Good day, everyone and welcome to the Willdan Group Fourth Quarter 2017 Conference Call. Today's call is being recorded. At this time, I would like to turn the conference over to Mr. Tony Rossi. Please go ahead.

Thank you. Good afternoon, everyone and thank you for joining us to discuss Willdan Group's financial results for the fourth quarter ended December 29, 2017. With us today from management are Thomas Brisbin, Chairman and Chief Executive Officer; Stacy McLaughlin, Chief Financial Officer; and Mike Bieber, President of Willdan Group. Management will review prepared remarks and we will then open up the call to your questions. Statements made in the course of today's conference call which are not purely historical, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve certain risks and uncertainties and it is important to note that the company's future results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially and other risk factors are listed from time to time in the company's SEC reports, including, but not limited to, the Form 10-K for the year ended December 30, 2016 and subsequent quarterly reports on Form 10-Q. The company cautions investors not to place undue reliance on the forward-looking statements made during the course of this conference call. Willdan Group disclaims any obligation and does not undertake to update or revise any forward-looking statements made today. In addition to GAAP financial results, Willdan also provides non-GAAP financial measures that we believe enhance investors' ability to analyze our business trends and performance. Our non-GAAP measures include revenue net of subcontractor services and other direct costs and EBITDA. We believe revenue net of subcontractor services and other direct costs allows for an improved measure of the revenue derived from the work performed by our employees. EBITDA is a supplemental measure of operating performance, which removes the impact of certain nonrecurring income and expense items from our operating results. GAAP reconciliations for both of these non-GAAP measures are included at the end of the earnings release we issued today. With that, I will now turn the call over to Chief Financial Officer, Stacy McLaughlin. Stacy?

Thanks, Tony. I'd like to add my welcome to those joining us on today's call. I'll start with an overview of our income statement, then our balance sheet and finally, our margin trend. Total contract revenue for the fourth quarter of 2017 increased 11.7% to $64.2 million from $57.4 million for the fourth quarter of 2016. By segment, including both organic and acquisitive revenue, for the fourth quarter Energy Efficiency Services revenue increased 19.4% to $45.7 million, Engineering Services Contract revenue declined 9.4% to $14 million, revenue from public finance services increased 4.9% to $3.3 million and Homeland Security Services revenue increased 124% to $1.1 million in the quarter. Willdan intends to collapse its segments in 2018 from four segments to two segments by combining its three non-energy segments into one. Our fourth quarter total contract revenue included incremental revenue of approximately $600,000 attributable to the acquisition of Integral Analytics which is included in our Energy Efficiency Services segment. The organic growth rate was 6% for the prior year period. Net revenue defined as contract revenue minus subcontractor services and other direct costs was $31.1 million, an increase of 9.8% from $28.4 million in the year ago quarter. Direct costs of contract revenue were $44.2 million for the fourth quarter of 2017, an increase of 12.3% from $39.3 million in the same period last year. The increase was primarily as a result of the growth in total contract revenue in the Energy Efficiency Services segment and the corresponding increase in subcontractor services and material costs related to the implementation of new contracts. Our direct costs of contract revenue were 68.9% of our total contract revenue in the fourth quarter of 2017 down from 70.6% in the third quarter of 2017. The decline was due to lower subcontractor services and other…

Thanks Stacy and good afternoon everyone. We finished 2017 was another good quarter. Through both organic business development and our acquisition activity, we continued to increase the overall diversification of the company and our revenue mix. In 2017, we worked in more states for more clients on a greater number of project types than at any point in our history. Comparing our fourth quarter results to the fourth quarter of last year, we grew revenue 12% against a tough comp, and we more than doubled our net income. We saw higher revenue coming from newer programs in New Jersey and Illinoi, and a ramp up of our local capacity requirements contract or LCR, for San Diego Gas and Electric. We have gotten off to an excellent start on the LCR program. Our goal was to deliver one megawatt of energy savings in 2017 and we delivered 1.4. The contribution from the LCR programs is expected to take another step up in 2018, where we are scheduled to deliver four megawatts of capacity. We believe we are well positioned for another positive year in 2018. All of our major energy efficiency programs for utilities will continue throughout 2018 and beyond, which gives us a strong foundation for layering on incremental growth. Our acquisition pipeline looks good and we expect continued strategic acquisitions in 2018. To this foundation, we expect to see additional contributions from as we said the LCR program, we see growth in our relationship with ComEd in Illinois. We had a recent announced of the expense from our datacenter program and a new award we received for a public sector program. The ramp up of our new small business direct install program for the Potomac Edison in Maryland. Our work in New Jersey will grow because of the addition…

Thank you. [Operator Instructions] We take our first question from Ariel Hughes with Wedbush.

Hi, good quarter. So just wanted to follow-up on…

Ariel, we can hardly hear you.

Hi, can you hear me.

Yes.

Okay. Just wanted to follow-up on the Integral Analytics acquisition, just hoping if you guys can provide some details on how clients are receiving the new offering, how you guys are advancing on cross selling opportunities and perhaps how that might affect margins moving forward?

We're very pleased with Integral Analytics. This is Mike. They have done very well out of the gate. They both helped us win new cross selling opportunities. For instance they went to Orals with us on the ComEd competitions that we won earlier in the year. And also they have done well on their own. They have been selling software, planning software to HECO and other utilities. So out of the gate, they have been doing well. That's why we expect $9 million, $10 million of revenue in 2018 and you are right, they will also improve, help to improve Willdan's operating margin.

Thank you, that's it for me.

[Operator Instructions]

We see no further questions.

With no further questions I would like to turn the call back over to management for any additional or closing remarks.

I would like to thank all of you for participating on our call today and for your continued interest in Willdan. Have a great day.