Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Jun. 29, 2019 | Aug. 01, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TRANSCAT INC | |
Entity Central Index Key | 0000099302 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --03-28 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Fiscal Year Focus | 2020 | |
Document Period End Date | Jun. 29, 2019 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,305,762 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Total Revenue | $ 42,395 | $ 36,658 |
Total Cost of Revenue | 32,343 | 27,545 |
Gross Profit | 10,052 | 9,113 |
Selling, Marketing and Warehouse Expenses | 4,472 | 4,032 |
General and Administrative Expenses | 3,622 | 3,056 |
Total Operating Expenses | 8,094 | 7,088 |
Operating Income | 1,958 | 2,025 |
Interest and Other Expense, net | 285 | 225 |
Income Before Income Taxes | 1,673 | 1,800 |
(Benefit from)/Provision for Income Taxes | (45) | 372 |
Net Income | $ 1,718 | $ 1,428 |
Basic Earnings Per Share | $ 0.24 | $ 0.20 |
Average Shares Outstanding | 7,257 | 7,177 |
Diluted Earnings Per Share | $ 0.23 | $ 0.19 |
Average Shares Outstanding | 7,491 | 7,438 |
Service Revenue [Member] | ||
Total Revenue | $ 22,398 | $ 19,325 |
Total Cost of Revenue | 17,026 | 14,406 |
Distribution Sales [Member] | ||
Total Revenue | 19,997 | 17,333 |
Total Cost of Revenue | $ 15,317 | $ 13,139 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 1,718 | $ 1,428 |
Other Comprehensive Income (Loss): | ||
Currency Translation Adjustment | 112 | (95) |
Other, net of tax effects of $6 and $(1) for the first quarter ended June 29, 2019 and June 30, 2018, respectively | 17 | 2 |
Total Other Comprehensive Income (Loss) | 129 | (93) |
Comprehensive Income | $ 1,847 | $ 1,335 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Other, tax expense (benefit) | $ 6 | $ (1) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 29, 2019 | Mar. 30, 2019 |
Current Assets: | ||
Cash | $ 621 | $ 788 |
Accounts Receivable, less allowance for doubtful accounts of $364 and $338 as of June 29, 2019 and March 30, 2019, respectively | 26,688 | 27,469 |
Other Receivables | 1,364 | 1,116 |
Inventory, net | 15,937 | 14,304 |
Prepaid Expenses and Other Current Assets | 1,650 | 1,329 |
Total Current Assets | 46,260 | 45,006 |
Property and Equipment, net | 19,113 | 19,653 |
Goodwill | 34,958 | 34,545 |
Intangible Assets, net | 4,787 | 5,233 |
Right To Use Assets, net | 7,808 | |
Other Assets | 737 | 793 |
Total Assets | 113,663 | 105,230 |
Current Liabilities: | ||
Accounts Payable | 13,187 | 14,572 |
Accrued Compensation and Other Liabilities | 6,784 | 5,450 |
Income Taxes Payable | 125 | 228 |
Current Portion of Long-Term Debt | 1,919 | 1,899 |
Total Current Liabilities | 22,015 | 22,149 |
Long-Term Debt | 20,439 | 19,103 |
Deferred Income Tax Liabilities | 2,462 | 2,450 |
Lease Liabilities | 6,226 | |
Other Liabilities | 1,818 | 1,898 |
Total Liabilities | 52,960 | 45,600 |
Shareholders' Equity: | ||
Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 7,303,664 and 7,210,882 shares issued and outstanding as of June 29, 2019 and March 30, 2019, respectively | 3,652 | 3,605 |
Capital in Excess of Par Value | 16,404 | 16,467 |
Accumulated Other Comprehensive Loss | (482) | (611) |
Retained Earnings | 41,129 | 40,169 |
Total Shareholders' Equity | 60,703 | 59,630 |
Total Liabilities and Shareholders' Equity | $ 113,663 | $ 105,230 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 29, 2019 | Mar. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, allowance for doubtful accounts (in Dollars) | $ 364 | $ 338 |
Common Stock, par value per share (in Dollars per share) | $ 0.50 | $ 0.50 |
Common Stock, shares authorized | 30,000,000 | 30,000,000 |
Common Stock, shares issued | 7,303,664 | 7,210,882 |
Common Stock, shares outstanding | 7,303,664 | 7,210,882 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Cash Flows from Operating Activities: | ||
Net Income | $ 1,718 | $ 1,428 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Net Loss on Disposal of Property and Equipment | 238 | 29 |
Deferred Income Taxes | 12 | (5) |
Depreciation and Amortization | 1,622 | 1,567 |
Provision for Accounts Receivable and Inventory Reserves | 102 | 39 |
Stock-Based Compensation Expense | 203 | 268 |
Changes in Assets and Liabilities: | ||
Accounts Receivable and Other Receivables | 562 | 2,937 |
Inventory | (1,497) | (614) |
Prepaid Expenses and Other Assets | (278) | 4 |
Accounts Payable | (1,385) | (1,300) |
Accrued Compensation and Other Liabilities | (314) | (1,470) |
Income Taxes Payable | (109) | 179 |
Net Cash Provided by Operating Activities | 874 | 3,062 |
Cash Flows from Investing Activities: | ||
Purchases of Property and Equipment | (1,446) | (1,918) |
Proceeds from Sale of Property and Equipment | 184 | |
Net Cash Used in Investing Activities | (1,262) | (1,918) |
Cash Flows from Financing Activities: | ||
Proceeds from (Repayment of) Revolving Credit Facility, net | 1,823 | (770) |
Repayment of Term Loan | (467) | (536) |
Issuance of Common Stock | 369 | 66 |
Repurchase of Common Stock | (1,346) | (143) |
Net Cash Provided by (Used in) Financing Activities | 379 | (1,383) |
Effect of Exchange Rate Changes on Cash | (158) | 148 |
Net Decrease in Cash | (167) | (91) |
Cash at Beginning of Period | 788 | 577 |
Cash at End of Period | 621 | 486 |
Cash paid during the period for: | ||
Interest | 245 | 221 |
Income Taxes, net | $ 57 | $ 194 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock Issued $0.50 Par Value [Member] | Capital In Excess of Par Value [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Total |
Balance at Mar. 31, 2018 | $ 3,578 | $ 14,965 | $ (281) | $ 33,086 | $ 51,348 |
Balance (in Shares) at Mar. 31, 2018 | 7,155,000 | ||||
Issuance of Common Stock | $ 2 | 64 | 66 | ||
Issuance of Common Stock (in Shares) | 4,000 | ||||
Repurchase of Common Stock | $ (4) | (77) | (63) | (144) | |
Repurchase of Common Stock (in Shares) | (8,000) | ||||
Stock-Based Compensation | $ 23 | 245 | 268 | ||
Stock-Based Compensation (in Shares) | 48,000 | ||||
Other Comprehensive Income (Loss) | (95) | (95) | |||
Net Income | 1,428 | 1,428 | |||
Balance at Jun. 30, 2018 | $ 3,599 | 15,197 | (376) | 34,451 | 52,871 |
Balance (in Shares) at Jun. 30, 2018 | 7,199,000 | ||||
Balance at Mar. 30, 2019 | $ 3,605 | 16,467 | (611) | 40,169 | $ 59,630 |
Balance (in Shares) at Mar. 30, 2019 | 7,211,000 | 7,210,882 | |||
Issuance of Common Stock | $ 14 | 355 | $ 369 | ||
Issuance of Common Stock (in Shares) | 28,000 | ||||
Repurchase of Common Stock | $ (27) | (561) | (758) | (1,346) | |
Repurchase of Common Stock (in Shares) | (55,000) | ||||
Stock-Based Compensation | $ 60 | 143 | 203 | ||
Stock-Based Compensation (in Shares) | 120,000 | ||||
Other Comprehensive Income (Loss) | 129 | 129 | |||
Net Income | 1,718 | 1,718 | |||
Balance at Jun. 29, 2019 | $ 3,652 | $ 16,404 | $ (482) | $ 41,129 | $ 60,703 |
Balance (in Shares) at Jun. 29, 2019 | 7,304,000 | 7,303,664 |
GENERAL
GENERAL | 3 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
GENERAL | NOTE 1 – GENERAL Description of Business: Transcat, Inc. (“Transcat” or the “Company”) is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement and control instrumentation. The Company is 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 industrial manufacturing; energy and utilities, including oil and gas; chemical manufacturing; FAA-regulated businesses, including aerospace and defense 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. Basis of Presentation: Transcat’s unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8-03 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation (consisting of normal recurring adjustments) have been included. The results for the interim periods are not necessarily indicative of what the results will be for the fiscal year. The accompanying Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended March 30, 2019 (“fiscal year 2019”) contained in the Company’s 2019 Annual Report on Form 10-K filed with the SEC. Revenue Recognition: Distribution sales are recorded when an order’s title and risk of loss transfers to the customer. The Company recognizes the majority of its Service revenue based upon when the calibration or other activity is performed and then shipped and/or delivered to the customer. The majority of the Company’s revenue generating activities has a single performance obligation and are recognized at the point in time when control transfers and/or our obligation has been fulfilled. Some Service revenue is generated from managing customers’ calibration programs in which the Company recognizes revenue over time. Revenue is measured as the amount of consideration the Company expects to receive in exchange for product shipped or services performed. Sales taxes and other taxes billed and collected from customers are excluded from revenue. The Company generally invoices its customers for freight, shipping, and handling charges. Provisions for customer returns are provided for in the period the related revenue is recorded based upon historical data. Revenue recognized from prior period performance obligations for the first quarter of the fiscal year ending March 28, 2020 (“fiscal year 2020”) was immaterial. As of June 29, 2019, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year. Pursuant to Topic 606 (defined below), the Company applied the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations. Deferred revenue, unbilled revenue and deferred contract costs recorded on our Consolidated Balance Sheets as of June 29, 2019 and March 30, 2019 were immaterial. Payment terms are generally 30 to 45 days. See Note 4 for disaggregated revenue information. In 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which established principles to report useful information to financial statement users about the nature, timing and uncertainty of revenue from contracts with customers. ASU No. 2014-09 along with various related amendments comprise Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“Topic 606”), and provide guidance that is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Transcat adopted the new standard for its fiscal year 2019, which began April 1, 2018 using the modified retrospective approach to each prior reporting period presented. Based on our analysis, the Company concluded that the adoption of the amended guidance did not have a material impact on its net revenue recognition. The cumulative effect adjustment upon adoption of the ASU in the first quarter of fiscal year 2019 was immaterial. Fair Value of Financial Instruments: Transcat has determined the fair value of debt and other financial instruments using a valuation hierarchy. The hierarchy, which prioritizes the inputs used in measuring fair value, consists of three levels. Level 1 uses observable inputs such as quoted prices in active markets; Level 2 uses inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which is defined as unobservable inputs in which little or no market data exists, requires the Company to develop its own assumptions. The carrying amount of debt on the Consolidated Balance Sheets approximates fair value due to variable interest rate pricing, and the carrying amounts for cash, accounts receivable and accounts payable approximate fair value due to their short-term nature. Investment assets, which fund the Company’s non-qualified deferred compensation plan, consist of mutual funds and are valued based on Level 1 inputs. At June 29, 2019 and March 30, 2019, investment assets totaled $0.5 million and are included as a component of other assets on the Consolidated Balance Sheets. Stock-Based Compensation: The Company measures the cost of services received in exchange for all equity awards granted, including stock options and restricted stock units, based on the fair market value of the award as of the grant date. The Company records compensation expense related to unvested equity awards by recognizing, on a straight-line basis, the unamortized grant date fair value over the remaining service period of each award. Excess tax benefits for share-based award activity are reflected in the Consolidated Statements of Income as a component of the provision for income taxes. Excess tax benefits are realized benefits from tax deductions for exercised awards in excess of the deferred tax asset attributable to stock-based compensation costs for such awards. The Company did not capitalize any stock-based compensation costs as part of an asset. The Company estimates forfeiture rates based on its historical experience. During the first quarter of fiscal year 2020 and fiscal year 2019, the Company recorded non-cash stock-based compensation expense of $0.2 million and $0.3 million, respectively, in the Consolidated Statements of Income. Foreign Currency Translation and Transactions: The accounts of Transcat Canada Inc., a wholly-owned subsidiary of the Company, are maintained in the local currency and have been translated to U.S. dollars. Accordingly, the amounts representing assets and liabilities have been translated at the period-end rates of exchange and related revenue and expense accounts have been translated at an average rate of exchange during the period. Gains and losses arising from translation of Transcat Canada Inc.’s financial statements into U.S. dollars are recorded directly to the accumulated other comprehensive loss component of shareholders’ equity. Transcat records foreign currency gains and losses on Canadian business transactions. The net foreign currency loss was less than $0.1 million in each of the first quarters of fiscal years 2020 and 2019. The Company continually utilizes short-term foreign exchange forward contracts to reduce the risk that its earnings will be adversely affected by changes in currency exchange rates. The Company does not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a loss of $0.1 million during the first quarter of each of fiscal years 2020 and 2019, was recognized as a component of other expense in the Consolidated Statements of Income. The change in the fair value of the contracts is offset by the change in fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On June 29, 2019, the Company had a foreign exchange contract, which matured in July 2019, outstanding in the notional amount of $4.4 million. The foreign exchange contract was renewed in July 2019 and continues to be in place. The Company does not use hedging arrangements for speculative purposes. Earnings Per Share: Basic earnings per share of common stock are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock reflect the assumed conversion of stock options and unvested restricted stock units using the treasury stock method in periods in which they have a dilutive effect. In computing the per share effect of assumed conversion, funds which would have been received from the exercise of options and unvested restricted stock units and the related tax benefits are considered to have been used to purchase shares of common stock at the average market prices during the period, and the resulting net additional shares of common stock are included in the calculation of average shares of common stock outstanding. For the first quarter of each of the fiscal years 2020 and 2019, the net additional common stock equivalents had a $0.01 effect on the calculation of diluted earnings per share. The average shares outstanding used to compute basic and diluted earnings per share are as follows: First Quarter Ended June 29, June 30, 2019 2018 Average Shares Outstanding – Basic 7,257 7,177 Effect of Dilutive Common Stock Equivalents 234 261 Average Shares Outstanding – Diluted 7,491 7,438 Anti-dilutive Common Stock Equivalents 20 - Recently Issued Accounting Pronouncements: In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC Topic 842), which requires lessees to recognize substantially all leases on the balance sheet and disclose key information about leasing arrangements. The new standard establishes a right of use ("ROU") model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. In July 2018, FASB issued ASU 2018-11, Leases (ASC Topic 842), which provides entities with an additional transition method to adopt the new leases standard. Under this method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, the prior comparative period's financials will remain the same as those previously presented. The Company adopted the new leasing standard on March 31, 2019. The Company adopted the package of practical expedients permitted under the transition guidance which allowed us to carry forward the historical lease classification. Upon adoption, the Company used hindsight in determining lease term. The most significant impact of adoption was adding ROU lease assets and lease liabilities on the consolidated balance sheet by the present value of the Company’s leasing obligations, which are primarily related to facility and vehicle leases. The present value of the remaining lease payments is recognized as lease liabilities on the consolidated balance sheet with a corresponding ROU asset. The value of the assets and liabilities added to the Consolidated Balance Sheets was approximately $8 million. The ROU asset is shown separately on the face of the Consolidated Balance Sheets. $1.7 million of the lease liabilities was included in Accrued Compensation and Other Liabilities on the Consolidated Balance Sheets with the remainder included in Lease Liabilities. Adopting the new standard did not have a material impact on our Consolidated Statement of Income or Consolidated Statement of Cash Flows. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 2 – LONG-TERM DEBT Description: On December 10, 2018, the Company entered into an Amended and Restated Credit Agreement Amendment 1 (the “2018 Agreement”). The 2018 Agreement has a term loan (the “2018 Term Loan”) in the amount of $15.0 million which replaced the previous term loan (the “2017 Term Loan”) which had an outstanding balance of $12.5 million as of December 10, 2018. As of June 29, 2019, $14.1 million was outstanding on the 2018 Term Loan, of which $1.9 million was included in current liabilities on the Consolidated Balance Sheets with the remainder included in long-term debt. The 2018 Term Loan requires total repayments (principal plus interest) of $0.2 million per month through December 2025. On October 30, 2017, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”), which amended and restated our prior credit facility agreement. The Credit Agreement extended the term of the Company’s $30.0 million revolving credit facility (the “Revolving Credit Facility”) to October 29, 2021. As of June 29, 2019, $30.0 million was available under the Revolving Credit Facility, of which $8.3 million was outstanding and included in long-term debt on the Consolidated Balance Sheets. The Credit Agreement also replaced the previous term loan with the 2017 Term Loan of $15.0 million. The 2017 Term Loan required principal repayments of $0.2 million per month plus interest through September 2022 with a $4.3 million repayment required on October 29, 2022. As stated above, the 2017 Term Loan was replaced by the 2018 Term Loan. The excess funds of the 2018 Term Loan and the 2017 Term Loan over the previous term loans were used to pay down amounts outstanding under the Revolving Credit Facility. Under the Credit Agreement, borrowings that may be used for business acquisitions are limited to $20.0 million per fiscal year. During the first quarter of fiscal year 2020, no borrowings were used for business acquisitions. The allowable leverage ratio under the Credit Agreement is a maximum multiple of 3.0 of total debt outstanding compared to earnings before income taxes, depreciation and amortization, and non-cash stock-based compensation expense for the preceding four consecutive fiscal quarters, as defined in the Credit Agreement. Interest and Other Costs: Interest on outstanding borrowings under the Revolving Credit Facility accrue, at Transcat’s election, at either the variable one-month London Interbank Offered Rate (“LIBOR”) or a fixed rate for a designated period at the LIBOR corresponding to such period, in each case, plus a margin. Interest on outstanding borrowings under the 2018 Term Loan accrue at a fixed rate of 4.15% over the term of the loan. Commitment fees accrue based on the average daily amount of unused credit available on the Revolving Credit Facility. Interest rate margins and commitment fees are determined on a quarterly basis based upon the Company’s calculated leverage ratio, as defined in the Credit Agreement. The one-month LIBOR as of June 29, 2019 was 2.4%. The Company’s interest rate for the Revolving Credit Facility for the first quarter of fiscal year 2020 ranged from 3.6% to 3.7%. Covenants: The Credit Agreement has certain covenants with which the Company must comply, including a fixed charge ratio covenant and a leverage ratio covenant. The Company was in compliance with all loan covenants and requirements during the first quarter of fiscal year 2020. Our leverage ratio, as defined in the Credit Agreement, was 1.22 at June 29, 2019, compared with 1.12 at the end of fiscal year 2019. Other Terms: The Company has pledged all of its U.S. tangible and intangible personal property, the equity interests of its U.S.-based subsidiaries, and a majority of the common stock of Transcat Canada Inc. as collateral security for the loans made under the Revolving Credit Facility. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Jun. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 3 – STOCK-BASED COMPENSATION The Company has a share-based incentive plan (the “2003 Plan”) that provides for, among other awards, grants of restricted stock units and stock options to directors, officers and key employees at the fair market value at the date of grant. At June 29, 2019, 1.0 million restricted stock units or stock options were available for future grant under the 2003 Plan. The Company receives an excess tax benefit related to restricted stock vesting and stock options exercised and redeemed. The discrete tax benefits related to share-based compensation activity during the first quarter of fiscal year 2020 and 2019 were $0.5 million and $0.1 million, respectively. Restricted Stock Units: The Company grants time-based and performance-based restricted stock units as a component of executive compensation. Expense for restricted stock grants is recognized on a straight-line basis for the service period of the stock award based upon fair value of the award on the date of grant. The fair value of the restricted stock grants is the quoted market price for the Company’s common stock on the date of grant. These restricted stock units are either time vested or vest following the third fiscal year from the date of grant subject to cumulative diluted earnings per share targets over the eligible period. Compensation cost ultimately recognized for performance-based restricted stock units will equal the grant date fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, the Company records compensation cost based on the estimated level of achievement of the performance conditions. The expense relating to the time vested restricted stock units is recognized on a straight-line basis over the requisite service period for the entire award. The Company achieved 131% of the target level for the performance-based restricted stock units granted in the fiscal year ended March 25, 2017 and as a result, issued 108 shares of common stock to executive officers and certain key employees during the first quarter of fiscal year 2020. The following table summarizes the non-vested restricted stock units outstanding as of June 29, 2019: Total Grant Date Estimated Number Fair Level of Date Measurement of Units Value Achievement at Granted Period Outstanding Per Unit June 29, 2019 April 2017 April 2017 – March 2020 68 $ 12.90 90% of target level April 2018 April 2018 – March 2021 1 $ 15.65 Time Vested May 2018 April 2018 – March 2020 26 $ 15.30 100% of target level May 2018 April 2018 – March 2020 26 $ 15.30 Time Vested October 2018 October 2018 – September 2027 10 $ 20.81 Time Vested March 2019 April 2019 – March 2021 25 $ 23.50 100% of target level March 2019 April 2019 – March 2021 25 $ 23.50 Time Vested Total expense relating to performance-based restricted stock units, based on grant date fair value and the achievement criteria, was $0.1 million and $0.2 million in the first quarter of fiscal year 2020 and fiscal year 2019, respectively. As of June 29, 2019, unearned compensation, to be recognized over the grants’ respective service periods, totaled $1.9 million. Stock Options: The Company grants stock options to employees and directors equal to the quoted market price of the Company’s stock at the date of the grant. The fair value of stock options is estimated using the Black-Scholes option pricing formula that requires assumptions for expected volatility, expected dividends, the risk-free interest rate and the expected term of the option. Expense for stock options is recognized on a straight-line basis over the requisite service period for each award. Options vest either immediately or over a period of up to five years using a straight-line basis and expire either five years or ten years from the date of grant. The following table summarizes the Company’s options as of and for the first quarter ended June 29, 2019: Weighted Weighted Average Average Number Exercise Remaining Aggregate of Price Per Contractual Intrinsic Shares Share Term (in years) Value Outstanding as of March 30, 2019 291 $ 11.16 Granted - - Exercised (25 ) $ 12.00 Forfeited - - Redeemed - - Outstanding as of June 29, 2019 266 $ 11.08 5 $ 3,859 Exercisable as of June 29, 2019 246 $ 10.29 4 $ 3,764 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of fiscal year 2020 and the exercise price, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all holders exercised their options on June 29, 2019. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common stock. Total expense related to stock options was less than $0.1 million during the first quarter of fiscal year 2020. There was no expense related to stock options during the first quarter of fiscal year 2019. Total unrecognized compensation cost related to non-vested stock options as of June 29, 2019 was $0.1 million, which is expected to be recognized over a period of five years. The aggregate intrinsic value of stock options exercised during the first quarter of fiscal year 2020 was $0.3 million. Cash received from the exercise of options the first quarter of fiscal year 2020 was $0.3 million. There were no stock options exercised during the first quarter of fiscal year 2019. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 4 – SEGMENT INFORMATION Transcat has two reportable segments: Distribution and Service. The Company has no inter-segment sales. The following table presents segment information for the first quarter of fiscal year 2020 and fiscal year 2019: First Quarter Ended June 29, June 30, 2019 2018 Revenue: Service Revenue $ 22,398 $ 19,325 Distribution Sales 19,997 17,333 Total 42,395 36,658 Gross Profit: Service 5,372 4,919 Distribution 4,680 4,194 Total 10,052 9,113 Operating Expenses: Service (1) 4,634 3,851 Distribution (1) 3,460 3,237 Total 8,094 7,088 Operating Income: Service (1) 738 1,068 Distribution (1) 1,220 957 Total 1,958 2,025 Unallocated Amounts: Interest and Other Expense, net 285 225 (Benefit from)/Provision for Income Taxes (45 ) 372 Total 240 597 Net Income $ 1,718 $ 1,428 (1) Operating expense allocations between segments were based on actual amounts, a percentage of revenues, headcount, and management’s estimates. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 3 Months Ended |
Jun. 29, 2019 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS | NOTE 5 – BUSINESS ACQUISITIONS Effective April 1, 2019, Transcat acquired substantially all of the assets of Gauge Repair Service (“GRS”), a California-based provider of calibration services. This transaction aligned with the Company’s acquisition strategy of targeting businesses that expand the Company’s geographic reach and leverage its infrastructure while also increasing the depth and breadth of the Company’s service capabilities. Due to the immaterial amount of the purchase price of the GRS assets, it has been included in the purchases of property and equipment, in the consolidated statement of cash flows. Effective August 31, 2018, Transcat acquired substantially all of the assets of Angel’s Instrumentation, Inc. (“Angel’s”), a Virginia-based provider of calibration services. This transaction aligned with the Company’s acquisition strategy of targeting businesses that expand its geographic reach and leverage its infrastructure while also increasing the depth and breadth of the Company’s service capabilities. The Company applies the acquisition method of accounting for business acquisitions. Under the acquisition method, the purchase price of an acquisition is assigned to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The Company uses a valuation hierarchy, as further described under Fair Value of Financial Instruments in Note 1 above, and typically utilizes independent third-party valuation specialists to determine certain fair values used in this allocation. Purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. All of the goodwill and intangible assets relating to the Angel’s acquisition have been allocated to the Service segment. Intangible assets related to the Angel’s acquisition are being amortized for financial reporting purposes on an accelerated basis over the estimated useful life of up to 10 years and are deductible for tax purposes. Amortization of goodwill related to the Angel’s acquisition is expected to be deductible for tax purposes only. The total purchase price paid for the assets of Angel’s was approximately $4.7 million, net of $0.1 million cash acquired. The following is a summary of the preliminary purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of Angel’s assets and liabilities acquired during the period presented: FY 2019 Goodwill $ 1,902 Intangible Assets – Customer Base & Contracts 1,470 Intangible Assets – Covenant Not to Compete 130 3,502 Plus: Current Assets 786 Non-Current Assets 473 Less: Current Liabilities (24 ) Total Purchase Price $ 4,737 Certain of the Company’s acquisition agreements, including Angel’s, include provisions for contingent consideration and other holdback amounts. The Company accrues for contingent consideration and holdback provisions based on their estimated fair value at the date of acquisition. As of June 29, 2019, $0.4 million of contingent consideration and $0.5 million of other holdback amounts were unpaid and reflected in current liabilities on the Consolidated Balance Sheets. During the first quarter of fiscal year 2020, no contingent consideration or other holdback amounts were paid. The results of acquired businesses are included in Transcat’s consolidated operating results as of the dates the businesses were acquired. The following unaudited pro forma information presents the Company’s results of operations as if the acquisition of Angel’s had occurred at the beginning of fiscal year 2019. The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transaction had occurred at the beginning of the period presented or what the Company’s operating results will be in future periods. (Unaudited) Quarter Ended June 30, 2018 Total Revenue $ 37,912 Net Income $ 1,677 Basic Earnings Per Share $ 0.23 Diluted Earnings Per Share $ 0.23 During the first quarter of fiscal years 2020 and 2019, acquisition costs of less than $0.1 million were recorded as incurred as general and administrative expenses in the Consolidated Statements of Income. Effective June 12, 2018, Transcat acquired substantially all of the assets of NBS Calibration, Inc. (“NBS”), an Arizona-based provider of calibration services. This transaction aligned with the Company’s acquisition strategy of targeting businesses that expand the Company’s geographic reach and leverage its infrastructure while also increasing the depth and breadth of the Company’s service capabilities. Due to the immaterial amount of the purchase price of the NBS assets, it has been included in the purchases of property and equipment, net, in the consolidated statement of cash flows. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Jun. 29, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 6 – SUBSEQUENT EVENT Effective July 19, 2019, Transcat acquired all of the shares of Infinite Integral Solutions Inc. (“IIS”). IIS, headquartered in Mississauga, Ontario, Canada, is the owner and developer of the CalTree™ suite of software solutions for the automation of calibration procedures and datasheet generation. Total consideration for the shares of IIS was C$1.4 million, subject in part to the achievement of certain milestones. |
GENERAL (Policies)
GENERAL (Policies) | 3 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business: Transcat, Inc. (“Transcat” or the “Company”) is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement and control instrumentation. The Company is 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 industrial manufacturing; energy and utilities, including oil and gas; chemical manufacturing; FAA-regulated businesses, including aerospace and defense 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. |
Basis of Presentation | Basis of Presentation: Transcat’s unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8-03 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation (consisting of normal recurring adjustments) have been included. The results for the interim periods are not necessarily indicative of what the results will be for the fiscal year. The accompanying Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended March 30, 2019 (“fiscal year 2019”) contained in the Company’s 2019 Annual Report on Form 10-K filed with the SEC. |
Revenue Recognition | Revenue Recognition: Distribution sales are recorded when an order’s title and risk of loss transfers to the customer. The Company recognizes the majority of its Service revenue based upon when the calibration or other activity is performed and then shipped and/or delivered to the customer. The majority of the Company’s revenue generating activities has a single performance obligation and are recognized at the point in time when control transfers and/or our obligation has been fulfilled. Some Service revenue is generated from managing customers’ calibration programs in which the Company recognizes revenue over time. Revenue is measured as the amount of consideration the Company expects to receive in exchange for product shipped or services performed. Sales taxes and other taxes billed and collected from customers are excluded from revenue. The Company generally invoices its customers for freight, shipping, and handling charges. Provisions for customer returns are provided for in the period the related revenue is recorded based upon historical data. Revenue recognized from prior period performance obligations for the first quarter of the fiscal year ending March 28, 2020 (“fiscal year 2020”) was immaterial. As of June 29, 2019, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year. Pursuant to Topic 606 (defined below), the Company applied the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations. Deferred revenue, unbilled revenue and deferred contract costs recorded on our Consolidated Balance Sheets as of June 29, 2019 and March 30, 2019 were immaterial. Payment terms are generally 30 to 45 days. See Note 4 for disaggregated revenue information. In 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which established principles to report useful information to financial statement users about the nature, timing and uncertainty of revenue from contracts with customers. ASU No. 2014-09 along with various related amendments comprise Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“Topic 606”), and provide guidance that is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Transcat adopted the new standard for its fiscal year 2019, which began April 1, 2018 using the modified retrospective approach to each prior reporting period presented. Based on our analysis, the Company concluded that the adoption of the amended guidance did not have a material impact on its net revenue recognition. The cumulative effect adjustment upon adoption of the ASU in the first quarter of fiscal year 2019 was immaterial. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: Transcat has determined the fair value of debt and other financial instruments using a valuation hierarchy. The hierarchy, which prioritizes the inputs used in measuring fair value, consists of three levels. Level 1 uses observable inputs such as quoted prices in active markets; Level 2 uses inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which is defined as unobservable inputs in which little or no market data exists, requires the Company to develop its own assumptions. The carrying amount of debt on the Consolidated Balance Sheets approximates fair value due to variable interest rate pricing, and the carrying amounts for cash, accounts receivable and accounts payable approximate fair value due to their short-term nature. Investment assets, which fund the Company’s non-qualified deferred compensation plan, consist of mutual funds and are valued based on Level 1 inputs. At June 29, 2019 and March 30, 2019, investment assets totaled $0.5 million and are included as a component of other assets on the Consolidated Balance Sheets. |
Stock-Based Compensation | Stock-Based Compensation: The Company measures the cost of services received in exchange for all equity awards granted, including stock options and restricted stock units, based on the fair market value of the award as of the grant date. The Company records compensation expense related to unvested equity awards by recognizing, on a straight-line basis, the unamortized grant date fair value over the remaining service period of each award. Excess tax benefits for share-based award activity are reflected in the Consolidated Statements of Income as a component of the provision for income taxes. Excess tax benefits are realized benefits from tax deductions for exercised awards in excess of the deferred tax asset attributable to stock-based compensation costs for such awards. The Company did not capitalize any stock-based compensation costs as part of an asset. The Company estimates forfeiture rates based on its historical experience. During the first quarter of fiscal year 2020 and fiscal year 2019, the Company recorded non-cash stock-based compensation expense of $0.2 million and $0.3 million, respectively, in the Consolidated Statements of Income. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions: The accounts of Transcat Canada Inc., a wholly-owned subsidiary of the Company, are maintained in the local currency and have been translated to U.S. dollars. Accordingly, the amounts representing assets and liabilities have been translated at the period-end rates of exchange and related revenue and expense accounts have been translated at an average rate of exchange during the period. Gains and losses arising from translation of Transcat Canada Inc.’s financial statements into U.S. dollars are recorded directly to the accumulated other comprehensive loss component of shareholders’ equity. Transcat records foreign currency gains and losses on Canadian business transactions. The net foreign currency loss was less than $0.1 million in each of the first quarters of fiscal years 2020 and 2019. The Company continually utilizes short-term foreign exchange forward contracts to reduce the risk that its earnings will be adversely affected by changes in currency exchange rates. The Company does not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a loss of $0.1 million during the first quarter of each of fiscal years 2020 and 2019, was recognized as a component of other expense in the Consolidated Statements of Income. The change in the fair value of the contracts is offset by the change in fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On June 29, 2019, the Company had a foreign exchange contract, which matured in July 2019, outstanding in the notional amount of $4.4 million. The foreign exchange contract was renewed in July 2019 and continues to be in place. The Company does not use hedging arrangements for speculative purposes. |
Earnings Per Share | Earnings Per Share: Basic earnings per share of common stock are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock reflect the assumed conversion of stock options and unvested restricted stock units using the treasury stock method in periods in which they have a dilutive effect. In computing the per share effect of assumed conversion, funds which would have been received from the exercise of options and unvested restricted stock units and the related tax benefits are considered to have been used to purchase shares of common stock at the average market prices during the period, and the resulting net additional shares of common stock are included in the calculation of average shares of common stock outstanding. For the first quarter of each of the fiscal years 2020 and 2019, the net additional common stock equivalents had a $0.01 effect on the calculation of diluted earnings per share. The average shares outstanding used to compute basic and diluted earnings per share are as follows: First Quarter Ended June 29, June 30, 2019 2018 Average Shares Outstanding – Basic 7,257 7,177 Effect of Dilutive Common Stock Equivalents 234 261 Average Shares Outstanding – Diluted 7,491 7,438 Anti-dilutive Common Stock Equivalents 20 - |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC Topic 842), which requires lessees to recognize substantially all leases on the balance sheet and disclose key information about leasing arrangements. The new standard establishes a right of use ("ROU") model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. In July 2018, FASB issued ASU 2018-11, Leases (ASC Topic 842), which provides entities with an additional transition method to adopt the new leases standard. Under this method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, the prior comparative period's financials will remain the same as those previously presented. The Company adopted the new leasing standard on March 31, 2019. The Company adopted the package of practical expedients permitted under the transition guidance which allowed us to carry forward the historical lease classification. Upon adoption, the Company used hindsight in determining lease term. The most significant impact of adoption was adding ROU lease assets and lease liabilities on the consolidated balance sheet by the present value of the Company’s leasing obligations, which are primarily related to facility and vehicle leases. The present value of the remaining lease payments is recognized as lease liabilities on the consolidated balance sheet with a corresponding ROU asset. The value of the assets and liabilities added to the Consolidated Balance Sheets was approximately $8 million. The ROU asset is shown separately on the face of the Consolidated Balance Sheets. $1.7 million of the lease liabilities was included in Accrued Compensation and Other Liabilities on the Consolidated Balance Sheets with the remainder included in Lease Liabilities. Adopting the new standard did not have a material impact on our Consolidated Statement of Income or Consolidated Statement of Cash Flows. |
GENERAL (Tables)
GENERAL (Tables) | 3 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Weighted Average Number of Shares | The average shares outstanding used to compute basic and diluted earnings per share are as follows: First Quarter Ended June 29, June 30, 2019 2018 Average Shares Outstanding – Basic 7,257 7,177 Effect of Dilutive Common Stock Equivalents 234 261 Average Shares Outstanding – Diluted 7,491 7,438 Anti-dilutive Common Stock Equivalents 20 - |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Jun. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Units Award Activity | The following table summarizes the non-vested restricted stock units outstanding as of June 29, 2019: Total Grant Date Estimated Number Fair Level of Date Measurement of Units Value Achievement at Granted Period Outstanding Per Unit June 29, 2019 April 2017 April 2017 – March 2020 68 $ 12.90 90% of target level April 2018 April 2018 – March 2021 1 $ 15.65 Time Vested May 2018 April 2018 – March 2020 26 $ 15.30 100% of target level May 2018 April 2018 – March 2020 26 $ 15.30 Time Vested October 2018 October 2018 – September 2027 10 $ 20.81 Time Vested March 2019 April 2019 – March 2021 25 $ 23.50 100% of target level March 2019 April 2019 – March 2021 25 $ 23.50 Time Vested |
Schedule of Stock Options Activity | The following table summarizes the Company’s options as of and for the first quarter ended June 29, 2019: Weighted Weighted Average Average Number Exercise Remaining Aggregate of Price Per Contractual Intrinsic Shares Share Term (in years) Value Outstanding as of March 30, 2019 291 $ 11.16 Granted - - Exercised (25 ) $ 12.00 Forfeited - - Redeemed - - Outstanding as of June 29, 2019 266 $ 11.08 5 $ 3,859 Exercisable as of June 29, 2019 246 $ 10.29 4 $ 3,764 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table presents segment information for the first quarter of fiscal year 2020 and fiscal year 2019: First Quarter Ended June 29, June 30, 2019 2018 Revenue: Service Revenue $ 22,398 $ 19,325 Distribution Sales 19,997 17,333 Total 42,395 36,658 Gross Profit: Service 5,372 4,919 Distribution 4,680 4,194 Total 10,052 9,113 Operating Expenses: Service (1) 4,634 3,851 Distribution (1) 3,460 3,237 Total 8,094 7,088 Operating Income: Service (1) 738 1,068 Distribution (1) 1,220 957 Total 1,958 2,025 Unallocated Amounts: Interest and Other Expense, net 285 225 (Benefit from)/Provision for Income Taxes (45 ) 372 Total 240 597 Net Income $ 1,718 $ 1,428 (1) Operating expense allocations between segments were based on actual amounts, a percentage of revenues, headcount, and management’s estimates. |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 3 Months Ended |
Jun. 29, 2019 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The following is a summary of the preliminary purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of Angel’s assets and liabilities acquired during the period presented: FY 2019 Goodwill $ 1,902 Intangible Assets – Customer Base & Contracts 1,470 Intangible Assets – Covenant Not to Compete 130 3,502 Plus: Current Assets 786 Non-Current Assets 473 Less: Current Liabilities (24 ) Total Purchase Price $ 4,737 |
Schedule of Proforma Information | The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transaction had occurred at the beginning of the period presented or what the Company’s operating results will be in future periods. (Unaudited) Quarter Ended June 30, 2018 Total Revenue $ 37,912 Net Income $ 1,677 Basic Earnings Per Share $ 0.23 Diluted Earnings Per Share $ 0.23 |
GENERAL (Narrative) (Details)
GENERAL (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Mar. 30, 2019 | |
Accounting Policies [Abstract] | |||
Investments | $ 0.5 | $ 0.5 | |
Allocated Share-based Compensation Expense | 0.2 | $ 0.3 | |
Foreign Currency Transaction Gain (Loss), Realized | (0.1) | (0.1) | |
Foreign Currency Transaction Gain (Loss), Unrealized | (0.1) | $ (0.1) | |
Derivative Asset, Notional Amount | $ 4.4 | ||
Dilutive Securities Effect Per Share on Earnings (in Dollars per share) | $ 0.01 | $ 0.01 | |
Estimated Value of Assets and Liabilities | $ 8 | ||
Lease liabilities | $ 1.7 |
GENERAL (Average Shares Outstan
GENERAL (Average Shares Outstanding Used to Compute Basic and Diluted Earnings per Share) (Details) - shares shares in Thousands | 3 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||
Average Shares Outstanding - Basic | 7,257 | 7,177 |
Effect of Dilutive Common Stock Equivalents | 234 | 261 |
Average Shares Outstanding - Diluted | 7,491 | 7,438 |
Anti-dilutive Common Stock Equivalents | 20 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 29, 2019USD ($) | Mar. 30, 2019USD ($) | Dec. 10, 2018USD ($) | |
Debt Instrument [Line Items] | |||
Current portion of loan outstanding | $ 1,919 | $ 1,899 | |
Allowable leverage ratio | 3 | ||
Leverage ratio | 1.22 | 1.12 | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 30,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.40% | ||
Amount available | $ 30,000 | ||
Amount outstanding | $ 8,300 | ||
Allowable leverage ratio | 3 | ||
Revolving Credit Facility [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate for period | 3.60% | ||
Revolving Credit Facility [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate for period | 3.70% | ||
2017 Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount of loan | $ 15,000 | ||
Loan outstanding | $ 12,500 | ||
Monthly principal payments | 200 | ||
Amount due in 2022 | $ 4,300 | ||
2018 Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate for period | 4.15% | ||
Principal amount of loan | $ 15,000 | ||
Loan outstanding | 14,100 | ||
Current portion of loan outstanding | 1,900 | ||
Monthly principal payments | 200 | ||
2018 Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Annual payments | $ 20,000 |
STOCK-BASED COMPENSATION (Narra
STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Discrete tax benefits related to share-based compensation awards | $ 500 | $ 100 |
Allocated Share-based Compensation Expense | $ 200 | 300 |
2003 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares) | 1,000,000 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 100 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 100 | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 5 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 300 | |
Proceeds from Stock Options Exercised | $ 300 | |
Employee Stock Option [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | |
Employee Stock Option [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 10 years | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of Target Level Achieved | 131.00% | |
Number of Shares Issued | 108 | |
Restricted Stock or Unit Expense | $ 100 | $ 200 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 1,900 |
STOCK-BASED COMPENSATION (Non-V
STOCK-BASED COMPENSATION (Non-Vested Performance-Based Restricted Stock Units) (Details) - Performance Shares [Member] shares in Thousands | 3 Months Ended |
Jun. 29, 2019$ / sharesshares | |
Performance Based Restricted Stock Awards Granted In April 2017 [Member] | |
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items] | |
Total Number of Units Outstanding | shares | 68 |
Grant Date Fair Value Per Unit (in Dollars per share) | $ / shares | $ 12.90 |
Estimated Level of Achievement | 90.00% |
Performance Based Restricted Stock Awards Granted In April 2018 [Member] | |
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items] | |
Total Number of Units Outstanding | shares | 1 |
Grant Date Fair Value Per Unit (in Dollars per share) | $ / shares | $ 15.65 |
Performance Based Restricted Stock Awards Granted In May 2018 [Member] | |
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items] | |
Total Number of Units Outstanding | shares | 26 |
Grant Date Fair Value Per Unit (in Dollars per share) | $ / shares | $ 15.30 |
Estimated Level of Achievement | 100.00% |
Performance Based Restricted Stock Awards Granted In May 2018 [Member] | |
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items] | |
Total Number of Units Outstanding | shares | 26 |
Grant Date Fair Value Per Unit (in Dollars per share) | $ / shares | $ 15.30 |
Performance Based Restricted Stock Awards Granted In October 2018 [Member] | |
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items] | |
Total Number of Units Outstanding | shares | 10 |
Grant Date Fair Value Per Unit (in Dollars per share) | $ / shares | $ 20.81 |
Performance Based Restricted Stock Awards Granted In March 2019 [Member] | |
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items] | |
Total Number of Units Outstanding | shares | 25 |
Grant Date Fair Value Per Unit (in Dollars per share) | $ / shares | $ 23.50 |
Estimated Level of Achievement | 100.00% |
Performance Based Restricted Stock Awards Granted In March 2019 [Member] | |
Schedule of Stock Based Compensation Details Non Vested Performance Based Restricted Stock Units [Line Items] | |
Total Number of Units Outstanding | shares | 25 |
Grant Date Fair Value Per Unit (in Dollars per share) | $ / shares | $ 23.50 |
STOCK-BASED COMPENSATION (Stock
STOCK-BASED COMPENSATION (Stock Options) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Jun. 29, 2019USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding, beginning balance | shares | 291 |
Granted | shares | |
Exercised | shares | (25) |
Forfeited | shares | |
Redeemed | shares | |
Outstanding, ending balance | shares | 266 |
Exercisable as of June 29, 2019 | shares | 246 |
Weighted Average Exercise Price Per Share | |
Outstanding, beginning balance | $ / shares | $ 11.16 |
Granted | $ / shares | |
Exercised | $ / shares | 12 |
Forfeited | $ / shares | |
Redeemed | $ / shares | |
Outstanding, ending balance | $ / shares | 11.08 |
Exercisable as of June 29, 2019 | $ / shares | $ 10.29 |
Weighted Average Remaining Contractual Term (in Years) | |
Outstanding as of June 29, 2019 | 5 years |
Exercisable as of June 29, 2019 | 4 years |
Aggregate Intrinsic Value | |
Outstanding as of June 29, 2019 | $ | $ 3,859 |
Exercisable as of June 29, 2019 | $ | $ 3,764 |
SEGMENT INFORMATION (Narrative)
SEGMENT INFORMATION (Narrative) (Details) | 3 Months Ended |
Jun. 29, 2019item | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | ||
Revenue: | |||
Revenue | $ 42,395 | $ 36,658 | |
Gross Profit: | |||
Gross Profit | 10,052 | 9,113 | |
Operating Expenses: | |||
Operating Expenses | 8,094 | 7,088 | |
Operating Income: | |||
Operating Income | 1,958 | 2,025 | |
Unallocated Amounts: | |||
Interest and Other Expense, net | 285 | 225 | |
Provision for Income Taxes | (45) | 372 | |
Unallocated Amounts | 240 | 597 | |
Net Income | 1,718 | 1,428 | |
Service Segment [Member] | |||
Revenue: | |||
Revenue | 22,398 | 19,325 | |
Gross Profit: | |||
Gross Profit | 5,372 | 4,919 | |
Operating Expenses: | |||
Operating Expenses | [1] | 4,634 | 3,851 |
Operating Income: | |||
Operating Income | [1] | 738 | 1,068 |
Distribution [Member] | |||
Revenue: | |||
Revenue | 19,997 | 17,333 | |
Gross Profit: | |||
Gross Profit | 4,680 | 4,194 | |
Operating Expenses: | |||
Operating Expenses | [1] | 3,460 | 3,237 |
Operating Income: | |||
Operating Income | [1] | $ 1,220 | $ 957 |
[1] | Operating expense allocations between segments were based on actual amounts, a percentage of revenues, headcount, and management's estimates. |
BUSINESS ACQUISITIONS (Narrativ
BUSINESS ACQUISITIONS (Narrative) (Details) - Angel's Instrumentation, Inc. [Member] - USD ($) $ in Millions | 3 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Business Acquisition [Line Items] | ||
Intangible assets acquired, useful life | 10 years | |
Business acquisition, consideration transferred | $ 4.7 | |
Business acquisition, cash acquired | 0.1 | |
Business acquisition, contingent consideration unpaid | 0.4 | |
Business acquisition, other holdback amounts unpaid | 0.5 | |
Acquisition costs | $ 0.1 | $ 0.1 |
BUSINESS ACQUISITIONS (Purchase
BUSINESS ACQUISITIONS (Purchase Price Paid for Businesses Acquired) (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Mar. 30, 2019 |
Allocation of Purchase Price: | ||
Goodwill | $ 34,958 | $ 34,545 |
Angel's Instrumentation, Inc. [Member] | ||
Allocation of Purchase Price: | ||
Goodwill | 1,902 | |
Total | 3,502 | |
Plus: Current Assets | 786 | |
Non-Current Assets | 473 | |
Less: Current Liabilities | (24) | |
Total Purchase Price | 4,737 | |
Customer Base & Contracts [Member] | Angel's Instrumentation, Inc. [Member] | ||
Allocation of Purchase Price: | ||
Intangible Assets | 1,470 | |
Covenant Not to Compete [Member] | Angel's Instrumentation, Inc. [Member] | ||
Allocation of Purchase Price: | ||
Intangible Assets | $ 130 |
BUSINESS ACQUISITIONS (Proforma
BUSINESS ACQUISITIONS (Proforma Information for Business Acquisitions) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Business Combinations [Abstract] | ||
Total Revenue | $ 37,912 | |
Net Income | $ 1,677 | |
Basic Earnings Per Share | $ 0.23 | |
Diluted Earnings Per Share | $ 0.23 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) $ in Millions | 1 Months Ended |
Jul. 19, 2019CAD ($) | |
Subsequent Event [Member] | Infinite Integral Solutions Inc. [Member] | |
Subsequent Event [Line Items] | |
Total consideration for shares | $ 1.4 |