Transcat, Inc.

Greetings and welcome to the TransCat, Inc. First Quarter Fiscal Year 2027 Financial Results Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Howe, Senior Director of Financial Planning and Analysis. Thank you, John. You may begin.

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 President and CEO, Jaime Irick, 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 2. 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 press release as well as 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, 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 comparable GAAP to non-GAAP measures in the tables accompanying the earnings release. With that, I'll turn the call over to Transgap President and CEO, Jaime Irick.

Thanks, John. Good afternoon, everyone, and thank you for joining us on today's call. Prior to discussing our strong financial performance, I want to share my observations and takeaways after my first full quarter. As CEO of Transcat, over the last 100 days, as you'd expect, I've had the opportunity to engage with and learn from our customers, our strategic partners, and the Transcat team members across technology labs, field operations, and the sales organization. I've also reviewed Transcat's end-to-end operations across North America, Central America, and Ireland. I've met with analysts and investors, many of you on the phone, and I've held in-depth discussions with our board of directors, both individually and collectively. These firsthand experiences have deepened my appreciation for Transtep's leadership, our employees' dedication, and the enduring customer and strategic partnerships we have built over more than 60 years. Our first quarter results, combined with the insights from my first 100 days, reinforce my confidence that we have clear, measurable opportunities to build on our industry-leading organic and inorganic growth. They also highlight an important opportunity to become as well-known for operational excellence as we have historically been for growth. This will require time, discipline, and consistent execution by continuously improving our customer-facing business processes, applying proven lean operating principles, optimizing business mix and pricing, and using technology and AI to improve productivity and customer solutions. We can create repeatable levers to expand margins, and to support sustained growth. As we move forward, we will build an even stronger Transcat by growing the business, improving how we operate, and energizing our teammates. With that, I'll briefly turn to our financial results. The fiscal first quarter of 2027 highlighted another sequential quarter of strong financial performance as strength in the calibration business drove double-digit service organic revenue growth and service gross margin expansion. Consolidated revenue was up 22% to $92.9 million in the fiscal first quarter, driven by double-digit revenue growth in both segments. Demand in our highly regulated end markets, including life sciences, aerospace and defense, and energy, remain strong and our differentiated value proposition continues to resonate throughout Transcat's addressable end markets. Given our strong organic growth, operational excellence, and strategic acquisitions, we firmly believe Transcat continues to gain market share in the calibration services market. Consolidated growth profit grew 19%. for the fiscal first quarter, led by 31% service gross profit growth. Adjusted EBITDA grew 19% in the quarter, driven by revenue momentum and productivity gains. And let's take a closer look at our service results. In the fiscal first quarter, service revenue increased 27%, and service organic revenue grew 13%. The first quarter marked our 69th straight quarter of year-over-year growth. Service revenue growth was driven by our differentiated value proposition along with the continued successful integration and performance of our acquired companies. The recent acquisition of SEM is progressing very well, and we are excited about the opportunity that exists in Central America. You can expect us to continue to complement our service's organic growth with strategic M&A. Service growth profit increased 31% in the quarter, with service growth margins expanding 90 basis points versus prior year, driven by the inherent operating leverage in our service model, along with focus on operational excellence and maturing of new customer relationships. The service segment has significant room for growth, both organically and through acquisitions. Our pipeline positions us to pursue strategic, accretive deals that deliver meaningful synergies, and M&A will remain central to our growth strategy. Turning to distribution, distribution revenue grew 11% in the fiscal first quarter on strong demand from rentals and product sales. As expected, Distribution gross margins of 31.4% were lower than prior year, given that fiscal 2026 first quarter margins were unusually high. Moving forward in fiscal 2027, we will have a more typical prior year comparisons and expect to benefit from a greater mix of higher margin rentals. Overall, we are pleased with our performance and optimistic about the future, given the momentum building in our service segment. With that, I will turn the call over to Tom for a more detailed look at our first quarter financial results.