Good day, ladies and gentlemen, and welcome to the Franklin Electric First Quarter 2013 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Treasurer, Patrick Davis. Mr. Davis, please go ahead.

Thank you, Charlotte, and welcome, everybody, to Franklin Electric's First Quarter 2013 Earnings Conference Call. With me today are Scott Trumbull, our Chairman and CEO; John Haines, our CFO; Robert Stone, SVP and President, International Water Systems; and Gregg Sengstack, President and COO. On today's call, Scott will review our first quarter business results, and then John will review our first quarter financial results. When John is through, we will have some time for questions and answers. Before we begin, let me remind you that any forward-looking statements contained herein, including those relating to market conditions or the company's financial results, costs, expenses, expense reductions, profit margins, inventory levels, foreign currency translation rates, liquidity expectations, business goals and sales growth, involve risk and uncertainties. These risk and uncertainties include, but are not limited to, general economic and currency conditions, various conditions specific to the company's business and industry, new housing starts, weather conditions, market demand, competitive factors, change in the distribution channels, supply constraints, effect of price increases, raw material costs, technology factors, integration of acquisitions, litigation government and regulatory actions, the company's accounting policies and future trends and other risk which are detailed in the company's SEC filings and are included in Item 1A of Part I of the company's annual report on Form 10-K for the fiscal year ending December 29, 2012, Exhibit 99.1 attached thereto, and in Item 1A of Part II of the company's quarterly reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and except as required by law, the company assumes no obligation to update any forward-looking statements. I will now turn the call over to our Chairman and CEO. Scott?

Thank you, Patrick. I'm pleased to report that during the first quarter, our earnings per share after non-GAAP adjustments were $0.33, an increase of 10% compared to the first quarter prior year and a record for any first quarter in the company's history. Our revenues increased by 10% overall compared to the first quarter of prior year, and our organic sales growth, excluding both acquisitions and foreign exchange, was 6%. In addition, our gross profit and operating income margins continue to improve on a year-over-year basis, increasing by 40 basis points. While our Water business achieved solid gains, our Fueling business was our star performer. Fueling Systems represented 21% of our consolidated sales during the first quarter. Our overall Fueling revenues increased by 25% compared to the first quarter prior year, while the organic sales increase was 17%. Essentially, all of this organic sales increase occurred in developing regions, where filling station owners are continuing to convert from suction pumping systems to the Franklin pressure pumping system in order to transfer gasoline from their underground tanks to the dispensers. While about 95% of the 175,000 filling stations in the U.S. have already made this conversion, we estimate that only about 25% of the 300,000 stations in the developing world have converted. So we anticipate that our sales will continue to benefit from this conversion in the developing regions for the foreseeable future. This is particularly encouraging because when a station owner converts to our pressure pumping system, it opens the door for us to sell our pipe, containment and leak detection products as well because these products are specifically designed to enhance the overall performance of our pressure pumping system. The integration of Flex-ing Incorporated, the Texas-based producer of filling station hardware products, that we purchased in the fourth quarter…

Thank you, Scott. As we have previously announced, the company executed a 2-for-1 stock split effective March 18, 2013. All of the information, commentary and analysis we are providing to our shareholders in the earnings release and this conference call are using post-split share information. Our fully diluted earnings per share were $0.32 for the first quarter of 2013 versus $0.48 for the first quarter of 2012. As we note in the tables in the earnings release, the company adjusts the as reported GAAP operating income and earnings per share for items we consider not operational in nature. We believe presenting these matters in this way gives our investors a more accurate picture of the actual operational performance of the company. In the first quarter of 2013, we made 2 non-GAAP adjustments that totaled about $1.1 million. These adjustments included $700,000 of restructuring charges, primarily for severance expenses, as well as the Flex-ing integration and other miscellaneous manufacturing realignments; and $400,000 for legal fees incurred in Franklin Fueling. In total, these charges round to an EPS impact of $0.01. In the first quarter of 2012, the company made non-GAAP adjustments totaling $11.9 million. The most significant of which was a gain recognized as part of the Pioneer transaction for $12.2 million. In total, the first quarter 2012 non-GAAP items resulted in a EPS reduction of $0.18 from the reported GAAP EPS of $0.48. So after considering each of these non-GAAP items, first quarter 2013 adjusted EPS is $0.33, which is 10% higher than the $0.30 adjusted EPS the company reported in the first quarter of 2012. Water Systems revenues were $176.4 million in the fourth -- first quarter 2013, an increase of $11.4 million or about 7% versus the first quarter 2012 sales of $165 million. Sales from businesses acquired…

[Operator Instructions] Our first question comes from the line of Matt Summerville from KeyBanc.

This is Joe on for Matt. Just on your commentary about the moderating growth forecast for Ag in the U.S. and Canada. Is that you being conservative based on the comp issue? Or are you hearing or seeing indications from the distributor base that would justify some cause for concern or caution there?

It's -- our distributor and contractor customers commentary is positive for the second quarter. If you look at the drought maps, you'll see that drought conditions continue to prevail across most of the western part of the United States and in fact, are, compared to the same period prior year, somewhat more severe. So they're anticipating strong sales. However, I believe we're going into the quarter with a little higher inventories in the trade this year than we went into the quarter last year. If you recall, last year, as an anecdotal case in point, on the first day of spring in Indiana, last year, it was 80 degrees. This year, it was 19 degrees. It's been wetter and colder, and contractors have not been able to get into the fields for installations as early this year as they did last year. And so that I think the season has shifted out a little bit. And last year, the shelf -- our distributor shelves were depleted pretty heavily, and I think this year, they're filled to normal levels. And as a result, we just have higher inventories in the trade than we did at this time last year, and that's a factor in our thinking as well.

Okay. And then can you comment on the pricing environment? Have you announced the list price increase to the channel this year? And then kind of as a follow-up to that, how would you characterize the promotional activity that you typically see around -- towards the end of the quarters?

Okay, we did have a price increase early in the first quarter in our Water business in the U.S. And it was followed...

Generally, Joe -- this is John Haines. We have 2% to 3% price increases. It depends on the product and the market that we're in. But generally, in our Water Systems businesses, globally, we would say 2% to 3%. Timing goes from kind of January 1 through April 1 or thereabout.

The first quarter -- at the end of the first quarter in the U.S. and Canada -- and again, the U.S. and Canada represents about 38% of our total sales, so we're only speaking of that particular market. But in the U.S. and Canada, it is customary in the industry, every year there are promotions just at the end of the first quarter because all of the suppliers want to have their products on the shelves when the season starts usually in mid- to late-April. And so it's customary that there is a promotion. I would say that the promotional activity this year was modestly more heavy at the end of the first quarter than the promotional activity was last year.

Okay. And then on the Fueling side, you talked about the growth there coming from developing regions. I'm assuming a lot of that's from the conversion that you've talked about in the past in India. What's the average cost for a station owner to convert to a pressure system? And then what's the attach rate that you typically see for your adjacent products, the piping, the leak detection, et cetera?

Joe, this is Gregg Sengstack. Conversion cost is a little difficult to come up with for a complete fueling station because there are other costs that are outside of our products, so the conversion cost can range from $50,000 to $100,000 or more. But when you're getting into specifically our pump products, you're looking at a conversion cost of, say, $2,000 to $5,000 in the pump product line. We can then have anywhere from $20,000 to $50,000 of additional products going into the station related to piping, containment and monitoring systems and so on. But it depends on the country, on the major oil or the independent marketers doing the upgrade. But that kind of range of revenue would follow on at a later date.

I do want to make a point that while India has been a really good market for these products, our growth story for as far as this conversion is concerned is much broader than India. We're achieving very solid sales gains in the Middle East, in Latin America, and then across the whole Asia Pacific region as well with that product line. So it's materially broader than India. The second thing is that we call it a conversion, and of course, your mental image of a conversion is somebody takes out an old system and puts in a new system. In fact, a big part of it is all of the new infrastructure that's going in to support new filling stations and just a higher percentage of it is now suction -- pressure than suction. In 2000, in Latin America and in China and India, those 3 areas combined, the total new passenger vehicle sales were 3 million units. And last year, they were over 15 million units in those same regions. That's annual new passenger vehicles. But as you know, the growth of new passenger vehicles is exploding in developing regions. And that's driving a big increase in the demand for fueling infrastructure, and it's working out that new investments coming in, a higher and higher percentage of it is going into these pressure pumping systems.

And our next question comes from the line of Mike Halloran from Robert W. Baird. Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division: So on the wastewater pump demand in North America, could you talk about how that's tracked and specifically how inventory levels have -- if those have worked off at all through the quarter? And then, with some of the flooding activity that's happened lately, how you expect that to impact demand as we work through the quarter here?

Yes. Wastewater shipments, overall, in the first 2 months of the year, were moribund and started picking up in the back -- in the second part of March. And I'll say, at this point, we're having trouble keeping up with demand. So inventories have been essentially depleted on our wastewater pump product line, and that has been growing nicely. Now to the -- wastewater tends to be a little less profitable for us than our Ag line, and so we're very happy about the wastewater growth, and -- but we're keeping an eye on that Ag shipment number as well. Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division: And then on the dewatering side, some of the tougher trends that you guys saw with that product in the first quarter, certainly, not unanticipated. Have you guys seen any signs that the end market demand on that side with some of the oil and gas and other applications are picking up? And if not, kind of when you talk to your customer base, do they have any sense for when that environment might start tracking a little bit better?

Yes, the -- last year, we acquired Pioneer at the end of the first quarter, and their sales were quite strong in the first quarter and strong in the second quarter and then in the back half of last year, just fell off rather sharply. And we're seeing almost the exact opposite pattern forming with Pioneer this year. Now for essentially all of our other product lines, we may put them on inventory and they sell from inventory, so we have no backlog. But Pioneer is a totally different kind of business. They're assembling these high-ticket mobile pumping systems, and they work completely from a backlog so we have pretty good visibility on their sales trend because we can watch their backlog grow. And we're anticipating a major -- very nice sales increases in our Pioneer product line in the back half of this year. So I think that the first quarter was down, the second quarter will continue to be down, but a little bit. And the first quarter was -- our sales were actually up in Pioneer, but only because we didn't acquire Pioneer until the end of the first quarter. But on a pro forma basis, they would have been down. They'll be down a little in the second quarter and then we're going to see a very strong back half. Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division: That makes sense. And then on the cost pressures that you guys -- that you lined out on the second quarter, essentially incremental margins driven by the growth initiatives that you guys are putting into place, is this the case where those costs will linger for a while until the growth initiatives come in to offset? Or are some of that $1 million to $1.5 million more onetime in nature and those will dissipate as you work through the year? Any way you can kind of hit that ...

Some of them are onetime, and others will stay but won't be relevant because we'll have the contribution from the sales to offset them. So right now, these new distribution centers are just costing us money. We're -- in the back half of this year, they'll start providing incremental sales, and the same is true, we believe, with our U.K. rental initiative. And we think, as we -- really, as we go into 2014, the oil and gas initiative will start paying for itself. We will complete the construction of our new headquarters facility here in the second quarter of this year or it may go over a little bit into the third quarter, but not much. So that will be largely behind us. And the new Brazil plant will be up and operating in the second quarter next year. So some of them will extend into 2014 and just be costs that will eventually go away, and others will start having the revenue to offset the expenses that we're -- that we'll probably continue to incur to support the business.

That's all the time we have for questions. I would like to turn the call back to CEO, Scott Trumbull, for closing remarks.

We thank you for your interest in Franklin Electric, and look forward to speaking with you at the end of the next quarter.