What changed in this filing

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Item 1. Business

2025-05-27 compared with 2024-05-28 · 60 added, 70 removed, 323 unchanged (29% of the section changed)

12 unchanged sentences

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

customers through our Service and Distribution segments, with approximately

We serve approximately 30,000 customers through our Service and Distribution segments, with approximately

of those customers transacting with us through both of our business segments.

Through the Company’s acquisition strategy, we have been focused on building out our business segments by entering adjacent and complimentary markets.

This has been demonstrated by the acquisitions of Axiom Test Equipment, Inc.

Through the Company’s acquisition strategy, we have been focused on building out our business segments, expanding our core calibration business, as well as entering new geographic markets and entering adjacent and complimentary markets.

This has been demonstrated by the acquisitions of Martin Calibration, Inc.

("Martin") and Becnel Rental Tools, LLC ("Becnel") in our fiscal year ended March 29, 2025 ("fiscal year 2025") and Axiom Test Equipment, Inc.

(“Axiom”), SteriQual, Inc.

(“SteriQual”) and TIC-MS, Inc.

("TIC-MS") in the fiscal year 2024, and Elite Calibration, LLC ("Elite"), Galium Limited (d/b/a Complete Calibrations) ("Complete Calibrations"), e2b Calibration ("e2b"), and Charlton Jeffmont Inc., Raitz Inc.

and Toolroom Calibration Inc.

d/b/a Alliance Calibration ("Alliance") in our fiscal year ended March 25, 2023 (“fiscal year 2023

Prior to fiscal year 2023, the Company acquired Cal OpEx Limited (d/b/a Transcat Ireland) which owns all of the issued and outstanding capital stock of its U.S.

based subsidiary, Cal OpEx Inc.

(d/b/a NEXA EAM), a Delaware corporation (collectively, "NEXA").

NEXA 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 solu tions (“CMMS”), (v) quality and compliance, and (vi) validation.

By delivering these services, NEXA is able to provide unique value to our 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.

("TIC-MS") in our fiscal year ended March 30, 2024 ("fiscal year 2024").

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® and our online customer portal, 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 30, 2024

(“fiscal year

”), we operated twenty-nine calibration service centers (“Calibration Service Centers”) strategically located across the United States, Puerto Rico, Canada and Ireland.

As of the end of our fiscal year 2025, we operated thirty-three calibration service centers (“Calibration Service Centers”) strategically located across the United States, Puerto Rico, Canada and Ireland.

We also serve our customers onsite at their facilities for daily, weekly or longer-term periods.

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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.

Prior to fiscal year 2024, the Company acquired Cal OpEx Limited (d/b/a Transcat Ireland) which owns all of the issued and outstanding capital stock of its U.S.

based subsidiary, Cal OpEx Inc.

(d/b/a NEXA EAM), a Delaware corporation (collectively, "NEXA").

During fiscal year 2025, NEXA went through a formal rebranding and is now known as Transcat Solutions.

Transcat Solutions 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, Transcat Solutions is able to provide unique value to our 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 Transcat Solutions 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.

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 75,000

test, measurement and control instruments, including products from approxima

test, measu rement and control instruments, including products from approxima

leading brands.

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

We strive to differentiate ourselves within the markets we serve and build on our competitive advantages by offering a broad range of products and services and by integrating these solutions in a value-added manner to benefit our customers’ operations.

During fiscal year 2025, we continued our commitment to capital, people and leadership investments, advancing our “Operational Excellence” initiative.

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.

This initiative resulted 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.

Our Operational Excellence initiative is a multi-year, ever-evolving program designed to create an infrastructure that supports our strategic goals and organic growth over a longer timeframe.

We also continued 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.

Within 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 have adopted an integrated sales model to drive sales, leverage our industry leading value proposition, which includes Transcat Solutions, 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.

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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.

During fiscal year 2025, we saw a significant erosion in the Transcat Solutions business, highlighting the need to further integrate that business into our existing sales and marketing infrastructure.

Through this integration, we expect to be able to leverage the appropriate resources within the Transcat sales team to ensure appropriate sales pipeline levels and conversions are maintained to support stable and consistent sales growth in the Transcat Solutions business over time.

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.

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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.

Through our Operational Excellence initiative, we have invested in dedicated resources to focus on strengthening 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.

Through our vendor relationships we have access to more th an 150,000 products, wh ich we market to our existing and prospective customers both with and without value-added service options that are unique to Transcat.

Through our vendor relationships we have access to more than 75,000 products, wh ich 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 new products, 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.

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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.

As part of our growth strategy, we completed three acquisitions during our fiscal year 2024 and four acquisitions during our fiscal year 2023:

As part of our growth strategy, we completed two acquisitions during our fiscal year 2025 and three acquisitions during our fiscal year 2024:

Effective December 10, 2024, the Company acquired Martin, a privately-held Minnesota-based Midwest regional calibration services company.

Martin's presence in Minneapolis, which is rich in life science and aerospace & defense customers and its reputation for quality and customer service satisfaction, made it a coveted target for Transcat.

Effective April 15, 2024, the Company acquired Becnel, a privately-held Louisiana limited liability company.

Becnel is an ISO 9001:2015 certified provider of rental tools and services primarily utilized in the decommissioning and maintenance of oil wells.

Effective August 8, 2023, Transcat purchased all of the outstanding capital stock of Axiom, a privately-held California rental provider of electronic test equipment to customers across the United States.

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Effective March 27, 2023, Transcat purchased all of the outstanding capital stock of TIC-MS, a Missouri based provider of calibration services.

Effective February 2, 2023, Transcat acquired substantially all of the assets of Elite, a California based provider of pipette calibration services.

Effective September 28, 2022, Transcat purchased all of the outstanding capital stock of Complete Calibrations, an Irish company.

Complete Calibrations is an ISO 17025 accredited calibration company specializing in calibration services for the life sciences industry.

Effective September 27, 2022, Transcat acquired substantially all of the assets of e2b, an Ohio based provider of calibration services.

Effective May 31, 2022, Transcat acquired substantially all of the assets of Alliance, an Ohio 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 and distribution capabilities and expertise and leverage our infrastructure.

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Infrastructure

Complete Calibrations

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 believe our combined Service and Distribution segment offerings, experience, technical expertise and focus on quality 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.

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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 850,000 calibrations annually and can address a significant majority of the items requested to be calibrated with our in-house capabilities.

We perform approximately 850,000 to 900,000 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.

While typically representing approximately 13% to 15% of ou r 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.

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.

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The speed, efficiency, and accuracy of this equipment are crucial factors that help minimize downtime for aircraft before, between, and after flights.

At Transcat, we’re proud to offer GSE certification, calibration, maintenance, and repair services for the aviation and aerospace industries.

At Transcat, we are proud to offer GSE certification, calibration, maintenance, and repair services for the aviation and aerospace industries.

Driving Continuous Improvement through Transcat’s Cost Control and Optimization Services, we provide technical, consulting, and staffing solutions in the U.S., 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.

Transcat Solutions 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, Transcat Solutions’ experienced teams can deliver results in all phases of the asset lifecycle.

Transcat Solutions' full suite of services or combination solutions are customizable to meet our customers' unique needs.

Other Services.

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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-nine 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;

client-based-laboratory services:

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.

In-house services - services are performed at one of our thirty-three 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.

Client-based-laboratory services - 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.

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

1 unchanged sentence

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

Transcat Cost Control and Optimization Services:

Transcat Solutions Cost Control and Optimization Services:

Calibration – criticality risk assessment;

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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.

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

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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 customers with multiple manufacturing operations throughout North America and Europe.

We target regulated customers with multiple manufacturing operations throughout North America and Ireland.

We leverage our ability to manage the complete life cycle of instrumentation from purchase of calibrated equipment to long-term service and maintenance requirements.

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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, 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, Puerto Rico and Ireland providing a comprehensive suite of services that spans many disciplines and hundreds of manufacturers which is not limited to certain product lines or brands.

We 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 is tailored to the markets we serve, leveraging a geographical footprint that spans North America, Puerto Rico and Ireland, and 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 both Transcat’s Cost Control and Optimization Services and Transcat’s Single Source Solution, 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.

Our comprehensive 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.

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

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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 control.

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

We believe we have established a strong, differentiated brand that has a deep and meaningful association with quality, compliance and control, and that the phrase “Calibrated by Transcat®” will be synonymous with risk reduction and quality compliance.

Acquired calibration labs might use other quality registration systems.

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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.

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

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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 typically sells lower price-point products, have become prominent competitors for sales of handheld test and measurement equipment, competing primarily on price.

Online distributors, including Amazon, which typically sell 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.

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We obtain our products from approximately 400 suppliers of brand name and private-labeled equipment.

In fiscal year 2024 , our top 10 vendors accounted for approximately 58% of our aggregate Distribution sales.

In fiscal year 2025 , our top vendor accounted for approximately 20% of our aggregate Distribution sales and our top 10 vendors accounted for approximately 45% of our aggregate Distribution sales.

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

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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.

The Company recorded vendor rebates of $0.6 million in both fiscal years 2024 and 2023, and $1.0 million in fiscal year 2022, respectively, as a reduction of cost of distribution sales.

The Company recorded vendor rebates of $0.9 million in fiscal year 2025 and $0.6 million in fiscal years 2024 and 2023 , respectively, as a reduction of cost of distribution sales.

Distribution Operations.

1 unchanged sentence

The Rochester location also fulfills orders for rental equipment, serves as our corporate headquarters, houses our customer service, sales and administrative functions, and is a Calibration Service Center.

We also have three smaller warehouse facilities.

Our Wisconsin warehouse fulfills orders for certain large industrial scales and our Vista, California and Houston, Texas warehouses fulfill orders for used equipment and rental equipment.

We also have two smaller warehouse facilities.

Our Vista, California and Houston, Texas warehouses fulfill orders for used equipment and rental equipment.

In fiscal year 2025 , we shipped approximately 30,000 product orders.

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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 backl og was $5.1 million and $8.1 million as of March 30, 2024 and March 25, 2023, respectively.

Our total backlog was $3.3 million and $5.1 million as of March 29, 2025 and March 30, 2024 , respectively.

CUSTOMER SERVICE AND SUPPORT

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INFORMATION REGARDING EXPORT SALES

In fiscal year 2024, approximatel y 10% of our total revenue resulted from sales to customers outside the United States.

In fiscal year 2025 , approximately 10% of our total revenue resulted from sales to customers outside the United States.

Of those export sales in fiscal year 2025 , approximately 9% were denominated in U.S.

dollars, 67% were denominated in Canadian dollars and 25% were deno minated in Euros.

dollars, 73% were denominated in Canadian dollars and 18% 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.

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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.

Historically, our fiscal fourth quarter has been stronger than our other fiscal quarters due to the operating cycles of our industrial sector customers.

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

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HUMAN CAPITAL MANAGEMENT

As of March 30, 2024, we had 1,104 employees, 976 of whom were employed in the United States and 128 employed outs ide the United States.

As of March 29, 2025, we had 1,245 employees, 1,123 of whom were employed in the United States and 121 employed outside the United States.

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

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Hiring Practices.

We seek to recruit and hire the most qualified people for our open positions without regard to protected status (age, color, creed, disability, domestic violence victim status, gender identity, genetic predisposition or carrier status, marital status, national origin, pregnancy, race, religion, sex, sexual orientation, status as a protected veteran or as a member of any other protected group or status).

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

We seek to recruit and hire the most qualified people for our open positions without regard to protected status (age, color, disability, genetic predisposition or carrier status, national origin, race, religion, sex (including pregnancy, sexual orientation, and gender identity), status as a protected veteran or as a member of any other protected group or status).

Non-Harassment .

We are committed to maintaining a workplace free from all forms of unlawful harassment and discrimination.

Our commitment to a discrimination-free work environment is reflected in our employee training, in particular, with respect to our policies against harassment (including sexual harassment) in the workplace.

Our Calibrated Wellness Program prioritizes our employees’ well-being and is designed to enhance their health.

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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