Good day, ladies and gentlemen, and welcome to the Q3 2014 Kadant Inc. Earnings Conference Call. My name is Whitley and I’ll be your operator for today. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator instructions) As a reminder, this call is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Thomas O’Brien, Chief Financial Officer. Please proceed, sir. Thomas O’Brien: Thank you operator and good morning everyone and welcome to Kadant’s third quarter 2014 earnings call. With me in the call today is Jon Painter, our President and Chief Executive Officer. Before we begin, let me read 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 slide presentation and those discussed under the heading Risk Factors in our report on Form 10-Q for the fiscal quarter ended June 28, 2014. Our Form 10-Q 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 represents 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 third 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. 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 third quarter results as well as our outlook for the remainder of the year. Overall, we had another solid quarter with strong cash flows, gross margins and better-than-expected revenue and earnings per share performance. I’ll begin today’s review with the financial highlights of the quarter. We finished the third quarter with revenues of 99 million which was up 8% compared to the third quarter of 2013 and the second highest in our history. In addition, we set a record for parts consumables revenue at $63 million. Gross margins in the third quarter were strong at 45%. Our adjusted EBITDA was also the second highest in our history at 13.4 million or 13.5% of sales, up 9% compared to Q3 of last year. Our GAAP diluted earnings per share of $0.60 in the third quarter included $0.03 of expense related to restructuring. Our adjusted earnings per share was up 11% to $0.63. Our bookings increased 23% over Q3 of last year to 100 million and we ended the quarter with a near-record backlog of 128 million. And last but certainly not least, we had excellent cash flow from operations of over 15 million, up 20% compared to the same period last year and we ended the quarter with net cash of 19 million. The bookings and revenue trend chart on Slide 6 shows our quarterly revenue which is the red line and our bookings which it the blue bars. Q3 revenue was up 8% from Q3 of last year to 99 million, boosted by our recent acquisitions. Revenue from all of our product lines was up except stock prep which saw a revenue decline of 20% compared to last year due to lower capital revenue. Our fluid-handling product line…

(Operator instructions) Questions will be taken in the order they are received. (Operator instructions) Your first question comes from the line of Rudy Hokanson of Barrington Research. Please proceed. Rudy Hokanson – Barrington Research Associates, Inc.: Good morning.

Good morning. Rudy Hokanson – Barrington Research Associates, Inc.: Questions, could you talk a little bit more about the activity you’re having in China and the success on the products and consumables, what you’re able to do there right now?

Next question and Rudy can dial back. Is there another question?

(Operator instructions) Our next question comes from the line of Swanee Vitnes [ph] with Global Hunter Securities, LLC. Please proceed. Swanee Vitnes – Global Hunter Securities, LLC: Oh, hello, guys. Thank you for taking my question. Can you please quantify the parts and consumables business revenue in Europe?

I didn’t quite get that. What was the question? Thomas O’Brien: Parts and consumables in Europe. Swanee Vitnes – Global Hunter Securities, LLC: The parts and consumables business revenues in Europe?

The parts and consumables business in Europe? Swanee Vitnes – Global Hunter Securities, LLC: Yes, that is correct.

And what is the – I’m not sure I understand. What’s the question on that? Swanee Vitnes – Global Hunter Securities, LLC: What is your revenue in the parts and consumables business in Europe? If I’m not audible maybe I can just call back again.

No, I think we hear you okay. I could tell you the businesses, our businesses in Europe, okay, which is primarily in Europe but no exclusively, their revenue was around – well, their bookings is around $15 million collectively. Swanee Vitnes – Global Hunter Securities, LLC: Okay. Okay. And I may have missed out on duties questions, but then, can you just walk us through the initiatives that you will be taking to offset the softness in South America and China?

Sure. I mean, part of it is doing things like growing our parts and consumables business. I mean, that’s just a more stable business. So, for example, in China, something like that example that I gave you where we’ve essentially partnered with a customer and we’re helping them become more productive. So this is kind of a trend we’ve seen in China before where as they move away from growing capacity at a rapid rate, they focus more on increasing the productivity of their mills and we’re in a great position to help them do that and many times that involves using our parts because they actually have a better pay back. And that same kind of thinking really can go on in South America. We did, as we mentioned, do a small restructuring in South America; but I think over time that market will recover. It has kind of everything going forth that a lot of developing markets have. The other – go ahead. Swanee Vitnes – Global Hunter Securities, LLC: No, go ahead.

So, some of the other stuff we work on with customers is we’ll focus on, for example, in China in particular they may have problems with water. There is more and more restrictions on mills for using water. So we have a number of products that help them to be more efficient and recycle more water within their mills. So this is something that’s more regulatory driven and that even in a market where there is a soft demand for new capacity, they have to do these kinds of things. Swanee Vitnes – Global Hunter Securities, LLC: Okay, sounds good. And do you have any sizeable project in hand to support the Europe growth?

Sizeable projects in Europe? Swanee Vitnes – Global Hunter Securities, LLC: Yes.

Yes, there are still projects going on in Europe. That’s why I was kind of saying, and I kind of refer to it as a business as usual attitude. There are still projects being discussed. It’s not like it was sort of during the Great Recession or financial time back in ‘08 where there was no discussion of projects. People are still getting stuff done. I would just say there’s a little heightened sense of caution. Swanee Vitnes – Global Hunter Securities, LLC: Okay.

We still definitely have a project pipeline if you will. I would just say it’s moving a bit slower than it was earlier. Swanee Vitnes – Global Hunter Securities, LLC: Sounds good. Thank you, guys.

You’re welcome.

Your next question comes from the line of Rudy Hokanson with Barrington Research Associates, Inc. Rudy Hokanson – Barrington Research Associates, Inc.: Can you guys hear me now?

Yes, we can hear you. Rudy Hokanson – Barrington Research Associates, Inc.: Okay, good, sorry. My question was focused on what was going on in China. We’ve been talking about the capacity issues there and them closing down inefficient plants et cetera, and I was just wondering – on the paper-making side, and I was just looking for what you see in terms of overall activity in China and demand for the consumables and the products. Since you had used as an example and you just repeated it about working with a particular customer, I was wondering if you could give us a little more color on the dynamics of China considering the conversations we’ve had the last year or two.

Sure. And just to remind sort of other listeners, there’s a few things going on in China that all impact capacity additions. One of them of course is the economy is growing at 7%, right? So that’s going to continually require new capacity to be added. One of the phenomena’s of China is they tend to add it in kind of weights. So we’ve got a lot of capacity going on. So I would say that the overcapacity that we’re seeing right now is as much an aspect of the supply side as the demand side. There is some demand there, maybe not as strong as it was two years ago but there is some demand side. The other side which you kind of refer to, Rudy, is the fact that the Chinese government is mandating the closure of smaller, high-polluting inefficient mills. And this, from our perspective, is like creating more demand because those aren’t our customers. And that’s continued this year. I have no reason to think it won’t continue next year. And it’s hard to quantify exactly what impact – how much of our bookings are tied to that versus expectations of general higher demand. And the other things which I’ve kind of probably first talked about in this call is just the geographic distribution of the mills. If you look at – China is one entity. There is some overcapacity particularly in things like printing and writing grades. But a lot of that overcapacity is in the south, kind of in Guangzhou province, the export area. And the government is interested in encouraging investment in the western part of China and the central part of China, and it really doesn’t make sense to move liner board and other grades that far. So you might have a case where you actually have demand in the west even though you have some oversupply in the east. Rudy Hokanson – Barrington Research Associates, Inc.: Okay.

Then on – I don’t know really what I could add to the parts story. It’s a definite factor that the Chinese operators are focused much more on the productivity of their mill and that’s a great opportunity for us that we’ve worked on seizing to improve our parts and consumables business in China. Rudy Hokanson – Barrington Research Associates, Inc.: Okay. Thank you. And also, just a quick follow up, again on to China. You had talked about the opportunities for OSB in China and that you – after the acquisition was made at the end of last year about how you were already starting to do some exchanges in China in terms of discussions about what could happen, is there anymore color on that?

Sure. Well, you’re absolutely right. OSB is kind of a newish product in China. We bought Carmanah, and then in April they got two strander orders in China in April of this year. That’s actually a lot. And those mills will be starting up in the coming months. And that is really going to be up to the producers of that OSB to find markets for it. And I believe they will because it makes total sense for China. It’s a less expensive product. It doesn’t need large trees and so forth. So they should do well, but I will say there’s probably a little bit of pioneering work that those customers will have to do and they haven’t really – they’re pre-selling now but those aren’t fully up and running. So it’ll take a little bit of time. Rudy Hokanson – Barrington Research Associates, Inc.: Okay. Thank you. Those are my questions.

Thank you.

(Operator instructions)

Operator, is there any other folks on the line there?

There are no further questions in queue.

Okay, thanks. Well, thanks. I want to conclude today’s call of what I think are several key takeaway points. First, we had another solid quarter with excellent cash flows and gross margins. Second, we continue to make progress in growing our parts and consumables business, setting a new revenue record in Q3, a quarter in which 64% of our revenues of some parts and consumables. And third, we’re seeing good business activity in North America, although some weakness overseas. And finally, although we’ve reduced our GAAP guidance, we do expect 2014 to be a record-setting year in terms of bookings, revenue, adjusted EBITDA and adjusted earnings per share. I look forward to updating you next quarter. Thanks very much.

Ladies and gentlemen, that conclude today’s conference. Thank you for your participation. You may now disconnect. Have a great day.