Good day and welcome to the Pioneer Power Solutions, Incorporated Fourth Quarter and Full Year 2015 Conference Call. Today's conference is being recorded. At this time I’d like to turn the conference over to Mr. Brett Maas from Hayden IR. Please go ahead sir.

Thank you. Good day and welcome to Pioneer Power Solutions' 2015 fourth quarter and full year 2015 financial results conference call. The call today will be hosted by Nathan Mazurek, Chairman and Chief Executive Officer, Tom Klink, Chief Financial Officer. Following this discussion there will be a formal Q&A session open to participants on the call. We appreciate having the opportunity to review the fourth quarter and year-to-date financial results. Before we get started let me remind you that this call is being broadcast over the Internet and that a recording of the call and the text of management's prepared remarks will be available on the company's website. During this call management will be making forward-looking statements. These statements are based on current expectations and assumptions that are subject to risk and uncertainties that could cause actual results to differ materially. Please refer to the cautionary text regarding forward-looking statements contained in the earnings release issued today, and in the posted version of these prepared remarks, both of which apply to the content of the call. I will now hand the call over to Nathan Mazurek, Chairman and CEO. Nathan, please go ahead.

Thanks Brett. Good afternoon and thank you for joining us today for our conference call. The results we reported today underscore the progress we have made and bolster our confidence for 2016. For the year our revenue was in line with our revised guidance at $106.5 million for the full year and our adjusted EBITDA came in at $3.8 million exceeding the guidance of $3 million to $3.5 million for the year. But the fourth quarter really shows the significant progress we have made. For the fourth quarter we grew revenue 5.3% sequentially and 8.8% year-over-year. More importantly we narrowed our operating loss by $1.4 million and increased our adjusted EBITDA by more than 91% sequentially due primarily to the cost reduction initiatives we've put in place. As discussed in our third quarter conference call, we took decisive actions to rationalize our business, streamlining operations to put us back on the right path. As part of this, we essentially consolidated six manufacturing facilities to three. In addition we've outsourced certain lower margin activities and adjusted our headcount. As a result of these efforts, we expect to reduce our annualized fixed cost by at least $2.5 million. Essentially all of this is now been completed on or ahead of schedule. A large portion of this initiative was completed during the fourth quarter and the remainder was completed during the first quarter. As a result, the benefit of the expense reductions is not fully seen in the fourth quarter financial results as several of the facility consolidation initiatives occurred during the first quarter. Nevertheless we generated $1.9 million in adjusted EBITDA for the fourth quarter representing a positive swing of $900,000 on a sequential basis from the third quarter and up $2.7 million compared to negative adjusted EBITDA in the fourth quarter…

Thank you, Nathan and good afternoon everyone. Fourth quarter revenues were $26.2 million up 8.8% compared to the $24.1 million in the fourth quarter of last year. The increase was largely driven by the growth in our Critical Power Solutions segment and increasing recurring services revenue from our Titan acquisition. From time to time our sales figures are negatively impacted by the effect of foreign currency translation when comparing our results to prior year periods, as was the case this quarter. In the quarter the effect of foreign currency translation on sales had a negative impact of $1.5 million. Gross profit for the fourth quarter was $5.9 million or a 22.6% gross margin compared to $2.4 million or 9.8% gross margin in the fourth quarter a year ago. As a reminder the cost to sales for the fourth quarter of last year included approximately $900,000 in expenses relating to the first three quarters of last year. For the quarter selling, general and administrative expenses increased 35% on an absolute dollar basis to $5 million as compared to $3.7 million in the fourth quarter of 2014. As a percentage of revenue, SG&A expenses increased from 15.2% of revenue in the fourth quarter of 2014 to 19.2% of revenue in the fourth quarter of 2015. Operating loss for the quarter was $1.2 million compared to an operating loss of $2.6 million in the fourth quarter of 2014. The fourth quarter of 2015 was impacted by a $2.1 million restructuring charge incurred for plant closings and consolidations, as well as the impact of penalties and interest for not filing and paying the company's pay roll tax liabilities in a timely manner. The fourth quarter last year included the previously mentioned expenses of $1.4 million related to the impairment of all the good will…

Thank you, Tom. Operator, I would like to open the call for questions, please.

[Operator Instructions] And we'll now take our first question from Michael Potter with the Monarch Capital Group.

Hi guys, congratulations on a very strong quarter and for a lot of information for 2016. Just couple of questions, Nathan can you give us an update on the - I guess the new rigs from the DOE that changed on the high efficiency transformers and how that is rolling out into market so far?

Sure. Those regulations are effective January 1 of this year, so you can't - there is a higher efficiency, can't sell transformers of a certain size of which most of Jefferson indeed actually most of our liquid-filled under in the United States. As long as they were manufactured before January 1 of 2016, you could continue to sell them which we are continuing to sell our older version albeit at a higher price than we did from most of 2015. We will probably be out of the old inventory middle of the second quarter and then switch everybody over to the DOE product only because will be out of the other one. And everybody most distributors want to take the old product as almost possible because it is cheaper than the new energy efficient one. Yes, it’s probably - even at our increase prices, it's still about 30% less than the new DOE 1. The impact for 2016 we obviously bake that in and that’s probably one of the reasons - probably that is one of the reasons that the profitably continues and the revenue continue to increase as 2016 marches on. The DOE product is a very, very favorable margin product to us. So if it figures mid second quarter, we got half the quarter in the second quarter of the DOE product and a full second half of the year which affects us both on a revenue and profit point of view.

Okay. And maybe you can give us - yes it does- and maybe you can give us an update with regards to - I guess Verizon and Target.

Yes, excellent. Mike, you don't forget anything that was said on any call. So, the Verizon agreement is in place. It's actually been expanded somewhat from what we thought, it’s a great, it’s a larger swap in the Midwest, we picked up the site. Our traditional Minnesota and Nebraska higher what we picked up a little bit of Illinois and North and South Dakota, the Verizon revenue is only started to trickle in this month of March of the first call that we made and that’s going to increase as the year goes on. They for correct reasons tried to do as little in January and February in the Midwest as possible becomes a very expensive call. We have to do a lot of them on normal DOE or ATV and they'd rather just defer and do and pushes much as they can to March, April, May for their first. So that's a big positive going forward. Target, that agreement is actually up right now. We rebid it. We're expecting positive results. We're hoping for at least as much as we've before, may be even an increase but I will not know that - we will now know that for probably another month or so.

Okay, terrific. Thanks guys. I’ll get back into the queue.

Thank you, Mike.

[Operator Instructions] And it appears there are no further questions in the queue at this time. I’d like to turn the conference back over to management for any additional or closing remarks.

Thank you, Brain. Thank you all for you time and support. We look forward to updating you again on our next call. Thank you and have a pleasant evening.

And ladies and gentlemen that concludes today's conference call. We thank you for your participation.