Good afternoon, my name is Jay, and I will be your conference operator today. At this time, I’d like to welcome everyone to the DXP Enterprises Incorporated First Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mac McConnell, Chief Financial Officer, you may begin your conference.

Thank you. Good evening and thank you for joining us. Welcome to DXP’s first quarter results conference call. David Little, our CEO, will also speak to you and answer your questions. Before we begin, I want to remind you that today’s discussion will include forward-looking statements. We want to caution you that such statements are predictions and actual events or results can differ materially. A detailed discussion of the many factors that we believe may have a material effect on our business on an ongoing basis is contained in our SEC filings, but DXP assumes no obligation to update that information. I will begin with a summary of DXP’s first quarter 2017 results. David Little will share his thoughts regarding the quarter’s results, then we will be happy to answer questions. Sales for the first quarter of 2017 decreased 5.9% to 238.5 million from 253.6 million for the first quarter of 2016. After excluding first quarter of 2016 sales of 7.1 million for Vertex, which was sold on October 01, 2016, sales for the first quarter decreased 7.2 million or 2.9% on a same-store sales basis. Sales by our service center segment in the first quarter of 2017 decreased 18.8 million or 11.2% to 148.7 million compared to 167.5 million of sales for the first quarter of 2016. After excluding 2016 service center segment sales of 7.8 million for Vertex, service center segment sales for the first quarter of 2017 decreased by 11 million or 6.9% from the first quarter of 2016 on a same-store sales basis. This sales decrease is primarily the result of decreased sales of bearings, pumps, industrial supplies and metalworking products. Sales of safety services increased during the quarter. Sales of innovative pumping solution products increased 1.6 million or 3.4% to 49.1 million compared to 47.4…

Thanks Mac and thanks everyone on our conference call today. We're off to a good start in 2017 and let me thank our DXP stakeholders. In particular our DXP people for their continued hard work and their grit as we turn the corner and momentum against the build in our business. This is DXP’s first quarter of meaningful sequential increases in total sales and EBITDA after adjusting for the one-time gain on the sale of Vertex. As such, we are encouraged by the improvement in market conditions and remain focused on growing our business in fiscal year 2017. DXP industrial end markets which is 51% of our business appears to have found some legs and is showing signs of positive upward movement. The ISM PMI manufacturing index which gives us an indication of how DXP’s broad industrial markets will perform continued to expand from January, a 56% rating through March of 57.2% rating. This trend is above the average over the last 12 months of 53.6% and looks to be a positive indicator for the year should the trend continue. DXP’s North Central and Northeast regions benefited the most from this movement as well as other regions within DXP. We are excited to see momentum in this side of our business and look forward to the improvement throughout the year. Oil and gas which remains 49% of DXP found a bottom in the third quarter of last year and is showing signs of gradual improvement. The majority of our business that is oil and gas tends to lag increases in the rig count and is tied closer to actual production or increase in CapEx budgets. Global exploration and production spending is expected to rise on an average of 3% to 5%. That said there still remains a fair amount of…

[Operator Instructions] Our first question comes from Will Steinwart with Stephens. Your line is open.

David, can you start by discussing the monthly trends in the business through the quarter. On the fourth quarter call you noted that March started off strong but kind of fell off towards the end of the month. Can you talk about how the trend line progressed out of March and into the 2Q after the quarterly summary?

Do you want me to go through the sales per month? January sales per day were $3,395,000; it increased in February to $3,826,000, increased a little in March to $3,944,000 a day for an average for the quarter of 3,727,000, our 64 business days in the quarter. April came out at 3,944,000, so coincidentally equal to March. There were 19 days in the month of April.

David, any commentary about what you saw in March that you might call out or maybe just customer conversations, tones, anything that you're starting to hear that's encouraging from here.

Yeah, I think, I’d say in general that all of our regions are performing better than fourth quarter, and so that covers both industrial, and oil and gas. Our oil and gas customers are increasing their CapEx budgets and certainly in certain oilfield plays like the Permian Basin, but everybody is busy. Canada, we’re certainly busy, and so we were pleased with that. So I think we don't have any reason to believe that both the industrial and the oil and gas markets are improving.

Then on IPS specifically, David, you spoke about backlog levels there. I was hoping that we could revisit those trends you called out. Make sure I got those right and hear what kind of growth levels you're expecting in that segment over the course of this year?

IPS and frankly everybody's backlogs even though as you point out our IPS backlog is a longer term backlog than our daily day to day business. But everybody's backlogs are trending up, they're continuing to trim up so there's not again any reason why we don't feel that things will improve besides the fact that we deal with all the political mumbo jumbo that happens in Washington and all the politics around the price of oil depending on what Russians, Saudi Arabia are going to do. But what we're seeing in the field is positive signs of increased activity both industrial and oil and gas. And our backlogs are reflecting that.

And then switching over a little bit to the debt plan, can you give any update on what the structure might look like that you’re hoping to get done and any update on the timing of the new debt structure would be helpful.

Sure. We have a lot of options that's a good thing. I think the one that is shaping up to be the best for us given that we have several conversations going on with acquisitions and acquisitions has been a point of our growth in the past, as we look at other pump distributors and other metalworking distributors to buy other safety distributors. So the one that I think gives us the best solution and the most flexibility probably is along the lines of a ABL and then either a term loan B or a bond deal. Both the bond and the term loan B have their pluses and minuses. The term loan B is a variable rate and the bonds of fixed rate. Bond deal starts a little higher, but may not end up higher who knows but we're going to do what's best for DXP and do it at a very competitive rate, we could go to the banks but we're going to end up with them wanting to ratchet us down and so we wouldn't have the kind of dry powder we need to do acquisition, so we don’t really see that as an option.

[Operator Instructions] And there are no further questions at this time. This concludes our DXP enterprises incorporated first quarter conference call. Thank you for joining.