Good day, ladies and gentlemen. Thank you for standing by and welcome to the Franklin Electric First Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen only mode. (Operator instructions.) As a reminder, this conference call is being recorded. I would now like to turn the conference to our host Mr. Jeff Frappier, Treasurer. Sir, you may begin.

Thank you, Eric. And welcome everyone to Franklin Electric's first quarter 2014 earnings conference call. With me today are Scott Trumbull, our Chairman and CEO; John Haines, our CFO; Robert Stone, SVP and President of 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 as we conduct this call we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, many of which could cause actual results to differ materially from such forward-looking statements. A discussion of these factors may be found in the company's Annual Report on Form 10 -K and in today's earnings release. Also our press release and this call contain non-GAAP financial measures that include but are not limited to earnings after non-GAAP adjustments, fully diluted earnings per share after non-GAAP adjustments or adjusted EPS, operating income after non-GAAP adjustments, and percent operating income to net sales after non-GAAP adjustments. The company believes that these measures help investors understand underlying trends in the company's business more easily. The differences between these measures and the most comparable GAAP measures are reconciled in the table in our earnings release. All forward-looking statements made during this call are based on information currently available and except as required by law the company assumes no obligation to update any forward-looking statements. With that I will now turn the call over to our Chairman and CEO. Scott?

Thank you, Jeff. During the first quarter we again achieve record sales and earnings and increased operating income margins driven strong Water Systems sales growth in developing regions and strong operating income growth in our Fueling Systems business. Our Water Systems sales in developing regions represented 33% of our consolidated sales, an increase by 8% compared to the first quarter last year. This strong growth occurred despite the negative impact of declining currency in developing regions. Our developing region in water sales grew organically by 19% during the quarter after adjusting the foreign exchange rate. While our fueling sales increased by about 2% during the quarter. Our fueling operating income increased by 35% driven by a combination of productivity, favorable pricing, mix and synergies from Flex-ing acquisition. These positive factors were partially offset during the quarter by lower sales and earnings for our Water business in the U.S. and Canada due to an unfavorable mix shift. In total, our first quarter sales in the U.S. and Canada grew by about 2%. Foreign exchange rates were also a factor during the quarter reducing our consolidated growth rate by 360 basis points. Turning to our first quarter review of our business by global market area. Our Water sales in the U.S. and Canada represented 38% of our consolidated sales and grew as I mentioned earlier by 2% during the quarter. While or sales of mobile pumping equipment sold to the pump rental channel grew, this growth was partially offset by declining sales to the groundwater and wastewater distribution channels. Our U.S. and Canada sales in the groundwater and wastewater channels declined by about 6.5% in the quarter driven by more significant declines during the severe weather months of January and February, but were positive during the month of March as the weather…

Thank you, Scott. Our fully diluted earnings per share were $0.35 for the first quarter 2014 versus $0.32 for the first quarter of 2013. As we noted in the tables in the earnings release the company adjusts 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. Non-GAAP expenses for the first quarter of 2014 were $200,000 and included $100,000 in restructuring costs and $100,000 in legal and advisory cost primarily related to the cancel acquisition. The first quarter 2014 non-GAAP adjustments had no EPS impact. The non-GAAP EPS adjustments in the first quarter of 2013 rounded to an EPS impacted about $0.01. So after considering these non-GAAP adjustments first quarter 2014 adjusted EPS is $0.35, 6% higher than the $0.33 adjusted EPS the company reported in the first quarter of 2013. Overall, the 2014 first quarter revenue, gross profit, adjusted operating income, adjusted net income, and adjusted earnings per share were records for any first quarter in the company’s history. Water Systems sales were $184.6 million in the first quarter 2014, an increase of $8.2 million or about 5% versus the first quarter 2013 sales of $176.4 million. Sales from businesses acquired since the first quarter of 2013 were $0.8 million or less than 1%. Water Systems sales were reduced by $8.6 million or about 5% in the quarter due to foreign currency translation. Water Systems sales growth excluding acquisitions and foreign currency translation was about 9%. Water Systems operating income after non-GAAP adjustments were $29.3 million in the first quarter of 2014, flat versus the first quarter of 2013. The first quarter operating income margin after non-GAAP adjustments was…

(Operator Instructions) and first question comes from Matt Summerville of KeyBanc. Please go ahead.

Hi, good afternoon guys, this Joe on for Matt. First a couple of questions on the distribution channel realignment. Do you expect to see a decline in sales following that July 15 deadline or do you already have other distribution outlets lined up that you think is going to fill that void completely?

Joe, this is Gregg Sengstack. We are discontinuing supply to about 30 outlet, we are adding about 50 to 60 outlets. So just to be a question of timing of liquidation inventories and added inventories, making room for Franklin product. So that's what could be going on during the next several months.

Okay and Gregg will you incur any costs associated with setting up those new outlets? Any sort of either incentives or you are helping them get set up in anyway?

Of course when you are bringing on new outlets you are going to have some additional upfront cost, the travel cost, incentive cost. So I am not sure how meaningful they are going be, the overall results will have some cost.

Okay and then would you expect to see any sort of prebuy in the second quarter from the outlet say you are discontinuing shipping product to ahead of that July deadline or no?

Joe, don't have a lot of clarity around that. I think that there will be -- it just I think depends on the market and again the weather is going to be big factor before starting the year, there aren't a lot clarity about whether it will be modest buy up or buy down, that's not we want to give you guys, it is a little heads up on that.

Okay but there is nothing in your agreement that says that, that they can't buy ahead I guess the last time there was sort of -- it was a completely different scenario but then with the changes strategy you had an over -- an inventory overhang as there was just some inventory like safety stock bought, you don't expect something significant like that, I don't imagine.

Yes, if you go back to history, of course that was a very a very different situation, it is obviously a much smaller overall revenue number again, what we are going to say is that people can buy new ordinary course, it will not be a situation like in southern hemisphere

Okay, that's helpful. And then Middle East and Africa, I mean that's been a region that's being growing nicely for several quarters now but 43% organic growth that's significantly better than any growth rate we have seen here recently. Can you give a little more color on what drove that in the quarter and may be some-- how sustainable -- may be not 43% but an elevated growth rate is there.

This is Robert. So we had a very good quarter probably due to timing. We won some tenders in North Africa which you cannot predict year-over-year. But we have steadily increased our penetration in this area. And a lot of nice things came together as you said going forward we would not expect that kind of growth year-over-year or quarter-over-quarter.

Okay and then may be lastly on the fueling side. The India tender shipments that are planned for later in the year, will that all fall in a single quarter similar to the first quarter of 2013 or is it going to be spread out over the course of the year and then is it correct to assume that it will have a similar dilutive impact on margin that tender business as it did in 2013?

We are a CF that we currently have inhouse go out though second and third quarters, maybe it is going into fourth quarter little bit. There may be traditional business coming but not clear at this point. It would have dilutive impact on margin, on the flip side as we have commented, fully bought Flex-ing acquisition and so we are getting some benefits there.

Okay and then actually may be if I could just sneak one more in. You guys commented on URI acquiring National Pump, I mean obviously they probably have talked about increasing their fleet size pretty meaningfully over the next few years. Based on your conversation when could you expect to see a benefit there? This business had some pretty impressive growth rate in the back half of the year so I mean is there -- could you think you can continue to grow off of that base given URI's comments or just may be some color around how that's going to benefit you.

Yes, Robert will address that, he is the executive closet to that that transaction.

Generally, we would expect the impact of the URI business to materialize in the back half of this year in the first part of next year. We had significant orders with NBC the company that URI acquire, those shipments will be primarily going out second and third quarter and then I would say and if the URI business with its additional branches would start to show up in the back half of this year, first financial year.

Our next question comes from Mike Halloran of Robert Baird. Please go ahead.

Good afternoon, everyone. So first could you talk about what are you seeing on the Ag side of the portfolio and what sort of trends are you expecting for the second quarter and I guess for the rest of the year?

Yes, Mike. Again, we are not -- we have a much larger replacement business that able to make me think people like Valmont and other (inaudible) who are selling our equipment, and so we have a large component that is replacement aspect of it. We have been impacted, it has been a slow start for the year because of weather and it depends on weather pattern whether we are going to see this acceleration earlier or later in the second quarter in North America. Europe, we haven't seen quite the severity of -- rains we saw last year in southern hemisphere is doing this time.

And when you look at the core North America trends if you could somehow just normalize for weather and then normalize for this channel shift that's going to happen here, how would you characterize the underlying fundamentals both in the wastewater side as well as the groundwater side? And just give a thought process on what that core underlying demand trend looks like?

Our business may be a little pun intended flows like water, it is pretty steady business. The underlying trends are pretty steady again large replacement is big part of that. We did a very wet last year; we do not believe there is an appreciable amount of inventory the channel above or below normal. So I think that as Scott pointed that couple of basis points of impact due to severity of weather, so we think that should be coming out over time. We are expecting the second quarter may be little bumpy on the purchases but that should come out over time and as the business will continue to grow as modest single digit rates.

So it doesn't sound like if you normalize for everything then on the Ag side you are seeing that they were changed and on the residential and some of the larger diameters stuff you are seeing much change here terms, if you adjust for everything pretty stable underlying environment from your perspective or am I putting words in your mouth?

No, I would say at this point that's best view we got.

And our next question comes from David Rose of Wedbush Securities. Please go ahead.

Good afternoon, gentlemen. Couple of follow up questions. I mean starting in the Middle East just so we don't have to call this out next year. What was the size of the tender for the Middle East so we look at Q1 comp next year, roughly?

Roughly $2 million U.S.

I am sorry, can you repeat that?

Two million U.S.

Okay and then on the working capital side, which drove the significant increase on working capital above and beyond sales?

David, this is John Haines. We typically see a seasonal increase in both AR and inventory as our northern hemisphere business is prepared for the high season in the second quarter. Our inventory increased in variety of different places around the world. We have redistribution centers, we drove some of that, we also have some new products that are driving some of that so a lot of that is in preparation of availability for the second quarter season in the northern hemisphere market. Receivables are basically growing now with sale, so there was really nothing unique, when we look at that, I mean one is we look at on a year-over-year basis inventory AR that's payable as a percent of sales of this kind of key measure that we pay attention too and year-over-year to the end of first quarter that was pretty flat.

Yes, I was just looking at AR inventory was up 50% year-over-year so I just wasn't sure if there was anything unusual.

Yes, Inventory plus AR that's payable is about 30% of sales at the end of the first quarter of this year and it is about 28% at the end of the first quarter last year. So anything unusual I would say no.

Okay. Can you comment on the -- looks like you had an acquisition in the quarter, small, can you talk about that?

David, we made a small investment in business we do that in time to time as we think there is -- it makes sense for the company and gives us a size, that's about as much detail as we are going to give at this point.

Did it contribute anything to the revenues in the quarter?

It is almost, yes, I think you talk about the acquisition in the UK. We did that last year that was last year.

This first quarter.

We had a minority investment in our business.

Yes, where are you seeing that David in the K?

I am looking at your Q, well not sure Q which your income statement you got in expenditures for acquisition

Yes, I am sorry, yes, it is a great point. In the first quarter, we made a minority investment in a water public company. We from time to time will make minority investments in companies around the world that we think can offer strategic platform for us that we can grow also. Sometimes thought it's not our best interest to disclose more about that because it is clearly offers an insight into our strategic intend and given materiality of this one what you see on the cash flow there, and what we read and the key will be, that I will say on that.

Okay, can you add whether it was U.S. or international?

It was in North America.

Okay, all right, that's helpful. And then the last one, in terms of what you are doing with the channel that you are restructuring a groundwater distribution channel. How did you assess the new distributors? Can you walk us through the process of how someone made the cut and what you were looking at?

Well, as you go back in history we had followed a policy or practice I guess selective distribution and working with regional distributors and we elected that since we want to get back to that -- we had a distributor getting more national nature. And we want to get back more to the regional distributors we know them very well, know more over the years and so we elected to refocus our efforts with these regional distributors.

And there are no further questions. I would like to turn back to Scott Trumbull for final remarks.

As previously have been announced on Friday of this week I will be stepping down as CEO of Franklin and turning the reins over to Gregg Sengstack. When I came to Franklin as CEO 11 years ago I was convinced it was the company with great growth potential. Since then Franklin people worldwide have provided our shareholders with a 40% compound annual rate of return. If I leave, I continue to believe that Franklin has great growth potential. Gregg has played a key role in all our successes and I am turning the company and its shareowners over to very capable hands. I will be eternally grateful to our Board and shareowners for giving me the opportunity to lead this great company. Thank you.