Transcat, Inc. engages in provision of calibration and laboratory instrument services. It operates through Service and Distribution segments. The Service segment offers calibration, repair, inspection, analytical qualifications, preventive maintenance, consulting, and other related services. The Distribution segment distributes professional grade test, measurement, and control instrumentation. The company was founded in 1964 and is headquartered in Rochester, NY.
During our first quarter of fiscal year 2020, we had consolidated revenue of $42.4 million. This represented an increase of $5.7 million or 15.7% versus the first quarter of fiscal year 2019. We showed significant revenue growth in both of our segments. Excluding acquired revenue, organic revenue growth was 13.1%.
First quarter gross profit improved 10.3% or $0.9 million versus the first quarter of fiscal year 2019. Gross margin was 23.7%, a decrease of 120 basis points, versus the first quarter of fiscal year 2019. This decrease reflected continued investments to support the strong Service segment revenue growth and product mix changes within the Distribution segment.
Operating expenses increased $1.0 million when compared to the prior year first quarter. Included in operating expenses during the first quarter of fiscal year 2020 was a $0.2 million loss on the sale of a Company-owned building in Montana that was no longer needed for operations. As a percentage of total revenue, operating expenses were 19.1%, down 20 basis points from 19.3% in the first quarter of fiscal year 2019. Operating income declined 3.3% or $0.1 million and operating margin decreased by 90 basis points.