Welcome to inTEST Corporation’s 2016 Fourth Quarter and Full-Year Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and answer-session. [Operator Instructions] As a reminder, this conference is being recorded today. A replay will be accessible at www.intest.com. I will now turn the call over to inTEST Investor Relations Consultant, Laura Guerrant. Please go ahead.

Thank you, Paula, and thank you for joining us for inTEST’s 2016 fourth quarter and year-end financial results Conference Call. With us today are Robert Matthiessen, President and CEO; Hugh Regan, Treasurer and Chief Financial Officer; and Jim Pelrin, Executive Vice President. Mr. Matthiessen will briefly review highlights from the fourth quarter as well as current business trends. Mr. Regan will then review inTEST’s financial results and discuss guidance for the 2017 first quarter. We’ll then have time for any questions. If you have not yet received a copy of today’s release, a copy can be obtained on inTEST’s website, www.intest.com. Before we begin the formal remarks, the Company’s attorneys advise that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not convey historical information, but relate to predicted or potential future events that are based upon management’s current expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, our ability to implement and execute the 2015 research -- excuse me, repurchase plan, changes in business conditions and the economy, changes in the demand for semiconductors, changes in the rates of and timing of capital expenditures by semiconductor manufacturers, the success of our strategy to diversify our business by entering markets outside the semiconductor or ATE markets, progress of product development programs, increases in raw material and fabrication costs associated with our products, and other risk factors set forth from time to time in the Company’s SEC filings, including, but not limited to, inTEST’s periodic reports on Form 10-K and Form 10-Q. The Company undertakes no obligation to update the information on today’s conference call to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events. And with that, let me now turn the call over to Bob Matthiessen. Please go ahead, Bob.

Thanks, Laura. I would like to welcome everyone to our 2016 fourth quarter and year-end conference call. I will review some of the highlights, our markets and what we are seeing in our customer base, and then Hugh will review the financial results in detail. Financial results for 2016 represent our seventh consecutive year of profitability, a metric we are very proud of as it speaks to the discipline and dedication exhibited by every inTEST employee. On a year-over-year basis, 2016 net revenues increased 3%. In absolute dollars, gross margin grew 9% and increased 260 basis points as a percentage of revenue; and earnings per share were up $0.08. While fourth quarter net sales were down 5% sequentially, they were up 29% compared to a year ago, and exceeded our guidance range. Our growth was broad based with solid advances in the telecom and defense, aerospace markets fueling our Thermal division, while automotive and the Internet of Things drove our Semiconductor Test business. In addition, cash and cash equivalents at the end of the quarter were again at record levels. Let me turn to the Thermal Products segment. Our Thermal Products segment, which is our largest and most profitable division, continues to be the major contributor to our results. We have strategically diversified this segment, resulting in new opportunities in industrial testing and a broadening of our end-market penetration into electronics test applications at various growth markets including automotive, consumer electronics, military aerospace, energy, industrial and telecommunications. In addition, new product offerings have opened industrial markets outside of test for both OEM and end-user applications. The inTEST Thermal Solutions business increased in Q4 for both Asia and Europe. In North America, the traditional semiconductor market improved over Q3. Defense aero market was also strong, despite lower bookings because Q3 included…

Thanks, Bob. Fourth quarter 2016 end-user net revenues were $9.6 million or 93% of net revenues compared with $10.5 million or 97% of net revenues in the third quarter. OEM net revenues were $692,000 or 7% of net revenues, up from $341,000 or 3% for the third quarter. Net revenues from markets outside of semiconductor test were $4.3 million or 42% of net revenues compared with $2.8 million or 26% of net revenues in the third quarter. The Company’s fourth quarter gross margin was $5.4 million or 53% as compared with $5.6 million or 52% in the third quarter. The improvement in the gross margin was primarily the result of a reduction in our consolidated component material costs, which declined from 33% in the third quarter to 32.1% in the fourth quarter. While there were decreases in component material costs of all three of our product segments, the reduction in consolidated component material costs in the fourth quarter was primarily the result of a reduction in the component material cost of our Mechanical Product segment whose component material costs decreased from 36.4% in the third quarter to 32.7% in the fourth quarter, while our Thermal Products segment saw its component material costs decline from 30.7% to 30.5% sequentially, and our Electrical Product segment experienced a reduction from 36.9% to 36.8%. These improvements were both the result of a more favorable product mix and customer mix in the fourth quarter as compared to the third. Selling expense is relatively unchanged at $1.4 million for both the fourth and third quarters. A reduction in commission expense was almost fully offset by increases in warranty, advertising and travel. Engineering and product development expense was $782,000 for the fourth quarter compared to $905,000 for the third quarter, a decrease of $123,000 or 14% sequentially.…

[Operator Instructions] You now have a question from Wes Cummins of Nokomis Capital.

Just a question, given the guidance, which is I was trying to look back in my model, it’s one of the highest quarters you’ve had in at least the last five years…

Yes, it is.

What do you think -- and I know you don’t have great visibility, but the follow-through out into Q2, I mean is this just a new level of business you think or at least an indication of the ability for the business to kind of grow up to a new level or do you think it’s a one quarter phenomenon?

Well, this is really being driven by the very strong semi market, as we’ve talked about. And here’s Bob Matthiessen to offer some additional thoughts.

Hi Wes, Jim Pelrin and I and others in the Company have been making customer visits to try to get a handle on this. We like to say that the cycles have stopped in the industry, and then just like that, all of a sudden things have exploded. We have visited both tester manufacturers and IDMs, end users and all of them are saying the same thing, this was relatively unexpected. They -- many of them think it’s the improved political climate. They don’t see an end to it, but then they don’t see very far away anyway, as we don’t. But they’re all having record quarters and they expect it to continue as far as they can see. And I’ve just heard that, and that’s for back end. I just heard front end is seeing the same thing. So I don’t know how long it’s going to go, but right now it’s really solid. And we’re just riding the wave. I don’t know if it’s a new level of business. It may be; it’s tough for us to tell. But everything is going positive at the moment.

And while we’ve also seen strength in the semi markets, as Bob talked about, we’ve also seen strength with our non semi customers, as you can see by our fourth quarter results. So the business is firing well on all cylinders across all served markets.

[Operator Instructions] And at this time, we have no further questions.

Operator, we did receive several other questions in advance of the call. So, I’m going to use those now. The first one is would you consider the strength you’re seeing in the semi markets to be cyclical? And Bob, you had talked about that a little bit earlier. I’m assuming...

Yes. The cycles had leveled out. The duration had changed. They had gotten shorter and then they sort of flattened out. So, we got into a seasonal cycle. But what’s happening now is outside of that. So, we don’t know what’s happening.

Right. I hear you on that. Another question that we’d received was could you offer more color on the non-semi market growth you’ve experienced in the quarter? Maybe Jim could offer some thoughts on that.

I would be happy to. The non-semi growth was driven in two particular markets. One was aerospace. In fact, the space industry is booming for us right now and the satellite manufacturers. And this is a relatively new industry for us. We have dabbled in it in the past, but now it seems to be really taking off for our Sigma Systems equipment. And the other is in the optical transceiver sector of the fiber of the telecom industry; that has really turned on with new entry -- entrants into the market, particularly in Asia. It’s all being driven by the need for high-speed data, 40 to 100 gig. And that’s been a very good market for us in the past two quarters of that.

Thank you, Jim. That’s it for questions at this point. I’ll turn the call back to Bob Matthiessen.

Okay. We look forward to updating you on our progress when we report our 2017 first quarter results in May. Thank you and good evening.

Thank you for your participation in today’s conference. This concludes today’s call. You may now disconnect.