Good day, ladies and gentlemen. Welcome to Alamo Group First Quarter 2016 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. [Operator Instructions] This conference is being recorded today, Friday, March 4th, 2016. I would now turn the conference over to Mr. Bob George, Vice President of Alamo Group. Please go ahead, Mr. George.

Thank you. By now you should have all received a copy of the press release, however, if anyone is missing a copy and would like to receive one, please contact us at 212-827-3746 and we will send you a release and make sure you are on the company's distribution list. There will be a replay of the call which will begin in one hour after the call and run for one week. The replay can be accessed by dialing 1-888-203-1112 with the passcode 9698455. Additionally, the call is being webcast on the company's website at www.alamo-group.com, and a replay will be available for 60 days. On the line with me today are Ron Robinson, Chief Executive Officer and President; Dan Malone, Executive Vice President and Chief Financial Officer; and Richard Wehrle, Vice President, Corporate Controller. Management will make some opening remarks and then we will open up the line for your questions. Before turning the call over to Ron, I'd like to make a few comments about forward-looking statements. We will be making forward-looking statements today that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following; market demand, competition, weather, seasonality, currency related issues, and other risk factors listed from time-to-time in the company's SEC report. The company does not undertake any obligation to update the information contained herein, which speaks only as of this date. I would also like to Ron. Ron, please go ahead.

Thank you Bob and we want to thank all of you for joining us here today. Dan, our CFO, Dan Malone will begin our call with a review of our financial results for the first quarter of 2016. I will then provide more comments on the quarter results and following which we will look forward to taking your questions. So Dan, please go ahead.

Thank you Rob. For the quarter 2016 sales of $210.9 million was a record for Alamo Group, beating first quarter 2015 sales of $207.8 million. Our quarter-to-quarter comparison was helped by continued strength in our Industrial division and stronger mower part sales, partially offset by a negative effect from currency translation and weakness in agricultural markets worldwide. Industrial division first quarter 2016 sales of $123.3 million represented a 5% increase over the prior year first quarter. Excluding our unfavorable currency translation effect of $1.1 million, sales in this division were up 6% due to improved sales of excavator, street sweeper and mowing products. Agricultural division first quarter 2016 sales were $48.6 million, up slightly over the prior year quarter, despite continued weakness in demand for most agricultural equipment. The effects of the Herder acquisition and currency translation affectively offset each other and neither had a material effect on the operating results of this division. European division first quarter 2016 sales were $39 million or about 8% lower than the first quarter of 2015, excluding the unfavorable currency translation effect, this divisions’ local currency sales were down about 4% quarter-to-quarter, reflecting weakness in European agricultural equipment markets. Our quarter-to-quarter and trailing 12 months margin and income comparisons include cost resulting from the fair value step up of acquired inventories, the confirmation of business acquisitions, information systems convergence and a plant closure in France. None of these costs impacted first quarter 2016 earnings, but they do affect the prior year first quarter and trailing 12 month results. In my next few comments when I say on an adjusted basis, it simply means that the prior year first quarter or applicable trailing 12 month result excludes these costs. First quarter 2016 gross margin of $50.3 million was 10% higher than the prior year…

Thank you, Dan. And as I think you can see, overall we were pleased with the results for the first quarter of 2016, even though the sales growth was quite modest especially given the ongoing headwinds we have been facing for quite a few quarters right now which include a weak global agricultural market, a generally weak European economy, and the continuing effects of the strong US dollar on the translation of our international results back into US dollars. So despite modest sales growth, we had earnings, which were quite robust, as we continue to benefit from ongoing margin improvement initiatives. I know we are saying the same thing quarter-after-quarter about our initiatives, but each quarter we continue to make a little more progress and it is our intent to stay focused on these initiatives. We’ve also talked consistently about the inherent stability of our core business, and once again I believe our sales and earnings give evidence of this stability, that while our sales have shown modest growth not only this quarter but even last year, we were pleased with that, because of I think many of our companies in our same sectors are struggling with no sales growth and even revenue declines. It is interesting to note that in the last year’s first quarter, we commented that the year was off to a slow start due to the strong winter weather conditions, particularly in the northeast US, and it certainly helped our snow business at that time, but hurt our other products since activities like mowing and street sweeping were a little late getting started. This year winter weather was considerably milder which hurt our snow business, but gave us a boost to activity such as mowing and street sweeping, as customers were getting their equipment in shape…

[Operator Instructions] First question comes from Tyler Etten from Piper Jaffray. Please go ahead.

Could we start with Europe, what do you think needs to change in Europe to get more positive charged about the demand side of things or what are you seeing outside of a fragile economy that’s making things difficult in the region.

The double thing is a fragile overall economy, but in particular very weak Ag economy in Europe just like it’s a weak Ag economy here. So I think while sale were down less in local currencies and in dollars, but again we saw combine sales in England alone were like down 25%, compared to a weak market last year. So I think we’re going to have to see some improvement in the overall prospects for the Ag sector and then as I said, I think there is a lot of uncertainty with things like the vote on England leaving the EU that has caused some delays in peoples outlook and we’re seeing dealers, they are not stocking up at the same levels they were. It’s not like that their sales is necessarily down or that their prospect is just that they are being, they want to order more when they are closer to demand rather than in anticipation of demand, just due to the uncertainty and concerns. I think there’s delays - some things, there’s been delays in farm subsidy payments that hasn’t helped. As I said, we’re still talking about modest interest rate increases in the US and then Europe to talk about negative interest rates. I think they just got to get - take some further actions to get some stability in the economies and get some growth in the economies because they’re struggling with no growth over there right now.

To dig into it a little bit more, what happens to your business if UK did leave the European Union?

That no one knows. There’s a lot of speculation and any kind of - if it was - it would take years for an exit to be fully affected. At the end of the day I don’t think a lot would change. There could be some uncertainty, they talked about that pound could drop if -. There’s lots of speculation on what could happen, there’s a lot of people who are saying all, you know the sky is falling, but for instance the UK is a net importer of goods from Europe. They import more from Europe and they export to Europe. So I think it’s in Europe’s interest that they weren’t in. But they have picking good trade agreements between the two, because there’s too much - like they both have too much at stake. So I think at the end of the day, whether they did or not, I think things will settle down and things will be okay. It’s just the short term uncertainty that’s creating the issues.

Two more questions if I may, and then I’ll pass it along. With the French consolidation what could you quantify for us, what cost savings that actually is for the margin in Europe. And then for Ag, since the season got a little bit sooner because of the shorter winter, do you believe that some of those sales that was supposed to be in the second quarter got pulled through the first quarter? Any color would be helpful, thank you.

I’ll answer the second one first; it’s like last year we had sort of a weak first quarter, a record one, but it was from our point of view a little on the weak side. It seems like some of the governmental mowing budgets, governmental street sweeping budgets they got eaten up by a snow removal budgets, and so I think it wasn’t just that the second quarter, like it was delayed, some of it was actually lost because they spent all on snow, they weren’t sweeping soon. So they didn’t wear out equipment as soon. So conversely I don’t think that having a better first quarter is going to rob from the second quarter. I don’t feel that at all. What was the --.

On French consolidation.

The French consolidation. We said we spent a couple of million dollars on the consolidation and actually it’s a fairly good payback. But we have not broken that out as a quantifiable number that we’ve released.

[Operator Instructions] The next question comes from Mike Shlisky from Seaport Global. Please go ahead.

Let me start off with a broad question, so if we don’t see your markets come back in ’16 or even in [2017] to say things don’t get all that great the next two years. The question is, if you had opportunities to cut cost further or to do some further rationalization, if we don’t see any growth there, there’s no other chance you can get to that 10% operating margin level going forward, but you need to actual volumes if you can estimate that work.

There’s a lot of things that depends on volume, it depends on mix, and certainly I think we can get there without much improvement in volume, but it will take - I’m not sure we can get there in a year or two. It might take a little bit longer, but I don’t think we need a lot of volume just need a little bit of real volume and we can get there sooner. So it’s hard to say and it depends on which product and what mix and if we - I’d say it’s a fairly complicated answer, but even with little to know volume, I think we can get there, but we can just there quickly with some volume.

I also want to ask about your cash. This is your highest cash I’m looking back for more than a year, is that ever your higher in this quarter cash balance for at least three or four years. And I was wondering if you could go over some of your priorities for your use of cash and I think what’s in there, and part two of that question is going to be, can you update us on the M&A market, is there’s any good looking targets out there?

Like a lot of the cash on our balance sheet is sitting in foreign jurisdiction, where we have it over in Canada and then in Europe, it’s the main places. So generally we don’t like to just repatriate, because it was quite a tax penalty to pay when we do that. And we like to leave in those jurisdictions, especially as long as we feel there are opportunities to utilize it in acquisitions. Our use for cash anyway is focused on acquisitions. We raised the dividend a little this year, CapEx is going to be sort of give or take in line with where we have been recently, and things like that. But the main use of cash that would change anything is acquisitions and that’s -. And as far as acquisitions go, like I commented last time, last year we lifted a [loss], but we didn’t think pricing was particularly attractive to, I don’t think shareholders want to speak doing acquisitions that have single digit returns. I think this year, we’re lucky we’re seeing less opportunities, but I think pricing is getting a little bit more attractive from our point of view, I think it probably goes there, the interest rate I think there’s a feeling they’re going to head up a little. Just that whole environment, and there’s people getting tired of single digit returns on acquisitions. So I think we are seeing fewer opportunities but more reasonable ones. And while there’s certainly nothing eminent, we feel optimistic that this year and early in the next year we’ll be able to find some reasonable acquisitions at pricing that is we feel could be nicely accretive to our results. So nothing eminent, but we’re still very active. We’re not seeing as much, pricing is a little bit better and I’d like to say from a cash flow point of view - and we’re looking everywhere. That’s why we’re looking in Europe, we’re looking in North America, we’re looking in other places that we operate or want to operate. So they are fairly optimistic about acquisitions.

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