Greetings, and welcome to the Transcat First Quarter Fiscal Year 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to Craig (indiscernible), Investor Relations for Transcat. Thank you. You may begin.

Yes, thank you and good morning, everyone. We certainly appreciate your time today and your interest in Transcat. On the call with me today are President and Chief Executive Officer, Lee Rudow, and our Chief Financial Officer, John Zimmer. After formal remarks, we will open up the call to questions and answers. If you don’t have the news release that was sent out after the market yesterday, it can be found on our website at transcat.com. We also posted slides that will accompany today’s discussion. Please refer to Slide 2 for our Safe Harbor statement. As you are aware, we may make forward-looking statements during the formal presentation and Q&A portion of this teleconference. Those statements apply to future events, which are subject to risks and uncertainties, as well as other factors that could cause the actual results to differ materially from where we are today. These factors are outlined in the news release, as well as the documents filed by the company with the Securities and Exchange Commission. You can find those on our website, where we regularly post information about the company as well as on the SEC’s website, sec.gov. So, please review our forward-looking statements in conjunction with these precautionary factors. With that, I would like to turn the call over to Lee to begin the discussion. Lee?

Thank you, Craig. Good morning, everyone. Thank you for joining us. Today, we will review our first quarter performance as well as discuss upcoming initiatives and our outlook for the current fiscal year. For those following along with the slides, I am starting on Slide 3, which is an overview of our long-term objectives. We are firmly focused on executing our strategic plan to build a foundation for future growth, while delivering near and mid-term earnings growth. We expect to achieve double-digit top line performance in the Service segment through an organic and acquisition growth strategy. On the organic front, we have and expect to continue to leverage our integrated sales model and the talent and industry expertise that we have added to the organization. We will continue to build our calibration through the development of larger enterprise customer opportunities, as well as maintaining and growing our high margin lower volume accounts. As always, we will continue to focus on regulated industries such as life science. Importantly, as we have shown over the past two years, as we move beyond the inflection point on the service side, over the long-term, we expect profits to expand at a rate faster than revenue. We continue to target acquisition opportunities that allow us to take market share and consolidate the highly fragmented calibration industry. Our acquisition strategy is to increase our capabilities, expertise, allow for geographic expansion and gain greater economies of scale. While there are larger acquisition opportunities, the majority of the potential opportunities are in the $1 million to $5 million revenue range. Our acquisition criteria are to pay 4 to 6 times EBITDA and achieve a target internal rate of return of 15%. In the Distribution segment, we will continue to leverage the strong cash generation and customer interactions to…

Thank you, Lee and good morning everyone. Let’s begin with Slide 5. In the first quarter we continued our trend of top line growth driven by Service segment revenue increasing to $12.1 million from $11.7 million in the prior year period. As we mentioned this growth was entirely organic. First quarter Distribution segment sales were $17 million, which was consistent with prior year period. We were able to offset our aggressive pricing due to the highly competitive market with additional volume during the quarter. Moving on Slide 6, both segments had negative impacts at the gross margin levels which were not fully offset by operating expense reductions. We do expect our Service segment gross margin to improve with increased revenue growth going forward. In addition, we continue to evaluate opportunities to reduce our outsourcing spend. For example, we recently added a state-of-the-art wind tunnel at our Rochester lab that will reduce related outsourcing costs in the future and offer additional revenue opportunities. The Distribution segment was primarily impacted by lower growth based vendor rebates, which had a 240 basis point impact on that segment’s gross margin and to a lesser extent increased price discounts. We did have some offset from higher cooperative advertising income. Each year our vendors established expected growth rates based on prior year performance in order to achieve certain rebate levels. As a result rebates tend to be cyclical. In other words, our strong growth in certain brands in one year makes it more difficult to achieve the same growth the following year. On a consolidated basis our operating income for the first quarter was $800,000, down from $1.2 million in the prior year’s first quarter. The Service segment operating income on a trailing 12-month basis was up 7.6% over the first quarter of fiscal 2014 trailing…

Okay, thanks John. While the first quarter provided its challenges, we continue to execute our strategic plan and remain excited about our near and long-term growth opportunities. For the remainder of fiscal 2015, we expect to see an improvement in our operating income and margin in the Service segment. While distribution margins are limited, we are maintaining our leading position in the market and leveraging the business to maximize opportunities in the Service segment. Capital allocation continues to be focused on growth initiatives. During fiscal 2014 and into fiscal 2015, Transcat completed a significant capital investment in upgrading and redefining Transcat’s client-facing software CalTrak Online, the new and innovative online service interface that manages our customers’ cost control and compliance data is branded as C3 Asset Management Software. We have already begun to gain customer confidence with the system and we are winning additional customers because of the value it provides for them. We will also be launching our new state-of-the-art website supporting both segments of the business. The new site will allow for improved transactions, enhanced search capabilities, strategic vendor stores, banner advertising revenue and an enhanced platform for premium content and customer reviews. As previously stated, we are continuing to work our acquisition pipeline to support our growth strategy. With that, we would like to open the call for any questions.

(Operator Instructions) And it seems that we have no questions at this time. I would like to turn the floor back to management.

Hey, Brenda, it looks like someone just came into the queue.

I just saw that as well. We have a question from the line of Steven Stern with Stern Investment Advisory. Please proceed with your question.

Sorry to be a little late on the queue. I have a question about the vendor rebates, who are our biggest vendors and are they the ones who provide us the bigger vendor rebates?

Yes, Steve, this is John Zimmer. The largest vendors – the largest of our vendors is Fluke and the rebates are primarily driven by them.

Okay. And do they rebate in the same period as our orders or is there a delay?

There is a variety of different rebate programs. Some of them are on an annual basis and some of them are on a quarterly basis.

Okay. But in reporting periods such as this first quarter, the rebates that are being referred to, were they for previous quarters or are they specifically for the first quarter?

They are for the calendar year.

Okay, very good. Thank you very much.

Yes, thank you.

(Operator Instructions) Okay. And we have a question from the line of (indiscernible) with the Horton Fund. Please proceed with your question.

Hey, John and Lee. It’s Joe from Horton Capital.

Hi, Joe.

Hey, just a question, can you articulate how you are doing on your life sciences strategy, are you making progress there, is that some of the big wins that you are seeing or are they related to other things?

So, this is Lee. Joe, we think we are making good progress. We like our pipeline. Some of our recent wins, four accounts, that will actually begin work shortly are in the life science space. Our pipeline continues to be weighted towards the life science opportunities, acquisitions that we work on are life science oriented. So I think that will be a yes all around your question and that strategy is not changed.

Okay. And then just a follow-up Lee, the double digit growth in terms of revenue is that a going forward basis or is that do you think you will be able to makeup this year from a weak first quarter?

Right. So, Joe, when we talk about double-digit growth we are talking – we are always talking about over the long-haul and into the future. We – I understand what you are saying. I would say that we are confident that the activity levels that we are participating in now will produce better revenue growth results throughout the remainder of the year. Our intent is always to produce double-digit growth through the blend of acquisitions, revenue, organic revenue growth and we are pretty confident that we will have significant increases in the back half of the year.

Okay. Thank you, guys.

Thanks Joe.

Thanks Joe.

(Operator Instructions) Okay, so it seems that we have no further questions at this time.

Okay. Well, thank you to everyone for participating in today’s call. We certainly appreciate your interest, your support. We look forward to updating you on our progress. Hope everyone has a nice day.