Good morning. My name is Stephanie and I will be your conference operator today. At this time I would like to welcome everyone Standex International Q4 FY '14 Earnings Call. (Operator Instructions) Thank you. I'll now like to turn the conference over to David Reichman with Sharon Merrill Associates. Please go ahead, sir.

Thank you, Stephanie. Please note that the presentation accompanying management's remarks can be found on Standex's Investor Relations Web site, www.standex.com. Please see Standex's Safe Harbor passage on Slide 2. Matters that Standex management will discuss on today's conference call include predictions, estimates, expectations and other forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. You should refer to Standex's recent SEC filings and public announcements for a detailed list of risk factors. In addition, I would like to remind you that today's discussion will include references to EBITDA, which is earnings before interest, taxes, depreciation and amortization; adjusted EBITDA, which is EBITDA excluding restructuring expenses and one-time items; non-GAAP net income; non-GAAP income from operations; non-GAAP net income from continuing operations and free operating cash flow. These non-GAAP financial measures are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. Standex believes that such information provides an additional measurement and consistent historical comparison of the company's performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in Standex's fourth quarter news release. On the call today is Standex's President and Chief Executive Officer, David Dunbar, and Chief Financial Officer, Tom DeByle. Please turn to Slide 3 as I turn the call over to David.

Thank you, David. I would like to welcome those listening to today's earnings call. Standex closed fiscal 2014 with a strong fourth quarter, resulting in double-digit growth in both sales and non-GAAP operating income. Total sales increased 12.2% from Q4 last year. Organic sales went up 11.2%, and foreign exchange contributing 0.8%. On the bottom line, non-GAAP operating income increased 23.8% and non-GAAP EPS was up 25.3% to $1.24 per share. We ended the quarter with a net cash position of $29 million after the sale of American Food Service and the acquisition of UltraFryer. Standex is starting the new fiscal year with a strong momentum. Our topline goal is to deliver long-term organic growth in excess of underlying market growth. Our end markets are growing, so execution will be critical to achieving this goal. We are about three months into a thorough review of the market opportunities in all of our businesses to reset strategic priorities and select programs to accelerate sales growth. It's clear that we have good brands serving attractive markets with above average growth prospects. We are committed to finding the best investment opportunities to leverage our increasingly healthy balance sheet and drive profitable growth and create meaningful shareholder value. Slide 4 gives an overview of our fiscal year 2014. Total sales increased 6.4% from last year, organic sales were up 5.8% and foreign exchange contributed 0.6%. Non-GAAP operating income increased 14.7% and non-GAAP EPS was up 17.2% to $4.22 per share, a record for the company. Free cash flow was over $4 a share. There were a number of important milestones here at Standex in 2014. Roger Fix retired as CEO and became Chairman of the Board. I joined January 20 and it was a smooth transition between Roger and me. From an operational standpoint, we closed our Cheyenne facility moving the products into our strategic Mexico factory. We also began repositioning in the food service portfolio by divesting a lower margin food custom fab business and adding an exciting fryer business. Our engineering technologies business won significant awards in the aviation markets, which we are reinforcing with the recently announced agreement to acquire Enginetics. Finally, electronics, engraving and hydraulics hit their strides in the second half. With that, Tom will discuss our results for the fourth quarter, after that I will discuss the performance and outlook in each of our business segments. Tom?

Thank you, David, and good morning everyone. Starting from a long-term perspective on Slide 5, you can see the impact of our cost reduction and growth initiative, both acquisition driven and organic. Since fiscal 2010 adjusted earnings per share has grown from $2.42 per share to $4.22 a compound annual growth rate of 14.9%. Sales have grown a compound annual growth rate of 9% during that same period. Turning to Slide 6, which summarizes our fourth quarter results. Net sales for the fourth quarter increased 12.2% to $197.3 million from $175.8 million in the fourth quarter of last year. Excluding special items, operating income grew 23.8% to $22.4 million from $18.1 million a year ago. Adjusted EBITDA grew 19.5% to $26.1 million, or 13.2% of sales compared with $21.9 million or 12.4% of sales in the fourth quarter of fiscal 2013. Please turn to Slide 7, which is our quarterly bridge that illustrates the impact of special items on net income from continuing operations. These items included, tax affected $3 million restructuring charges, primarily related to the Cheyenne closure and approximately $0.3 million of non-recurring management transition expense and acquisition related costs. Partially offset by $1.1 million in non-monetary conversion and $0.1 million in discrete tax items. In the comparable period of fiscal 2013, there was $0.3 million of tax affected restructuring charges. Year-over-year excluding special items, earnings per share increased 25.3% to $1.24. Turning to Slide 8. You can see our full-year 2014 performance. Sales were up 6.4%, non-GAAP operating income grew 14.7% to $76.5 million and adjusted EBITDA was up 12.4% to $91.9 million. On Slide 9, we have a reconciliation of GAAP to non-GAAP net income from continuing operations for the full fiscal year. In fiscal '14, tax impacted restructuring expenses were $7 million, primarily driven by…

Thank you, Tom. Please turn to Slide 15, food service equipment group and I will begin our segment overview. Sales in food service increased 11.1% from Q4 last year. Operating income was up 9%. In refrigeration, our growth was largely driven by continued strength in our new line of engineered endless merchandising cabinets sorted into the Dollar store segment and the national rollout of low temperature beer merchandising cooler. In the quick service restaurant segment, some of the pent-up demand due to weather in Q3 came in during Q4 and we expect more of it to come in during the first quarter. Our backlog in refrigerated solutions was up about 20% in the quarter. In cooking solutions sales were down slightly from Q4 of fiscal '13. We completed the closure of our Cheyenne facility on schedule in June but the ramp-up in our new facility in Nogales has been slower than planned as we pursued an ambitious implementation plan and incoming orders remain strong. As a result, our backlog in cooking solutions increased by double digits from the fourth quarter last year. Getting Nogales up to speed and reducing our backlog is our highest priority in cooking solutions. In specialty solutions, we announced the divestiture of our custom fabrication business. This was a low margin business that provided no synergies with our core food service equipment business. We are investing CapEx dollars in automated manufacturing in Nogales to improve throughput, quality and margins. We also have redeployed talented operations professionals from across our business to assist this ramp-up. We continue to expect the consolidation to result in $4 million in annual cost savings. We began realizing these savings in the second half of fiscal 2014 and we expect to achieve full run rate savings in fiscal year 2015. In June,…

(Operator Instructions) Your first question comes from the line of Chris McGinnis with Sidoti and Company.

Just to start off, I guess on the food-service side. The improvement in quick service, is that more an easier comp due to the weather or you are actually seeing also an improvement kind of in that end market demand?

A little of both, Chris. I mean some of the demand from the winter was pushed into the spring quarter and we also saw some pickup in demand.

All right. And then just on the UltraFryer acquisition. How is that so accretive? Is that just the margin profile of that operation is that much better or is it synergies, or a combination of the two?

I would say it's primarily the first but there are also synergies. It's a business that operates at healthy margins and as I said before, we have got some immediate cost synergies by leveraging our greater purchase volume, both in materials and in our logistics.

Great. And just on the cadence, the $4 million of cost savings for the year. Is that all -- is that one a quarter, is that's the way to think about it?

We are in the second half, Chris.

All right. So you are -- all right.

So they are (indiscernible)

$2 million for the next two quarters and then you are flat with the prior year.

Yes.

All right. And then just on the Nogales. It sounds like -- how much longer could that be a headwind for you?

I think through the end of the year, as we stabilize and get our backlog to where it ought to be.

All right. Just moving on to the auto platforms and talking about the strength in the engraving. How much of that is market share gains compared to actually the strength of the model being introduced?

Yes, this last year it was clearly both. We did take share because of our worldwide presence and it was a record year for new model introductions around the world.

Sure. And that's directly related to the expansion of your geographic presence just on those market share gains?

Yes. It's a culmination of two things. One is that we have a common central technical database for all our designs that feed all of our sites around the world. So we can work with the OEM as they design their texture. And we do design ones that we can deliver at multiple sites and then over the years as we have expended geographically, we put our sites close to the tool makers that the auto manufacturers use.

Sure. And then just two quick ones. Just CapEx for the year?

We gave guidance of $24 million to $26 million.

All right. Sorry, I didn't see that. Thank you. And then just lastly as you're starting to make acquisitions again, what is your comfort on the leverage ratio if you did see such an acquisition?

You know we want to stay investment-grade, so we want to stay in the 2 to 3 times EBITDA leverage ratio, probably closer to 2.

Great. And I know they were smaller acquisitions but does that change your approach in terms of timing of additional acquisitions? Do you need to take time to really integrate these or do you feel ready to move on pretty quickly?

Well it depends on which business segment; I think it's going to take a little time for Engineering Technologies to digest Enginetics. But we really still be actively looking for bolt-on acquisitions in that group.

Your next question comes from the line of Beth Lilly with Gamco Investors.

I wanted to drill down in the food service business. Roger, during his tenure talked about getting the margins up and now you are very explicit about getting your operating margins up 200 basis points. And so, can you just drill down, it seems to me the real issue continues to be on the cooking side. And can you just help us understand exactly what the problems are there and am I incorrect in that statement that the problems are on the cooking side? And then ultimately I guess, where do you think the margins can go on the food service side?

Yes, let me start with that and then get to the specifics. If you look at all these -- the large food -- publicly traded companies that either are entirely in food services or have reported segments in food service, the margin rates they report are, in the last two years, between 13% and the low 20s and we are below that. We believe this market, this business, will allow us to deliver margins in that range. Now we are not going to get there overnight. My statement about that 200 basis points was something we thought was achievable in the next 18 to 24 months, a comment I made last quarter, and pretty explicit about how we would deliver those margins. You are right to say that our primary challenge right now is in cooking solutions. And so the way I look at cooking solutions is, the demand is good. We had good growth in the quarter, good topline growth. We didn't leverage the bottom line primarily because of, that the ramp-up in our Nogales plant didn't track with the wind down of Cheyenne. And that to me, tells me it's a self help story. It is a problem that we can solve. We have the orders in-house. We know we can make these -- the margins on those orders. We just got to get the right people, give them the right tools and support them with systems and structure.

Okay. So the demand is good. So you've got the right products and it sounds like it's simply then an operational issue?

In the short-term, yes, operational issue. But I would say long-term, we still have -- we have to introduce new products. You know we have our speed oven, that we didn't talk much about that today. We are getting a lot of interest in our speed oven. We hope to see that grow in the next couple of years. We have launched new products. Continue to look in our portfolio like we did with UltraFryer. So part of it, the longer term story to get to the target margins that are representative of the industry, will include some of those actions. But in the short term you are entirely right. It's getting the right people around our operational issues and getting that performance right where it needs to be.

Is the competitive dynamics different on the hot side of the market versus the cold side?

Yes, it is. I mean if you look - you can look at it a couple of different ways. In general on the hot side, there tends to be more innovation, more churn in products and in technology as end-users change their formulas, change their recipes and things. On the cold side, the technology is not as -- doesn’t evolve as quickly. Our wins in that side have had more to do with designing products around ease of use, ease of installation and energy efficiency and competing on service levels. So little less technology, more service levels, ease of use.

Okay. Have you broken out the -- if you look at your revenues of, let's call it give or take 400, a little over $400 million on the food service side what's the breakdown between refrigeration and cooking?

The last time we did that was at the last quarter at the investor presentation.

It's 50%, so $200 million in refrigeration and 25% in basically in cooking. A little over 25%. Maybe 30%.

Yes. So you probably have it Beth. It's on our Web site. Is it in the investor presentation from last quarter?

Yes. We have got it in number of presentations.

Okay good. All right. And so just one more question about this. So the refrigeration side, you are happy with the margins, things are tracking, but the real issue is on the cooking side, right?

I would say, pleased with progress, never happy. There is always room for improvement. Biggest issues is on the cooking side, yes.

Yes, okay. All right. And then my other question is, I wanted to ask you about the capital spending. So you can give us a breakdown, you are going to spend $24 million to $26 million this coming year, what's the breakdown on that?

Let me give you some mover overall comments and then I can ask Tom to find some additional detail. If you look at comps of other industrial products companies you would see a CapEx level, depending on industry, say 2% to 2.5%, in some cases 3% of sales. And I view that as the cost of doing business to maintain competitiveness to stay in the business. Now in our business in the last five years, you look at that five-year trend that Tom showed, coming out of the recession, we were very cautious in our spending and spent below depreciation. So now as we are growing, we got a couple of things going on. One is we are reinvesting in some of the basic competitiveness enabling technologies in the plants like auto-forming machines and laser machines. But we are also growing and what we said in the past is to leverage our cash position, we will look at capital investment above that run rate if there are good prospects. So we have got four businesses that are really firing on all cylinders. They have good growth opportunities and we fundamentally see that investments in internal growth opportunities are lower risk and higher return than, say, acquisitions. And our business leaders, as they come to us and request acquisitions or internal capital investment and they are competing for the same dollar. So I would say, whatever you think our comps ought to be for CapEx in that 2% or 3% range, that the $24 million to $26 million, the part of that is above that 2% to 3%. That is growth oriented in aviation, engraving and electronics in particular.

So aviation, what I was trying to understand is just which divisions are you spending more money in than others?

Well, in this next year the engineering technologies to support the aviation contracts. In engraving as we bring some laser machines on line and our nickel shell molding on line, which are emerging technologies in those markets. And electronics, as they move more to sensors.

Your next question comes from Jamie Wilen with Wilen Management.

Hi, most of my questions have been answered. But as far as Engineering Technologies, the developmental spending that you are doing, is that for new term projects or long-term projects and the pay-off on that type of spending?

I would say majority long-term projects. Lot of activities. You can imagine now, we are very excited about the aviation wins we announced earlier in the year, you can bet we are pursuing others. And that is long-term, long-term work as you know with the build schedules of these new engines.

And lastly, just one commentary. I've been following you guys for a lot of years and I look at every metric to judge a company whether it's sales, operating margins, consolidation of plants and improving the balance sheet, making accretive acquisitions. You guys have been just on point and making progress on every single metric. Well done and just hope you don't lose focus and continue to make that same progress. Well done, fellows.

Yes, thank you, Jamie. We really appreciate that. We hope we don’t lose focus either and appreciate your support.

At this time there are no additional questions. I will turn it back over to David Dunbar for closing remarks.

All right. Thank you operator and thank you everybody who joined us this morning. This concludes our call. Bye, bye.