Good day, everyone, and welcome to The Eastern Company's Fourth Quarter and Fiscal Year 2018 Earnings Conference Call. Today's call is being recorded. [Operator Instructions]. At this time for opening remarks and introductions, I would like to turn the call over to Chris Moulton, Head of Corporate Development and Investor Relations for Eastern. Please go ahead, Chris.

Good morning and thank you everyone for joining us. Speaking first today will be Eastern's President and CEO, Gus Vlak; and CFO, John Sullivan. And as mentioned, after that we will open the call to questions from participants. Please note that some of the information you will hear today during our discussion will consist of forward-looking statements about the company's future financial performance and business prospects, including, without limitation, statements regarding revenue, gross margin, operating expenses, other income expense, taxes and business outlook. These forward-looking statements are subject to risks and uncertainties that could cause actual results or trends to differ significantly from those projected in these forward-looking statements. For more information regarding these risks and uncertainties, please refer to the risk factors discussed in our Form 10-K filed on March 14 to the SEC. Eastern assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. Discussions during the call will also include certain financial measures that were not prepared in accordance with U.S. GAAP. Reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in our Form 10-K. You can obtain a copy of the Form 10-K on our Web site at easterncompany.com under the Investor Information tab. Any non-GAAP measures presented are not and should not be viewed as substitutes for financial measures required by U.S. GAAP. With that, I'd now like to turn the call over to Gus Vlak for introductory remarks.

Thank you, Chris, and thank you for joining us to review the 2018 results of The Eastern Company. On our call today, we’ll discuss our financial results for the year as well as our progress on our three-part strategy to create long-term shareholder value. In 2018, we made solid progress on our three-part strategy and our results reflected this. Our total sales grew to $234 million in 2018 and that’s an increase of 15% over 2017. Net income in 2018 was 14.5 million, and that’s compared to $5 million in 2017. 2017 net income was impacted by several one-time items that John is going to discuss in a few minutes. Our return on invested capital in 2018 was 11.3% compared to 6.6% for 2015 when we first started reporting on this measure. We believe return on invested capital is an important metric because it basically computes the underlying return that we earn on the cumulative investments in our businesses, no matter how those are financed. We also look at book value, which grew by 11.5% over the prior year. On December 31, 2018, Eastern’s book value was 96.6 million and that’s after paying $2.8 million in dividends. That’s a record for our company’s 160-year history. Finally, in 2018, Eastern’s total return to shareholders was a negative 6.9%, and while of course we seek to generate positive returns over any period, we did outperform the Russell 2000 by 4.1% in 2018. As I mentioned before, our strategy for creating a long-term shareholder value includes strengthening our portfolio businesses, maximizing the performance of our best businesses, and using our balance sheet to drive growth. Last year, we were successful in each of those areas. In June of 2018, we acquired assets of Load N Lock Systems, a leader in innovative truck cap and tonneau cover locks, and this acquisition helped strengthen our Illinois Lock Company by bringing new and innovative technologies, building scale in some of the attractive end markets that we’re targeting, and increasing our access to new markets. At the same time, we invested in the long-term growth of our best businesses. In 2018, we invested $7 million in product development. That’s an increase of 24% over the prior year. Some of the things we worked on include a brand new closing system for roll-up doors, electronic and pneumatic door controls for school buses, and Bluetooth locking systems. Finally, we took advantage of our strong cash flow and reduced our debt by 6.6 million, used cash to acquire the assets of Load N Lock, and allocated 2.5 million towards our pension obligations. We’re proud of the results and the progress our teams delivered in 2018. To tell you more about the results in the fourth quarter and the full year, I’ll now turn the call over to John Sullivan.

Thank you, Gus. First, I’d like to start off by going over the fourth quarter of 2018. Net sales in the fourth quarter of 2018 increased 5% to $57 million from $54 million a year earlier. Sales increased in the Industrial Hardware segment by 6% for the fourth quarter of 2018 as compared to sales in the fourth quarter of 2017 as a result of strong sales growth to Class 8 truck distribution, specialty vehicle and truck accessory customers. Sales of new products contributed 5% and included a new hood mount truck mirror, a modular toolbox latching system, an electronic activated latching system, and various composite panels. Sales in the Security Products segment increased by 2% for the fourth quarter of 2018 compared to the fourth quarter of 2017. Sales in the Metal Products segment increased 5% for the fourth quarter of 2018 from sales in the fourth quarter of 2017 as a result of an increase in sales to industrial casting customers. Cost of products sold in the fourth quarter of 2018 increased 1.4 million or 3% from the corresponding period in 2017. The increase in costs primarily reflects increased material costs associated with increased sales volume and higher cost to scrap iron, which was up 15% used in our Metal Products segment. Gross margin as a percentage of net sales for the fourth quarter of 2018 was 26% and 25% in the fourth quarter of 2017. Product development expenses as a percentage of sales in the fourth quarter of 2018 and 2017 were comparable at 3%. And selling and administrative expenses in the fourth quarter of 2018 were comparable with the fourth quarter of 2017 at approximately $8 million or 15% of sales. Net income for the fourth quarter of 2018 increased to $4.4 million or $0.70 per…

Thank you, John. Looking ahead in 2019, we anticipate continued steady growth in sales and earnings primarily as a result of our investments in new products. We believe that 2019 sales will benefit more modestly from underlying demand growth in our core markets with only modest growth in Class 8 trucks and a cyclical downturn in the market for recreational vehicles. We intend to fund the growth of our highest return businesses by investing in new product development at Eberhard, Illinois Lock and Velvac and making targeted acquisitions. We remain committed to finding acquisition opportunities that have strong economics to help us build scale and create differentiation in attractive end markets. With that, I’ll turn the call back to Chris for questions.

Thanks, Gus. Operator, do we have any questions that have come in over the telephone.

There are no questions at this time. [Operator Instructions]. And no questions are coming in. Mr. Moulton, I’ll turn it back over to you. : :

Thank you. It also appears though that we have no additional questions via the webcast. So with that, thank you very much for joining us today. I’ll now turn the call back to the operator. Thanks.

Thank you. That does conclude today’s teleconference. We thank you for your participation and you may disconnect your lines at this time. Have a great day.