Good morning. My name is Rocco and I will be your conference operator today. At this time, I would like to welcome everyone to the Lindsay Corporation First Quarter 2018 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. During this call, management may make forward-looking statements that are subject to risks and uncertainties, which reflect management’s current beliefs, estimates of future economic circumstances, industry conditions, company performance and financial results. Forward-looking statements include the information concerning possible or assumed future results of operations of the company and those statements preceded by, followed by, or including the words expectations, outlook, could, may, should or similar expressions. For these statements, we claim the protection of the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. I would now like to turn the call over to Mr. Tim Hassinger, President and Chief Executive Officer. Please go ahead.

Good morning and thank you for joining our call. With me on today’s call is Brian Ketcham, Chief Financial Officer and Lori Zarkowski, our Chief Accounting Officer. As you know, the objective of this call is to discuss our quarter one results. Before we jump into that overview, I would like to make a few introductory comments. It’s a real privilege to join the Lindsay team as President and CEO. This is a company that has a long and storied history in the irrigation sector, along with its more recent successful entry into the infrastructure business. Based on what I have observed in my roughly 2 months in the company this organization with its portfolio of assets and innovation capabilities have strong potential to grow. During this timeframe that I have been in Lindsay, I have invested a lot of time with the management team and I see a group focused on continuous improvement and that are highly committed to serving our customers. For those on the call that don’t know much about me, I have been in the agricultural business my entire career and you could really say my entire life. I grew up on a family farm in Illinois and after getting an ag degree, I began what turned out to be a 33-year career at Dow AgroSciences, which was the ag division of Dow Chemical. The last 3.5 years, I was the President and CEO of Dow AgroSciences. Throughout that time, I had the opportunity to work in or lead all of the geographies and business units in that company, including 2 years living and working in China. Those experiences exposed me to several areas that I am finding very useful in my new role at Lindsay. Lindsay is a company with two business platforms that compete…

Thank you, Tim and good morning everyone. Total revenues for the first quarter of fiscal 2018 were $124.5 million, an increase of 13% over the same quarter last year. Net earnings for the quarter were $3.2 million or $0.30 per diluted share compared with $900,000 or $0.08 per diluted share in the prior year. The impact of foreign currency translation for the quarter was minimal in comparison to the prior year. The irrigation segment revenues in the first quarter were $103.4 million, an increase of 15% over the same quarter last year. In the North America irrigation market, revenues increased 28% over the same quarter last year. The increase was driven by higher irrigation system sales volume across most regions reflecting a more traditional fall selling season in comparison to the prior year when we experienced growers deferring equipment purchases. Revenues from other irrigation product lines including pump and filtration systems increased modestly in comparison to the prior year. In the international irrigation markets, revenues in the first quarter decreased 4% compared to the same quarter last year. The decrease was primarily the result of a lower level of project sales, while certain markets, including Brazil, Africa, and Europe had higher sales compared to the prior year. Total irrigation segment operating margin increased to 7.6% of sales from 5.7% in the same quarter last year primarily the result of additional sales volume leverage in North America. Infrastructure segment revenues in the quarter were $21.2 million, an increase of 3% over the same quarter last year. Increased sales volume in road safety products and higher Road Zipper system lease revenue were partially offset by lower revenue in other product lines. Infrastructure segment operating margin increased to 15.5% for the quarter compared to 14.5% in the same quarter last year primarily the…

Thank you. [Operator Instructions] Today’s first question comes from Mike Shlisky of Seaport Global. Please go ahead.

Good morning, guys.

Good morning, Mike.

So, just quickly here on the backlog piece, when you take out the backlog from the Road Zipper order, you are still up 18%, 19% or something like that from the prior year. Could you kind of bucket for us, whether there is a big skew towards one of the other segment or do you characterize both segments, excluding this single order as up pretty substantially from the prior year?

Yes, Mike, this is Brian. I would characterize the backlog we indicated it was up in both irrigation and infrastructure. It’s predominantly split between the two I would say obviously the Road Zipper project for Alex Fraser was the majority of the increase on infrastructure and the remainder would be on the irrigation segment.

I am sorry, so are you saying that it was flat outside of that single order infrastructure or are there other orders that might be causing a positive backlog in infrastructure?

I would say it was relatively flat if you exclude that Alex Fraser Bridge.

Okay, got it. Thank you. Also wanting to make just a quick question on the price of metals and pricing in the quarter, were there any impacts to your gross margins on the high cost of other galvanizing or fuel etcetera. And is there any outlook you had for the rest of the year as to how that might kind of play out for you guys?

Yes. If you look at quarter-over-quarter to our first quarter last year, steel is – market price of steel is probably up about 10% and zinc is probably up around 30%. So, there is definitely an impact from that, but we have been able to pass-through I would say the majority of that, which has been traditionally the case and that would breakdown into probably more of a 3% to 4% change at the product cost side. Going forward, I think we continue to see steel at or slightly above the current level, but again, we planned for that based on where we see the market trending we may take on additional inventory if we see steel prices going up and intend to continue to manage margins so that any change in steel or zinc prices get pass-through.

Okay, great. And just other one for me, I know you had up quarter in domestic irrigation and a down quarter in international irrigation, but based on your current outlook and change your comments to kind of start the call. Do you think that might actually reverse in the rest of the year here given what you mentioned that actually, domestic might be flat to maybe up, just up slightly or is international has improved your growth load right now?

Yes, no, thanks Mike. And as we look at year-over-year sales as you have seen, we did see a good healthy increase there year-over-year. Now, at the same time, we do want to highlight, we think there has been a return to what we will call more normal fall buying pattern. So to be even more specific to your question has this been a result of market share gain and we would say it’s too early right now to be able to say that in North America. Now, we have seen some share growth in some of the project driven markets internationally. So, that’s been positive news. And the other area that I would focus on is that we continue to see FieldNET get recognized as a leading technology in the marketplace and that’s definitely creating additional opportunities for share growth throughout most of our markets.

So buy online then from an end-market perspective, you had some easy comps here in the quarter, but it looks flatter for domestic, but possibly up for international, is that what you are trying to say or are you saying that this could still be a down year for international?

No, we don’t see it as down year. What I am saying is we did have some markets where we believe we did gain share. Now, obviously there were other markets that offset some of that growth and you saw what the total numbers were for the quarter. But when we come back to North America, what I want to just say is that we think it’s been a combination of both. We have seen farmer sentiment improved some. There is no doubt there have been some capital investments that had been delayed. So, we saw an improved environment with farmer buying attitude, but at the same time, we also saw what we would consider to be some of a shift back to a normal buying pattern. So, it is a combination of both factors.

Okay, thanks so much. I will hop back in the queue. I appreciate it and happy holidays.

Thank you. You too, Mike.

And our next question comes from Brian Drab of William Blair. Please go ahead.

Good morning, guys. This is Kyle Dicke on for Brian Drab. Thanks for taking the questions. It looks like you touched on this in the back of the slide deck, but just regarding the new tax bill and the ability for farmers to fully expense potentially fully expense capital investments, how much of a tailwind or a tailwind at all do you expect that to be to demand next year?

Kyle, this is Brian. I think it’s definitely a favorable factor. It’s hard to access right now how much of a tailwind that would provide. It depends on the farmer’s taxable income position. I think that, but it’s definitely something that would support the market for sure going forward across all equipment, agricultural equipment.

Okay, great. Thanks. And then congratulations on the Alex Fraser deal, are you able to provide anymore details on that regarding how many can be units, how many miles of barrier? And then I know you gave the $14 million kind of from 3Q ‘18 to 1Q ‘19 is that kind of a – is that weighted evenly between the three quarters or how do you kind of see that in terms of revenue playing out?

Yes, I think probably more details coming out later in, I think the customers planning and marketing release, but I think it’s around a little over 3 kilometers of barrier and I think a couple of machines. As far as how it falls in fiscal ‘18 I would say that the majority of it will be in ‘18 there will be some that spills over into the first quarter next year.

Okay, great. And then just one last one looking at kind of the irrigation gross margins, I know you mentioned kind of the mix changes there as a headwind, but is there anything else underlying there, any changes in kind of the pricing environment or from a competition standpoint?

Yes, we don’t – our selling margins I would say were consistent with where they had been in the first quarter last year. Again, I think there is a mixed component within irrigation equipment where during the quarter probably a higher percentage of sugar machines compared to in the past which has a little bit of a negative mix impact, but then I think the other probably biggest impact was just in that change in regional mix on the international side.

Okay, great. And I will leave it at that. Thanks.

And our next question comes from Joe Mondillo of Sidoti & Company. Please go ahead.

Hi, guys. Good morning.

Hi, Joe.

Just to follow-up on that last question relative to the prior recent quarters that you have seen in terms of international mix, where does it stack up, was this one of the weaker sort of regional mix quarters that you have seen in a while? And then in terms of the backlog and sort of the outlook and what you are expecting, where do you see that mix going over the next year?

Yes, Joe. I think couple of components to that. Obviously, there is the project related area and that the projects can vary as far as margin levels. That’s part of the mix. But then I think in the regional mix that we called out some of our export markets say, Australia, Mexico generally tend to have higher margin profile and in any one quarter, the change in regional mix can make a difference. I think Europe being up this quarter again is probably more of a year-over-year comp than anything. I think it had been impacted similarly in the past to the domestic market with lower commodity prices. So, it’s a little bit of a mixed bag.

And in terms of going forward, is there any reason that you believe that these Australia, Mexico will remain sort of at the levels where they were in this quarter or do you think they bounce back or how do you sort of look at going forward?

We would expect the improvement as the market recovery continues in some of the established markets internationally.

Okay, great. And then on the Alex Fraser Zipper project, I am just wondering when we last spoke in early October where were you in the process of sort of landing this project and could you give us an idea of what the rest of the pipeline looks like with other projects going forward?

Yes, I mean, I think as we have mentioned in the Road Zipper projects, they can be in discussion for quite a period of time and then appear in the backlog. I think Alex Fraser probably has been in some form of discussion for about 2 years. As far as the pipeline I would say the pipeline continues to improve. I think again Alex Fraser is probably an example that really kind of got its start based on seeing what the Golden Gate Bridge project was like. And I think that project has definitely increased the awareness and interest level in Road Zipper as a solution for applications like that.

Okay. And so the perspective that I was actually trying to sort of get at, is there a chance that we could expect some other large project like this to be landed over the next quarter or two, was it hard to say or how healthy is that pipeline I guess relative to the next 18 months or so?

Joe, this is Tim, I will try to address it, but I won’t be able to give you an exact answer on that just to give you kind of set expectations on the front end her. We do not include sales in backlog until a contract is signed. And to be specific on your other point is this actual deal Alex Fraser got aimed between the time of the last call and this call. So, that’s the timing of when that occurred. Now, we do understand your desire to get more transparency on the backlog or a potential size of this. So, we are going to spend time evaluating what I will say the disclosure threshold is to use, but what we can give you as a directional statement here, we are seeing an increase in interest and we do think the Alex Fraser contract is a good proof point of that.

Okay, appreciate that. I will jump back in queue right now. Thanks a lot.

Great, thanks.

And our next question today comes from Brett Wong of Piper Jaffray. Please go ahead.

Great, guys. Thanks for taking my questions. I just wanted to dig into the domestic demand on irrigation a little bit more, I know you have touched on this, but really why demand and sentiment kind of picked up in the quarter? And just wondering as we have seen with some machinery replacements kind of during this period that stronger than expected yields resulted in higher income than originally budgeted and so some growers who have been meaning to put in the irrigation bid. Basically, that tied to the stronger yields that we have seen this year that’s driving kind of the sentiment improvement and the demand improvement?

Yes, Brett, this is Brian. I think what we saw in the quarter traditionally we have said over a longer period of time the breakdown between dry land conversion replacement has been roughly a third, a third, a third. In this particular quarter which actually matches up pretty well with the first quarter last year, we saw higher amount of conversion probably, well it was 42% conversion replacement was 34%. So, what drove the conversion is primarily in the Northwest area of the U.S. where what we are seeing is replacement of older wheel line technology with center pivots. And I think that is there is different crops in the Northwest in your traditional corn and soybeans, but we did see broad-based demand across all of our regions. And again, I think some of it maybe also this past season, machines ran longer, put a lot more hours on them. So, the people that we are holding off on replacement maybe have reached that time when they need to make that replacement decision, but we will obviously see as the next quarter plays out too if it is just a shift in the demand or again the year-over-year comparables were last year was kind of an anomaly there.

So, Brett, this is Tim, just to build on what Brian has said. So, there what he put in place and then we do think there we have seen some positive signs of I will say more favorable farmer sentiment, but we are hesitant to try to indicate what does it going to mean going forward because it’s one quarter have seen it. So, we can say that I look back on this quarter yes we did see an improved farmer sentiment specifically in North America?

Okay, that’s helpful. And I guess kind of on that same point, Tim, if you look at next year and assuming we get to trend line yields again and you have kind of this range-bound grain price environment as you have kind of suggested here. Do you think that you continue to see this kind of positive sentiment or is there maybe a pullback in how farmers feel given that the environment is still pretty tough?

Well, you see us avoiding hitting that direct, because we are not sure. We think there is an improvement. I think the question on the table is how much. And I am hesitant to try to give a specific on that, because we only have the one quarter here to go off of where we have seen it. So, we think it’s a very positive sign as again not only the increase, but the movement back to what we would call more of a normal fall buying pattern is a positive sign, but to what level this was going to drive that’s what we are hesitant and really believe next – the end of next quarter we will have a better sense if there is a directional change in.

Excellent. Thanks so much and congratulations on the new gate and looking forward to hear probably more.

It sounds good. Thanks a lot. Appreciate the call.

And our next question today comes from Ryan Connors of Boenning and Scattergood. Please go ahead.

Great, thanks. Good morning.

Hi, Ryan.

I had kind of one big picture strategic question and then kind of more of a housekeeping item as well. So, the big picture, Tim, thanks so much for laying out your big picture vision and so forth, but I want to kind of build upon that a little bit. And you mentioned you don’t have rose-colored glasses when it comes to the commodity prices and so forth as the driver of growth in value and you are going to focus on what the company can do independently to drive value. I mean, can you just expand on that a little bit and talk about the platform of Lindsay, talk about M&A priorities and product development priorities. Do you see this remaining – do you see this as an irrigation platform, do you see it as an agricultural products platform? Do you see it as an industrial platform, I mean, what direction do you think if we operate on the assumption that we are in kind of – and we are not going to expect a big ag upcycle anytime soon. What direction do you take it in terms of growth, what’s your vision there right now?

Yes. So, Ryan, let me first of all answer just where am I spending my time in the short-term and then if I can broaden that out and try to address your question more head on. Yes, I am still in this 100-day plan. So my focus is listen and learn and as I mentioned in my introductory comments, I am trying to bring the fresh set of eyes. So, we are doing a lot of relook whether it’s strategy, processes or key differentiation points getting the small group feedback has been very helpful in getting out to all of the locations. So, my goal is to come with a more direct answer to your question here in the Q2 earnings call. Just a few comments though that I can say, obviously irrigation has been the foundation of this company and I see a key driver here and a key need is we need to be able to deliver the meaningful results from that business that we have. Now, under the infrastructure, we are in a market, where our U.S. infrastructure is clearly in need of repair. We know we have got developing countries starting to adopt and enforce safety standards. So, I see a growth potential in that business better than global GDP rate. This segment contributed 25% to 35% of the company’s operating income over the last several quarters when sales were 20% or less of the total sales. So, this has been a very important contributor to the company. And at the same time, you are seeing increasing standards being implemented, MASH being the very obvious example. So, we are taking a fresh look at everything, but I would like how this segment is performing. So, I am going to pause on going any farther in answering your question until we have had at least this next quarter to get through the 100-day plan and reflect back on it, but I see obviously the ag – the irrigation segment is one how we get more results. And I am quite intrigued in having a very favorable view so far of what I have seen of the infrastructure business, so hope that addresses at least for now and more to come.

Yes. No, I appreciate that and we will look forward to that next quarter. My housekeeping question and I apologize if I missed something I came on as the touch late, but tax rate, tax reform I know it’s something that you probably don’t have to find a real detailed pinpoint answer on right now, but we are obviously even more in the dark than you are on how this will impact Lindsay from a tax rate standpoint. So, any color you can give us just even directionally on what the impact of tax reform will be on your tax rate and what the key kind of moving parts are?

Yes, Ryan, this is Brian. With the statutory rate dropping from 35% to 21%, it definitely will have a beneficial impact on our effective tax rate. For our fiscal 2018, it’s a transitional year. So, 4 months we will be at 35% and 8 months at 21%. So, it’s a blended statutory rate of about 25.7%. There are some one-time items upon enactment, one of which is being the deemed repatriation of foreign earnings that could add a point or two to the effective tax rate and some of it depends on the mix of foreign earnings obviously, but for fiscal 2018, we are expecting the effective tax rate could be 2 to 4 points lower than what we saw in Q1.

Okay.

Next year as we work through the transition it should come down further than that, but we have got in any year it could be 35% to 40% of our earnings coming from foreign operations and now to flip-flop U.S. rates are going to be the lowest in some of our other countries where we are operating will be at higher rates. So, it will be higher than the U.S. statutory rate could be 5 to 7 points above that.

Okay. So, there is one of the things we have heard from others is that it impacts on different things like where components are being sourced and excise taxes. It sounds like you are expecting a pretty straightforward application of that lower statutory rate without a lot of complexity on supply chain issues. Is that fair?

Yes. I would say for the most part, I mean, we are in these markets in order to serve the customers and not from a sourcing standpoint, so we will be taking a look at sourcing as well just to make sure that with the lower U.S. rates there is definitely an advantage to do more in the U.S., which is just the opposite of the way it has been. So, definitely we are taking a look at it, but in general, I wouldn’t expect significant shifts.

Okay, great. Well, I appreciate that. Thanks for your time.

Thanks.

And our next question today comes from Jose Garza of Gabelli & Company. Please go ahead.

Hey, good morning guys.

Good morning.

And welcome Tim. You guys talked a little bit about the MAX-Tension and just I guess give us a sense of where things kind of stand in terms of approvals maybe at the state level or however you guys are looking at it just to kind of get a sense for the adoption of that?

Yes. So, we have submitted to many of the states that we will be looking to get that approved. Many of the states have come back and have approved the product already. I would describe our situation right now as we are well-positioned for the MASH sunset date, which is the end of June of next year. So, we feel we are progressing towards being in a very good position.

Okay. And you don’t have like I guess number of states?

I would not in a position to give the specific numbers.

Okay. And I guess just housekeeping, Brian, are you guys going to breakout I guess the domestic versus I guess North America now on the irrigation side just the revenue there? I might have missed that before.

Yes, Jose, we are breaking that out between North America and international whereas in the past it was U.S. and international and the difference there being Canada being included now in North America and it’s really market characteristics are similar to the U.S. and we manage it internally, Canada is managed as part of North America, so it just makes sense to report externally the same way that we manage it internally.

Okay. So are you going to give historicals by any chance?

No, you can see the impact on the quarter.

Yes. So, this is kind of like 2.5 million or so run-rate?

Yes, it’s not a significant number in total.

Okay, okay. Alright. Thanks, guys. Appreciate it and happy holidays.

Yes, you too. Thank you.

And our next question today comes from Chris Shaw of Monness Crespi. Please go ahead.

Yes, good morning everyone. How are you doing?

Good.

If I can ask the margin question again and irrigation maybe looking at it slightly differently, I guess I was just expecting higher margin percentage given the gains in sales. And if you look back at Q1 ‘16 you did just slightly less sales, but had $5 million more on profit? So, I can’t imagine that’s all just from the breakdown in different geographies on the international side, but is there something else that’s happened over the past 2 years, I know I am going back to the time before either of you guys, so maybe it will be hard for you to answer about it, if you have any color?

Yes, Chris. I mean I think if you go back 2 years ago, there is quite a change within the international as well as within some of the domestic irrigation businesses where we have added some other businesses, but I would say within the biggest change year-over-year is within the international irrigation. And one thing back 2 years ago in the first quarter that those results also included recovery of receivable that have been previously written off, so the comps are not really apples-to-apples, but I think the biggest thing, two things really, there is a change in the regional mix of sales between the two periods. And then the other thing is the Turkey plant is now fully operational and it wasn’t in the first quarter of ‘16 so that’s definitely had an impact, especially in the kind of a lower overall volume environment. So, we would expect clearly improvement going forward. We expected to see a little bit more leverage this quarter as well, but I have a variety of factors played into that.

Alright. That’s very helpful. And then about the tax, I guess the sort of expansion of Section 179, is it that – I thought that was already in place for this year and I thought that was only really just expanding the program to higher I guess level of spending. Why would you think of the tailwind, just because it’s continuing mostly or do you think that is excellent? I guess I didn’t think irrigation projects went up to $1 million really in the United States.

Yes. I mean it’s two things. One is it’s continuing and then the other thing is that it’s now the limit has been taken off. So, to the extent that you are looking at multiple systems or other agricultural equipment it’s not you don’t have to necessarily prioritize, but that’s the biggest thing is that the limit has been increased.

Okay. And then just lastly given the impression, I mean I know the fires in California seem to be around a fairly fertile agricultural area. Is there – have you any sense of there has been a lot of damage to irrigation systems out there or have you heard any feedback from customers?

Yes. I mean, the fires were in an area that isn’t our type of agriculture. It’s going to be in the vineyards and fruit trees and things like that. So, that’s not an area that we would have our equipment.

Okay, great. Thanks a lot.

And our next question is a follow-up from Mike Shlisky of Seaport Global. Please go ahead.

Hey, guys. Thanks for taking these other questions here. First, I just want to ask about your selling expenses, you have sales of 13%, but essentially the same selling expenses kind of year-over-year. Is that the kind of run-rate $10 million we should kind of expect going forward in your best quarters or your worst quarters of last year, it was all with the exact same selling expense all year around? Is this the right kind of run-rate going forward at this point?

Yes, Mike, I would say in general, yes, it represents a run-rate. I would say it can vary a little bit. Again, a Road Zipper project that could have some commissions attached to it, but I would say in general it doesn’t vary that much with sales.

Okay. And then secondly, I just want to get a little bit color on the Alex Fraser Bridge project here, it’s been so long since you are actually seeing a full order from start to finish kind of going through the book. So, if you just kind of take us through some of the timeline, I know it sounds like it’s a three quarter type project, are the sales kind of back-end loaded once you are actually get it installed or is it kind of evenly throughout the entire three quarters? And the same question for the profitability, is this going to be a project that is the similar margins to the overall segment and profits back-end loaded given the installation of that project?

Yes, Mike, let me just give you, I will make a few comments for the project itself and then Brian can jump in and give you more what that will mean from a revenue standpoint for us. The final project planning is underway now as you can expect in the implementation we believe will be completed by the second half of 2018. So, we believe it will be completed in the 2018 calendar year timeframe. So, Brian, you want to give a view of how that will look from a revenue standpoint.

Yes, each contract is different, Mike, but this one allows for revenue recognition upon delivery. So, it should be – well, it’s dependent upon when we actually delivered the product, but there is a possibility that some of it could rollover into the first quarter, but we think the majority of it will be within the fiscal year.

And then from the profit standpoint is did you not recognize it until it’s officially installed and you have done all your work on it or as soon as it’s delivered?

Yes, profit will be recognized as the revenue is recognized.

And again is this kind of that could have more margins that are in line with the rest of this segment or might this be something that is a little bit lower margin to start and then there is parts and service over time that might help you with higher margins in future years?

Yes, we are not going to comment on profitability of the specific order.

Okay, thanks guys. Fair enough. Appreciate it.

Alright, thank you.

And our next question today is a follow-up from Joe Mondillo of Sidoti & Company. Please go ahead.

Hi, guys. Thanks. Just one – actually two questions. One on the inventory, I think I asked the same question last quarter, inventory for this quarter was up 17% year-over-year and I think in October you mentioned that, that was internationally driven. So, I guess even though this quarter was quite a little weakfish on the international front, should I expect international growth to return later this year?

Yes, Joe, the inventory I would say is most of the growth is in the international irrigation business. There is some in domestic as well as in the infrastructure side, but the majority of it is in the international. And again, the supply chain, the channels are longer, but it is to support what we think will be the growth in the business.

Okay. But the timing of these international projects that the reason why the inventory is up, is there any chance of this to expend into fiscal ‘19 or can we expect international growth to return this year?

Yes. I mean, the timing of the projects does contribute to the inventory there is no doubt about that. As far as when that takes place generally, it’s not – it doesn’t go over a 12-month, so I would think within the fiscal year. Again, it depends on what comes in and out of the backlog, but in general, I would say it’s at a higher point right now than what we would anticipate going forward.

Okay. And then just lastly acquisitions they haven’t really done much over the last couple of years, just wondering do you think that changes at all in terms of opportunities or is it going to sort of just be consistent is what it is just the opportunity there to start as much as maybe in the past?

Yes, Joe, this is Tim I will take a shot here at this. As I have said a couple of times, we are still in this 100-day plan, so we are trying to determine where our best opportunity should be focused on. We are very open to bolt-on opportunities. Just the right opportunity comes, we do have a very strong balance sheet, but I do want to come back to you. My focus right now, our immediate focus is on implementing this 100-day plan and trying to sort out exactly where our priorities are. So, that’s where majority of the efforts going right now.

Okay, appreciate it. Happy holidays.

Thank you.

And our next question is a follow-up from Brett Wong from Piper Jaffray. Please go ahead.

Hi, guys. Thanks for taking this follow-up. Just wanted to ask about the Brazil market, you mentioned that it’s still favorable there, but just wanted to see what you are seeing in that market given the weaker fundamentals with lower grain prices and kind of less favorable effects compared to this time last year?

Brett, I would describe it as we are seeing some extremes there. First of all, weather we are seeing some difference between south and north in terms of wet versus dry. So, we are getting some variability there in Mato Grosso where corn acreage and yield reduction has definitely played a factor there. Interest rates have remained favorable. So, with all of the volatility though, we still are rather optimistic for potential growth in Brazil. So, we still see it as a good growth opportunity for us.

Excellent. Thanks so much, guys.

And this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Hassinger for any closing remarks.

Great. Well, thanks for your interest and participation in today’s call. This concludes our first quarter earnings call. I am looking forward to updating you on our progress in our quarter two call to be held at the end of March. We thank you for joining us and we wish you all a safe and happy holiday season.

Thank you, sir. Today’s conference has now concluded and we thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.