Transcat Q3 2025 Earnings Report

Transcat EPS Results

• Actual EPS: $0.45
• Consensus EPS: $0.38
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: $0.56

Transcat Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $70.30 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Transcat Announcement Details

• Quarter: Q3 2025
• Date: 1/27/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, January 28, 2025
• Conference Call Time: 11:00AM ET

Transcat (NASDAQ:TRNS) provides calibration and laboratory instrument services in the United States, Canada, and internationally. It operates through two segments: Service and Distribution. The Service segment offers calibration, repair, inspection, analytical qualification, preventative maintenance, consulting, and other related services. This segment also provides CalTrak, a proprietary document and asset management system that is used to manage the workflow of its calibration service centers and customers' assets; and Compliance, Control and Cost, an online customer portal that provides its customers with web-based asset management capability, as well as a safe and secure off-site archive of calibration and other service records. The Distribution segment sells and rents test, measurement, and control instruments for customers' test and measurement instrumentation needs, as well as value added services, such as calibration/certification of equipment purchase, equipment rental, used equipment for sale, and equipment kitting. This segment markets and sells its products through website, digital and print advertising, proactive outbound sales, and an inbound call center. The company provides services and products to highly regulated industries, principally life science, which includes companies in the pharmaceutical, biotechnology, medical device, and other FDA-regulated industries; and additional industries, including aerospace and defense industrial manufacturing, energy and utilities, and other industries that require accuracy in processes and confirmation of the capabilities of their equipment. Transcat, Inc. was incorporated in 1964 and is headquartered in Rochester, New York.

Transcat Q3 2025 Earnings Call Transcript

Presentation

[Operator]

Greetings and welcome to Transcat Incorporated Third Quarter Fiscal Year twenty twenty five Financial Results. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Tom Barbato.

[Operator]

Thank you. You may begin.

[Thomas Barbato, CFO at Transcat]

Thank you, operator, and good morning, everyone. We appreciate your time and your interest in Transcat. With me here on the call today is our President and CEO, Lee Ruto and our Chief Operating Officer, Mike West. We will begin the call with some prepared remarks and then we'll open it up the call for questions. Our earnings release crossed the wire after markets closed yesterday.

[Thomas Barbato, CFO at Transcat]

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 and 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 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.

[Thomas Barbato, CFO at Transcat]

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.

[Thomas Barbato, CFO at Transcat]

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

[Lee Rudow, President & CEO at Transcat]

Thank you, Tom. Good morning, everyone, and thank you for joining us. Consolidated revenue was up 2% to $6,680,000,0.0 However, organic service revenue declined 4% from prior year Last quarter, we talked about the Nexa solutions channel and that our expectations were that softness in that channel would continue through the current fiscal year. This continues to be our view and the team is focused on pipeline development and getting new solutions deals across the finish line. What we did not anticipate in the was the Dec.

[Lee Rudow, President & CEO at Transcat]

0 decline in core calibration service demand following in Oct. 0 and Nov. 0, which was largely in line with expectations. We discovered that the mid week Christmas holiday drove extended manufacturing closures in the back half of the month. Essentially, this affected the incoming calibration service work in 2 ways.

[Lee Rudow, President & CEO at Transcat]

In the December,, many of our customers ramped up manufacturing to meet demand up to and through the holiday shutdowns. The intensified production makes it difficult to send in equipment for calibration. In the December,, extended holiday facility closures and reduced staff reduced staffing levels contributed to a reduced volume of incoming equipment through the end of the calendar year. So timing contributed to the Dec. 0 service shortfall.

[Lee Rudow, President & CEO at Transcat]

And as 1 would expect, service revenue picked up significantly in Jan. 0 as a result of pent up demand from Dec. 0. Stepping away for a moment from the quarterly performance on December '10, we acquired Martin Calibration. We're very excited to get this deal done as Martin satisfies all of our strategic acquisition requirements.

[Lee Rudow, President & CEO at Transcat]

With annual revenues more than $25,000,000 Martin gives Transcat a strong presence in the Midwest, including Minneapolis, Chicago and Milwaukee, as well as Tempe, Arizona and Los Angeles, California. Martin's flagship lab is in Minneapolis, an area rich in medical device and life science. This is a region that relies heavily on quality calibrations and related services and solutions. From a bolt on perspective, we anticipate the ability to leverage our current operational infrastructure by combining our Arizona and LA labs with the Martin facilities that are in very close proximity. From a capabilities perspective, the 2 companies are very complementary.

[Lee Rudow, President & CEO at Transcat]

Martin brings a higher level of expertise on the mechanical and dimensional side and represents an ideal match with Transcat's advanced capabilities on the temperature, pressure and electrical side of the business. So in addition to the cost synergies you would expect over time with bolt on acquisitions, we expect to drive service growth by leveraging the expanded combined capabilities of both Martin and Transcat. The integration process is off to a great start and as we work and we work to maximize the early returns on this exciting coveted opportunity. Turning to distribution, revenue grew 7% in the quarter in the In Dec. 0, however, due to the extended closure of many of our customers, our rental channel experienced a similar decline in demand as our core calibration services channel.

[Lee Rudow, President & CEO at Transcat]

The rental revenue decline in Dec. 0 resulted in a distribution segment mix change that negatively impacted distribution service margins. And before I turn things over to Tom, I want to point out that the Transcat team has consistently delivered excellent results over an extended period. We have a demonstrated track record of driving growth and productivity. Our team is working to overcome the near term challenges we've encountered in the last couple of quarters and this primarily pertains to the year over year softness of the solutions channel.

[Lee Rudow, President & CEO at Transcat]

From a traditional calibration services channel perspective, we currently have a very strong pipeline of new high probability opportunities. And as we close out we are prepared for a strong So with that, I'll turn things over to Tom for a more detailed look at the financial results.

[Thomas Barbato, CFO at Transcat]

Thanks, Lee. I'll start on Slide 4 of the earnings deck posted on our website, which provides detail regarding our revenue on a consolidated basis and by segment for the consolidated revenue of $6,680,000,0.0 was up 2% from versus prior year driven by growth in distribution. Looking at it by segment, service revenue grew slightly. 3.8% organic decline was offset by growth from acquisitions. As Lee mentioned, service revenue was negatively impacted by the unexpected extended Dec.

[Thomas Barbato, CFO at Transcat]

0 holiday closures at our customer sites as well as the anticipated year over year decline in the Transcat Nexa solutions channel. Turning to distribution, revenue of $2,520,000,0.0 grew 7% driven by strong product sales and rental growth. Turning to Slide 5, our consolidated gross profit for the of $1,970,000,0.0 was down 6% from prior year. Service gross profit declined 8% versus prior year. Continued leverage from higher levels of technician productivity could not offset the headwinds caused by lower organic revenue levels.

[Thomas Barbato, CFO at Transcat]

Distribution segment gross profit of $730,000,0.0 was down 2% as margins were pressured in the due to mix. Turning to Slide 6, Q3 net income of $240,000,0.0 was down $1,000,000 versus prior year. Diluted earnings per share came in at $0,.25 down $0,.13 We report adjusted diluted earnings per share as well to normalize for the impacts of upfront and ongoing acquisition related costs. Adjusted diluted earnings per share was $0,.45 Flipping to Slide 7, where we show our adjusted EBITDA and adjusted EBITDA margin. We use adjusted EBITDA, which is non GAAP to gauge the performance of our business because we believe it best measures our operating performance and ability to generate cash.

[Thomas Barbato, CFO at Transcat]

As we continue to execute on our acquisition strategy, this metric becomes even more important to highlight as it does adjust for 1 time deal related transaction costs as well as the increased level of non cash expenses that will hit our income statement from acquisition purchase accounting. Consolidated adjusted EBITDA of $790,000,0.0 was down 13% from the same quarter in the prior year as extended Dec. 0 holiday closures and the expected solutions revenue softness negatively impacted EBITDA. As always, a reconciliation of adjusted EBITDA to operating income and net income can be found in the supplemental section of this presentation. Moving to Slide 8, operating cash flow and operating free cash flow were both higher year over year.

[Thomas Barbato, CFO at Transcat]

Capital expenditures were $140,000,0.0 higher than prior year and continue to center around service segment capabilities, rental pool assets, technology and future growth projects. The spend was in line with expectations. Slide 9 highlights our strong balance sheet. At quarter end, we had total net debt of $4,080,000,0.0 with a leverage ratio of 0.97x. We had $3,950,000,0.0 available from our credit facility as previously and as previously announced, we acquired Martin Calibration for $79,000,000 in paid in combination of $69,000,000 in cash and $10,000,000 in company stock.

[Thomas Barbato, CFO at Transcat]

Lastly, we expect to file our Form 10 Q on February '5. With that, I'll turn it back to you, Lee.

[Lee Rudow, President & CEO at Transcat]

Okay. Thanks, Tom. As we wind down the we expect organic service revenue to be in the low to mid single digits once adjusted for the fifty three week fifty third week in Of course, that is below our expectations. And as I mentioned earlier, it's driven by the softness primarily driven by the softness in our solutions channel that negatively impacted our organic growth rates in We're certainly looking forward to improve solutions performance in the year ahead. Relative to our core calibration business, we have a strong pipeline and momentum, but both are building as we get ready to embark on We believe organic service growth in will be more in line with our historical performance.

[Lee Rudow, President & CEO at Transcat]

We will continue to focus on the full integration of Martin calibration. Working together, we expect to capitalize on the numerous opportunities we have for both service growth and productivity gains. I shared my vision for the company over the years, which includes strong organic service growth and industry leading value proposition, inherent service operating leverage, lower cost of goods sold and SG and A over time driven by process improvement, automation and other productivity improving initiatives, strong operating cash flow and sensible expansion of addressable markets. We still believe in our vision, our goals and our ability to achieve them. We're excited for the fiscal year ahead.

[Lee Rudow, President & CEO at Transcat]

And with that, Rob, you can open the line for questions.

[Operator]

Thank Our first question comes from Greg Palm with Craig Hallum. Please proceed with your question.

[Greg Palm, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Yes. Good morning. Thanks for taking the questions here. I wanted to start, I guess, with the near term outlook. So understand some of the timing around the holidays.

[Greg Palm, Senior Research Analyst at Craig-Hallum Capital Group LLC]

You still and it sounds like things picked up in Jan. 0, but you still took down the full year guide. So I'm just curious, if it was timing just things slipping from Dec. 0 to Jan. 0, you wouldn't expect that guide to come down, but it did.

[Greg Palm, Senior Research Analyst at Craig-Hallum Capital Group LLC]

So is there sort of more of a deferral or what I guess what's kind of the incremental weakness here relative to what we were talking about three months ago?

[Lee Rudow, President & CEO at Transcat]

So this is Lee. I'll start and maybe Tom can add some color as well. Yes, so we had the slowness in Dec. 0. We spoke to many of our customers during and after the slowdown.

[Lee Rudow, President & CEO at Transcat]

So we kind of confirmed that that was taking that took place and impacted the numbers. The business has generally gotten very busy in Jan. 0, so we made some of that back. Just looking at the full year, looking at the solutions impact, continued impact, We're just we're confident that we'll be in the mid single digit range for organic growth, generally speaking. And there's been there has been some relative delays in some orders and things with high probability that we expect it to close in some will close at the back end of maybe even early into fiscal year in April 0, but we're just being conservative in the guidance.

[Greg Palm, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Yes. Okay. And can you maybe just give us a little bit more color on the visibility in the pipeline and really tie this back into kind of expectations for next year. Last quarter, I think you were kind of confidently talking about returning to high single digit organic growth. I think the commentary is a little bit more vague, understandably so.

[Greg Palm, Senior Research Analyst at Craig-Hallum Capital Group LLC]

But just any comments on visibility pipeline, timing around some of the closures, that'd be pretty helpful.

[Lee Rudow, President & CEO at Transcat]

Yes. Right now, our core calibration pipeline is very strong. So it's about as strong as I probably have ever seen it, which is good. There's a couple of big opportunities, for example, where we've gotten verbal confirmation, yes, we're going to go with Transcat, we're going to proceed according to these terms and this timing, and some of those have been delayed, which has affected some kind of our softer guidance trying to get our arms around exactly when some of these jobs are going to start. There's a variety of reasons why you have delays like this.

[Lee Rudow, President & CEO at Transcat]

We can get into some of them if you'd like. But generally speaking, the pipeline is very strong. I think that's the most important point. And for us, it's a matter and they have to come to fruition, of course, and that doesn't always happen. But we feel pretty good about where we stand going into the year, into the timing.

[Lee Rudow, President & CEO at Transcat]

And I think when we talk about we're a little vague for but when we talk about next year, particularly in the back half, Greg, as some of these things come to fruition, we're feeling pretty good about the level of activity that we're seeing. So not a lot has changed. And I think when we look at the solutions business improving throughout next year and we combine that with the pipeline activities, the macros appear to be pretty strong and there's no reason to believe that we shouldn't be back to more historic levels in terms of sales.

[Greg Palm, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Got it. Okay. And that was going to be kind of my next question or sort of final on this level of thinking just making sure that nothing structural has changed whether it's large numbers or something else. But historically, we've you've demonstrated and you've talked about this high single digit, low double digit organic growth profile for the service business and understand a couple of hiccups recently. But anything as you look ahead over the next handful of years, there's nothing that gives you hesitancy in your ability to sort of match those targets?

[Lee Rudow, President & CEO at Transcat]

Absolutely not. I mean, we have to keep things in perspective. We've had a lot of growth over a very, very long time quarter after quarter after quarter. Nothing has changed. Still, we have recurring revenue streams.

[Lee Rudow, President & CEO at Transcat]

Still, the business is driven by regulation. There hasn't been any competition that we've noticed that's been able to that is taking market share or doing anything differently. We're still in a really good position. And when you just take a little bit of a broader perspective on the sales engine, which from our perspective continues to get better, there's always tweaks that you can make, there's always technology that you can implement to make the sales process and other processes better. We're working on all those things.

[Lee Rudow, President & CEO at Transcat]

And to have a couple of quarters that you're in the mid single digit growth as opposed to high or even low double digits, that's to be expected. You can't win every game the same way, but we have a really good team, a really good plan. The fundamentals are the same and we expect that over the long term and in even the midterm, we expect strong performance from this company. I can't point to anything today that would stop me from believing that. So we expect a good year and the pipeline going into the year supports it.

[Lee Rudow, President & CEO at Transcat]

So we'll see. You never know 100%, but I like the fundamentals. Nothing's changed and we just got to get over a couple of quarters of softness and we and for the most part that we've identified the areas that need to be addressed. So we feel pretty good about the year.

[Greg Palm, Senior Research Analyst at Craig-Hallum Capital Group LLC]

All right. Thanks, Lee. Yes.

[Lee Rudow, President & CEO at Transcat]

No problem, Greg. Thanks.

[Thomas Barbato, CFO at Transcat]

Thanks, Greg.

[Operator]

Our next question is from Ted Jackson with Northland Securities.

[Edward Jackson, Managing Director & Senior Research Analyst at Northland Capital Markets]

I got a list of questions. Let's start with kind of the next at Transcat Services and maybe get an update with regards to kind of the actions that you've taken so far and kind of the actions that are left to kind of put that business back where you want it to be.

[Lee Rudow, President & CEO at Transcat]

Yes. So from a solutions perspective, it's something we're talking a lot about. There's 2 ways to look at the solutions business. 1 is as a standalone business that offers 5 or 6 service tracks in the ecosystem for calibration and that business has to be profitable and that business has to grow. Those are our expectations.

[Lee Rudow, President & CEO at Transcat]

There's also, Ted, the benefit that you get from the solutions business in terms of organic growth for our calibration services business because they also sit at the table with us literally and figuratively while trying to win new business. They're a differentiator. Their suite of services make our calibration business in some cases more affordable and helps our customers accomplish and complete their goals. So we like the business. We just needed to have better pipeline development.

[Lee Rudow, President & CEO at Transcat]

Needed a different way to sell, needed our marketing team involved. We're doing all these things. Unfortunately, the nature of that business is you're just not going to turn around in a quarter or 2, it takes a few quarters. So we think we're doing all the right things. The pipeline is better today.

[Lee Rudow, President & CEO at Transcat]

That's a fact that it was when we kind of discovered that we needed to work on it. And I think we'll get it to be an improved business, stable and growth in time. I'm not overly concerned with it. It's still a relatively small business, but we expect that it will be, I'm going to say, back on track next fiscal year and earlier the better.

[Edward Jackson, Managing Director & Senior Research Analyst at Northland Capital Markets]

Okay, thanks. Then just kind of shifting over to more to some model questions. Like service gross margins, the lowest it was since like And I know volume was a big impact there, but we're expecting to see a rebound in the and carry forward into 2026. Can you give us some kind of view on what you would expect your service margins to be next quarter and how we would think about that for next fiscal year?

[Thomas Barbato, CFO at Transcat]

Yes. I think, Ted, as we've talked and kind of gone through models, I would expect to be kind of more in line to be kind of flat year over year and then continue to grow as we look into and beyond.

[Edward Jackson, Managing Director & Senior Research Analyst at Northland Capital Markets]

And then shifting over to distribution, you did see I mean, I know you said it was a lot, but it was a little bit of recovery from last quarter. How do we think about that '25 in '20 06/00? And then can you provide some kind of I mean like did we get the recovery out of Becknell that we expected with regards to some of the rental stuff, maybe an update on that front?

[Thomas Barbato, CFO at Transcat]

Yes. So let me take that in pieces, right. So from a margin standpoint, certainly we've talked in the past about being consistently above 30 on the distribution side and growing from there as the mix towards rentals continues, right? I think if we we certainly would have been there if we didn't see the slowdown in rentals that Lee referenced in the back half of December. And then as we look ahead, that certainly that 30% threshold is 1 that we feel that we should be able to achieve.

[Thomas Barbato, CFO at Transcat]

And then as I said, as we see a bigger mix towards rentals, we should see some growth from there. Beknel was certainly better sequentially in versus and we expect it to be better in sequentially than

[Edward Jackson, Managing Director & Senior Research Analyst at Northland Capital Markets]

Okay. And then I lost my train of thought. I wanted to hit something else on when your earlier answer on the margin. I'll come back and maybe it will come into my head. How about just on pro form a earnings?

[Edward Jackson, Managing Director & Senior Research Analyst at Northland Capital Markets]

How should we think about you've just done a pretty large size acquisition. How should we think about the amortization of intangible assets within your pro form a earnings and also acquisition deal costs for in FY 2026?

[Thomas Barbato, CFO at Transcat]

Why don't I follow-up with you on that, Ted. I don't have the numbers in front of me right now, but I know when we talked about the model after the acquisition, I think we had done that update, but I could follow-up via email.

[Edward Jackson, Managing Director & Senior Research Analyst at Northland Capital Markets]

Yes, I'm just double checking. Then shifting over to working capital, your receivables were up, inventories were down, payables were up, the turns all followed, all that kind of stuff. Can you give us kind of a view on kind of what's going on with some of those working capital levers and how you see them playing out for the next few quarters?

[Thomas Barbato, CFO at Transcat]

Well, I think we should see a move kind of consistent with the growth in revenue. We've had a we've been focused on inventory levels all year and I think you've seen the improvements we've made since the beginning of the year from an inventory standpoint. I mean, accounts receivable part of the growth, right, is just bringing on a business. And as we bring on these bigger businesses, right, we're bringing on the accounts receivable that goes along with that. So you saw that addition coming from the Martin acquisition in Dec.

[Thomas Barbato, CFO at Transcat]

0. But I think we've over time, we've seen those working capital numbers kind of flex accordingly based on the inorganic and organic growth that we've experienced.

[Edward Jackson, Managing Director & Senior Research Analyst at Northland Capital Markets]

Okay. That's it for me. Thank you very much. Thanks,

[Operator]

Our next question comes from Martin Yang with Oppenheimer. Please proceed with your question.

[Martin Yang, Senior Analyst at Oppenheimer & Co. Inc.]

Hi. Thank you for taking my question. First question on distribution, would you attribute the weakness in distribution this quarter to the same reasoning you described for services? And how uniform are those 2 segments performing based on those seasonal patterns?

[Lee Rudow, President & CEO at Transcat]

What we refer to Martin in the earnings call script was the rental business as part of the rental channel, as part of the distribution. That was impacted the same way that the calibration services. So that is to say that we saw a decrease in demand throughout the month, particularly in the back half. That's what we're referring to. And of course, as you have that as rentals becomes as rentals was lowered in the quarter, that changes the mix, the overall mix to heavily it's weighted heavier towards core distribution, which has lower margin.

[Lee Rudow, President & CEO at Transcat]

So it has both an impact on margin, which is significant, but also in volume. So that's the effect that you saw on distribution. And yes, so it was similar to service in the month of Dec. 0 rentals that is.

[Martin Yang, Senior Analyst at Oppenheimer & Co. Inc.]

Got it. And then when we look at overall distribution on a year over year basis, can you tell us about the respective growth rate for rental versus non rental?

[Thomas Barbato, CFO at Transcat]

So, I think Martin, what we've said, what we've kind of said historically and it still kind of plays out here is that, we expect kind of our core distribution to decline slowly over time. And then we expect the rental business to grow at a similar rate to service, right. And what we've seen historically with service, like high single digits. That's kind of the goal and that's what we've the trajectory we've been on over the past couple of years.

[Martin Yang, Senior Analyst at Oppenheimer & Co. Inc.]

Got it.

[Martin Yang, Senior Analyst at Oppenheimer & Co. Inc.]

My next question is regarding your comment on what happened in Dec. 0. Is there any other seasonal patterns every quarter or other certain time of the year that could give you surprises like the past Dec. 0?

[Lee Rudow, President & CEO at Transcat]

Not really. There are certain patterns in the business. Typically, volume for services is higher in our which is Jan. 0 through March 0. And typically, distribution core distribution, not rentals, is a little bit stronger in our I mean, there are some patterns that seem to repeat, Martin, year over year.

[Lee Rudow, President & CEO at Transcat]

I think what happened this year, again, when you have a holiday on a Wednesday and you never know exactly how people react, it's just for whatever reason, which I don't think we saw as much in the past. So maybe it's an anomaly, maybe it's a pattern, don't know yet, But being having a holiday land on a Wednesday, people shut down that week and then things extend to ten days and so on and so forth. So I don't know of we've been doing this a long time and typically there aren't patterns like that. I'm not sure if this is a pattern or a 1 off, but either way caught us a little bit off guard in terms of modeling and forecasting. So I guess that's the best way to answer.

[Martin Yang, Senior Analyst at Oppenheimer & Co. Inc.]

Got it. Thank you, Lee. That's it for me.

[Lee Rudow, President & CEO at Transcat]

Okay. Thanks, Martin.

[Operator]

We have reached the end of the question and answer session. I'd now like to turn the call back over to management for closing comments.

[Lee Rudow, President & CEO at Transcat]

Okay. This is Lee and thank you all for joining us on the call today. We appreciate your continued interest in Transcat. We will be attending the Oppenheimer tenth Annual Emerging Growth Conference, which is February '26. So for those of you who are attending the conference, feel free to call on us, check-in on us and maybe sign up for a meeting time.

[Lee Rudow, President & CEO at Transcat]

Otherwise, you're free to contact us anytime after that conference and we'll be speaking to everybody again after our results. So thank you. Thanks again for joining us. Take care.

[Operator]

This concludes today's conference. You may disconnect your lines at this time and we thank you for your participation.

Participants

Executives

• Thomas Barbato, CFO
• Lee Rudow, President & CEO

Analysts

• Greg Palm, Senior Research Analyst at Craig-Hallum Capital Group LLC
• Edward Jackson, Managing Director & Senior Research Analyst at Northland Capital Markets
• Martin Yang, Senior Analyst at Oppenheimer & Co. Inc.