Greetings, and welcome to the Transcat Fourth Quarter Fiscal Year 2016 Financial Results. 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 Mychajluk with Investor Relations. Thank you. You may now begin.

Thank you and good morning everyone. We certainly appreciate your time today and your interest in Transcat. With me on the call today we have Transcat's President and CEO, Lee Rudow and our Chief Financial Officer, Mike Tschiderer. After formal remarks, we will open up the call for questions. If you don't have the news release that crossed the wire after markets closed yesterday, that can be found on our Web site at transcat.com. The slides that accompany today’s discussion are also on our Web site. 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. 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 with documents filed by the Company with Securities and Exchange Commission. You can find those on our Web site where we regularly post information about the Company, as well as on the SEC's Web site at sec.gov. Please review our forward-looking statements in conjunction with these precautionary factors. I would also like to point out that during today’s call we will discuss 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 have provided reconciliations of non-GAAP to comparable GAAP measures in the table accompanying the earnings release. With that, I'll turn the call over to Lee to begin the discussion. Lee?

Okay, thank you Craig. Good morning everyone and thanks for joining us on the call today. I’ll start with some highlights for the quarter and year, then we’ll talk to our acquisition strategy and the very successful year that we’ve had on that front and then I’ll turn things over to Mike a more in depth review of the financials. At the conclusion of which I’ll provide an update on our outlook for fiscal 2017. The results for the fourth quarter were mixed, strong service results were muted by softness in distribution, the bottom line was down in the quarter and slightly up for the year from an expense perspective we incurred additional one-time cost related to the completion of two acquisitions in the fourth quarter and a third deal that was completed just after the closing of the fiscal year. In addition, the variable based compensation cost tied to achievement of performance targets mostly related to our service segment increased in the quarter. These costs were compared to difficult comps in that, in the prior year fourth quarter there was no variable based compensation cost. We generated strong cash from operations in fiscal 2016, $11 million versus $4.4 million in the prior year. Our service segment continues to be the primary growth engine, from both a revenue and earnings perspective. Service revenue for the quarter was up 21% and 14% for the full year. That represents 28 consecutive quarters of year-over-year growth. And for the first time, service revenue exceeded distribution as Q4 service revenue was 53% of the total, and that’s a trend we expect to see continue. Service margins contracted as I mentioned just a moment ago mostly tied to those two incremental expenses that were absorbed because of the two acquisitions that we processed in fourth…

Thanks Lee, and good morning, everyone. The results that I will talk about are included in the slides that we have posted to accompany this call. And I’ll refer to some of those slides here as dive in a bit more. To start, fourth quarter consolidated revenue increased 1.6% to nearly $33 million as revenue in our higher margin service segment increased by double-digits, offsetting the impact of the decrease in the distribution segment. For the full year, consolidated revenue was 1.2% to $122.2 million largely due to the same factors driving the change in the fourth quarter. On a constant currency basis if you were to remove the impact of unfavorable exchange rates, between the U.S. dollar and the Canadian dollar that we experienced in 2016 revenue was essentially flat. In the service segment specifically, fourth quarter revenue was up more than 21% to a record $17.6 million and was comprised both organic and acquisition related growth. For the full year 2016, service revenue was up over 14% to a record $59.2 million. The compounded annual growth rate for the service segment revenue since fiscal 2012 is 13%. Sales in the distribution segment declined $2.6 million or 14.4% to $15.3 million in the quarter due to the factors that Lee noted. For the full year, distribution revenue was $63 million, down about 12%. Our gross margin in the service segment declined in the quarter due to the one-time expenses from recent acquisitions and higher expenses including variable performance based compensation that were recorded in the fourth quarter of 2016 versus the prior year fourth as Lee just described. Acquisition costs also impacted our operating margins. I think it's important to note that we expense all acquisition cost in the period incurred none are deferred. These costs were $187,000 in…

Okay. Thanks Mike. I’ll wrap up with a few comments regarding expectations for the year ahead, fiscal 2017. We expect double digit growth in our service segment. As always service growth will be a blend of acquired and organic growth, and organic growth will be our primary focus throughout the year. We expect sales and cost synergies from recent acquisitions to drive operating leverage as we work to integrate the recent acquisitions. We expect the short-term macros to be about the same, but have a good plan in place to drive the business, certainly more stability and energy in the industrial market would be a positive. We expect growth in our instrument and rental business and that growth with its attractive margin profile will aid in the stabilization and distribution. The Excalibur acquisition with in addition to its calibration business offers rental and used equipment is expected to contribute positively as well to the stabilization and distribution. Excalibur also brings to Transcat a new sales engine by a way of their well-established nationwide rep network. Long term we expect to continue to strengthen our value proposition and to be a leading provider of calibration services throughout U.S. and Canada. And we’ll continue to target consolidated revenues between $175 and $200 million and double digit EBITDA margins at that level within the next five years. So with that operator we can open the line for questions.

Thank you. At this time, we will be conducting the question-and-answer session. Thank you. [Operator Instructions] Our first question is coming from the line of John Sturges with Oppenheimer. Please go ahead with your question.

Nice acquisitions, congratulations, things look like they’re progressing well. I am just curious about the -- if you could give me -- review some details on the variable compensation, what you’re thinking is or what the goals are behind that?

Okay. Thanks John. I appreciate the questions. We relative to the compensation for the quarter we have -- all of our compensation is based upon performance of the company, we set targets, we detail this, John, in our proxy and those targets are strategic for the company and the variable fees is paid to the staff and to the management based on performance against those targets. I think what you see year-over-year was the fact that in fiscal ’15 we did not meet our targets and therefore in the fourth quarter particularly there was no competition expense. This year our targets were primarily geared towards achievement of certain performance in the service business. Some of those targets were met and so we have the year-over-year difference. That answer your question?

Yes, it does. Thank you.

[Operator Instructions] At this time, there are no additional questions. I will turn the floor back to management for closing remarks.

It looks like somebody just jumped in the queue.

Yes. We have a question coming from Steven Stern with Stern Investment Advisory. Please go ahead with your question.

I had several questions and they’ve been subsequently answered in large part, the tax rate shift you addressed very well in the primary statements and it was noticed -- well the drop in the tax rate and then John Sturges question on the variable compensation touched on a topic that I’d like to follow up on a little. I noticed that the compensations expense was split between cost of services provided and operating expenses. Is there a formula by which you allocated 200 at one level of the income statement and 500 at the other?

Yes, Steven this is Mike. There is an allocation that we go through based on the actual participants in the plant and the achievement of each of those individuals towards their goals as well as the corporate goals and then we look at the headcount, the dollars of each of those people and were those costs normally reside, lab cost would be more in the cost of sales if it’s direct related to lab functions with others being put into the administrative work or selling, general or warehouse expense. So it is based on headcount and dollars earned by each person Steven.

Very good. So it’s actually allocated by the function of the person receiving the compensation?

Correct.

Okay very good, and then final question on your lines of credit and you seem to have a lot of leeway and good margin there with availability. Can I ask who your banks are or who you are providers of credit are. Are they only banks?

Yes, and it is disclosed. So the credit facility is actually filed and our primary bank for lending, it’s all with M&T bank. We use other banks for operating accounts, but the credit facility is all with M&T banks, Steven.

Very good. Thank you very much.

Thank you all for joining us. We appreciate your interest and support in Transcat. For those of you -- I do want to announce, for those of you who are in the Cleveland area we’re going to be presenting at the Midwest Investment Conference which is hosted by the Cleveland CFA on June 22. So let us know if you have any interest in meeting with us, we’ll be happy to meet with you there and again thank you all for participation.

Thank you everyone. This concludes today‘s teleconference. You may disconnect your lines at this time. Thank you for your participation.