Ladies and gentlemen, thank you for standing by and welcome to the Matthews International First Quarter Financial Results Conference Call. At this time, all the participant lines are in a listen-mode. There will an opportunity for your questions and instructions will be given at that time. [Operator instructions] As a reminder, today's call is being recorded. I'll now turn the conference over to Mr. Steve Nicola. Please go ahead, sir.

Thank you, John. Good morning. I’m Steve Nicola, Chief Financial Officer of Matthews. Also, on the call this morning is Joe Bartolacci, our Company’s President and CEO. We have posted on our website, which is www.matw.com, the first quarter earnings release and financial information we will discuss this morning. The earnings release can be found on our home page for the quarterly financial data, on the top of our home page under the Investor tab, click on Investor News, then click on Financial Reports to access the information under the section Matthews International Quarterly Reports. Today's call will be available for replay later this morning. To access the replay dial 1320-365-3844 and enter the access code of 442278. The replay will be available until 11:59 PM February 9, 2018. Before beginning the discussion, at the advice of legal counsel, I have been advised to read the following disclaimer as it pertains to forward-looking statements. Any forward-looking statements in connection with this discussion are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to be materially different from management’s expectations. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct. Factors that could cause the Company’s results to differ from those discussed today are set forth in the Company’s annual report on Form 10-K and other periodic filings with the SEC. To begin the conference, I'll review the financial results, Joe will then provide general comments on our operations. For the quarter ended December 31, 2017 the company reported earnings of $1.10 per share compared to $0.32 per…

Thank you, Steve. Good morning. Our first quarter results were modestly ahead of our expectations. Continued strong results in our industrial technologies group, strong performance in our SGK Brand business from the U.K. and Asia markets, improved results out of our cremation equipment business and continued synergy capture from several acquisitions, all helped to offset lower volumes in our caskets and cemetery business and soft market conditions in our North American and EU brand business. Having said that however, during the quarter, we saw significant improvements in our business. We got clarity of our ongoing interest costs as a result of our bond offering. We saw a return to strong tobacco orders in our EU brand business as well as significant increases in orders for our engineering business, where we design and built web-based solutions utilizing our technical cylinders and rollers. We also saw increased order activity in our industrial technologies business for both printing equipment and warehouse automation software solutions. As you may be aware, our recent acquisition of Compass Engineering, a leading provider of automated warehouse software to the logistics industry is a significant addition to our strategy of becoming an integrated provider of technology to the e-commerce warehouse group saw offering, integrated printing solutions with software and picking technology. In our Memorialization segment, as severe flu season is causing increased demand of our funeral home products at least in this early part of the second quarter. The severe weather however is impacting our Memorial sales due to the inability to set markers or stone in the cold weather. We expect there to only be a delay and to recover those sales later in the year. In our Brand business, recent wins in North America and the U.K. and cost initiatives look promising for a better year in…

For those of you, who will be asking questions, we request that you limit them to one question and a follow-up question until all those who wish to participate in the Q&A session have had an opportunity to do so. John?

Good morning, Joe. Good morning, Steve.

Hi Dan.

Good morning, Dan.

I was hoping Joe might spend a minute or two elaborating on Compass Engineering, what they bring to the table for you more generally and then just granularly revenue contribution for the quarter if any and your expectations for fiscal '18.

Sure. Let's start, that sounds like a multipart question. So, let's start with what it brings to us. Recently in the last several four, five years we required impairment controls, which is part of the integrated solution we're trying to provide. Pyramid focused on warehouse control software system, principally for retailers and brands. What Compass brings to us is the same type of warehouse control automation for the logistic companies with major transportation companies and delivery companies across the United States. Our expectations over time to strategic bring these two businesses together to provide a solution to go end-to-end from a retailer's website all the way to your doorstep on one single platform. We coupled that with the technologies that we've added on the printing side and the new product we have laid out and the expectations that additional technologies in the automated warehouse we're having solution we think we're going to bring about and Compass is a big part of that. As a practical matter, one of those things you'll see in our P&Ls as we move forward is Compass being a low asset-based company brought to us a significant addition to our intangible assets. This year we're going to start to push close to $30 million in this year in intangible amortization as a result of recent acquisitions, one of them being Compass which is a significant contributor there. We expect Compass this year to push an additional couple $3 million at least of EBITDA to our P&L from where we started off. So that's -- I think I've answered all your question at this point Dan, if you have more, let me know.

No that's great. Very good and then I have -- the second was just any update -- you gave some color, but on the beta test of the new print solution, any additional color you would be willing to give in terms of market opportunity as well?

We're getting our Board of Directors out to see the operation that's what we said. We are going to have a sample test provided to our first beta group which will be our Board of Directors here in February. So, we're pretty confident where that's coming out and looking forward to what it can do. The value propositions for our customers with what we think is the most compelling part of the story around that product and the ability to eliminate a large part of the downtime associated with repair and maintenance of the product is the value proposition itself. We expect that they will be in market by the end of the calendar year. You know what product development is like right now. We're bullish on that timeline. Our expectation is that it will be there and we'll start to see revenue offsetting some of that development cost early calendar year 2019.

Very helpful. Thank you.

Next, we'll go to Jamie Clement with Macquarie. Please go ahead.

Hey Joe. Hey Steve, thanks a lot in advance for taking my questions.

Hi Jamie.

You're welcome. Good morning, Jamie.

Hey Joe. I know, listen I know it's a sensitive subject, but with respect to all the news about the very, very severe flu season, that we started to get the last I don't know, three, four, five, weeks something like that. Have you been seeing an uptick in your memorialization business over the last month or so?

No question Jamie. One of the many factors that are causing us to increase our guidance for the year we are seeing it on the funeral home side. Today we expect that to translate to the Memorial side, but as I said in my comments, that flu season in terms of severely cold weather, we've also seen a modest downtick in our cemetery products setting of stone and bronze excuse me, is difficult in the cold weather. We expect that to be a multi-quarter uptick for us.

Refresh my memory please, you would so and I think you were maybe just saying this, but would you expect to see more of a maybe a rebound in casket sales in the March quarter and then when the ground thaws and that kind of thing, you'd expect to see fall through more on the memorial side in the June quarter. is that right?

Thanks for making my job easy Jamie, thanks exactly right.

Okay. Okay. All right, great. I'll get back if queue. Thank you very much.

And our next question is from Liam Burke with B. Riley FBR. Please go ahead.

Yes. Thank you. Good morning, Joe. Good morning, Steve.

Good morning, Liam.

Joe you talked about some awards in the North American market in SGK, could you just give us a little more detail on that and will that help you offset the trend in the CPGs pulling back on SKUs?

Well, we've had a couple of recent awards. We don't want to call out names and we're not going to get into the business of calling out wins and losses. This is a business where there is always ups and downs with respect to wins and losses with customers. Not significant numbers, we have fortunately been able to land a couple of very significant new accounts that are -- that one, did not contribute anything into the first quarter and one that is only ramping up and will take to be a multi-year ramp-up for us. They are significant accounts and will be beneficial to us. They are in spaces like retail where lot of the private label work is moving and in pharmaceuticals, which is a little bit off the CPG side of the business. So, we think is a good balance for where we can split our risk.

Terrific. Thank you. Steve, based on the fact sheet you put out this morning, I took the operating income and just netted out your CapEx. You are cash flow negative. Is it timing of working capital or you obviously expect to generate $4 in free cash for the year, but was there anything in the quarter or is it just timing?

It's generally timing, but our fiscal first quarter just from a seasonality standpoint tends to be the slowest from a cash flow perspective. So, no, with respect to Joe's remarks on projections for the year, we expect that we'll achieve those cash flow result over the next three quarters.

Great, thanks Steve. Thanks Joe.

No problem.

[Operator instructions]

Okay John. Well that seems to be the end of our session this morning. We appreciate everyone participating in the call and we look forward to our call after our second quarter earnings release. Thank you.