Q2 2026 Transcat Inc Earnings Call

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Greetings and welcome to the transcat Inc, second quarter, fiscal year, 2026 Financial results. Call

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, John how senior director of financial planning and Analysis.

Thank you, John. You may begin.

Thank you, operator and good afternoon everyone. We appreciate your time and your interest in transcap.

With me here on the call today is our president and CEO Lee rudo and our Chief Financial Officer Tom barbado.

We will begin the call with some prepared remarks and then we will open the call for questions.

Our earnings release crossed the wire after markets closed this afternoon, both the earnings release and the slides that we will reference during our prepared. Remarks can be found on our website transcat.com in the investor relations section.

If you would, please refer to slide 2.

As you are aware, we may make forward-looking statements during the formal presentation and Q&A portion of this teleconference,

these statements apply to future events which are subject to risks and uncertainties as well as other factors that could cause the actual results to defer to differ materially from where we are today.

These factors are outlined in the news release, as well as in the documents filed by the company with the SEC.

You can find those on our website where we regularly post information about the company, as well as on the sec's website at sec.gov

We undertake no obligation to publicly update, or correct any of the forward-looking statements contained in this call.

Whether as a result of new information, future events, or otherwise, except as required by law.

Please review our forward-looking statements in conjunction with these precautionary factors.

Additionally, during today's call, we will discuss certain non-GAAP measures, which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP.

We've provided reconciliations of non-GAAP to compare GAAP measures in the tables accompanying the earnings release with that. I'll turn the call over to Lee.

Okay, thank you, John.

Good afternoon, everyone. Thank you for joining us on the call today. Transcat delivered strong performance again in our second quarter of fiscal 2026.

The key to transcat ongoing success is the consistent execution of our unique strategy, which includes the diversity of our product and service portfolio.

As a reminder, there are 4 key elements to our strategy. Organic service growth inherent operating, leverage in our service platform, strategic Acquisitions and growth in our highly profitable rental Channel.

The combination of all 4 creates a unique and proven resiliency in our business model, which can be seen clearly in the first half of our fiscal 2026 year.

And then the second quarter despite continued economic uncertainty and volatility, Consolidated Revenue, increased 21%

To 83 million.

Stable calibration, revenue driven by customer retention, and strong performances by our two recent acquisitions, Martin Calibration and Essco Calibration, along with significant growth in our rental channel, drove double-digit revenue growth in both our service and distribution segments.

In addition in the second quarter Consolidated, gross profit, grew 26%, and gross margins expanded 120 basis points. Our differentiated strategy also enabled adjusted Eva, dog. Growth of 37% with 160 basis, points of margin expansion.

amidst, macroeconomic uncertainty and continued headwinds, the team did an excellent job finding ways to win grow and position the company for sustainable long-term growth throughout both segments,

Over your growth.

Early results of our most recent acquisition, Essco Calibration, have been very strong, as expected. Essco is a perfect fit, and as we like to say, write down the Fairway for Transcat.

Esco like the Martin calibration acquisition earlier in the fiscal year demonstrates, our ability to attract and acquire, highly sought-after calibration companies that expand our capabilities, Geographic footprint leadership, and most importantly, our ability to deliver long-term organic service growth

Transcat's reputation as a strategic acquirer of choice in the calibration industry continues to be an important differentiator.

We firmly believe our methodology and culture around integration and Synergy capture is second to none.

The Acquisitions of both Esco and Martin had made transcat a very difficult company to compete with.

Turning the distribution in the second quarter, revenue grew 24% from high demand, especially in our rental channel.

Gross margin expanded, 530 basis points versus prior year, driven primarily by an increase in the mix of higher margin, rental Revenue within the distribution segment.

The strength of our balance sheet continues to support transc cat's proven growth strategy. Our new syndicated credit facility nearly doubles transcat resources to execute on, proven acquisition and growth strategies Automation. And many new AI programs in the works.

We expect AI to generate new data streams and Associated insights that will benefit both sales and operations.

From productivity to capacity planning from marketing to customer retention, we are engaged in a new level of data, management and delivery.

overall, we're pleased with our second quarter performance, which like the first quarter remains strong,

The spike continued despite economic headwinds. With that, I'll turn things over to Tom for a more detailed look at the second quarter financial results.

Thanks Lee. I'll start on slide 5 of the earnings deck, which provides detail regarding our revenue on a Consolidated basis.

and by segments for the second quarter of fiscal 2026,

Looking at it by segment, service revenue grew 20%. Despite continued economic volatility,

Distribution revenue of 29.4 million.

Grew 24%, primarily due to strong performance from the higher-margin rental business.

Turning to slide 6.

Our consolidated gross profit for the second quarter of $26.8 million was up 26% from the prior year. Service gross profit increased 17% versus the prior year. We continue to leverage higher levels of technician productivity and our differentiated value proposition.

That said, service margins continue to be pressured by lower-than-historic levels of organic growth, as well as lower year-over-year Transat Solutions revenue.

Distribution, segment growth. Profit of 9.8 million was up 48%.

With 530 basis points of gross margin expansion.

Driven primarily from the performance in our rental Channel.

Turning the slide 7.

Q2 net income of 1.3 million decreased, 2 million dollars versus the prior year, driven by higher interest expense and increased tax rate within the quarter.

Net income was negatively impacted by both one-time expenses related to the company's CEO succession plan and a higher effective income tax rate.

The income tax rate was impacted by higher-than-anticipated excluded compensation. Expenses were also tied to the CEO succession plan.

Dil diluted earnings per share came in at 14 cents we expect additional 1 time, CEO succession cost in a similar resulting impact on the company's effective tax rate in the second half of fiscal 2026.

We reported adjusted diluted earnings per share as well to normalize for the impact of upfront and ongoing acquisition-related costs.

Q2 adjusted diluted earnings per share was 44 cents. A reconciliation of diluted earnings per share to adjusted diluted earnings per share can be found in the supplemental schedules attached to this presentation.

Flipping this slide 8 where we show our Consolidated adjusted ibida and adjusted ibida margin.

We use adjusted evida, which is non-gaap to gauge the performance of our business because we believe it is the best measure of our operating performance and ability to generate cash.

as we continue to execute on our acquisition strategy,

This metric becomes even more important to highlight, as it does adjust for one-time deal-related transaction costs, as well as increased levels of non-cash expenses that will hit our income statement from acquisition purchase accounting.

Second quarter Consolidated, adjusted ebit of 12.1 million increased 37% from the same quarter in the prior year was 16 160 basis points of margin expansion.

Please note that segment. Non-gaap results are now labeled adjusted operating income but the calculation did not change.

As always, a Reconciliation of adjusted ibida to operating income and net income, can be found in the supplemental section of this presentation.

Moving to slide 9, operating cash flow is up 5% versus the prior year, and CapEx is in line with expectations, continuing to be centered around service segment capabilities.

Rental pool assets. Technology and future growth projects.

So, it's like 10 highlights are strong. Balance sheet, we had total debt of $111,900,000 at quarter end.

38.1 million available for borrowings under our secured revolving credit facility and a leverage ratio of 2.25 X.

We were pleased to close the Essco calibration deal in the second quarter. Tesco was a coveted calibration company that is highly synergistic and fulfills all of our strategic acquisition drivers. The IBA margin will drive a lower leverage ratio in subsequent quarters.

Lastly.

Our form. 10 Q will be filed, November 5th after the market closes.

With that, I'll turn it back to you, Lee. All right, thank you, Tom.

As I mentioned earlier, our diversified portfolio of products and services, along with a strong financial profile, has generated consistent results over an extended period of time.

And through various economic Cycles, this should not be understated. As our business model continues to demonstrate its resiliency. In addition, we will continue to leverage technology as a competitive Advantage by investing in state-of-the-art capabilities.

Systems processes and AI, all of which drive sustainable growth and efficiencies into our business model. This is the Transcat way.

As previously discussed, we expect a return to high single-digit organic service growth in the second half of fiscal 2026.

Margin expansion, as we return to historical rates of organic growth.

We have a strong acquisition pipeline to support an increase in our geographic footprint capabilities and overall market share.

And where it makes sense. We will continue to expand our addressable markets through acquisition,

Our leadership team across multiple levels of the organization continues to get stronger and has been a major contributor to our ability to continue to deliver sustainable long-term value for our shareholders.

And with that operator, we can open the call up for questions.

Thank you.

If you would like to ask a question,

please press the star and 1 on your telephone keypad.

You may withdraw your question by pressing star 2.

Once again to ask a question, please press the star and 1 on your telephone keypad.

We'll take our first question from Greg Palmer with Greg Hollum. Please go ahead. Your line is open.

hi uh, good afternoon and thanks for

Taking the questions. I wanted to start with, uh, just in terms of the quarter. You know, distribution was, you know, I think the highlight again. So maybe a two-part question: number one, what's driving the rentals acceleration? I don't know if it's, you know, how much is market related versus, you know, company specific that you're doing to drive incremental sales? And are you able to give us kind of the mix of what was rentals in the quarter as a percent of...

Distribution.

Yeah, Greg, it's Tom. How you doing? Um, so I think, you know, with when we talk about rentals, I think there's there's 2 things, you know, driving the growth there, I think 1 is and we've talked about this before, right? I mean, we, we acquired Axiom test equipment. Um, you know, about 2 years ago, when we made a conscious effort to, you know, focus last year on really accelerating and integration of that business. And I think, you know, part of what we're seeing is that that that, that integrated team is, is performing at a very high level. Um, I'll just say winning more opportunities, um, that are presented to them and really helping to drive. Um, you know, some of the growth we're seeing, I think there there is some, you know, rent versus buy, um, impact to to the results as well. Um, you know, given some of the, some of the, uh, you know, macroeconomic challenges that exist. But I think this 1 is, is heavily weighted towards execution on our part and, and the benefits of the, the, um,

Uh, the integration work we did last year and I think, you know, a year-over-year, the back rental business is also, you know, performing very well on a year-over-year basis, and we're seeing, um, you know, consistent demand there as well.

What kind of visibility levels do you have for the second half of that business? Because obviously, the revenue growth in the first half is, you know, from a numbers standpoint, is pretty incredible.

Yeah, I I think, I think, you know, we we started seeing in the second half of last year. We started seeing some of the benefits of of, you know, better better performance better execution, you know, post integration. So I think, you know, it's not it's not a reasonable expectation to to think that we're going to continue to see, you know, the growth rates we saw in the first half of the year but, you know, I I I'm still expecting, you know, reasonable. Um, you know, margin expansion, not to the tune, you know, on a on a, on a year to date basis. I we're seeing north of 500 basis, points of margin expansion year of the year. I think, you know, we'll continue to see margin expansion. Probably something more, you know, in the, you know, 250 to 300, uh, basis points. But um,

You know, you should expect to continue to see good performance.

Okay. And then, uh, on the service side, you know, I think by my math still, you know, kind of low single digit organic decline. Um, what, what gives you the confidence to sit here today and still say, yes, we're going to return to high single digit organic in the in the back half of the year because it strikes me going from a low single digit, decline to a high single digit.

Um that's a that's a pretty big move. Pretty big uptick.

So, so I'll take, I'll take this 1. Um,

You know, closing new business and starting new business. I think the, uh, the economy is such that, uh, the longer time to close has become more normal. Um, the incremental cost for the, for our customers to change vendors at this particular time, with some of the uncertainty has been a challenge. But the reason why we're still quoting in the high single digit range, is because, you know, a number of counts have been won recently and will come to fruition. And, and we expect Revenue as as we drive through the third quarter into the fourth. And so I think there's enough there uh, that, you know, we have a fair, Fairly good sight lines in into more growth than we've experienced in the first half, which by the way, is what we we, you know, we've been guiding to softly for the last several quarters. This is what we thought would happen and it's not too far away too, too, too far off from original expectations.

Okay, understood. Uh, that's it for me. Best of luck. Thanks.

Okay, thanks. Thanks.

Thank you.

Our next question comes from Max Mika Alice with Lake Street Capital markets. Please go ahead. Your line is open

Hey guys, thanks for taking my questions. Congrats on the quarter. Uh, maybe just a question towards Esco, maybe looking back 90 days, since you guys acquired them on the 5th of August. Maybe are there some things with that acquisition that have been have become more of a positive than you originally thought. And then, maybe on the other hand, some negatives that you, or maybe some obstacles, you've run in with the Esco acquisition as well,

Get it. This is Lee Max. I'm very very few obstacles. I mean, we we we in addition to acquiring the company, we we acquired a really good management team, they understand their business, um, and and that business has done really well. We we don't really count in our organic growth numbers when when our Acquisitions grow in the first year, but we've had really impressive growth from Esco actually we have from Martin as well. So both those companies are in a double digit range for growth, um, since we acquired them and I expect that to continue. Um, and as far as negatives I really can't think of any. I mean, there's, there's always some challenges just trying to get the no people. Um, but most of the planning sessions have gone. Well, uh, our sales are integrated almost day 1 without any real issues whatsoever that have been, you know, at least come to my attention. I think it's, it's been as smooth as as we've experienced and I think you're going to get that with the better quality companies and we saw it with Martin, we're seeing it again. Um, that's that's that's almost common place. And it's it's part of, you know you get

What you pay for and um we've been pleased, really pleased.

Yeah, and I guess kind of go back to sort of the question Greg had just with the back half of the second year or second half of the year with service returning to organic growth. And you, you talk about some economic uncertainty bar barring any economic uncertainty further obstacles. I mean, like, what is that? Like, how would you define that of, um, like this economic uncertainty? Um, stalling. You guys from growing in?

The second half of the year, I mean just kind of getting a gauge on. Like what is

Kind of what we should be looking for. I guess to kind of model out the second half of the year for service growth.

Well I I I think what we're what we're alluding to Max is, maybe kind of more of what we've seen in the first half of the year. A lot of, you know, uncertainty around tariff levels. Um, and you know where things are going from an interest rate environment standpoint. I think it's, you know, it's got some of our, our customers, um, you know, reacting a little slower than what we normally see. And I think, you know, with recent news, I think we're expecting, um, you know, that's improved some, but it just seems like in this environment, we're operating in things are subject to change at any point in time.

I mean, have you seen customer sales cycles?

Shrink since maybe 3 or 4 months ago up until now.

I don't think the sales cycle has shrunk. I think we've experienced for the last half a year to 3/4 of a year. We've had consistent. Delays for customers who originally expressed? Yeah. Yes, we're going to go with transcat. Um, we like the value proposition. Here's what we're going to make the change and then that seems to get delayed and delayed again. And so you know I've seen this before, it's not uncommon it's it's why we try not to Focus quarter to quarter. Try to look at the bigger picture of who we are, where we're headed, where we've been in terms of a service company. We love the position.

Addition we're in, but you're going to have economic cycles like this that are just going to be a little bit softer than you like. But our revenue and retention relative to our revenue relative to retention has been solid. We've made $2.

Which I tried to allude to in the script. So, um, we're we're right on target, um, you know, and and I I consider this really good performance given

Some of the headwinds we have. So we'll, we'll see how it all plays out. You know, we, we are seeing sight lines, we are seeing signs of of customers. Um, you know, actually giving us the go, you know, a new orders and and that's where the confidence is coming from, in the back half.

Awesome. Thanks guys. Great core.

Okay, take care. Thanks Max.

Thank you.

Our next question comes from, Ted Jackson with Northland Securities, please go ahead, your line is open.

Um, thanks very much. Um, I want to just it's not really a question but maybe it is a question, but just with regards to rental, you know, the rental business has been going really well. Um, you keep it buried in um, distribution of what's going to get you to break that out and and why I ask is, you know, I mean, it's becoming a a pretty important piece of business and it's an important piece of your capex and you know, I don't mean that I'm not mistaken. I don't think you even you break.

Your rental capex is out, but you know the capex is substantially larger than it was before. Um, you're clearly investing in either the same thing or your rental assets, you know? I mean, at what point do we get to where you're going to start showing a little more about that so we can get a better handle on, you know, the return you're getting on that investment rather than deciding it just be a growth driver on the topic? So, that's my first question.

Yeah, hey Ted, it's Tom. Um so you know, 1 of the beauties of the rental business, right? And and part of the way that we got this business started,

I think at some point in time, you know, we may be there, but currently, it's kind of operated as one business, you know, um, internally from a resource standpoint, you know, so on and so forth. I think, you know, when we talk about CapEx,

um,

you know, I I would, I would just think in, in the context of, you know, about a third of our capex budget is allocated towards rentals. And, you know, when we talk about rentals, you got to think about capex from a net standpoint, right? Because anytime you have an effective rental business. You also have to have a way to, um, you know, identify slow moving equipment and have a used program to, you know, turn that equipment out generate cash and reinvest it in, you know, assets that do have Demand, right? So I would just say on a net basis, um, you know, it's about a third of our, our, uh,

our capacity.

And what is it in terms of a piece of your PP&E? You know what I mean, because it would not be in your inventory; it would be in your, you know,

At the I I I don't have that number off the top of my head, but I could follow up with you.

Okay. I mean, you get where I'm going with it, I mean, it's turning into like, you know, it's an important turning into an important business driver. And I I just think there needs to be some more metrics around it, that's all.

um, the uh, the next question is on, um,

The solutions business, you know? I mean, it's been, you know, I mean now we have, you know, all these new headwinds but, you know, you know, prior to the election and everything was taking place, you know, it's been a drag for the business for quite a bit of time. And it, you know, you you've singled in the signal, in the past that, um,

That it it's it's you know come to a point where it's stabilized can we can you give a little more color? I mean when when you look at that Solutions business, for the third quarter, you know, what was it relative to the second quarter? How did it come in? What was it relative to the prior year period and you know kind of how is it performing? These are the year expectations that we went into the quarters

Yeah, this is this is this is Lee Ted. I I think it's in line. It's I I'll say it's within pretty close range of our expectations. Um, you know, we wanted the business to be stable. Meaning, you know, it had gotten to a certain point. There was a, there was a significant drop off. And now we're not seeing drop offs anywhere near what we saw, you know, back a year ago and that's that's what we're shooting for, from a, um, you know, sequential standpoint. If you look from q1 to Q2, you did see, stability. Uh, which is what we expected, but we got it towards. If you look year-over-year, you still see you still see declines. But there, I'm going to say and characterize them within the range of what we

The possible expectations. So that business, um, it's an important. It's an important business because in time and overtime, uh, it would, it will help us drive organic, um, service growth and, and we like it for that reason. Um, but we would expect once we get to the the place where we think the business can go, um, its growth rate should be similar or with, you know, then our normal then, then our what our typical overall growth rates are for, for calibration Services. We'll see. Um, but right now, uh, you know, it's closed. And I, I would say it's in range of the expectations that we set a year ago.

So if we if if let's just say it was flat sequentially and it just Trends, you know, flat I mean not saying that, that's your expectation or anything but if it did that at what point would you, you know what, what would it stop being a drag with regards to growth metrics in the top line?

Yeah. I mean if it if it if it was a flat business, um then it's a business that that, you know, we we you know if we're going to maintain a flat business, that's going to be for 1 reasons to an end and it drives calibration business force. And therefore, it's a channel that we see value in. Um, we don't see it today as a flat business in the long term. Um, I think once we get it stabilized and you know, um, get get, get, get everything lined up the way we think. Uh we're capable of doing that should be a growth business. But um, no no I I I process my question.

I'm just kind of where I'm driving to is, you know, to be honest at what point does it stop being a drag with regards to Topline growth? That's really coming out with a given that if you'd save water.

Yeah, very soon. I mean as we get through this fiscal year in the back half of the year, that's exactly what we would expect. So, I, you know, we shouldn't be talking about the solutions business. Like we've talked about it for the last year as we get through third and fourth quarter. This is, this is the time when we solve the declines, this is when we thought we, we, we get stabilized, we're close. So I think, yeah, that conversation is going to be over the next quarter or 2.

And then, um, the last thing with regards to, um, your transitions and stuff, uh.

Still going through the bottom line in that and your performance? Or is that being removed?

No, it's adjusted out of the, um, it's adjusted out for the adjusted EVA number and it's adjusted out for the adjusted EPS number for the reconciliation. Okay. I just wanted to make sure that, yeah, so that the, what is it, 44 cents? So adjusted earnings? That's, that has that removed. That's, that's what I was asking. That's right, that's correct. All right, hey, thanks very much, I'll step out of line. Okay? Thanks, Dad. Take care.

Thank you.

Our next question comes from Martin. Yang with Oppenheimer, please go ahead. Your line is open.

All right. Thank you for taking my question. Um, so I want to

make sure I understand the difference growth Dynamics between

uh, newly acquired Esco and Martin and then your uh, other

Service businesses, our service, this is overall have organic growth rate at low single digits, but also mentioned as converter is still on Double Digit growth.

So what's created such different growth profiles, anything you can do.

To upgrade to.

Between okay. So you know I guess the question is, why are those businesses doing well?

Um, yeah, so some of the better than the rest of your service.

Right. So, so for, you know, there's there's probably a couple of reasons, um, that I would that, I would Point towards Martin, um, you know, first and foremost, it really depends. Like, for example, escos, in the New England area where that, which is their strength, and, um, there are certain life science customers that are doing very, very well. Um, and and, you know, we do a lot of research. We do we we we we turn a lot of data to figure out which customers are growing, which ones are descending. Which ones, you know, have have troubles, which ones are building plants, which ones are are not. And, and we knew in due diligence that their, their portfolio of customers was a really strong portfolio and we expected them to grow. You know, some of the ones that we have are just just a little bit different. We have some of the same customers, but in some cases, they're different and part of what made Esco Esco, um, is that, you know, there the strength of their customer base and their trajectory of growth. So, that's not that has not come to us. That's not surprising to us really the same thing with Martin too. You know, in in

In the particular region that they're in which, which is Minneapolis, um, the light, the life science companies that are there in the med device primarily that are, there are companies that are performing really well. So as you go around the country,

I mean, we, we have 34 commercial Labs, you know, I would say, you know, 80% of our of our home maintenance number, but a large percentage of our commercial labs are growing, you know, it's just we have different pockets in different regions for different reasons where you know, we've got some headwinds and and that's, that's normal. So um we bought those companies for a reason and we expected them to grow even with these headwinds and and and they're doing that. So they're meeting our expectations.

Got it. Um, another question on the next quarter.

so,

do you part of the Market's performance will be characterized as?

Organic growth. Come next quarter. Correct.

That's correct. So, at the end of the quarter, yep. Yeah. Are you with quantify how much that can contribute to your, uh, organic growth Target?

Um, you know, I I I would just say Martin it. It's it's um,

You know.

25 million on a base of, um, on a full year on a base of, um,

You know, 225 or 230 million of of service Revenue, right? So, you know, it's it's it it kind of gets diluted because it's, you know, it's 10% of the total.

um, but um

Yeah, I don't I don't know how else, how else to characterize it? If I don't have a specific Martin to would you expect Martin and Esco to sustain their double digit growth?

To perform in, uh, the double digit range.

Understood. Thank you, Tom. Thank you, Lee.

Thank you. Thanks Martin.

Thank you.

And we do have a follow-up from Greg Palm with Greg Halen please go ahead. Your line is open.

Yeah, thanks just a couple uh, uh, follow-ups on on distribution, you know?

I I, I feel like every year it almost sort of

Builds throughout the year. And and so I guess my, my question is, I mean, from a seasonality standpoint, do you expect anything different this year or is there anything you know, any reason why you would have maybe higher than normal first half revenues? I don't know if that's just timing or what you sort of see right now based on, you know, visibility levels but just kind of curious how you think distribution plays out more specifically in the second half.

Yeah, right. I I I think we're going to see it continue to be strong, you know, I mean typically third quarter is a a strong quarter historically for distribution, but when we look at, we look at Pulse so pulse for us would be, you know, things like daily quotes and activity levels and so on and so forth. And the pulse for a distribution continues to be strong into third quarter, which is what we expected. And I I I don't see anything right now on the radar and I'll and I'll defer to Tom as well.

Um, that that would lead me to believe there's a drop off coming, um, from the, from the, from the strong performance we've had. Yeah, certainly not a certainly, not a drop off. But I think as I mentioned earlier, I think, you know, when we talk about rentals and some of the benefits that we're seeing from, um, you know, the execution and the and as a result of our integration, you know, we started to see, you know, some meaningful, um, you know, acceleration and growth um, you know, towards the back half of last year. So I think as we look ahead to the second half of this year, I don't think you know we're certainly not going to see, you know, things reversed, but I I think the growth will moderate a little bit and that's why, you know, I'm also not expecting, you know, 500 plus basis points of margin expansion. I think, you know, something as I mentioned earlier, 250 to 300 is probably, you know, more reasonable on, you know, slightly lower growth.

Yep. Okay, fair enough. And then I was wondering if you could comment at all on the competitive landscape in in the service segment with a couple of things, you know, going on. Um I don't know how that sort of relates to your expectations of accelerated, organic service growth, but just kind of curious to get your thoughts there.

Well, you know that when you look at the competitive landscape, you know, there's there's a group of traditional customers that we've always competed against. You know, you're talking the Simcoe is the the tektronix, the trescal and and you know from the information that we gather from the marketplace um and at least a couple of cases, you know you know those companies are struggling a bit you know with the with these particular headwinds that we have. Um, and there's reasons for that, I mean over the longer term Transit has been so committed to the calibration market. We've invested years in and year out. Not only in our people and our training, but the assets we put in capabilities, the types of Acquisitions. We make the competitors that I just refer to have have not done that. You know, they haven't acquired companies and increased capabilities, they have not um, you know, put a lot of capital into their businesses. So when you hit look this is my opinion and from the information that I have and so when you, when you come up against headwinds, we're much better suited to withstand them than than than, than that group of competitors. And I think we've done an excellent job. I'm doing that. I'm very proud actually.

The organization. And, you know, yeah, maybe our organic growth is, is, is is in a flat or low single digit range. But but I think relative to others um that are traditional much much well better better defensive better position better Diversified. I use the word Diversified a couple times in my script for that very, very reason Greg. Um, now we also compete these days with a new with, there's a new group of competitors, there's some private Equity um in our business space who have um you know, sort of cons

Validated several uh, in some cases smaller companies but again longer term, if you don't integrate those companies and you can't take advantage of the synergies, particularly the growth synergies, I think you're going to end up with the same scenario. So if you invest the way we invest, you integrate, the way we integrate acquire, the types of companies, we acquire, I think we're going to continue to fare, well, with the old competition, which I described and the new competition which is more PE backed. I like the position we're in. Doesn't mean, you know, we're not going to face headwinds like everybody else. I just think we're going to fare better and then the longer term we're going to be better, positioned. And we've proven that over time, and I think we're proving it right now.

Yeah. Okay, makes sense. All right, appreciate the caller. Thanks.

Thanks Greg.

Thank you.

And these will conclude our Q&A session. I will now turn the call back to John how

Thank you all for joining us on the call today.

We have a number of upcoming conferences in the month of November on November 11th, we will be attending the beard 2025 Global industrial conference in Chicago.

On November 17th, we will be attending the Raymond James, Soma small cap Summit in Sonoma, California. And finally, on November 19th, we will be attending the Stevens annual investor conference in Nashville, Tennessee.

For those attending the conferences, we look forward to seeing you there. Otherwise, feel free to reach out to us at any time. Thanks again for your interest in transit.

And these cells conclude today's program.

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