Transcat, Inc.

Good afternoon, everyone. Welcome to the TransCat fourth quarter fiscal year 2026 financial results conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. And as a quick reminder, today's conference is being recorded. It is now my pleasure to introduce your host, Mr. John Howe, Senior Director of Financial Planning and Analysis. Mr. Howe, please go ahead.

Thank you, Operator, and good afternoon, everyone. We appreciate your time and your interest in TransCat. With me here on the call today is our newly appointed President and CEO, Jamie Eyrich, and our CFO, Tom Barbato. We will begin with some prepared remarks and then open the call for questions. Our earnings release crossed the wire this afternoon after the market closed. 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 two. 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 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 compared GAAP measures in the tables accompanying the earnings release. With that, I'll turn the call over to TransCat President and CEO, Jamie Eyrich.

Thank you, John. Good afternoon, everyone, and thank you for joining us on the call today. Before we walk through the quarter, I just want to spend a few minutes introducing myself. I joined TransCat at the end of March, and in the time since, I spent many days on the road, visiting our calibration labs and meeting with our talented team of employees, sitting down with our board and getting in front of as many customers and partners as possible. I came in with a very high opinion of this company, and I leave each of these conversations more convinced that Transcat is the most attractive growth platform in our industry. Two things attracted me to Transcat. First, the people. From the board of directors to the senior management team to the technicians in our service centers and on the road, This is a high-performing organization with deep cultural commitment to integrity, technical excellence, and customer service in the highly regulated industries we serve. Additionally, many of our employees are U.S. military veterans, which really resonated with me because I'm also a veteran and a West Point graduate, and that's a special part just of our population here at Transcat. Second, the opportunity. Transcat is the established leader in a calibration services market with exceptional fundamentals, highly regulated end markets, durable secular tailwinds, recurring revenue streams, and a long runway for both organic growth and disciplined consolidation. That opportunity also aligns directly with my background, driving profitable B2B growth at scale, executing strategic M&A, and leading teams through technology-enabled transformations. My message to you today is straightforward. The strategy is working and we are going to keep executing and accelerating against our four clear strategic imperatives. High single-digit service organic revenue growth, service gross margin expansion, strategic M&A, and rentals growth. With that, I will briefly turn to our financial results. Transcat delivered strong performance across our entire business portfolio in the fiscal fourth quarter, and as expected, service organic revenue continued growing in the high single digits. Consolidated revenue was up 16% to $89.3 million in the fiscal fourth quarter, and increased 19% to $331.9 million for the full year, driven by double-digit revenue growth in both segments. Demand in highly regulated end markets, including life sciences, aerospace and defense, and energy, remained strong, and our differentiated value proposition continues to resonate throughout Transcat's addressable end markets. Given our organic growth and strategic acquisitions of top regional players, we believe Transcat gained market share in the calibration services market during fiscal 2026. Consolidated gross profit grew 18 percent and gross margins expanded 50 basis points in the fiscal fourth quarter. We experienced similarly strong full year results as gross profit increased 21 percent with gross margin expansion of 50 basis points. Adjusted EBITDA grew 16 percent in the fiscal fourth quarter and 23 percent for the full fiscal year. Let's take a closer look at our services results. In the fiscal fourth quarter, service revenue increased 18% and service organic revenue grew 7%. The fourth quarter marked our 68th straight quarter of year-over-year growth. Service revenue grew 20% on a full-year basis, driven by our differentiated value proposition, along with the continued successful integration and performance of our acquired companies. The recent acquisition of SCM metrology and laboratories is consistent with our M&A strategy and establishes TransCat's first operational presence in Latin America, advancing the strategy to grow alongside our customers in high growth, highly regulated end markets. You can expect us to continue to complement our services organic growth with strategic M&A. Service gross profit increased 16% in the fiscal fourth quarter and 16% full year. As expected, service gross margins improved sequentially in the fiscal fourth quarter by 670 basis points. The service segment has substantial runway for growth, both organically and through acquisition. Our acquisition pipeline positions us well to pursue strategic, accretive deals that generate real synergistic value. M&A will remain a cornerstone of how we grow. Turning to distribution, distribution revenue grew 11% in the fiscal fourth quarter and 18% full year due to strong demand from rentals and product sales. Gross margins expanded 280 basis points versus prior year in the fourth quarter and 330 basis points full year, driven primarily by an increase in the mix of higher margin rental revenue within the distribution segment. Overall, we are very pleased with our performance and optimistic about the future given the momentum building in our service segment. With that, I will turn things over to Tom for a more detailed look at our fourth quarter and full year financial results.