Well thank you, Catherine and good morning everyone and welcome to Kadant's first quarter 2013 earnings call. With me on the call today is Jon Painter, our President and Chief Executive Officer. Let me begin by encouraging all participants in our business review today to participate via webcast. You may access the live webcast by going to www.kadant.com, select the investor's tab. And then select the listen live option on the webcast. To participate in the question-and-answer session at the end of our prepared remarks you will need to dial into the teleconference. The dial-in number is available in our press release issued yesterday. It will also be shown at the end of our presentation. Let me now remind everyone of our Safe Harbor statement. Various remarks that we may make today about Kadant's future expectations, plans and prospects are forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Our actual results may differ materially from these forward-looking statements as a result of various important factors, including those outlined at the beginning of our slide presentation and those discussed under the heading Risk Factors in our annual report on Form 10-K for the fiscal year ended December 29, 2012. Our Form 10-K is on file with the SEC, and is also available in the investor section of our website at www.kadant.com under the heading, SEC filings. In addition, any forward-looking statements we make during this webcast represent our views only as of today. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change, and you should not rely on these forward-looking statements as representing our views on any date after today. During this webcast we will refer to some non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is contained in our first quarter earnings press release issued yesterday, which is available in the investor section of our website at www.kadant.com under the heading, Investor News. And with that I will turn the call over to Jon Painter, who will give you an update on Kadant's business and future prospects. Following Jon's remarks, I will give an overview of our financial results for the quarter and we will then have a Q&A session. Jon?

Thanks, Tom. Hello everyone. It's my pleasure to brief you on our first quarter results. Overall we had a much stronger quarter than we expected, particularly in the areas of bookings, gross margins and earnings per share. I will begin today's business review with the financial highlights of the quarter. We finished the quarter with revenues of 76 million, which exceeded our guidance of 71 million to 73 million, although revenues were down 9% compared to the first quarter of 2012. Gross margins in the first quarter were stronger than we expected at 47.3% and just shy of the record 47.6% in the first quarter of 2011. We generated GAAP diluted earnings per share of $0.47 in the first quarter, which exceeded our guidance of $0.32 to $0.34. This strong performance relative to guidance was driven by a number of factors, including higher than expected gross margins, particularly for capital and higher than expected revenues due to several projects that were completed and accepted by the customer earlier than planned. In addition we had expected higher R&D spending in Q1 for a new product we are working on, but that spending has slipped from Q1 into Q2. Cash flows in the quarter were $7 million allowing us to end the quarter with a net cash position of nearly 52 million. In addition to declaring our first quarterly dividend we also purchased 50,000 shares of our stock for $1.3 million during the first quarter. Perhaps the most encouraging highlight of the quarter was our bookings which increased for the second quarter in a row to 90 million and increased our backlog to 93 million. Before I go through our quarterly performance in detail I want to tell you about two small but exciting acquisitions that we have been working on. The…

Thank you, Jon. I will start with a review of our gross margin performance. Consolidated product gross margins were 47.3% in the first quarter of 2013, the second highest level we have ever achieved and increased 170 basis points compared to an excellent result in the first quarter of 2012. Looking at our major product lines the most notable performance was in stock-prep where margins were up significantly particularly in North America. North American stock-prep margins increased due to better margins on a number of smaller capital projects as well as the higher margins on parts and consumables. On a consolidated basis the gross margin improvement from last year was primarily due to a favorable product mix with higher margin parts and consumable revenues representing 67% of total revenues, a relatively high proportion and up considerably from 58% in the first quarter 2012. In addition parts and consumable margins were approximately 100% basis points higher than last year's first quarter. Looking ahead and including the results of CBTI, we still expect that full year 2013 consolidated product gross margins will be approximately equal to or perhaps even slightly higher than the annual record of 43.9% achieved in 2012. Note that there is likely to be some variability in the gross margin results by quarter due in part to product mix as well as to the timing and profitability of larger system orders. Now let's turn to slide 20 and our SG&A expenses. SG&A expenses were 27 million in the first quarter of 2013, up 800,000 or 3% from last year's first quarter. Almost half of this increase is attributable to due diligence and legal costs associated with the CBTI and Noss acquisition efforts. Due to the lower revenues in the 2013 period, along with a 3% increase in SG&A expenses,…

(Operator Instructions). And the first question is from Walt Liptak from Global Hunter Securities. Please proceed.

Hi, thanks. Good morning guys.

Hey Walt, welcome back.

Yeah, thank you. I want to ask you about the mix of business in the parts and consumables this quarter and the kind of visibility you might have going into the next quarter, you know maybe so the first question would be just, you said you had bookings of 55 million but sales of 51, is this booking shift so there is not much of a backlog buildup for parts?

Generally, the parts go in and out pretty quick. The stock-prep parts particularly things like screen baskets can take a month or two to go out. So it's a lot to do with the mix within parts as well as when does it come in March versus January.

Okay, so what's the visibility looking like or it sounds like you are expecting less of a mix of parts in the second quarter.

Yeah you follow us Walt, 67% is definitely on one of our higher parts and consumables pieces and there is two parts of it, obviously the parts and consumables and the capital it's often the capital that will have a big revenue quarter that's what will bring it down. The parts is relatively stable but the capital you know moves right up. I will say as you know from the past Q1 does tend to be a stronger quarter for us for parts and consumables, that saying I was -- I am very pleased about the efforts that are going on our parts business in terms of really growing market share and we see this in China, we see this in screen baskets, you noticed in the call I kind of went through the improvement in parts that's really in every geographic region. So I do think we are making some solid kind of sustainable work but that said Q1 does tend to be a little stronger.

Okay, got it. Your guidance I guess could have gone up more if you had confidence that the parts were going to come in, in the second quarter in the back half, is it that it's because you don't have much lead time on it, it's hard to forecast?

Well we kind of forecast the parts almost on a flow business. We don't have backlog or we don't -- we see parts coming in a long chain. I would say a lot of what goes into the forecast is really our projections for the timing of capital and the margins on those capital. So I said in the call we have some projects that are pretty big out there. We are not factoring those into our guidance. I mean I don't think you I am not sure that the timing would be such that we would get much revenue from them in this year if we got them but I would say it's more related to the capital than the parts in terms of our guidance for the year. Do you want to add anything to that Tom?

I just wanted to say Walt if you are looking - if you are thinking about our margins or something going forward, I think the mix will still be good I think in the second quarter which will be good for margins in the second quarter, maybe quite as high as in the first. But I think it should be pretty strong in the second.

Okay if we can switch over to China and it sounds like your bookings have picked up a little bit here, are you still expecting more as the year goes on. I wonder if you could provide a little bit more color on the visibility or the "work" that you are doing the past few levels I guess if you've got that.

You know the industry doesn't have great information on operating rates and capacity levels. It does seem, I guess you got, it's kind of a mixed message a little bit. The stuff you read about still talks about an overhang capacity that needs to be absorbed and is being absorbed. At the same time we do have active discussions on projects of you know both in our fluid handling product line, our stock-prep product line and really all of our product lines. So things are kind of moving forward, kind of I would say at levels that we are seeing right now.

Okay I will get back in queue, I have got a couple more but I will let somebody else have a go. Thanks.

Okay.

Thank you. The next question is from the line of Larry Stavitski from Sidoti. Please go ahead. Lawrence Stavitski - Sidoti & Company: Hey good morning guys. Thanks for taking my questions. You guys kind of covered a lot of them with your previous caller but I guess just turning to the bookings. What gives you confidence that you guys can kind of mirror what you did in the first quarter? I know you mentioned a lot of the orders are lumpy and I guess somebody mentioned visibility so what gives you guys confidence you guys can achieve what you did in the first quarter?

Lawrence Stavitski - Sidoti & Company: Okay, got you.

You know that's about what we do. Lawrence Stavitski - Sidoti & Company: Okay. You know you purchased you said your share repurchases equaled about 1.3 million this quarter. Do you guy have any outlook on the rest of the year or maybe in next quarter?

We don't have a program. We buy a certain amount every quarter. We don't have a program or we look -- it's not formulaic in anyway. I think we try to be opportunistic. We try to look for blocks. We look at the value of the stock just like we look at when we do an acquisition is a good value for our shareholders so it's not very easy to predict it. The only thing I would say is we are committed to the concept of returning cash to shareholders both through the dividend and through stock buybacks. Lawrence Stavitski - Sidoti & Company: Right, got you. And I guess switching gears to the acquisitions you just alluded to, do you guys have a benchmark ROIC for these acquisitions or how do you, I guess view the return on them.

Tom, do you want to comment on that?

As a general rule Larry what we try to say is three to five years out we like to see a 20% return on invested capital, that's the pretax measure for us from the acquisition. We did try to give you some indication of what it looked next year by giving some of the EBITDA forecast that Jon mentioned in his remarks so both of those you will see a good EBIT prospects and once we do some restructuring and some reorienting some of the business we expect in 2014. Lawrence Stavitski - Sidoti & Company: Okay, thanks a lot guys.

Thanks a lot.

Thank you.

Thank you, the next question is from Walt Liptak from Global Hunter Securities. Please go ahead.

Okay great. Yeah, I want to ask about just a fast one on accretion from the two deals, you mentioned that you thought in the second quarter in 2013, you would get some accretion, I wonder if you can give us a number.

Well, we didn't -- just to be clear, our guidance for this year, since Noss isn't closed there is no -- we didn't include Noss at all in our guidance.

Okay, but the accretion from the CBTI I guess…

And CBTI, I think we just said, it's modest. It's kind of under $0.05 kind of thing. To be honest with you I mean this is a nicely profitable business over the years. We are not really I would say used to making forecasts by quarter and that kind of stuff. So we are taking it somewhat cautiously and we have got some acquisition expenses to work through that sort of thing. It's not a huge impact is really the answer for 2013.

Well and congratulations on these two acquisitions. I know they are difficult to do. And you talked about, just so I understand the air drying system, is that an add-on to an existing product line that you had or is that a new system and…

Well, it's a totally new system. So this is not -- they license our products with the stock-prep and doctoring, screening and conditioning and this is a product that they have on their own.

Okay, so what kind of a market opportunity do you think you have here?

They tend to be, I would say it's fairly volatile and one of the reasons we gave five year average revenues is because these systems can be fairly large and it's fairly lumpy. So when they get them it's not, sometimes you will get $5 million-$10 million orders but you could go a fair bit of time without having that.

Okay, and then switching over to Europe kind of interesting that you had the strong ordering during the quarter given what's going on there, is it because of pent-up demand you think or these are just projects there were in the pipeline eventually that go despite the economies out there.

There a little element of both of that, Walt. So there is some -- our performance in Q1 was largely impacted by those two big orders of $9 million. So that's -- I would not say we are going to get that every quarter. That said we actually had one of our managers in last week and I was kind of contrasting to him the same thing you are doing. I am saying reading the paper seems a lot glummer than you seem, you seem more optimistic about your prospects. And he says I think our customers are just getting austerity fatigue and they are deciding to get along with the projects that they need to do. So I was actually encouraged after having talked to him.

Okay, that's good. What is the profitability and the margins look like on that (inaudible) order. Are those very competitive to win?

Yes, I mean it goes with the -- there is two things, they are not as profitable as our overall gross margins, really for two reasons, one they are large stock-prep systems which are not as high margin as our other businesses. And these businesses often have a large percentage of buy-outs where we do installations and that kind of stuff. And it's almost like a pass-through for us. So that impacts the margins as well.

Okay. Thanks again guys. And good luck next quarter.

Thanks Walt. I'd also add another encouraging thing about Europe is the pick-up in spares business. So the capital kind of comes and goes but the nice solid increase in their spare parts and consumables booking in Europe was to me quite encouraging.

Okay, great.

Thanks, Walt. Operator Thank you. The next question comes from the line of Bill (inaudible).

Yes, good morning. Thank you. I have a couple of questions. One, I know you break down your approximate exposure to the various paper markets. But it sounds like the growth in container board and packaging, U.S. and globally is more than offsetting the decline in newsprint and paper for you guys and helping the longer term outlook, but do you tend to sell more equipment into these type of facilities generally, the container board and packaging as compared to the newsprint and paper.

Absolutely, if you look at our, if you look on the investor section of our website, there is a presentation that we kind of we often give when we go see investors, and it shows in a newsprint and printing and writing last year we were about 15% of our revenue. The container board is by far the largest and box board which is similar that can be nearly half our revenue and tissue which is a nice solid steadily growing business, was around 15%, 14%.

I see. So if we add two plants of the same tonnage, paper or newsprint or paper and container board you would sell more equipment into the packaging and more parts and consumables, it's just more intense, more intensity.

And we have larger market shares. Our biggest product line which is stock-prep, they have the largest market share in containerboard. But we are the strongest. They are actually relatively weak in newsprint. So…

Okay, and just one quick follow-up, I missed it. You said something about waste management, I think it was in China.

Yes.

Is that a new end market for you?

Yeah, it is and it's especially quite interesting. So what -- I will say that we have been asked by mills sometimes can you help us separate out, we are obviously separating and giving them clean fiber, separating out the contaminants. But often in that waste paper mix is things like plastics and metals that they would also like to remove and chemicals. So this is a little different it's actually for municipal waste. So this is post-consumer municipal waste where the customer is trying to do just that. He is recovering a metals stream, a plastics stream and he is going to reuse those. So it will be and we will see how it goes. This is the first, it's a kind of a prototype installation but it's quite interesting.

Interesting, yes. Okay, thank you.

All right, thank you.

Thank you, sir. You have no questions at this time. (Operator Instructions).

Okay there are no more questions, operator.

No questions coming through at the moment.

Okay, well thanks very much. Let me conclude the call by going through, what I think are the three key takeaway points from our performance this quarter. First we had excellent quarter for bookings, exceeding $92 million and most particularly we had significant strength in Europe. Second we had a very strong aftermarket parts and consumables bookings, 55 million. And finally we are in the process of adding two new businesses to Kadant which are going to further our strategy of increasing our presence in the faster growing developing markets, increasing our spare parts business and expanding our product offering to adjacent markets such as virgin pulp and approach flow. I look forward to updating on the next quarter on our progress. Thanks very much.

Thank you for joining in today's conference. This concludes the presentation. You may now disconnect and have a very good day.