What changed in this filing

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Item 1. Business

2022-06-09 compared with 2021-06-08 · 616 added, 647 removed, 26 unchanged (98% of the section changed)

BUSINESS OVERVIEW

Transcat, Inc.

(“Transcat”, the “Company,” “we”

or “us”) is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor

of professional grade test, measurement and control instrumentation.

We are focused on providing services and products to highly regulated

industries, particularly the life science industry, which includes pharmaceutical, biotechnology, medical device and other FDA-regulated

Additional industries served include FAA-regulated businesses, including aerospace and defense industrial manufacturing;

and utilities, including oil and gas and alternative energy;

and other industries that require accuracy in their processes, confirmation

of the capabilities of their equipment, and for which the risk of failure is very costly.

We conduct our business through two operating segments:

service (“Service”)

and distribution (“Distribution”).

See Note 7 to our Consolidated Financial Statements in this report for financial information

for these segments.

We concentrate on attracting new customers in each segment, retaining existing customers and cross-selling to customers

to increase our total revenue.

We serve approximately 26,000 customers through our Service and Distribution segments, with approximately

25% to 30% of those customers transacting with us through both of our business segments.

Through our Service segment, we offer calibration, repair, inspection,

analytical qualifications, preventative maintenance, consulting and other related services, a majority of which are processed through

our proprietary asset management system, CalTrak® (“CalTrak®”) and our online customer portal, C3® (“C3®”).

Our Service model is flexible, and we cater to our customers’ needs by offering a variety of services and solutions including permanent

and periodic onsite services, mobile calibration services, pickup and delivery and in-house services.

As of the end of our fiscal year

ended March 27, 2021 (“fiscal year 2021”), we operated twenty-two calibration service centers (“Calibration Service

Centers”) strategically located across the United States, Puerto Rico, and Canada.

We also serve our customers onsite at their facilities

for daily, weekly or longer-term periods.

In addition, we have several imbedded customer-site locations that we refer to as “client-based

labs,” where we provide calibration services, and in some cases other related services, exclusively for the customer and where we

reside and work every day.

We also have a fleet of mobile calibration laboratories that can provide service at customer sites which may

not have the space or utility capabilities we require to service their equipment.

All of our Calibration Service Centers have obtained ISO/IEC 17025:2017

scopes of accreditation.

Our accreditations are the cornerstone of our quality program, which we believe is among the best in the industry.

Our dedication to quality is highly valued by businesses that operate in the industries we serve, particularly those in life science and

other regulated industries, and our accreditations provide our customers with confidence that they will receive a consistent and uniform

service, regardless of which of our service centers completes the service.

Through our Distribution segment, we sell and rent national and proprietary

brand instruments to customers globally.

Through our website, in-house sales team and printed and digital marketing materials, we offer

access to more than 150,000 test, measurement and control instruments, including products from approximately 500 leading brands.

instruments we sell and rent require calibration service to ensure that they maintain the most precise measurements.

By having the capability

to calibrate these instruments at the time of sale and at regular post-sale intervals, we can give customers a value-added service that

most of our competitors are unable to provide.

Calibrating before shipping means the customer can place their instruments into service

immediately upon receipt, reducing downtime.

Other value-added options we offer through our Distribution segment include equipment kitting

(which is especially valued in the power generation sector), equipment rentals and used equipment sales.

Our commitment to quality goes beyond the services and products we deliver.

Our sales, customer service and support teams provide expert advice, application assistance and technical support to our customers.

calibration is an intangible service, our customers rely on us to uphold high standards and provide integrity in our people and processes.

Our customers include leading manufacturers in the life science/pharmaceutical,

energy, defense, aerospace and industrial process control sectors.

We believe our customers do business with us because of our integrity

and commitment to quality service, our broad range of product and service offerings, our proprietary asset management system, CalTrak®,

and our online customer portal, C3®.

In our fiscal year ended March 28, 2020 (“fiscal year 2020”) through fiscal year

2021, no customer or controlled group of customers accounted for 5% or more of our total revenue.

The loss of any single customer would

not have a material adverse effect on our business, cash flows, balance sheet, or results of operations.

Transcat was incorporated in Ohio in 1964.

We are headquartered in Rochester,

Our executive offices are located at 35 Vantage Point Drive, Rochester, New York 14624.

(“Transcat”, the “Company,” “we” or “us”) is a leading provider of accredited calibration

services, enterprise asset management services, and value-added distributor of professional grade handheld test, measurement and control

instrumentation.

We are focused on providing services and products to highly regulated industries, particularly the life science industry,

which includes pharmaceutical, biotechnology, medical device and other FDA-regulated businesses.

Additional industries served include

FAA-regulated businesses, including aerospace and defense industrial manufacturing;

energy and utilities, including oil and gas and alternative

and other industries that require accuracy in their processes, confirmation of the capabilities of their equipment, and for which

the risk of failure is very costly.

conduct our business through two operating segments:

service (“Service”) and distribution (“Distribution”).

Note 7 to our Consolidated Financial Statements in this report for financial information for these segments.

We concentrate on attracting

new customers in each segment, retaining existing customers and cross-selling to customers to increase our total revenue.

We serve approximately

30,000 customers through our Service and Distribution segments, with approximately 20% to 25% of those customers transacting with us

through both of our business segments.

our Service segment, we offer calibration, repair, inspection, analytical qualifications, preventative maintenance, consulting and other

related services, a majority of which are processed through our proprietary asset management system, CalTrak® and our online customer

Our Service model is flexible, and we cater to our customers’ needs by offering a variety of services and solutions

including permanent and periodic onsite services, mobile calibration services, pickup and delivery and in-house services.

As of the end

of our fiscal year ended March 26, 2022 (“fiscal year 2022”), we operated twenty-four calibration service centers (“Calibration

Service Centers”) strategically located across the United States, Puerto Rico, and Canada.

We also serve our customers onsite at

their facilities for daily, weekly or longer-term periods.

In addition, we have several imbedded customer-site locations that we refer

to as “client-based labs,” where we provide calibration services, and in some cases other related services, exclusively for

the customer and where we reside and work every day.

We also have a

fleet of mobile calibration laboratories that can provide service

at customer sites which may not have the space or utility capabilities we require to service their equipment.

the Company’s acquisition strategy, we have been focused on building out our Services segment by entering adjacent and complimentary

This has been demonstrated by the acquisition of Tangent Labs, LLC, Cal OpEx Limited (d/b/a NEXA Enterprise Asset Management)

which owns all of the issued and outstanding capital stock of its U.S.

based subsidiary, Cal OpEx Inc., a Delaware corporation (collectively,

“NEXA”), and Upstate Metrology Inc.

in fiscal year 2022 and the acquisitions of BioTek Services, Inc.

in our fiscal year

ended March 27, 2021 (“fiscal year 2021”), and the acquisition of TTE Laboratories, Inc.

in our fiscal year ended March 28,

2020 (“fiscal year 2020”).

provides asset management services to the biopharmaceutical industry by leveraging its six service tracks:

(i) calibration, (ii) maintenance

and spare, (iii) reliability, (iv) computerized maintenance management systems solutions (“CMMS”), (v) quality and compliance,

and (vi) validation.

By delivering these services, NEXA is able to provide unique value to their end customers in managing their asset

portfolios, avoiding asset downtime and helping to accelerate delivery of their life changing products to market, ultimately driving

significant cost savings and improved reliability.

This NEXA suite of services, combined with the existing Transcat service offerings,

provides a very comprehensive and robust value proposition to existing and new customers, which allows us to manage the complexity that

is tied to doing business in these highly regulated industries.

Laboratories, Inc.

and BioTek Services, Inc.

provided Transcat entry into pipette calibration, repair, refurbishment or replacement,

calibration management and user training, by enabling both in lab and on-site services to life sciences and other regulated industry

TTE Laboratories, Inc.

also provided Transcat with an opportunity to strengthen its Distribution sales platform with incremental

product sales through their growing e-commerce website, www.pipettes.com

of our Calibration Service Centers have obtained ISO/IEC 17025:2017 scopes of accreditation.

Our accreditations are the cornerstone of

our quality program, which we believe is among the best in the industry.

Our dedication to quality is highly valued by businesses that

operate in the industries we serve, particularly those in life science and other regulated industries, and our accreditations provide

our customers with confidence that they will receive a consistent and uniform service, regardless of which of our service centers completes

our Distribution segment, we sell and rent national and proprietary brand instruments to customers globally.

Through our website, in-house

sales team and printed and digital marketing materials, we offer access to more than 150,000 test, measurement and control instruments,

including products from approximately 500 leading brands.

Most instruments we sell and rent require calibration service to ensure that

they maintain the most precise measurements.

By having the capability to calibrate these instruments at the time of sale and at regular

post-sale intervals, we can give customers a value-added service that most of our competitors are unable to provide.

Calibrating before

shipping means the customer can place their instruments into service immediately upon receipt, reducing downtime.

Other value-added options

we offer through our Distribution segment include equipment kitting (which is especially valued in the power generation sector), equipment

rentals and used equipment sales.

commitment to quality goes beyond the services and products we deliver.

Our sales, customer service and support teams provide expert

advice, application assistance and technical support to our customers.

Since calibration is an intangible service, our customers rely

on us to uphold high standards and provide integrity in our people and processes.

customers include leading manufacturers in the life science/pharmaceutical, energy, defense, aerospace and industrial process control

We believe our customers do business with us because of our integrity and commitment to quality service, our broad range of

product and service offerings, our proprietary asset management system, CalTrak®, and our online customer portal, C3®.

fiscal year 2021 and in fiscal year 2022, no customer or controlled group of customers accounted for 5% or more of our total revenue.

The loss of any single customer would not have a material adverse effect on our business, cash flows, balance sheet, or results of operations.

was incorporated in Ohio in 1964.

We are headquartered in Rochester, New York.

Our executive offices are located at 35 Vantage Point

Drive, Rochester, New York 14624.

Our telephone number is 585-352-7777.

Our website is www.transcat.com.

Information available on our website is not a part of, and is not incorporated into, this Annual Report

on Form 10-K.

We trade on the Nasdaq Global Market under the ticker symbol “TRNS”.

Our two operating segments are highly complementary in that their offerings

are of value to customers within the same industries.

Our strategy is to leverage the complementary nature of our operating segments in

ways that add value for all customers who select Transcat as their source for test and measurement equipment and/or calibration and laboratory

instrument services.

We strive to differentiate ourselves within the markets we serve and build barriers to competitive entry by offering

a broad range of products and services and by integrating our product and service offerings in a value-added manner to benefit our customers’

During fiscal year 2021, we continued to commit capital, people and leadership

investments to advance our “Operational Excellence” initiative.

This initiative is resulting in increased productivity and

operational efficiency and further differentiation from our competitors as we leverage technology and process improvements to improve

our effectiveness and our customers’ experiences.

Our Operational Excellence initiative is a multi-year, ever-evolving program designed

to create an infrastructure that supports our strategic goals over a longer timeframe.

Within the Service segment, our strategy is to drive double-digit revenue

growth through both organic expansion and acquisitions.

Our strategy is to achieve mid-to-high single digit organic revenue growth in

this segment.

We have adopted an integrated sales model to drive sales and capitalize on the cross-selling opportunities between our two

segments, especially leveraging our Distribution relationships to develop new Service relationships.

We leverage these relationships with

our unique value proposition which resonates strongly with customers who rely on accredited calibration services and/or laboratory instrument

services to maintain the integrity of their processes and/or meet the demands of regulated business environments.

Our customer base values

our superior quality programs and requires precise measurement capability in their processes to minimize risk, waste and defects.

this strategy by leveraging our quality programs, metrology expertise, multiple locations, qualified technicians, breadth of capabilities,

and onsite and depot service options.

Together, this allows us to meet the most

rigorous quality demands of our most highly regulated customers while simultaneously

being nimble enough to meet their business needs.

We expect to continue to grow our Service business organically by taking

market share from other third-party providers and original equipment manufacturers (“OEMs”), as well as by targeting the outsourcing

of in-house calibration labs as multi-year client-based lab contracts.

We believe an important element in taking market share is our ability

to expand into new technical capabilities that are in demand by our current and target customer base.

The other component to our Service growth strategy is acquisitions.

are three drivers of our acquisition strategy:

geographic expansion, increased capabilities and infrastructure leverage.

of our acquisition opportunities have been in the $500 thousand to $10 million annual revenue range, and we are disciplined in our approach

to selecting target companies.

One focus of our Operational Excellence initiative is to strengthen our acquisition integration process,

allowing us to capitalize on acquired sales and cost synergies at a faster pace.

Our Distribution segment strategy is to be the premier distributor and

rental source of leading test and measurement equipment while also providing cross-selling opportunities for our Service segment.

our vendor relationships we have access to more than 150,000 products, which we market to our existing and prospective customers both

with and without value-added service options that are unique to Transcat.

In addition to offering pre-shipment value-added services,

we offer our customers the options of renting selected test and measurement equipment or buying used equipment, furthering our ability

to answer all of our customers’ test and measurement equipment needs.

We continuously evaluate our offerings and add new in-demand

vendors and products.

Our equipment rental business continues to grow, and with it used equipment sales.

Having new, used and rental equipment

further differentiates us from our Service segment competitors.

We see these various methods of meeting our Distribution customers’

needs as a way to differentiate ourselves and to diversify this segment’s customer base from its historically niche market.

differentiation and diversification strategy has been deliberately instituted in recent years as a means to mitigate the effect of price-driven

competition and to lessen the impact that any particular industry or market will have on the overall performance of this segment.

As part of our growth strategy, we completed one acquisition during our

fiscal year 2021 and three business acquisitions during our fiscal year 2020:

Effective December 16, 2020, Transcat acquired substantially all of

the assets of BioTek Services, Inc.

Information available on our

website is not a part of, and is not incorporated into, this Annual Report on Form 10-K.

We trade on the Nasdaq Global Market under the

ticker symbol “TRNS”.

two operating segments are highly complementary in that their offerings are of value to customers within the same industries.

is to leverage the complementary nature of our operating segments in ways that add value for all customers who select Transcat as their

source for test and measurement equipment and/or calibration and laboratory instrument services.

We strive to differentiate ourselves

within the markets we serve and build barriers to competitive entry by offering a broad range of products and services and by integrating

these solutions in a value-added manner to benefit our customers’ operations.

fiscal year 2022, we renewed our commitment to capital, people and leadership investments, advancing our “Operational Excellence”

This initiative is resulting in increased productivity and operational efficiency and further differentiation from our competitors

as we leverage technology, automation, and process improvements to enhance our effectiveness and our customers’ experiences.

also implemented Transcat University’s build-a-tech program.

This program attracts fresh talent to the organization and provides

training and career advancement opportunities for our existing employees.

Our Operational Excellence initiative is a multi-year, ever-evolving

program designed to create an infrastructure that supports our strategic goals over a longer timeframe.

the Service segment, our strategy is to drive double-digit revenue growth through both organic expansion and acquisitions.

We have adopted

an integrated sales model to drive sales and capitalize on the cross-selling opportunities between our two segments, especially leveraging

our Distribution relationships to develop new Service relationships.

We leverage these relationships with our unique value proposition

which resonates strongly with customers who rely on accredited calibration services and/or laboratory instrument services to maintain

the integrity of their processes and/or meet the demands of regulated business environments.

Our customer base values our superior quality

programs and requires precise measurement capability in their processes to minimize risk, waste and defects.

We execute this strategy

by leveraging our quality programs, metrology expertise, geographical footprint, qualified technicians, breadth of capabilities, and

tailored service delivery options.

Together, this allows us to meet the most rigorous quality demands of our most highly regulated customers

while simultaneously being nimble enough to meet their business needs.

expect to continue to grow our Service business organically by taking market share from other third-party providers and original equipment

manufacturers (“OEMs”), as well as by targeting the outsourcing of in-house calibration labs as multi-year client-based lab

We believe an important element in taking market share is our ability to expand into new technical capabilities and adjacent

service solutions that are in demand by our current and target customer base.

other component to our Service growth strategy is acquisitions.

There are three drivers of our acquisition strategy:

geographic expansion,

increased capabilities and infrastructure leverage.

The majority of our acquisition opportunities have been in the $500 thousand to $10

million annual revenue range, and we are disciplined in our approach to selecting target companies.

One focus of our Operational Excellence

initiative is to strengthen our acquisition integration process, allowing us to capitalize on acquired sales and cost synergies at a

Distribution segment strategy is to be the premier distributor and rental source of leading test and measurement equipment while also

providing cross-selling opportunities for our Service segment.

Through our vendor relationships we have access to more than

150,000 products, which we market to our existing and prospective customers both with and without value-added service options that are

unique to Transcat.

In addition to offering pre-shipment value-added services, we offer our customers the options of renting selected

test and measurement equipment or buying used equipment, furthering our ability to answer all of our customers’ test and measurement

equipment needs.

We continuously evaluate our offerings to add new in-demand vendors or products, or remove less relevant vendors

and products.

Our equipment rental business continues to be a strong growth segment for us and helps support our distribution and service

segment growth strategies.

Having new, used and rental equipment further differentiates us from our Service segment competitors.

see these various methods of meeting our Distribution customers’ needs as a way to differentiate ourselves and to diversify this

segment’s customer base from its historically niche market.

This differentiation and diversification strategy has been deliberately

instituted in recent years as a means to mitigate the effect of price-driven competition and to lessen the impact that any particular

industry or market will have on the overall performance of this segment.

part of our growth strategy, we completed three acquisitions during our fiscal year 2022 and one business acquisition during our fiscal

December 31, 2021, Transcat purchased all of the outstanding membership units of Tangent

Labs, LLC, a privately-held company (“Tangent”).

Tangent provides in-house and

on-site calibrations of precision measurement and control instrumentation to customers in

the life science, aerospace and other regulated industries, and has lab locations in Indianapolis,

Indiana and Huntsville, Alabama.

August 31, 2021, Transcat purchased all of the outstanding capital stock of NEXA.

NEXA provides

calibration optimization and other technical solutions to improve asset and reliability management

programs to pharmaceutical, biotechnology, and medical device companies worldwide.

April 29, 2021, Transcat acquired substantially all of the assets of Upstate Metrology Inc.

(“Upstate Metrology”), a New York based provider of calibration services.

December 16, 2020, Transcat acquired substantially all of the assets of BioTek Services,

(“BioTek”), a Virginia based provider of pipette calibration services.

Effective February 21, 2020, we acquired substantially all of the

assets of TTE Laboratories, Inc.

(“TTE”, now known as pipettes.com), a Boston, MA-based provider of pipette equipment and

Effective July 19, 2019, we acquired Infinite Integral Solutions Inc.

IIS, a Mississauga, Ontario, Canada company, the owner and developer of the CalTree™ suite of software solutions

for the automation of calibration procedures and datasheet generation.

Effective April 1, 2019, we acquired substantially all of the assets

of Gauge Repair Service (“GRS”), a Los Angeles, California-based provider of calibration services.

Our acquisition strategy primarily targets service businesses that expand

our geographic reach, increase the depth and/or breadth of our service capabilities and expertise and leverage our infrastructure.

table below illustrates the strategic drivers for the acquisitions described above:

acquisition strategy primarily targets service businesses that expand our geographic reach, increase the depth and/or breadth of our

service capabilities and expertise and leverage our infrastructure.

The table below illustrates the strategic drivers for the acquisitions

described above:

Infrastructure

We believe our combined Service and Distribution segment offerings, experience,

technical expertise and integrity create a unique and compelling value proposition for our customers, and we intend to continue to grow

our business through organic revenue growth and business acquisitions.

We consider the attributes of our Service segment, which include

higher gross margins and recurring revenue streams from customers in regulated industries to be more compelling and scalable than our

legacy Distribution segment.

For this reason, we expect our Service segment to be the primary source of revenue and earnings growth in

future fiscal years.

The charts below illustrate Service, Distribution and consolidated revenue over the past five years:

Service Segment

Calibration is the act of comparing a unit or

instrument of unknown value to a standard of known value and reporting the result in some specifically defined form.

After the calibration

has been completed, a decision is made, based on rigorously defined parameters, regarding what, if anything, should be done to the unit

to conform to the required standards or specifications.

The decision may be to adjust, optimize or repair a unit;

limit the use, range

or rating of a unit;

believe our combined Service and Distribution segment offerings, experience, technical expertise and integrity create a unique and compelling

value proposition for our customers, and we intend to continue to grow our business through organic revenue growth and business acquisitions.

We consider the attributes of our Service segment, which include higher gross margins and recurring revenue streams from customers in

regulated industries to be more compelling and scalable than our legacy Distribution segment.

For this reason, we expect our Service

segment to be the primary source of revenue and earnings growth in future fiscal years.

The charts below illustrate Service, Distribution

and consolidated revenue over the past five years:

Calibration is the act of comparing a unit or instrument of unknown value to a standard of known value and reporting the result

in some specifically defined form.

After the calibration has been completed, a decision is made, based on rigorously defined parameters,

regarding what, if anything, should be done to the unit to conform to the required standards or specifications.

The decision may be to

adjust, optimize or repair a unit;

limit the use, range or rating of a unit;

scrap the unit;

or leave the unit as is.

The purpose of calibration is to significantly reduce the risk

of product or process failures caused by inaccurate measurements.

to its being an element of quality control and risk management, calibration improves an operation’s productivity and efficiency

to optimal levels by assuring accurate, reliable instruments and processes.

The need for calibration is often driven by regulation, which identifies

a requirement for quality calibration and laboratory instrument services as a critical component of a company’s business operation.

We specifically target industries and companies that are regulated by the FDA, FAA or other regulatory bodies.

As a result of the various

levels of regulation within our target industries, our customers’ calibration and laboratory instrument service sourcing decisions

are generally made based on the provider’s quality systems, accreditation, reliability, trust, customer service and documentation

To maintain our competitive position in this segment, we maintain internationally recognized third-party accredited quality

systems, further detailed in the section entitled “Service Quality” below, and provide our customers with access to proprietary

asset management software solutions, which offer tools to manage their internal calibration programs and provide them with visibility

to their service records.

Through our Service segment, we perform recurring periodic calibrations

(typically ranging from three-month to twenty-four month intervals) on new and customer-owned instruments.

We perform approximately 700,000

calibrations annually and can address a significant majority of the items requested to be calibrated with our in-house capabilities.

customers’ calibration needs in less common and highly specialized disciplines, we subcontract some calibrations to third-party

vendors that have unique or proprietary capabilities.

While typically representing approximately 13% to 15% of our Service segment revenue,

we believe the management of these items is highly valued by our customers and providing this service has enabled us to continue our pursuit

of having the broadest calibration offerings in these targeted markets.

We regularly review outsourced services to identify opportunities

for in-house capability expansion.

Compliance Services.

Our compliance services include analytical

qualification, validation, remediation and preventative maintenance services.

Our analytical qualification and validation services provide

a comprehensive and highly specialized service offering focused on life science-related industries.

Analytical qualifications and validation

services include validations to specifically documented protocols that are commonly used in highly-regulated life science industries including

installation qualification (“IQ”), operational qualification (“OQ”), and performance qualification (“PQ”).

Most of the demand for our qualification, validation and preventative maintenance services comes from companies and institutions engaged

in pharmaceutical manufacturing and research and development.

Our goal is to deliver specialized technical services with a quality assurance

approach, which maximizes document accuracy and on-time job delivery.

These industries demand knowledgeable contract services, and Transcat

meets these demands with current good manufacturing practice (“cGMP”) and good laboratory practice (“GLP”) compliant

Companies within these innovative and cutting-edge life science industries need a reliable alternative to the OEMs and the “generalist”

service providers who cannot meet their industry-specific needs.

We believe our value proposition to the life science industries is unique

as a result of offering a comprehensive suite of both traditional calibration and laboratory instrument and other analytical services.

Analytical qualifications and preventative maintenance services are typically

based on service agreements for periodic service and tend to generate recurring revenue.

Some validation services are based on certain

customer processes.

While some validation services may not be repeated, we generally develop relationships with these customers that lead

to demand for additional unique validation services.

Remediation services are based on specific regulatory actions and are generally project-based

and required by a customer for a finite period of time.

Remediation revenue is not recurring by its nature.

Other Services.

We provide other services to our customers

such as inspection, repair and consulting services, which appeal to customers across all sectors in our customer base.

These are generally

value-added services and allow us to provide “one-stop shopping” for our customers.

Service Value Proposition.

Our calibration services strategy

encompasses multiple ways to manage a customer’s calibration and laboratory instrument service needs:

We offer an “Integrated Calibration Service Solution” that provides a complete wrap-around

service, which can be delivered in the following ways:

The purpose of

calibration is to significantly reduce the risk of product or process failures caused by inaccurate measurements.

In addition to its

being an element of quality control and risk management, calibration improves an operation’s productivity and efficiency to optimal

levels by assuring accurate, reliable instruments and processes.

need for calibration is often driven by regulation, which identifies a requirement for quality calibration and laboratory instrument

services as a critical component of a company’s business operation.

We specifically target industries and companies that are regulated

FDA, FAA or other regulatory bodies.

As a result of the various levels of regulation within our target industries, our customers’

calibration and laboratory instrument service sourcing decisions are generally made based on the provider’s quality systems, accreditation,

reliability, trust, customer service and documentation of services.

To maintain our competitive position in this segment, we maintain

internationally recognized third-party accredited quality systems, further detailed in the section entitled “Service Quality”

below, and provide our customers with access to proprietary asset management software solutions, which offer tools to manage their internal

calibration programs and provide them with visibility to their service records.

our Service segment, we perform recurring periodic calibrations (typically ranging from three-month to twenty-four month intervals) on

new and customer-owned instruments.

We perform approximately 800,000 calibrations annually and can address a significant majority of

the items requested to be calibrated with our in-house capabilities.

For customers’ calibration needs in less common and highly

specialized disciplines, we subcontract some calibrations to third-party vendors that have unique or proprietary capabilities.

typically representing approximately 13% to 15% of our Service segment revenue, we believe the management of these items is highly valued

by our customers and providing this service has enabled us to continue our pursuit of having the broadest calibration offerings in these

targeted markets.

We regularly review outsourced services to identify opportunities for in-house capability expansion.

NEXA provides technical, consulting, and staffing solutions in the US, Canada, Ireland, Europe, and Asia Pacific

to improve asset management programs for our most highly-regulated customers, especially those in the pharmaceutical, biotechnology,

and medical device industries.

NEXA offers six service tracks that support the creation or optimization of our client’s enterprise

asset management program.

Whether a facility is in preconstruction, operational or decommissioning stage, NEXA’s experienced teams

can deliver results in all

phases of the asset lifecycle.

NEXA’s full suite of services or combination solutions are customizable

to meet our customer’s unique needs.

We provide other services to our customers such as inspection, repair and consulting services, which appeal to customers

across all sectors in our customer base.

These are generally value-added services and allow us to provide “one-stop shopping”

for our customers.

Value Proposition.

Our calibration services strategy encompasses multiple ways to manage a customer’s calibration and laboratory

instrument service needs:

We offer an “Integrated Calibration Service Solution” that provides a complete wrap-around service, which can be delivered in the following ways:

in-house services:

services are performed at one of our twenty-two

Calibration Service Centers (often accompanied by pick-up and delivery services);

services are performed at one of our twenty-four Calibration Service Centers (often accompanied by pick-up and delivery services);

periodic onsite services:

Transcat technicians travel to a customer’s

location, including aboard vessels docked at shipyards, and provide bench-top or in-line calibration or laboratory services on predetermined

service cycles;

Transcat technicians travel to a customer’s location, including aboard vessels docked at shipyards, and provide bench-top or in-line calibration or laboratory services on predetermined service cycles;

client-based-laboratory services:

Transcat establishes and manages

a calibration service program within a customer’s facility;

Transcat establishes and manages a calibration service program within a customer’s facility;

mobile calibration services:

services are completed on a customer’s

property within one of our mobile calibration units.

services are completed on a customer’s property within one of our mobile calibration units.

For companies that maintain an internal calibration operation, we can provide:

calibration of their primary calibration assets, also called “standards”;

overflow capability, either onsite or at one of our Calibration Service Centers, during periods

of high demand.

Inclusive with all the above services, we provide total program management

including logistics, remediation and consultation services when needed.

We strive to provide the broadest accredited calibration offering to our

targeted markets, which includes certification of our technicians pursuant to the American Society for Quality standards, complete calibration

management encompassing the entire metrology function, and access to our complementary service and product offerings.

We believe our calibration

services are of the highest technical and quality levels, with broad ranges of accreditation.

Our Compliance Services strategy is to identify and establish long-term

relationships with life science research and development and manufacturing customers who require analytical qualifications, validation,

remediation and/or preventative maintenance services.

In most cases, these customers are life science companies, including pharmaceutical

and biotechnology companies engaged in research and development and manufacturing, which are subject to extensive government regulation.

The services we provide to these regulated customers are typically a critical component of the customer’s overall compliance program.

Because many laboratory instrument service customers operate in regulated industries, these same customers typically also require accredited

calibration services.

This requirement allows a natural synergy between our laboratory instrument and calibration services.

includes cross-selling our services within our customer accounts to maximize our revenue opportunities with each customer.

Proprietary Asset Management Software.

CalTrak® is our

proprietary documentation and asset management software which is used to integrate and manage both the workflow of our Calibration Service

Centers and our customers’ assets.

With CalTrak®, we are able to provide our customers with timely and consistent calibration

service while optimizing our own efficiencies.

CalTrak® has been validated to U.S.

federal regulations 21 CFR Part 820.75 and 21

CFR Part 11, as applicable.

This validation is important to pharmaceutical and other FDA-regulated industries where federal regulations

can be particularly stringent.

Additionally, C3® provides our customers with web-based asset management

capability and a safe and secure off-site archive of calibration and other service records that can be accessed 24 hours a day through

our secure password-protected website.

C3® stands for Compliance, Control and Cost, and we see these as the major areas of focus

for our clients within the regulatory environment as it relates to instrument calibration.

We specifically designed C3® to assist

our customers in increasing efficiency, driving compliance to quality system and enhancing control of instrumentation, all while bringing

their overall metrology costs down.

Understanding the regulated environments that our clients operate within, we customized the platform

to allow for single system of record utilization via capabilities that allow clients to track and manage instruments maintained internally

in addition to instruments supported by Transcat.

C3® is validated to 21 CFR Part 820.75 and 21 CFR Part 11 to meet stringent FDA

overflow capability, either onsite or at one of our Calibration Service Centers, during periods of high demand.

Enterprise Asset Management

Calibration – criticality risk assessment;

calibration interval analysis;

calibration plans/task lists;

planning and scheduling.

Maintenance and Spares – PM optimization;

spares/BOM management;

PM plans/task lists;

planning and scheduling.

Reliability – asset criticality assessments;

asset hierarchy development;

PdM plans/task lists;

CMMS – implementation and migration;

data optimization;

business intelligence;

CMMS KPIs/reporting.

Quality and Compliance – technical writing;

compliance audits;

compliance management.

Validation – validation master plan;

confidence assessment model;

validation interval analysis;

validation method/process optimization.

with all the above services, we provide total program management including logistics, remediation and consultation services when needed.

strive to provide the broadest accredited calibration offering to our targeted markets, which includes certification of our technicians

pursuant to the American Society for Quality standards, complete calibration management encompassing the entire metrology function, and

access to our complementary service and product offerings.

We believe our calibration services are of the highest technical and quality

levels, with broad ranges of accreditation.

compliance services strategy is to identify and establish long-term relationships with life science research and development and manufacturing

customers who require analytical qualifications, validation, remediation and/or preventative maintenance services.

In most cases, these

customers are life science companies, including pharmaceutical and biotechnology companies engaged in research and development and manufacturing,

which are subject to extensive government regulation.

The services we provide to these regulated customers are typically a critical component

of the customer’s overall compliance program.

Because many laboratory instrument service customers operate in regulated industries,

these same customers typically also require accredited calibration services.

This requirement allows a natural synergy between our laboratory

instrument and calibration services.

Our strategy includes cross-selling our services within our customer accounts to maximize our revenue

opportunities with each customer.

Asset Management Software.

CalTrak® is our proprietary documentation and asset management software which is used to integrate

and manage both the workflow of our Calibration Service Centers and our customers’ assets.

With CalTrak®, we are able to provide

our customers with timely and consistent calibration service while optimizing our own efficiencies.

CalTrak® has been validated to

federal regulations 21 CFR Part 820.75 and 21 CFR Part 11, as applicable.

This validation is important to pharmaceutical and other

FDA-regulated industries where federal regulations can be particularly stringent.

Additionally,

C3® provides our customers with web-based asset management capability and a safe and secure off-site archive of calibration and other

service records that can be accessed 24 hours a day through our secure password-protected website.

C3® stands for Compliance, Control

and Cost, and we see these as the major areas of focus for our clients within the regulatory environment as it relates to instrument

We specifically designed C3® to assist our customers in increasing efficiency, driving compliance to quality system

and enhancing control of instrumentation, all while bringing their overall metrology costs down.

Understanding the regulated environments

that our clients operate within, we customized the platform to allow for single system of record utilization via capabilities that allow

clients to track and manage instruments maintained internally in addition to instruments supported by Transcat.

C3® is validated

to 21 CFR Part 820.75 and 21 CFR Part 11 to meet stringent FDA requirements.

CalTrak® and C3®, each customer calibration is tracked and automatically cross-referenced to the assets used to perform the calibration,

providing traceability.

Marketing and Sales.

Under our integrated sales model, we have both inside and outside sales teams that seek to acquire new customers

in our targeted markets by leveraging our unique value proposition, including our broad geographic footprint and comprehensive suite

We target regulated, enterprise customers with multiple manufacturing operations throughout North America.

We leverage our

ability to manage the complete life cycle of instrumentation from purchase of calibrated equipment to long-term service and maintenance

requirements.

Through CalTrak® and C3®, each customer calibration is tracked

and automatically cross-referenced to the assets used to perform the calibration, providing traceability.

Service Marketing and Sales.

Under our integrated sales model,

we have both inside and outside sales teams that seek to acquire new customers in our targeted markets by leveraging our unique value

proposition, including our broad geographic footprint and comprehensive suite of services.

We target regulated, enterprise customers with

multiple manufacturing operations throughout North America.

We leverage our ability to manage the complete life cycle of instrumentation

from purchase of calibrated equipment to long-term service and maintenance requirements.

Connecting all the dots by using new and used

product sales, rentals, and repair and calibration services is the goal

of our marketing and sales initiatives.

We also have a team of customer

success managers focused on delivering ever-increasing value for our existing customers.

We utilize print media, trade shows and web-based

initiatives to market our services to customers and prospective customers with a strategic focus in the highly regulated industries including

life science and other FDA-regulated industries, aerospace and defense, energy and utilities, and chemical manufacturing.

We also target

industrial manufacturing and other industries that appreciate the value of quality calibrations.

Service Competition .

The calibration services industry

is highly fragmented and is composed of companies ranging from internationally recognized and accredited OEMs, to non-accredited sole

proprietors as well as companies that perform their own calibrations in-house, resulting in a tremendous range of service levels and capabilities.

A large percentage of calibration companies are small businesses that generally do not have a range of capabilities as broad as ours.

There are also several companies with whom we compete that have national or regional operations.

We differentiate ourselves from our competitors by demonstrating our commitment

to quality, having a wide range of capabilities that are tailored to the markets we serve, having a geographical footprint that spans

North America and providing a comprehensive suite of services that spans many manufacturers and is not limited to certain product lines

Our unique ability to bundle our products with our compliance and calibration services also provides a high level of differentiation

from our competitors.

As one of the only North American compliance and calibration service providers who also distributes product, our

customers can seamlessly replace instruments that cannot be calibrated or are otherwise deemed to be at end of life.

Our close knowledge

of the products we distribute also allows our service staff to consult and advise customers on what products are best suited for their

in-house calibration needs.

Connecting all the dots by using new and used product sales, rentals, and repair and calibration services is the goal of

our marketing and sales initiatives.

We also have a team of customer success managers focused on delivering ever-increasing value for

our existing customers.

We utilize print media, trade shows and web-based initiatives to market our services to customers and prospective

customers with a strategic focus in the highly regulated industries including life science and other FDA-regulated industries, aerospace

and defense, energy and utilities, and chemical manufacturing.

We also target industrial manufacturing and other industries that appreciate

the value of quality calibrations.

Competition .

The calibration services industry is highly fragmented and is composed of companies ranging from internationally

recognized and accredited OEMs to non-accredited sole proprietors as well as companies that perform their own calibrations in-house,

resulting in a tremendous range of service levels and capabilities.

A large percentage of calibration companies are small businesses

that generally do not have a range of capabilities as broad as ours.

There are also several companies with whom we compete that have

national or regional operations.

differentiate ourselves from our competitors by demonstrating our commitment to quality, expanding upon the largest 17025 scope of accreditation

and calibration capabilities of any commercial calibration laboratory that are tailored to the markets we serve, leveraging a geographical

footprint that spans North America and Puerto Rico providing a comprehensive suite of services that spans many disciplines and hundreds

of manufacturers which is not limited to certain product lines or brands.

Our unique ability to bundle our products with our compliance

and calibration services also provides a high level of differentiation from our competitors.

As one of the only North American compliance

and calibration service providers who also distributes product, our customers can seamlessly replace instruments that cannot be calibrated

or are otherwise deemed to be at end of life.

Our close knowledge of

products we distribute also allows our service staff to consult and advise customers on what products are best suited for their in-house

calibration needs.

We also believe that our proprietary software is a key differentiator from our competitors.

and C3® are utilized by our customers in an integrated manner, providing a competitive barrier as customers realize synergies and

efficiencies as a result of this integration.

In fiscal year 2020, we invested in a software solution for the automation

of calibration procedures and datasheet generation.

We are in the testing phases with the rollout for the first set of calibration disciplines.

In fiscal year 2022, we expect to make significant investments in capital equipment, technology, and human resources to increase automation

in performing calibration services.

We believe automation will deliver the next step change in productivity, improve customer experience

in turnaround time and quality, and increase the flexibility of our workforce.

In addition, we have expanded our range of capabilities

by making significant capital and staffing investments in reference-level radio frequency/microwave (“RF/Microwave”) calibration

capabilities.

This allowed us to increase business with our prestigious clients in the enterprise computer manufacturing and aerospace

and defense sectors.

In fiscal year 2021, we made additional capital investments to expand RF/Microwave capability to the East Coast region

of the United States.

Also, we grew our mobile calibration laboratory fleet and added the ability to carry inventory and sell products

while onsite.

This was done to strategically target onsite calibration and instrument sales to the wind energy sector.

We believe this

mobile approach combined with our high-quality services significantly improves our differentiation in this space.

Competition for laboratory instrument services is composed of both small

local and regional service providers and large multi-national OEMs.

We believe we are generally financially stronger, service a larger

customer base and are typically able to offer a larger suite of services than many of the small local and regional competitors.

OEMs may offer specialized services and brand-specific expertise which we do not offer, but they are generally focused on providing specialized

services only for their proprietary brands and product lines, rather than servicing an array of brands and product lines as we do.

believe our competitive advantages in the laboratory instrument services market are our financial and technical resources, turnaround

time, and flexibility to react quickly to customers’ needs.

The breadth of our suite of laboratory instrument service, combined

with our calibration service offerings, also differentiates us from our competitors by allowing us to be our customers’ one-source

accredited services provider for their entire calibration and compliance programs.

Service Quality.

The accreditation process is the only

system currently in existence that validates measurement competence.

To ensure that the quality and consistency of our calibrations are

consistent with the global metrology network, designed to standardize measurements worldwide, we have sought and achieved international

levels of quality and accreditation to provide uniformity across all locations with advanced levels of training for our technical staff.

Our Calibration Service Centers are accredited to ISO/IEC 17025:2017 by ANSI-ASQ National Accreditation Board (“ANAB”) and

other accrediting bodies.

These accrediting bodies are International Laboratory Accreditation Cooperation Mutual Recognition Arrangement

(“ILAC MRA”) signatories, are proficient in the technical aspects of the chemistry and physics that underlie metrology, and

provide an objective, third-party, internationally accepted evaluation of the quality, consistency, and competency of our calibration

Accreditation also requires that all measurement standards used for accredited measurements have a fully documented path, known

as Metrological

Traceability, through the National Institute of Standards and Technology

or the National Research Council (the National Measurement Institutes for the United States and Canada, respectively), or to other national

or international standards bodies, or to measurable conditions created in our Calibration Service Centers, or accepted fundamental and/or

natural physical constants, ratio type of calibration, or by comparison to consensus standards, all inclusive of measurement uncertainties.

The importance of this international oversight to our customers is the

assurance that our service documentation will be accepted worldwide, removing one of the barriers to trade that they may experience if

using a calibration laboratory provider whose accrediting body is not an ILAC MRA signatory.

To provide the widest range of services to

our customers in our target markets, our ISO/IEC 17025:2017 accreditations extend across many technical disciplines, including working-level

and reference-level capabilities.

We believe our scope of accreditation to ISO/IEC 17025:2017 to be the broadest for the industries we

To reinforce our belief in the importance of calibration quality, we are

leveraging a branding campaign for our Service segment that is centered around three simple words – “Calibrated by Transcat®”.

We believe we have established a strong, differentiated brand that has a deep and meaningful association with quality, compliance and

We want the phrase “Calibrated by Transcat®” to be synonymous with risk reduction and quality compliance.

Acquired calibration labs might use other quality registration systems.

We continually evaluate when to integrate acquired quality systems with the focus on minimizing business disruptions and disruptions to

our customers while maintaining our commitment to quality.

Our scopes of accreditation can be found at http://www.transcat.com/calibration-services/accreditation/calibration-lab-certificates.

Distribution Segment

Distribution Summary.

We distribute professional grade test,

measurement and control instrumentation throughout North America and internationally.

Our customers use test and measurement instruments

to ensure that their processes, and ultimately their end products, are within specification.

Utilization of such diagnostic instrumentation

also allows for continuous improvement processes to be in place, increasing the accuracies of their measurements.

The industrial test

and measurement instrumentation market, in those geographic areas where we predominately operate, has historically been serviced by broad-based

national equipment distributors and niche or specialty-focused organizations such as Transcat.

We offer value-added services such as calibration/certification

of equipment purchases, equipment rentals, used equipment for sale, and equipment kitting.

In recent years, online-based distributors

have become more prevalent.

To compete with these online-based distributors more effectively, we have continued to make improvements to

our digital platform, including enhanced e-commerce capabilities.

We believe that a customer chooses a distributor based on a number of different

criteria, including product availability, price, ease of doing business, timely delivery and accuracy of orders, consistent product quality,

technical competence of the representative serving them and availability of value-added services.

The decision to buy is generally made

by plant engineers, quality managers, or their purchasing personnel, and products are typically obtained from one or more distributors

as replacements, upgrades, or for expansion of manufacturing and research and development facilities.

As a result, sales to Distribution

customers are somewhat unpredictable and potentially non-recurring.

Our online presence, including our website and e-newsletters;

supplemental mailings and other sales and marketing activities are designed to create interest and maintain a constant presence

in front of our customers to ensure we receive the order when they are ready to purchase.

We provide our customers with value-added services, including technical

support, to ensure our customers receive the right product for their application, and more comprehensive instrument suitability studies

to customers in regulated industries who are concerned about the technical uncertainties that their testing or in-process instruments

may bring to a process.

We consider our biggest value-added service for our Distribution customers is the option to have calibration service

performed on their new product purchases prior to shipment, allowing them to place newly acquired equipment directly into service upon

receipt, saving downtime.

We also offer online procurement, credit card payment options, same day shipment of in-stock items, kitted products,

the option to rent, training programs and a variety of custom product offerings.

Items are regularly added to and deleted from our product

offerings on the basis of customer demand, recommendations of suppliers, sales volumes and other factors.

Because of the breadth of our

product and service offerings, we are often a “one-stop shop” for our customers who gain operational efficiency by dealing

with just one distributor for most or all of their test and measurement instrumentation needs.

Our focus on higher margin channels such as used equipment and rentals

will be a continual focus to bolster profitability in the Distribution segment.

This effort is intended to offset competitive pressures

in our legacy distribution business.

CalTrak® and C3®

are utilized by our customers in an integrated manner, providing a competitive barrier as customers realize synergies and efficiencies

as a result of this integration.

for laboratory instrument services is composed of both small local and regional service providers and large multi-national OEMs.

we are generally financially stronger, service a larger customer base and are typically able to offer a larger suite of services than

many of the small local and regional competitors.

The large OEMs may offer specialized services and brand-specific expertise which we

do not offer, but they are generally focused on providing specialized services only for their proprietary brands and product lines, rather

than servicing an array of brands and product lines as we do.

We believe our competitive advantages in the laboratory instrument services

market are our financial and technical resources, turnaround time, and flexibility to react quickly to customers’ needs.

of our suite of laboratory instrument service, combined with our calibration service offerings, also differentiates us from our competitors

by allowing us to be our customers’ one-source accredited services provider for their entire calibration and compliance programs.

The accreditation process is the only system currently in existence that validates measurement competence.

ensure that the quality and consistency of our calibrations are consistent with the global metrology network, designed to standardize

measurements worldwide, we have sought and achieved international levels of quality and accreditation to provide uniformity across all

locations with advanced levels of training for our technical staff.

Our Calibration Service Centers are accredited to ISO/IEC 17025:2017

by ANSI-ASQ National Accreditation Board (“ANAB”) and other accrediting bodies.

These accrediting bodies are International

Laboratory Accreditation Cooperation Mutual Recognition Arrangement (“ILAC MRA”) signatories, are proficient in the technical

aspects of the chemistry and physics that underlie metrology, and provide an objective, third-party, internationally accepted evaluation

of the quality, consistency, and competency of our calibration processes.

Accreditation also requires that all measurement standards

used for accredited measurements have a fully documented path, known as Metrological Traceability, through the National Institute of

Standards and Technology or the National Research Council (the National Measurement Institutes for the United States and Canada, respectively),

or to other national or international standards bodies, or to measurable conditions created in our Calibration Service Centers, or accepted

fundamental and/or natural physical constants, ratio type of calibration, or by comparison to consensus standards, all inclusive of measurement

uncertainties.

importance of this international oversight to our customers is the assurance that our service documentation will be accepted worldwide,

removing one of the barriers to trade that they may experience if using a calibration laboratory provider whose accrediting body is not

an ILAC MRA signatory.

To provide the widest range of services to our customers in our target markets, our ISO/IEC 17025:2017 accreditations

extend across many technical disciplines, including working-level and reference-level capabilities.

We believe our scope of accreditation

to ISO/IEC 17025:2017 to be the broadest for the industries we serve.

reinforce our belief in the importance of calibration quality, we are leveraging a branding campaign for our Service segment that is

centered around three simple words – “Calibrated by Transcat®”.

We believe we have established a strong, differentiated

brand that has a deep and meaningful association with quality, compliance and control.

We want the phrase “Calibrated by Transcat®”

to be synonymous with risk reduction and quality compliance.

calibration labs might use other quality registration systems.

We continually evaluate when to integrate acquired quality systems with

the focus on minimizing business disruptions and disruptions to our customers while maintaining our commitment to quality.

scopes of accreditation can be found at http://www.transcat.com/calibration-services/accreditation/calibration-lab-certificates.

We distribute professional grade test, measurement and control instrumentation throughout North America and internationally.

Our customers use test and measurement instruments to ensure that their processes, and ultimately their end products, are within specification.

Utilization of such diagnostic instrumentation also allows for continuous improvement processes to be in place, increasing the accuracies

of their measurements.

The industrial test and measurement instrumentation market, in those geographic areas where we predominately operate,

has historically been serviced by broad-based national equipment distributors and niche or specialty-focused

organizations such as Transcat.

We offer value-added services such as calibration/certification of equipment purchases, equipment rentals, used equipment for sale, and

equipment kitting.

believe that a customer chooses a distributor based on a number of different criteria, including product availability, price, ease of

doing business, timely delivery and accuracy of orders, consistent product quality, technical competence of the representative serving

them and availability of value-added services.

The decision to buy is generally made by plant engineers, quality managers, or their purchasing

personnel, and products are typically obtained from one or more distributors as replacements, upgrades, or for expansion of manufacturing

and research and development facilities.

As a result, sales to Distribution customers are somewhat unpredictable and potentially non-recurring.

Our online presence, including our website and e-newsletters, master catalog, supplemental mailings, and other sales and marketing activities

are designed to create interest and maintain a constant presence in front of our customers to ensure we receive the order when they are

ready to purchase.

provide our customers with value-added services, including technical support, to ensure our customers receive the right product for their

application, and more comprehensive instrument suitability studies to customers in regulated industries who are concerned about the technical

uncertainties that their testing or in-process instruments may bring to a process.

We consider our biggest value-added service for our

Distribution customers is the option to have calibration service performed on their new product purchases prior to shipment, allowing

them to place newly acquired equipment directly into service upon receipt, saving downtime.

We also offer online procurement, credit

card payment options, same day shipment of in-stock items, kitted products, the option to rent, training programs and a variety of custom

product offerings.

Items are regularly added to and deleted from our product offerings on the basis of customer demand, recommendations

of suppliers, sales volumes and other factors.

Because of the breadth of our product and service offerings, we are often a “one-stop

shop” for our customers who gain operational efficiency by dealing with just one distributor for most or all of their test and

measurement instrumentation needs.

continue to focus on higher margin channels such as rentals to bolster profitability in the Distribution segment.

To remain competitive,

we are focusing on brand consolidation along with inventory investments to support our overall strategy of being a value-added distributor

that supports our customers and Service segment.

Additional areas of focus include consumable products within the life science market

which is intended to offset competitive pressures in our legacy distribution business.

Marketing and Sales.

We market, create demand and

sell to our customers through multiple direct sales channels including our website, digital and print advertising, proactive outbound

sales and an inbound call center.

Our outbound and inbound sales teams are staffed with technically trained personnel who are available

to help guide product selection.

Our website serves as a sales channel for our products and services, and provides search capability,

detailed product information, in-stock availability, selection guides, demo videos and downloadable product specification sheets.

made investments in our website to implement the latest marketing technologies which allow us to provide an intuitive customer experience,

with simple product comparison and quoting, ease at checkout and automated post-order follow-up.

We also operate and maintain several

industry-specific service websites, obtained through recent acquisitions.

For example, the URL www.pipettes.com was obtained in connection

with the acquisition of TTE (now known as pipettes.com).

Pipettes.com focuses on selling pipettes, pipette supplies and related services

to customers.

Within our fiscal year 2021, we were able to increase our distribution sales at pipettes.com through enhancements of the

website and leveraging our historical base of customers.

We use a multichannel approach to reach our customers and prospective customers

including our master catalog, periodic supplemental catalogs, website, e-newsletters, and other direct sales and marketing programs.

Our digital marketing strategy includes ongoing investment in search engine optimization, application-specific digital content, pay-per-click

search engine advertising, and product listings on online marketplaces such as Amazon and Google Shopping.

We continue to invest in back-end

technologies designed to provide a seamless customer experience across all our marketing channels.

During fiscal year 2021, we proactively

communicated with our customers and prospective customers through direct mail catalogs, email newsletters, vertical email drip campaigns,

retargeting ads, educational webinars, and outbound sales calls.

Some of the key factors that determine the marketing materials

a customer may receive include relevancy of new product introductions, current promotions, purchase history, the customer’s market

segment, and the contact’s job function.

As a result of strong relationships with our product vendors and our historical

marketing program results, we have the opportunity to carry out co-branded marketing initiatives, aimed at our existing customers and

our prospective customer base, for which we receive cooperative advertising support.

These co-branded marketing initiatives typically

feature specific vendors, new products or targeted product categories and take the form of direct mailers, web-based initiatives or outbound

sales efforts.

Distribution Competition.

The distribution market for industrial

test and measurement instrumentation is fragmented and highly competitive.

Our competitors range from large national distributors and

manufacturers that sell directly to customers to small local distributors and online distributors.

Key competitive factors typically include

customer service and support, quality, lead time, inventory availability, brand recognition and price.

To address our customers’

needs for technical support and product application assistance, we employ a staff of highly trained technical sales specialists.

to maintain this competitive advantage, technical training is an integral part of developing our sales staff.

To differentiate ourselves

from competitors, we offer pre-shipment calibration or performance data reports which allow customers to receive our products and immediately

place them into service, saving them downtime and money.

Online distributors, including Amazon which sells lower price-point products,

have become prominent competitors for sales of handheld test and measurement equipment, competing primarily on price.

While online competitors

lack the value-added services we offer in our Distribution segment, they have been successful in capturing some market share in the worldwide

market for test and measurement instruments.

To stay ahead of growing competition from these online distributors and in keeping with the

general trend of increased use of e-commerce, we continue to invest in our digital platform including a well-indexed website with improved

design and functionality.

In addition, we have diversified our offerings by expanding the brands and product lines that we offer and adding

higher gross margin equipment rentals and used equipment sales, which we believe makes Transcat unique among our competitors.

Distribution Suppliers and Purchasing.

We believe that effective

purchasing is a key element to maintaining and enhancing our position as a provider of high-quality test and measurement instruments.

We frequently evaluate our purchase requirements and suppliers’ offerings to obtain products at the best possible cost.

our products from approximately 500 suppliers of brand name and private-labeled equipment.

In fiscal year 2021, our top 10

vendors accounted for approximately 63% of our aggregate Distribution sales.

In fiscal year 2021, the COVID-19 pandemic impacted the supply of products from our vendors resulting in increased lead times and an increase

We market, create demand and sell to our customers through multiple direct sales channels including our

website, digital and print advertising, proactive outbound sales and an inbound call center.

Our outbound and inbound sales teams are

staffed with technically trained personnel who are available to help guide product selection.

Our website serves as a sales channel for

our products and services, and provides search capability, detailed product information, in-stock availability, selection guides, demo

videos and downloadable product specification sheets.

We have made investments in our website to implement the latest marketing technologies

which allow us to provide an intuitive customer experience, with simple product comparison and quoting, ease at checkout and automated

post-order follow-up.

We also operate and maintain several industry-specific service websites, obtained through recent acquisitions.

For example, the URL www.pipettes.com was obtained in connection with the acquisition of TTE (now known as pipettes.com).

focuses on selling pipettes, pipette supplies and related services to customers.

use a multichannel approach to reach our customers and prospective customers including our master catalog, periodic supplemental catalogs,

website, e-newsletters, and other direct sales and marketing programs.

Our digital marketing strategy includes ongoing investment

in search engine optimization, application-specific digital content, pay-per-click search engine advertising, and product listings on

online marketplaces such as Amazon and Google Shopping.

We continue to invest in back-end technologies designed to provide a seamless

customer experience across all our marketing channels.

a result of strong relationships with our product vendors and our historical marketing program results, we have the opportunity to carry

out co-branded marketing initiatives, aimed at our existing customers and our prospective customer base, for which we receive cooperative

advertising support.

These co-branded marketing initiatives typically feature specific vendors, new products or targeted product categories

and take the form of direct mailers, web-based initiatives or outbound sales efforts.

The distribution market for industrial test and measurement instrumentation is fragmented and highly competitive.

Our competitors range from large national distributors and manufacturers that sell directly to customers to small local distributors

and online distributors.

Key competitive factors typically include customer service and support, quality, lead time, inventory availability,

brand recognition and price.

address our customers’ needs for technical support and product application assistance, we employ

a staff of highly trained technical sales specialists.

In order to maintain this competitive advantage, technical training is an integral

part of developing our sales staff.

To differentiate ourselves from competitors, we offer pre-shipment calibration or performance data

reports which allow customers to receive our products and immediately place them into service, saving them downtime and money.

distributors, including Amazon which typically sells lower price-point products, have become prominent competitors for sales of handheld

test and measurement equipment, competing primarily on price.

While online competitors lack the value-added services we offer in our

Distribution segment, they have been successful in capturing some market share in the worldwide market for test and measurement instruments.

To stay ahead of growing competition from these online distributors and in keeping with the general trend of increased use of e-commerce,

we continue to invest in our digital platform including a well-indexed website with improved design and functionality.

In addition, we

have diversified our offerings by expanding the brands and product lines that we offer and adding higher gross margin equipment rentals

and used equipment sales, which we believe makes Transcat unique among our competitors.

Suppliers and Purchasing.

We believe that effective purchasing is a key element to maintaining and enhancing our position as

a provider of high-quality test and measurement instruments.

We frequently evaluate our purchase requirements and suppliers’ offerings

to obtain products at the best possible cost.

We obtain our products from approximately 500 suppliers of brand name and private-labeled

In fiscal year 2022, our top 10 vendors accounted for approximately 64% of our aggregate Distribution sales.

fiscal year 2022, the COVID-19 pandemic impacted the supply of products from our vendors resulting in increased lead times and an increase

in our backlog.

We plan our product mix and inventory stock to best serve the anticipated

needs of our customers, whose individual purchases vary in size.

We can usually ship our top selling products to our customers the same

day they are ordered.

Distribution Vendor Rebates.

We have agreements with certain

product vendors that provide for rebates based on meeting a specified cumulative level of purchases and/or incremental distribution sales.

plan our product mix and inventory stock to best serve the anticipated needs of our customers, whose individual purchases vary in size.

We can usually ship our top selling products to our customers the same day they are ordered.

Vendor Rebates.

We have agreements with certain product vendors that provide for rebates based on meeting a specified cumulative

level of purchases and/or incremental distribution sales.

These rebates are recorded as a reduction of cost of distribution sales.

Purchase rebates are calculated and recorded quarterly

based upon our volume of purchases with specific vendors during the quarter.

Point of sale rebate programs that are based on year-over-year

sales performance on a calendar year basis are recorded as earned, on a quarterly basis, based upon the estimated level of annual achievement.

Point of sale rebate programs that are based on year-over-year sales performance on a quarterly basis are recorded as earned in the respective

In fiscal 2021, vendors reduced these rebate programs to lower their own costs in response to the COVID-19 pandemic.

recorded vendor rebates of $0.7 million and $1.6 million in fiscal years 2021 and 2020, respectively, as a reduction of cost of distribution

Distribution Operations.

Our Distribution operations primarily

take place at our 48,500 square-foot facility in Rochester, New York which includes 17,000 square feet of warehouse space.

The Rochester

location also serves as our corporate headquarters, houses our customer service, sales and administrative functions, and is a Calibration

Service Center.

rebates are calculated and recorded quarterly based upon our volume of purchases with specific vendors during the quarter.

of sale rebate programs that are based on year-over-year sales performance on a calendar year basis are recorded as earned, on a quarterly

basis, based upon the estimated level of annual achievement.

Point of sale rebate programs that are based on year-over-year sales performance

on a quarterly basis are recorded as earned in the respective quarter.

Rebates had been cut significantly in fiscal year 2021 as our

vendors implemented cost cutting measures in response to the COVID-19 pandemic.

During fiscal year 2022, our Distribution sales were

high enough that we saw an increase in the rebates offered by our vendors.

The Company recorded vendor rebates of $1.0 million and $0.7

million in fiscal years 2022 and 2021, respectively, as a reduction of cost of distribution sales.

Our Distribution operations primarily take place at our 48,500 square-foot facility in Rochester, New York which

includes 17,000 square feet of warehouse space.

The Rochester location also serves as our corporate headquarters, houses our customer

service, sales and administrative functions, and is a Calibration Service Center.

We also have two smaller warehouse facilities.

Our Wisconsin warehouse fulfills orders for certain large industrial scales

and our Houston, Texas warehouse fulfills orders for used equipment and rental equipment.

In fiscal year 2021, we shipped approximately

26,000 product orders.

Distribution Backlog .

Distribution orders include

orders for instruments that we routinely stock in our inventory, customized products, and other products ordered less frequently, which

we do not stock.

Pending product shipments are primarily backorders, but also include products that are requested to be calibrated in

one of our Calibration Service Centers prior to shipment, orders required by the customer to be shipped complete or at a future date,

and other orders awaiting final credit or management review prior to shipment.

Our total backlog was $6.3 million and $4.3 million as

of March 27, 2021 and March 28, 2020, respectively.

CUSTOMER SERVICE AND SUPPORT

Key elements of our customer service approach are our business development

sales team, outbound sales team, account management team, inbound sales and customer service organization.

To ensure the quality of service

provided, we monitor our customer service through customer surveys, call monitoring and daily statistical reports.

Customers may place orders via:

Mail to Transcat, Inc., 35 Vantage Point Drive, Rochester, NY 14624;

Telephone at 1-800-828-1470;

Email at sales@transcat.com;

Online at www.

transcat.com ;

Fax at 1-800-395-0543

INFORMATION REGARDING EXPORT SALES

In fiscal years 2021 and 2020, approximately 10% of our total revenue resulted

from sales to customers outside the United States.

Wisconsin warehouse fulfills orders for certain large industrial scales and our Houston, Texas warehouse fulfills orders for used equipment

and rental equipment.

In fiscal year 2022, we shipped approximately 30,000 product orders.

Distribution orders include orders for instruments that we routinely stock in our inventory, customized products,

and other products ordered less frequently, which we do not stock.

Pending product shipments are primarily backorders, but also include

products that are requested to be calibrated in one of our Calibration Service Centers prior to shipment, orders required by the customer

to be shipped complete or at a future date, and other orders awaiting final credit or management review prior to shipment.

backlog was $7.7 million and $6.3 million as of March 26, 2022 and March 27, 2021, respectively.

SERVICE AND SUPPORT

elements of our customer service approach are our business development sales team, outbound sales team, account management team, inbound

sales and customer service organization.

To ensure the quality of service provided, we monitor our customer service through customer

surveys, call monitoring and daily statistical reports.

may place orders via:

to Transcat, Inc., 35 Vantage Point Drive, Rochester, NY 14624;

at 1-800-828-1470;

at sales@transcat.com;

at www.transcat.com;

at 1-800-395-0543

REGARDING EXPORT SALES

each of fiscal years 2022 and 2021, approximately 10% of our total revenue resulted from sales to customers outside the United States.

Of those export sales in fiscal year 2022, approximately 8% were denominated in U.S.

dollars and the remaining 91% were in Canadian dollars.

Our revenue is subject to the customary risks of operating in an international

environment, including the potential imposition of trade or foreign exchange restrictions, tariff and other tax increases, fluctuations

in exchange rates and unstable political situations, any one or more of which could have a material adverse effect on our business, cash

flows, balance sheet or results of operations.

dollars, 81% were denominated in Canadian dollars

and 11% were denominated in Euros.

Our revenue is subject to the customary risks of operating in an international environment, including

the potential imposition of trade or foreign exchange restrictions, tariff and other tax increases, fluctuations in exchange rates and

unstable political situations, any one or more of which could have a material adverse effect on our business, cash flows, balance sheet

or results of operations.

See “Foreign Currency” in Item 7A.

of Part II and Note 7 to our Consolidated

Financial Statements in this report for further details.

INFORMATION SYSTEMS

We utilize a turnkey enterprise software solution from Infor, Inc.

called Application Plus to manage our business and operations segments.

This software includes a suite of fully integrated modules to

manage our business functions, including customer service, warehouse management, inventory management, financial management, customer

relations management and business intelligence.

This solution is a fully mature business package and has been subject to more than

20 years of refinement.

We utilize customer relationship management (“CRM”) software offered by SalesForce.com, Inc., which

is strategically partnered with Infor, allowing us to fully integrate the CRM software with our Infor enterprise software.

We also utilize CalTrak®, our proprietary document and asset management

system, to manage documentation, workflow and customers’ assets within and amongst most of our Calibration Service Centers.

to functioning as an internal documentation, workflow, and asset management system, CalTrak®, through C3®, provides customers

with web-based calibration cycle management service and access to documentation relating to services completed by Transcat.

Certain recent

acquisitions utilize either third-party or their own proprietary calibration management systems.

We continually evaluate when to integrate

these acquired systems with a focus on obtaining operational synergies while imposing minimal disruption to customers.

INTELLECTUAL PROPERTY

We have federally registered trademarks for Transcat®, CalTrak®,

C3® and Procision™, which we consider to be of material importance to our business.

The registrations for these trademarks

are in good standing with the U.S.

of Part II and Note 7 to our Consolidated Financial Statements

in this report for further details.

utilize a turnkey enterprise software solution from Infor, Inc.

(“Infor”) called Application Plus to manage our business

and operations segments.

This software includes a suite of fully integrated modules to manage our business functions, including

customer service, warehouse management, inventory management, financial management, customer relations management and business

intelligence.

This solution is a fully mature business package and has been subject to more than 20 years of refinement.

customer relationship management (“CRM”) software offered by SalesForce.com, Inc., which is strategically partnered with

Infor, allowing us to fully integrate the CRM software with our Infor enterprise software.

also utilize CalTrak®, our proprietary document and asset management system, to manage documentation, workflow and customers’

assets within and amongst most of our Calibration Service Centers.

In addition to functioning as an internal documentation, workflow,

and asset management system, CalTrak®, through C3®, provides customers with web-based calibration cycle management service and

access to documentation relating to services completed by Transcat.

Certain recent acquisitions utilize either third-party or their own

proprietary calibration management systems.

We continually evaluate when to integrate these acquired systems with a focus on obtaining

operational synergies while imposing minimal disruption to customers.

have federally registered trademarks for Transcat®, CalTrak®, C3® and Procision® which we consider to be of material

importance to our business.

The registrations for these trademarks are in good standing with the U.S.

Patent & Trademark Office.

Our CalTrak® trademark is also registered in Canada for one class

with the Canada Intellectual Property Office.

Our trademark registrations must be renewed at various times, and we intend to renew

our trademarks, as necessary, for the foreseeable future.

In addition, we own www.transcat.com, www.transcat.ca and pipettes.com

among other Internet domain names.

As with phone numbers, we do not have, and cannot acquire any property rights to an Internet address.

The regulation of domain names in the United States and in other countries is also subject to change.

Regulatory bodies could establish

additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names.

we might not be able to maintain our domain names or obtain comparable domain names, which could harm our business.

Our business has certain historical seasonal factors.

Historically, our

fiscal third and fourth quarters have been stronger than our fiscal first and second quarters due to the operating cycles of our industrial

sector customers.

Our Distribution segment has historically been strongest in our third fiscal quarter while Service has historically

been strongest in our fourth fiscal quarter.

We operate on a 52/53-week fiscal year, ending the last Saturday in March.

In a 52-week fiscal year, each of the four quarters is a 13-week period.

Our CalTrak® trademark is also registered in Canada for one class with the Canada Intellectual Property Office and in Puerto Rico.

Our trademark registrations must be renewed at various times, and we intend to renew our trademarks, as necessary, for the foreseeable

addition, we own www.transcat.com, www.transcat.ca and pipettes.com among other Internet domain names.

As with phone numbers, we

do not have, and cannot acquire any property rights to an Internet address.

The regulation of domain names in the United States and in

other countries is also subject to change.

Regulatory bodies could establish additional top-level domains, appoint additional domain

name registrars or modify the requirements for holding domain names.

As a result, we might not be able to maintain our domain names or

obtain comparable domain names, which could harm our business.

business has certain historical seasonal factors.

Historically, our fiscal third and fourth quarters have been stronger than our fiscal

first and second quarters due to the operating cycles of our industrial sector customers.

Our Distribution segment has historically been

strongest in our third fiscal quarter while Service has historically been strongest in our fourth fiscal quarter.

operate on a 52/53-week fiscal year, ending the last Saturday in March.

In a 52-week fiscal year, each of the four quarters is a 13-week

In a 53-week fiscal year, the last quarter is a 14-week period.

Fiscal year 2022 and fiscal year 2021 both consisted of 52 weeks.

Fiscal year 2022 which ends on March 26, 2022 (“fiscal year 2022”)

will also have 52 weeks.

ENVIRONMENTAL MATTERS

We believe that we are in compliance with federal, state, and local provisions

relating to the protection of the environment, and that continued compliance will not have any material effect on our capital expenditures,

earnings, or competitive position.

HUMAN CAPITAL MANAGEMENT

As of March 27, 2021, we had 765 employees, of which 685 were employed

in the United States and 80 were employed outside of the United States.

None of our employees are covered by collective bargaining agreements

or work councils.

Overall, we consider our employee relations to be good.

Fiscal year 2023 which ends on March 25, 2023 (“fiscal year 2023”) will also have 52 weeks.

ENVIRONMENTAL

believe that we are in compliance with federal, state, and local provisions relating to the protection of the environment, and that continued

compliance will not have any material effect on our capital expenditures, earnings, or competitive position.

CAPITAL MANAGEMENT

of March 26, 2022, we had 918 employees, of which 812 were employed in the United States and 106 were employed outside of the United

None of our employees are covered by collective bargaining agreements or work councils.

Overall, we consider our employee relations

Our culture is important to the overall success of the Company.

Health and Safety The health and safety of our employees is of utmost

importance to us.

We conduct regular self-assessments and audits to ensure compliance with our health and safety guidelines and regulatory

requirements.

ultimate goal is to achieve a level of work-related injuries as close to

zero as possible through continuous investment in our safety programs.

We provide protective gear (e.g.

eye protection, masks and gloves)

as required by applicable standards and as appropriate given employee job duties.

Additionally, during the COVID-19 pandemic, we have

invested heavily in safety measures and other initiatives to help ensure the health of our employees.

Hiring Practices We recruit the best people for the job without

regard to gender, ethnicity or other protected traits and it is our policy to comply fully with all domestic, foreign and local laws relating

to discrimination in the workplace.

Diversity and Inclusion Recognizing and respecting our international

presence, we strive to maintain a diverse and inclusive workforce everywhere we operate.

Our diversity and inclusion principles are also

reflected in our employee training, in particular with respect to our policies against harassment and bullying and the elimination of

bias in the workplace.

In addition, to support mental health and emotional well-being, all employees

and their dependents worldwide have access to an Employee Assistance Program ("EAP"), at no cost to them.

This includes access

to visits with mental health care providers through the EAP.

Compensation and Benefits Our compensation and benefits program

is designed to attract and reward individuals who demonstrate the skills necessary to support our business objectives, assist in the achievement

of our strategic goals and create long-term value for our shareholders.

We provide employees with compensation packages that include base salary

and may also include annual incentive bonuses and/or long-term incentive awards depending upon the employee’s level.

that a compensation program with both short-term and long-term awards provides fair and competitive compensation and aligns employee and

shareholder interests.

In addition to cash and equity compensation, we also offer employees benefits such as life and health (medical,

dental and vision) insurance, paid time off, paid parental leave, and a 401(k) plan.

In response to the COVID-19 pandemic, we implemented significant changes

that we determined were in the best interest of our employees as well as the communities in which we operate.

This includes having the

vast majority of our corporate employees work from home while also implementing a number of safety measures for employees continuing critical

Employees in our Calibration Service Centers were given additional COVID-19 paid time off as well as incremental pay if they

were required to work offsite at a customer location.

and Safety The health and safety of our employees is of utmost importance to us.

We conduct regular self-assessments and audits

to ensure compliance with our health and safety guidelines and regulatory requirements.

Our ultimate goal is to achieve a level of work-related

injuries as close to zero as possible through continuous investment in our safety programs.

We provide protective gear (e.g., eye protection,

masks, and gloves) as required by applicable standards and as appropriate given employee job duties.

Additionally, in response to the

COVID-19 pandemic, we invested heavily in safety measures and other initiatives to help ensure the health of our employees.

Practices We recruit the best people for the job without regard to race, ethnicity, gender, sexual orientation or any other protected

It is our policy to comply fully with all domestic, foreign and local non-discrimination employment laws.

and Inclusion Recognizing and respecting our employees’ backgrounds and experiences, and our international presence, we

strive to maintain a diverse workforce and inclusive work environment everywhere we operate.

Our diversity and inclusion principles are

also reflected in our employee training, in particular with respect to our policies against harassment and bullying and the elimination

of bias in the workplace.

addition, to support our employees’ mental health and emotional well-being, all employees and their dependents worldwide have access

to an Employee Assistance Program ("EAP"), at no cost to them.

This includes access to visits with mental health care providers.

and Benefits Our compensation and benefits program is designed to attract and reward individuals who demonstrate the ability

to support and advance our operational and strategic goals and create long-term value for our shareholders.

provide employees with compensation packages that include base salary and may also include annual incentive bonuses and/or long-term

incentive awards, depending upon the employee’s position.

We believe that a compensation program with both short-term and long-term

incentive awards provides fair and competitive compensation and aligns employee and shareholder interests.

In addition to cash and equity

compensation, we also offer employees benefits such as life and health (medical, dental and vision) insurance, paid time off, paid parental

leave, and a 401(k) plan.

response to the COVID-19 pandemic, we implemented significant changes that we determined were in the best interest of our employees as

well as the communities in which we operate.

This includes having the vast majority of our corporate employees work from home while also

implementing a number of safety measures for employees continuing critical onsite work.

Employees in our Calibration Service Centers

were given additional paid time off as well as incremental pay if they were required to work offsite at a customer location.

AVAILABLE INFORMATION

We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current

Reports on Form 8-K, proxy statements and other information with the Securities and Exchange Commission (“SEC”).

with the SEC are available on the SEC’s website at www.sec.gov.

We file Annual Reports on Form 10-K, Quarterly Reports on

Form 10-Q, Current Reports on Form 8-K, proxy statements and other information with the Securities and Exchange Commission (“SEC”).

Our filings with the SEC are available on the SEC’s website at www.sec.gov.

We also maintain a website at www.transcat.com.

We make available,

free of charge, in the Investor Relations section of our website, documents we file with or furnish to the SEC, including our Annual Reports

on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports.

We make this information

available as soon as reasonably practicable after we electronically file such materials with, or furnish such information to, the SEC.

The other information found on our website is not part of this or any other report we file with, or furnish to, the SEC.

Copies of such

documents are available in print at no charge to any shareholder who makes a request.

Such requests should be made to our corporate secretary

at our corporate headquarters, 35 Vantage Point Drive, Rochester, New York 14624.

available, free of charge, in the Investor Relations section of our website, documents we file with or furnish to the SEC, including our

Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports.

this information available as soon as reasonably practicable after we electronically file such materials with, or furnish such information

The information found on our website is not part of this or any other report we file with, or furnish to, the SEC.

of such documents are available in print at no charge to any shareholder who makes a request.

Such requests should be made to our corporate

secretary at our corporate headquarters, 35 Vantage Point Drive, Rochester, New York 14624.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business