			695
Income Before Provision For Income Taxes			$ 7,989
Capital Expenditures	$ 6,779	$ 8,519
Depreciation and Amortization	$ 7,526	$ 18,646

 

Year Ended March 29, 2025:
	Distribution	Service	Total
Revenue	$ 96,993	$ 181,428	$ 278,421
Less Significant Segment Expenses
Cost of Revenue	68,199	120,769
Selling, Marketing & Warehouse Expenses	14,328	19,013
General and Administrative Expenses	11,772	26,466
Operating Income	$ 2,694	$ 15,180	$ 17,874
Reconciliation of Segment Operating Income to Income Before Taxes
Interest Expense			798
Interest Income			(825)
Other Income			(425)
Income Before Provision For Income Taxes			$ 18,326
Capital Expenditures	$ 8,007	$ 5,190
Depreciation and Amortization	$ 7,485	$ 11,082

 

Year Ended March 30, 2024:
	Distribution	Service	Total
Revenue	$ 89,956	$ 169,525	$ 259,481
Less Significant Segment Expenses
Cost of Revenue	63,403	112,272
Selling, Marketing & Warehouse Expenses	11,769	16,941
General and Administrative Expenses	10,046	25,269
Operating Income	$ 4,738	$ 15,043	$ 19,781
Reconciliation of Segment Operating Income to Income Before Taxes
Interest Expense			1,835
Interest Income			(808)
Other Expense			315
Income Before Provision For Income Taxes			$ 18,439
Capital Expenditures	$ 7,139	$ 6,141
Depreciation and Amortization	$ 4,284	$ 9,193

 

The following table presents geographic data for fiscal years 2026, 2025 and 2024 (dollars in thousands):

 

		FY 2026				FY 2025				FY 2024
Geographic Data:
Revenues to Unaffiliated Customers (1):
United States (2)		$	309,883			$	255,811			$	235,117
Canada			17,275				17,162				16,666
Other International			4,719				5,448				7,698
Total		$	331,877			$	278,421			$	259,481
Property and Equipment:
United States (2)		$	51,891			$	44,727			$	33,507
Canada			4,830				4,866				5,415
Other International			1,080				431				22
Total		$	57,801			$	50,024			$	38,944

 

(1)

Revenues are attributed to the countries based on the destination of a product shipment or the location where service is rendered.

(2)

United States includes Puerto Rico.