Financial Data and Key Metrics Changes - Consolidated revenue increased by 26% to $83.9 million, driven by double-digit growth in both distribution and service segments [5][10] - Consolidated gross profit grew by 28%, with gross margins expanding by 60 basis points [5][10] - Adjusted EBITDA rose by $2.2 million or 27.2% to $10.1 million, with a slight margin expansion [5][13] - Net loss decreased to $1.1 million, influenced by higher amortization and interest expenses [11][12] Business Line Data and Key Metrics Changes - Service revenue grew by 29%, with organic growth of 7%, supported by acquisitions [10][11] - Distribution revenue increased by 20%, driven by strong demand in rentals and product sales, with gross margin expanding by 330 basis points [9][10] Market Data and Key Metrics Changes - Strong demand observed in regulated end markets such as life sciences, aerospace and defense, and energy [5][6] - The service segment marked its 67th consecutive quarter of year-over-year growth, indicating sustained demand [7] Company Strategy and Development Direction - The company aims to continue its growth through acquisitions, enhancing geographic footprint and technical capabilities [6][16] - Investments in leadership, technology, and process improvement are expected to drive differentiation and sustainable long-term value [16] - The company is well-positioned to capitalize on the increasing demand in regulated markets due to onshoring trends [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining high single-digit organic service revenue growth expectations for the fourth quarter [15][32] - The company anticipates continued growth momentum into the next fiscal year, supported by a strong new business pipeline [32][33] - Management acknowledged the challenges of onboarding new customers but expects normalization of costs over the next few quarters [38] Other Important Information - The company is in the process of selecting a new CEO, with expectations to conclude the search soon [57][58] - Additional one-time expenses related to the CEO search are anticipated in the fourth quarter [58] Q&A Session Summary Question: Drivers of Service Segment Growth - Management highlighted that delayed service orders began to trend positively, contributing to the return to high single-digit growth [19][24] Question: Impact of Startup Costs - Management indicated that startup costs are not significant but are a reality of onboarding new customers, with normalization expected in the coming quarters [20][22] Question: Distribution Segment and AI Opportunities - Management discussed strong execution in distribution, particularly in power generation and data center markets, with ongoing opportunities in calibration services [25][26] Question: Future Service Growth Expectations - Management reaffirmed guidance for high single-digit growth in Q4, with a strong pipeline for future business [31][32] Question: M&A Strategy and Geographic Expansion - Management outlined gaps in geographic presence, particularly in Northern California, Dallas, Atlanta, and the Mid-Atlantic, with ongoing efforts to fill these voids [34][35] Question: Gross Margin Expectations - Management noted that Q4 typically sees the highest gross margins of the year, with expectations for normalization of startup costs [37][38] Question: Long-term Growth Outlook - Management acknowledged potential for increased organic growth due to significant investments in life sciences and defense sectors [46][51]

Financial Data and Key Metrics Changes - Consolidated revenue increased by 26% to $83.9 million, driven by double-digit growth in both distribution and service segments [5][10] - Consolidated gross profit grew by 28%, with gross margins expanding by 60 basis points [5][10] - Adjusted EBITDA rose by $2.2 million or 27.2% to $10.1 million, with a slight margin expansion [5][13] - Net loss decreased to $1.1 million, influenced by higher amortization and interest expenses [11] Business Line Data and Key Metrics Changes - Service revenue grew by 29%, with organic growth of 7%, marking the 67th consecutive quarter of year-over-year growth [6][10] - Distribution revenue increased by 20%, supported by strong demand in rentals and product sales, with gross margin expanding by 330 basis points [9][10] Market Data and Key Metrics Changes - Strong demand for calibration services in regulated markets such as life sciences, aerospace, defense, and energy [5][6] - The service segment is expected to maintain growth momentum into the fourth quarter, driven by high customer activity and retention [15] Company Strategy and Development Direction - The company aims to continue its acquisition strategy to expand geographic footprint and technical capabilities, with a strong acquisition pipeline [17] - Investments in leadership, technology, and process improvement are expected to enhance competitive differentiation and long-term shareholder value [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to sustain high single-digit organic service revenue growth, reaffirming expectations for the fourth quarter [15][33] - The company is well-positioned to benefit from increased manufacturing and defense spending, which are expected to drive future growth [49][52] Other Important Information - The CEO succession plan is nearing completion, with a search committee evaluating candidates [11][12] - Additional one-time expenses related to the CEO search are anticipated in the fourth quarter [60] Q&A Session Summary Question: Drivers of Service Segment Growth - Management highlighted that delayed service orders began to trend positively, contributing to the return to high single-digit growth [20][21] Question: Impact of Startup Costs - Management indicated that startup costs are not significant but are a reality of onboarding new customers, with normalization expected in the coming quarters [22][39] Question: Distribution Segment Performance - Management discussed strong execution in distribution, particularly in power generation and data center markets, with ongoing opportunities in calibration services [26][27] Question: Future Growth Expectations - Management confirmed commitment to high single-digit growth for Q4, with a strong new business pipeline supporting future growth [33][34] Question: M&A Opportunities - Management identified geographic gaps for potential acquisitions, including Northern California, Dallas, Atlanta, and the Mid-Atlantic region [36] Question: Long-term Growth from Life Sciences and Defense - Management acknowledged that onshoring of manufacturing in regulated sectors is beneficial for the company, with opportunities in calibration and validation services [49][50]

Financial Data and Key Metrics Changes - Consolidated revenue increased by 2% to $6,680,000, driven by growth in distribution [6][14] - Organic service revenue declined by 4% year-over-year, primarily due to softness in the Nexa solutions channel [6][14] - Consolidated gross profit decreased by 6% to $1,970,000, with service gross profit down 8% [15] - Net income for Q3 was $240,000, down $1,000,000 compared to the prior year, with diluted earnings per share at $0.25, down $0.13 [16] - Adjusted EBITDA was $790,000, down 13% from the same quarter in the prior year [17] Business Line Data and Key Metrics Changes - Service revenue saw a slight growth, but organic decline was offset by acquisitions [14] - Distribution revenue grew by 7% to $2,520,000, driven by strong product sales and rental growth [11][15] - Rental revenue experienced a decline in December due to extended customer closures, negatively impacting distribution service margins [11][12] Market Data and Key Metrics Changes - The core calibration service demand saw a decline in December, attributed to holiday-related manufacturing closures [7][9] - The rental channel faced similar demand declines, affecting overall distribution performance [11][54] Company Strategy and Development Direction - The company is focused on integrating Martin Calibration, which is expected to enhance service growth and productivity [10][22] - Management aims for strong organic service growth and improved operational efficiencies through process improvements and automation [22] - The company maintains a strong pipeline of new opportunities in calibration services, anticipating a return to historical growth rates [21][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of holiday timing on service demand and expressed confidence in a recovery in January [26][27] - The outlook for organic service revenue is expected to be in the low to mid-single digits, below previous expectations [21] - Management remains optimistic about the fundamentals of the business and the potential for strong performance in the upcoming fiscal year [35][36] Other Important Information - The company acquired Martin Calibration for $79,000,000, enhancing its presence in key markets [19] - The company reported total net debt of $4,080,000, with a leverage ratio of 0.97x [19] Q&A Session Summary Question: Near term outlook and guidance reduction - Management confirmed that December's slowdown impacted guidance, but January showed recovery, leading to conservative full-year guidance [26][27] Question: Visibility in the pipeline and expectations for next year - Management reported a strong core calibration pipeline, with some delays affecting guidance but remains optimistic for the upcoming year [30][31] Question: Service gross margins and future expectations - Management expects service margins to stabilize and grow in the upcoming quarters, aiming for consistent performance [46] Question: Distribution performance and rental recovery - Management indicated that the rental business was impacted similarly to calibration services, but expects recovery as demand increases [54] Question: Working capital and inventory management - Management noted improvements in inventory levels and accounts receivable due to the acquisition, aligning with revenue growth [50][51]