Just four years ago, test, measurement, and calibration instruments distributor Transcat reported a net loss of $6.6 million. Since then, the Rochester, NY-based company has shed its manufacturing operation and focused on its core catalog, distribution, and calibration businesses. The result? Transcat is back in the black.
“Transcat is financially sound, virtually debt free, with growth in revenue and earnings,” says CEO Carl Sassano. “It is well positioned in the North American manufacturing process, petrochemical, utility, and pharmaceutical industries. In five years, Transcat’s revenue and earnings should be 33%-50% greater.”
During its 2006 fiscal year ended March 25, Transcat’s net sales increased 9%, to $60.5 million. Net income, meanwhile, burst through the roof, reaching $3.6 million, compared with $256,000 for fiscal 2005. Net product sales rose 10%, to nearly $41 million; revenue from the calibration services division rose nearly 8%, to $19.7 million.
What’s more, Transcat made two acquisitions during fiscal 2006 that pushed the number of its calibration services centers to 12: Hilton Engineering’s facility, which gives it a presence in Puerto Rico, and Fort Wayne, IN-based N.W. Calibration Inspection.
Transcat’s turnaround is due in large part to the company’s decision to reposition itself as a supplier of both products and services. “The major difference is the increasing depth of interaction,” Sassano says. “These aren’t just ‘order me this product’ calls. They are highly consultative and really do help solve customers’ problems by helping them to select the right piece of equipment, deepening the levels of quality and excellence.”
President Charles Hadeed notes that Transcat’s customer base has grown 15% in the past five years. Transcat now teams its 10 field service representatives with its 10 telephone representatives to “follow leads more closely,” he says. “The phone people are more in tune with the catalog, and we’ve focused on teaming the inside and outside people together.”
Sassano says the cornerstone of Transcat’s products division is its 736-page master catalog, which sells more than 25,000 items and is used as a prospecting tool by both of its divisions. The company mailed 52,000 copies of the 2007 master catalog in September. During the past year it also mailed 240,000 short-form catalogs (24-48 pages) and 600,000 supplements.
Transcat in October also began enhancing its Website. “We plan to optimize the site for Google and Yahoo! searches, improve the Transcat search engine, and improve customer shopping-cart ease of use,” Sassano says.