Transcat (TRNS) has reported 2.05 percent rise in profit for the quarter ended Sep. 24, 2016. The company has earned $0.90 million, or $0.12 a share in the quarter, compared with $0.88 million, or $0.12 a share for the same period last year.     

Revenue during the quarter grew 16.99 percent to $34.48 million from $29.48 million in the previous year period. Gross margin for the quarter expanded 42 basis points over the previous year period to 23.28 percent. Total expenses were 95.42 percent of quarterly revenues, up from 95.35 percent for the same period last year. That has resulted in a contraction of 7 basis points in operating margin to 4.58 percent.

Operating income for the quarter was $1.58 million, compared with $1.37 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $3.30 million compared with $2.39 million in the prior year period. At the same time, adjusted EBITDA margin improved 145 basis points in the quarter to 9.57 percent from 8.12 percent in the last year period.  

Lee D. Rudow, president and chief executive officer, commented, "We are building momentum in fiscal 2017 as demonstrated by our solid results for the second quarter. Our Service segment continues to show steady progress with revenue growth from both organic initiatives, particularly related to life sciences, and recent acquisitions. We expect Service segment margins to improve over time as our actions to integrate recent acquisitions and capture operational synergies take hold. We are pleased with the positive traction in Distribution as that segment’s revenue improved 15%. We benefited from incremental used equipment sales and rental business from our April 2016 acquisition of Excalibur Engineering, Inc. "Excalibur" as well as from traditional Transcat customers, particularly from the alternative energy space."

The company has spent $9.46 million cash to meet investing activities during the first six months as against cash outgo of $5.64 million in the last year period.

Cash flow from financing activities was $4.48 million for the first six months as against cash outgo of $0.02 million in the last year period.

Cash and cash equivalents stood at $0.60 million as on Sep. 24, 2016, up 266.87 percent or $0.43 million from $0.16 million on Sep. 26, 2015.

Working capital drops significantly
Transcat has witnessed a decline in the working capital over the last year. It stood at $9.16 million as at Sep. 24, 2016, down 26.60 percent or $3.32 million from $12.48 million on Sep. 26, 2015. Current ratio was at 1.47 as on Sep. 24, 2016, down from 1.98 on Sep. 26, 2015.

Cash conversion cycle (CCC) has decreased to 30 days for the quarter from 45 days for the last year period. Days sales outstanding went down to 46 days for the quarter compared with 49 days for the same period last year.

Days inventory outstanding has decreased to 13 days for the quarter compared with 26 days for the previous year period. At the same time, days payable outstanding was almost stable at 29 days for the quarter, when compared with the previous year period.