Accounting Policies, by Policy (Policies)

12 Months Ended

Mar. 29, 2014

Accounting Policies [Abstract]

Business Description and Basis of Presentation [Text Block]

Description of Business:  Transcat, Inc. (“Transcat” or the “Company”) is a leading provider of accredited calibration, repair, inspection and compliance services and distributor of professional grade handheld test, measurement and control instrumentation primarily for the life science, biotechnology, medical device, pharmaceutical and other FDA-regulated industries, industrial manufacturing, energy and utilities, chemical manufacturing, and other industries.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation:  The Consolidated Financial Statements of Transcat include the accounts of Transcat, Inc. and the Company’s wholly-owned subsidiaries, Transmation (Canada) Inc., United Scale & Engineering Corporation, WTT Real Estate Acquisition, LLC and Anacor Acquisition, LLC (“Anacor Acquisition”).  All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates:  The preparation of Transcat’s Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires that the Company make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Significant estimates and assumptions are used for, but not limited to, allowance for doubtful accounts and returns, inventory reserves, probability of achievement for performance-based restricted stock units, fair value of stock options, depreciable lives of fixed assets and estimated lives of major catalogs and intangible assets.  Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment.  The accounting estimates used in the preparation of the Consolidated Financial Statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the operating environment changes.  Actual results could differ from those estimates.  Such changes and refinements in estimation methodologies are reflected in reported results of operations in the period in which the changes are made and, if material, their effects are disclosed in the Notes to the Consolidated Financial Statements.

Fiscal Period, Policy [Policy Text Block]

Fiscal Year:  Transcat operates on a 52/53 week fiscal year, ending the last Saturday in March.  In a 52-week fiscal year, each of the four quarters is a 13-week period.  In a 53-week fiscal year, the last quarter is a 14-week period.  The fiscal years ended March 29, 2014 (“fiscal year 2014”) and March 30, 2013 (“fiscal year 2013”) consisted of 52 weeks.

Receivables, Policy [Policy Text Block]

Accounts Receivable:  Accounts receivable represent amounts due from customers in the ordinary course of business.  These amounts are recorded net of the allowance for doubtful accounts and returns in the Consolidated Balance Sheets.  The allowance for doubtful accounts is based upon the expected collectability of accounts receivable.  Transcat applies a specific formula to its accounts receivable aging, which may be adjusted on a specific account basis where the formula may not appropriately reserve for loss exposure.  After all attempts to collect a receivable have failed, the receivable is written-off against the allowance for doubtful accounts.  The returns reserve is calculated based upon the historical rate of returns applied to revenues over a specific timeframe.  The returns reserve will increase or decrease as a result of changes in the level of revenue and/or the historical rate of returns.

Inventory, Policy [Policy Text Block]

Inventory:  Inventory consists of products purchased for resale and is valued at the lower of cost or market.  Costs are determined using the average cost method of inventory valuation.  Inventory is reduced by a reserve for items not saleable at or above cost by applying a specific loss factor, based on historical experience, to specific categories of inventory.  The Company evaluates the adequacy of the reserve on a quarterly basis

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment, Depreciation and Amortization:  Property and equipment are stated at cost.  Depreciation and amortization are computed primarily under the straight-line method over the following estimated useful lives:

	Years
Machinery, Equipment and Software	2	–	15
Furniture and Fixtures	3	–	10
Leasehold Improvements	2	–	10
Buildings		39

Property and equipment determined to have no value are written off at their then remaining net book value.   Transcat capitalizes certain costs incurred in the procurement and development of computer software used for internal purposes.  Leasehold improvements are amortized under the straight-line method over the estimated useful life or the lease term, whichever is shorter.  Maintenance and repairs are expensed as incurred.  See Note 2 for further information on property and equipment.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill and Intangible Assets:  Goodwill represents costs in excess of fair values assigned to the underlying net assets of an acquired business.  Other intangible assets, namely customer base and covenants not to compete, represent an allocation of purchase price to identifiable intangible assets of an acquired business.  The Company estimates the fair value of its reporting units using the fair market value measurement requirement.

The Company tests goodwill for impairment on an annual basis, or immediately if conditions indicate that such impairment could exist.  Other intangible assets are evaluated for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.  The Company determined that no impairment was indicated as of March 29, 2014 and March 30, 2013.  A summary of changes in the Company’s goodwill and intangible assets is as follows:

	Goodwill								Intangible Assets
	Distribution		Service			Total			Distribution			Service			Total
Net Book Value as of March 31, 2012	$	8,031	$	5,359		$	13,390		$	724		$	1,725		$	2,449
Additions (see Note 9)		-		4,234			4,234			-			2,062			2,062
Amortization		-		-			-			(239	)		(563	)		(802	)
Currency Translation Adjustment		-		(32	)		(32	)		-			(18	)		(18	)
Net Book Value as of March 30, 2013		8,031		9,561			17,592			485			3,206			3,691
Amortization		-		-			-			(167	)		(743	)		(910	)
Currency Translation Adjustment		-		(208	)		(208	)		-			(130	)		(130	)
Net Book Value as of March 29, 2014	$	8,031	$	9,353		$	17,384		$	318		$	2,333		$	2,651

The intangible assets are being amortized on an accelerated basis over their estimated useful life of up to 10 years.  Amortization expense relating to intangible assets is expected to be $0.7 million in the fiscal year ending March 28, 2015 (“fiscal year 2015”), $0.6 million in fiscal year 2016, $0.5 million in fiscal year 2017, $0.3 million in fiscal year 2018 and $0.2 million in fiscal year 2019.

Capitalized Costs [Policy Text Block]

Catalog Costs:  Transcat capitalizes the cost of each Master Catalog mailed and amortizes the cost over the respective catalog’s estimated productive life.  The Company reviews response results from catalog mailings on a continuous basis, and if warranted, modifies the period over which costs are recognized.  The Company amortizes the cost of each Master Catalog over an eighteen month period and amortizes the cost of each catalog supplement over a three month period.  Total unamortized catalog costs, included as a component of prepaid expenses and other current assets on the Consolidated Balance Sheets, were $0.3 million as of March 29, 2014 and March 30, 2013.

Income Tax, Policy [Policy Text Block]

Deferred Taxes:  Transcat accounts for certain income and expense items differently for financial reporting purposes than for income tax reporting purposes.  Deferred taxes are provided in recognition of these temporary differences.  If necessary, a valuation allowance on net deferred tax assets is provided for items for which it is more likely than not that the benefit of such items will not be realized based on an assessment of both positive and negative evidence.  See Note 4 for further discussion on income taxes

Fair Value of Financial Instruments, Policy [Policy Text Block]

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 March 29, 2014 and March 30, 2013, investment assets totaled $0.8 million and $0.6 million, respectively, and are included as a component of other assets (non-current) on the Consolidated Balance Sheets.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

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 cost 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 from the exercise of equity awards are presented in the Consolidated Statements of Cash Flows as a financing activity.  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 fiscal years 2014 and 2013, the Company recorded non-cash stock-based compensation cost in the amount of $0.5 million and $0.3 million, respectively, in the Consolidated Statements of Income.

The estimated fair value of options granted in fiscal year 2014 were calculated using the Black-Scholes-Merton pricing model (“Black-Scholes”), which produced a weighted average fair value of $4.05 per share.  During fiscal year 2013, the Company did not grant any stock options.

The following are the weighted average assumptions used in the Black-Scholes model:

	FY 2014
Expected term (years)	6
Annualized volatility rate	57.6%
Risk-free rate of return	1.6%
Dividend rate	0.0%

The Black-Scholes model incorporates assumptions to value stock-based awards.  The risk-free rate of return for periods within the contractual life of the award was based on a zero-coupon U.S. government instrument over the contractual term of the equity instrument.  Expected volatility was based on historical volatility of the Company’s stock.  The expected option term represented the period that stock-based awards are expected to be outstanding based on the simplified method, which averages an award's weighted-average vesting period and expected term for "plain vanilla" share options.  Options are considered to be "plain vanilla" if they have the following basic characteristics: granted "at-the-money"; exercisability is conditioned upon service through the vesting date; termination of service prior to vesting results in forfeiture; limited exercise period following termination of service; and options are non-transferable and non-hedgeable.  The Company will continue to use the simplified method until it has the historical data necessary to provide a reasonable estimate of expected life.

Revenue Recognition, Policy [Policy Text Block]

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.  Some service revenue is generated from managing customers’ calibration programs in which the Company recognizes revenue in equal amounts at fixed intervals.  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 Recognition, Rebates [Policy Text Block]

Vendor Rebates:  Vendor rebates are generally based on specified cumulative level of purchases and/or incremental distribution sales and are recorded as a reduction of cost of distribution sales.   Purchase rebates are calculated and recorded quarterly based upon our volume of purchases with specific vendors during the quarter.  Point of sale rebate programs are based upon annual year-over-year sales performance on a calendar year basis and are recorded as earned, on a quarterly basis, based upon the expected level of annual achievement.  The Company recorded vendor rebates of $2.1 million and $1.3 million in fiscal years 2014 and 2013, respectively.

Cooperative Advertising Income [Policy Text Block]

Cooperative Advertising Income:  Transcat records cash consideration received from a vendor for advertising as a reduction of cost of distribution sales as the related inventory is sold.  The Company recorded consideration in the amount of $1.9 million and $1.8 million in fiscal years 2014 and 2013, respectively.

Shipping and Handling Cost, Policy [Policy Text Block]

Shipping and Handling Costs:  Freight expense and direct shipping costs are included in the cost of revenue.  These costs totaled approximately $1.8 million in each of the fiscal years 2014 and 2013.  Direct handling costs, the majority of which represent direct compensation of employees who pick, pack, and otherwise prepare, if necessary, merchandise for shipment to customers, are reflected in selling, marketing and warehouse expenses.  Direct handling costs were $0.8 million in each of the fiscal years ended March 29, 2014 and March 30, 2013.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation and Transactions:  The accounts of Transmation (Canada) Inc. 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 Transmation (Canada) Inc.’s balance sheets into U.S. dollars are recorded directly to the accumulated other comprehensive income component of shareholders’ equity.

Transcat records foreign currency gains and losses on Canadian business transactions.  The net foreign currency loss was $0.1 million for fiscal year 2014 and less than $0.1 million for fiscal year 2013.  The Company utilizes foreign exchange forward contracts to reduce the risk that its earnings would 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 gain of $0.4 million in fiscal year 2014 and a gain of less than $0.1 million in fiscal year 2013, 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 March 29, 2014, the Company had a foreign exchange contract, which matured in April 2014, outstanding in the notional amount of $4.8 million.  The Company does not use hedging arrangements for speculative purposes.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income:  Other comprehensive income is comprised of net income, currency translation adjustments, unrecognized prior service costs, net of tax and unrealized gains on other assets, net of tax.  At March 29, 2014, accumulated other comprehensive income consisted of cumulative currency translation gains of $0.6 million, unrecognized prior service costs, net of tax, of $0.1 million and an unrealized gain on other assets, net of tax, of $0.1 million.  At March 30, 2013, accumulated other comprehensive income consisted of cumulative currency translation gains of $0.6 million, unrecognized prior service costs, net of tax, of $0.2 million and an unrealized gain on other assets, net of tax, of less than $0.1 million.

Earnings Per Share, Policy [Policy Text Block]

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 fiscal years 2014 and 2013, the net additional common stock equivalents had a $.02 and $.01 per share effect, respectively, on the calculation of dilutive earnings per share.  The average shares outstanding used to compute basic and diluted earnings per share are as follows:

	For the Years Ended
	March 29, 2014		March 30, 2013
Average Shares Outstanding – Basic		7,080		7,404
Effect of Dilutive Common Stock Equivalents		277		188
Average Shares Outstanding – Diluted		7,357		7,592
Anti-dilutive Common Stock Equivalents		10		464

Stockholders' Equity, Policy [Policy Text Block]

Shareholders’ Equity: During fiscal year 2014, the Company repurchased and subsequently retired 0.8 million shares of its common stock, including 0.7 million shares purchased from an unaffiliated shareholder in a privately-negotiated transaction for $5.6 million.

Reclassification, Policy [Policy Text Block]

Reclassification of Amounts:  Certain reclassifications of financial information for prior fiscal years have been made to conform to the presentation for the current fiscal year.