(Operator Instructions) Welcome to the Titan Machinery Second Quarter Fiscal 2010 Conference Call. I will now hand the conference over to John Mills.

Welcome to Titan Machinery Second Quarter Conference Call. On the call today from the company are David Meyer, Chairman and Chief Executive Officer and Peter Christianson, President and Chief Financial Officer, and Mark Kalvoda, Chief Accounting Officer. By now everyone should have access to the earnings release for the fiscal second quarter ending July 31, 2009, which went out this morning at approximately 7:00 am Eastern time. If you have not received the release it is available on the Investor Relations portion of Titan’s website at TitanMachinery.com. This call is being webcast and a replay will be available on the company’s website as well. In addition, we are providing a slide presentation to accompany today’s prepared remarks. We suggest you access the presentation now by going to Titan’s website and clicking on the Investor Relations tab and the presentation is directly below the webcast information in the middle of the page. Before we begin we’d like to remind everyone that the prepared remarks contain forward looking statements and management may make additional forward looking statements in response to your questions. These statements do not guarantee future performance, and therefore undue reliance should not be placed upon them. These statements are based on current expectations of management and involve inherent risks and uncertainties including those identified in the risk factors section of Titan's most recently filed 10-K. These risk factors contain a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward looking statements. Titan assumes no obligation to update any forward looking projections that may be made in today's release or call. With that I'd like to turn the call over to the company's Chairman and CEO, Mr. David Meyer.

On today’s call I will provide highlights of our second quarter, discuss some of the recent acquisitions, and provide a general update on our business. Then Peter will review the financial results for the second quarter in more detail. I will then provide some closing remarks and we will open up the call to take questions. As John mentioned, to help you follow today’s prepared remarks we’ve provided a slide presentation which you can access on the investor relations portion of our website at TitanMachinery.com. If you click on the Investor Relations tab on the right side of the page you will see the presentation directly below the webcast in the middle of the page. I will pause for a few moments to allow you to access the presentation on your website. I am pleased to report solid second quarter results for Titan Machinery. Turning to slide two, we have an overview of the quarter. Revenue for our second quarter increased to $193 million up 43% from $135 million in the second quarter of last year. Our gross profit for the quarter was up approximately 42% to $36 million compared to a gross profit of $25 million in the comparable period last year. Our pre-tax income for the quarter was $8.2 million compared to $5.6 million last year. We achieved earnings per diluted share of $0.27 in the second quarter compared to $0.19 per share last year. Turning to slide three you see our first six month results. Revenue for the first half of fiscal 2010 increased 25% to $360 million in the first half of last year. Our gross profit for the first six months of fiscal 2010 was $65 million up 29% from $50 million in the prior year period. Our pre-tax income for the first half of…

Turning to slide nine, our total revenue for the second quarter ended July 31, 2009, was $193.2 million. Our increase in revenue from all three of our main revenue sources was up from 37% to 45% compared to the same period last year, reflecting our strong organic and acquisition growth. As you may recall, in addition to discussing our three primary revenue streams, last quarter we also discussed what is referred to as our other revenue stream on our income statement. Our revenue from this category increased 48% to $4 million in the second quarter of fiscal 2010 from $2.7 million in the second quarter of the prior year. On slide 10 our gross profit for the quarter increased to $36 million compared to gross profit of $25.4 million for the same period last year. Gross profit from our reoccurring parts and service revenue contributed 54% of overall gross profit for fiscal second quarter of 2010 which is the same as in the second quarter last year. Gross margins in the quarter were 18.6% compared to 18.8% in the second quarter a year ago. Our overall gross margins were impacted by our lower year over year gross margins from our other revenue category which is comprised primarily of revenue generated from our rental business. Gross margins for this category decreased to 18.9% in the second quarter of fiscal 2010 compared to 28.9% in the prior year quarter. Let me provide some color on this change. The lower results are driven by a larger rental fleet in the construction stores that were purchased last year combined with a soft construction environment. Adequate sizing of our rental fleet and maximization of rental fleet utilization are primary objectives for us. Our operating expenses as a percentage of net sales decreased 60 basis points…

We believe our strong performance in a very challenging economy is a testament to our strong operating model and leadership position in our industry. We are benefiting from the strong agriculture environment and our diversified revenue streams as well as our reputation of providing farmers with the best value and selection of equipment and parts as well as superior service. We look forward to continuing to deliver solid results and meet our full year goals. Before we take your questions I’d like to conclude by thanking our employees for all their hard work and thank our valued customers for their continued support. Operator we are now ready for the question and answer period of the call.

(Operator Instructions) Your first question comes from Bob Evans - Craig-Hallum Capital

Can you comment on how much of your inventory is non-interest bearing as of the end of the quarter?

Our interest bearing inventory as of the end of the quarter was 30%. In relation to where our interest bearing inventory as of the end of the second quarter was 30% versus 35% as of January 31st.

You said 30% is interest bearing?

Yes.

Your debt level bumped up a little bit sequentially from Q1 to Q2. I want to make sure I understand the reason for that.

We just went to a more traditional financing arrangement where we have a five year term debt with Bremer Bank on our fixed assets. That was $15 million.

How will that flow through as we look at the second half? Can you give us a sense of how the cash flow, going back to the more traditional model, how will you pay that down? I’m trying to get a sense of cash flow for the second half.

There’s a five year term on that. Its straight amortization on that.

USDA came out with comments not long ago as early farm receipts and then costs being higher for the farmer. Can you maybe talk about that, maybe what you’re seeing in the marketplace in terms of farmer income and maybe put a little bit more clarity on it in terms of your market.

If you look at our market where it’s predominantly production agriculture, heavy in your grains, your corn and soybeans and wheat, if you actually look at the forecast of $165 billion for crop cash receipts, if you eliminate the livestock and dairy out of that, if you just strictly look at the crop cash receipts $165 billion that’s the second highest level ever in history right now. It’s a little bit off from last year but still it’s the second highest level ever. We think in our area here where its predominantly large production agriculture we’re a little buffered from what you’re seeing from those numbers for all of North America it includes hogs, cattle, dairy and some of the different diversified crops.

How about the input costs, have you seen, would you say the USDA is accurate there or would you say its more, are you seeing a little greater margins in your region?

We’re seeing some big drops in fertilizer costs; you’re definitely seeing some drops in some of the energy type things, the fuel costs. I’d say you’re seeing land prices seems to be maintaining and they’re holding steady which is actually pretty much bodes well for disposable income or the ability to purchase that the customers have. Cash, rents, and it looks like land prices were pretty stable. The fertilizer is a big one and that’s decreasing. Also I think a lot of these growers are picking up some efficiencies through some of the things that technology is bringing to the table which bodes well for what we’re selling. Fuel efficient engines, some of the GPS technology and some of the efficiencies out there they have in the new technology.

Acquisitions, you’ve maybe been a little less aggressive this year then last year. Can you give us, has anything changed in the marketplace or give us your lay of the land in terms of acquisition pipeline and what you’re seeing.

We really don’t see any change at all. We’re aggressively out there doing acquisitions, there’s a lot of interest amongst the dealers. I think you need to go back when you look at the demographics of what’s boding well for acquisitions dealer age, increase sophistication of equipment, the capital requirements right now, the increased level of management is taking and really the benefits of our operating model to go out and to acquire these dealerships. A lot of it what you’re looking at is timing right now. We have done a number of acquisitions and there’s quite a bit in the pipeline but it’s just a matter of timing what you’re looking at right now.

Your next question comes from Rick Nelson – Stephens Inc Rick Nelson – Stephens Inc: About the floorplan line which I know renewed in August. Can you tell us about the terms?

We renewed our floorplan line with CNH in addition to that we have increased our floorplan that we have available to us from GE Capital. We have an arrangement with CNH Capital with different steps of interest based on our level of finance that we do with them. There’s a $300 million total wholesale facility that’s available and the base $25 million is at a lower rate and the amount that we finance above the $25 million is at a little higher rate on that. When we look at that and we combine that with our other wholesale floorplan available from us with all the wholesale floorplan facility really what we’re looking at is probably about a 20% difference in our interest costs on a going forward basis. Rick Nelson – Stephens Inc: Are the terms disclosed in the Q?

On the CNH line there would be but not on our other miscellaneous ones. The take away on it is that we have increased our amount of wholesale credit that we have available to us and we don’t really have a material increase in the cost of that wholesale credit and we’ll manage that to get maximal operating leverage out of what we’re doing with our financing on our inventory. Rick Nelson – Stephens Inc: I’d like to also ask about the construction side of the business, how that is performing relative to your expectations and what does the guidance assume about that business going forward. I think in the first quarter you indicated construction stores were $0.04 to $0.05 alludive to EPS if you could comment on second quarter, what the outlook is there.

Looking at that really if you go that slide 14 that’s kind of the reason why we put that together was because of the fact that, like David talked about AG economy in our area is still remaining strong and we’ve been able to deliver a +3.5% on our same store comps. Those comps do include what we call our core construction stores which were the stores in North Dakota and South Dakota and on the western side of Minnesota. Those stores are still all of our construction stores are running in a soft industry. As you’re aware there’s a headwind in that industry and so that’s why I thought it would be a good thing for us to break this out on a slide where we updated our same store modeling so that we went to a 5% decline instead of a 10%. Yet we reiterated our 2010 revenue guidance and maintained that guidance and that’s based on the fact that even though we’re experiencing these positive results on our AG side of our business that is being offset by what’s happening on the construction industry. Rick Nelson – Stephens Inc: I could see that with six month same store sales up 3.5% the full year guide now calls for a 5% decline. Is that something you’re actually seeing in the business today or is it your desire to be more conservative with the guidance.

What ends up happening is that you have your six stores from the Midland acquisition coming in and being included in our same store quarterly sales comparison. As you have more of the effect of the construction stores into all of our numbers that’s what’s going to moderate this thing rather then maintaining it at that +3.5%. We feel confident in reiterating our annual guidance and think that the strength on our AG side of our business is going to offset any of the softness that we’re currently experiencing on the construction stores and that should put us in to the end of this fiscal year and we anticipate then looking at next year where we’ll take another look at the construction industry in fiscal 2011. Rick Nelson – Stephens Inc: Could you comment on the delusion to EPS from construction in the second quarter and what your expectations are for the year?

We haven’t been breaking that out in our guidance but last call we talked about $0.04 to $0.05 and that will continue on that same trend that we’ve experienced in the first half of the year will continue in the second half of the year. Rick Nelson – Stephens Inc: The second quarter was similar on the $0.04 to $0.05?

We’ve been experiencing the same trend line throughout the year. Probably the second quarter had a little bit less of a drag on it then what the first quarter had but definitely what’s happening is that the strength in our AG business is offsetting the softness in our construction business. Rick Nelson – Stephens Inc: The inventory growth, you’re up 89% I think the implied revenue growth at the midpoint is 2% growth, the factors again driving that increase were tough, and you had depleted inventories a year ago and interest free deals available this year.

Basically that’s what’s driving this is that we’re trending back towards more of a traditional inventory stocking cycle. Like we had said on our first call that we anticipated the inventory to go up at the end of our second quarter and I’m pretty comfortable with the idea that the inventory now should trend down because of the fact that we’re stocking this inventory to support our sales plan for fiscal 2010 on the third and fourth quarters. We are returning more traditionally where a year ago you had this extreme demand and it was a global demand where some of this equipment was going overseas out of the plants and now we’re returning more to that traditional shipping cycle and to the interest free period related with that. Rick Nelson – Stephens Inc: The year over year growth rate should moderate in third quarter and again in the fourth quarter?

Yes, that’s what we anticipate.

Your next question comes from Chris Weltzer – Robert W. Baird Chris Weltzer – Robert W. Baird: I’m wondering if you could give us an update on what you’re seeing in the used equipment pricing environment now that demand might be starting to plateau a little bit on the AG side.

We haven’t seen any big changes on the AG side at all in the equipment price. Tractors still seem to be a good demand for good late model tractors. Combine new sales have been up. If you look at the industry numbers over the last six months it’s been way up which if they’re up you’re going to have that higher level of used coming into the system. Yes there’s a good demand for these late used model combines and talking to our stores our store managers and watching our pricing we haven’t seen any deviation from standard pricing trends. Chris Weltzer – Robert W. Baird: Your comment about timing of acquisition activity this year. Is that something that is seller driven, are you consciously focusing more effort on the construction dealerships you bought last year or is it just sort of the random travails of trying to do acquisitions in this environment?

When we look at the operation of our stores, our acquisitions you’re almost looking at two, you’ve got different teams of things working on different things. Concurrently we’re building up our stores; we’re improving our stores at the same time we’re doing acquisitions. I guess what we’re looking at is doing methodical quarter after quarter acquisitions. Like last year, we forecast a certain number of acquisitions. We really outpaced that because the opportunities came up and we capitalized on them and we don’t want to rush anything, we want to be real methodic about it, we want to do a good job. We want to take acquisitions that are part of our strategic plan. We’re very interested in contiguous acquisitions and I think we’ve been doing a real good job of that, we’re managing those and we’re conscious of the price and also we want to get these done. Like I said, there’s a good pipeline out there and we’re not interested in saying we’re going to do this many this month, we just want to do them in a good way, we want to plan them out and we are cautious of the pricing on them. They out there and we’re not just going to rush them and pay more of a price just to get them done. We’re going to do this in the context that they allow us to do them in. Chris Weltzer – Robert W. Baird: Not a function of seller’s expectations changing or sellers getting more cautious?

No, I don’t think so. If anything all the dealers had really good years last year. We looked at a lot of financial statements at a lot of our prospective acquisitions and I don’t think I’ve seen one that didn’t have a record year in last year’s fiscal year. Many of them are following that same trend this year. Their motivation sometimes to sell when they’re making this kind of money they’re not as motivated because they say let’s just run it one more year. They’re still out there so like I said earlier it’s more a function of timing. Chris Weltzer – Robert W. Baird: Could you give us a little color on what types of equipment are driving the increased inventory, is it broad based, are there particular categories where you’re getting more favorable financing terms or better deals?

I’d say right now if you look at the big part of our business its four-wheel drive tractors, its combines, and its combine headers and roll crop tractors, those are the big three product groups. We forecast our sales for this year and order the inventories to support our sales so we can meet our plan.

Your next question comes from Brent Rystrom – [Inaudible] Brent Rystrom – [Inaudible]: For comp guidance in the third and four quarters do you have any updates specifically on what you’re looking for the third and fourth quarters?

On slide 14 we talk about that we’re going to model a 5% annual decline. Now in the third quarter you’ll see the stores from the Midland complex that we bought at the end of our second quarter last year, you’ll see them coming online and those same store comps will be negative relative to what we’ve been seeing on the AG side so that’s going to change that a little bit. Brent Rystrom – [Inaudible]: Previously I had been modeling 3Q at -10% and to get to the -5% I’m going to have to bump that more into a negative teen comp. Does that sound rationale?

What I’m saying is that the comps that we’re going to see coming in from our AG stores we’re going to have negative comps coming in on the CE stores. It’s an annual decline that we’re looking at. Brent Rystrom – [Inaudible]: What I’m wondering specifically third and fourth quarter would you weight a worse comp in the third quarter, fourth quarter, would it be heavier to the fourth quarter for a tougher comp?

We really don’t get into quarterly guidance on our comps going forward. We look at our business like our producers and our contractors, we look at our business on an annual basis and we feel comfortable and that’s why I wanted to share that with everyone that when we look at our business and we talk about our annual fiscal 2010 revenue guidance I just kind of wanted to update you on the fact that we went into this and we were guiding towards a -10% same store comps. We’re updating that modeling because of the fact that we’re delivering stronger results on the AG side we are updating that so we’re changing that to a -5% but wanted to share with all of you when you’re modeling this that one of the things that you have to keep in mind is we have the annualization of last year’s acquisition stores which are also driving part of our revenue and our results for fiscal 2010. Most of those acquisition stores from last year are not included in the same store comp and so those are because they’re construction stores they’re running less then we anticipated and so what’s going to happen is the strength from our AG stores is getting offset somewhat by our CE stores but we’re still comfortable with reiterating our fiscal 2010 guidance on an annual basis. Brent Rystrom – [Inaudible]: In the second half of the year do you anticipate your AG comps will be positive and your CE comps will be the negative component and the net will be a negative?

That’s what’s been trending in the first half of the year. You could read that into it because of the fact that the construction industry is softer. I would add that I’m pretty confident that we won’t see the construction industry get much weaker then what it is and that we’ve kind of hit the bottom side of that cycle. That’s what we anticipate but still the industry is facing a headwind. For the last half of the year we anticipate the AG business to remain strong and the construction is kind of where it’s at right now. Brent Rystrom – [Inaudible]: By remaining strong you’re saying you expect positive comps in the AG business in the second half?

That’s what we’ve seen in the first half. Brent Rystrom – [Inaudible]: The comps in the first half next year I would assume that as you cycle through 12 months of the CE that you’re going to have tougher comps in the first half of ’11 and then they should get better in the second half?

We’ll talk about that next year on our call when we give our fiscal 2011 guidance. Brent Rystrom – [Inaudible]: Year end target for inventories obviously up 89% is not something that you’re going to do at the end of the year, do you think its going to be up proportionate relative to the sales, and should it be up a little bit faster then sales?

We’ll see how the stocking goes. What I would say is that when I was talking with Rick earlier that we saw this anticipated jolt in our inventory levels because of the fact they were returning to a more traditional stocking cycle. We see the inventory now trending down because of the fact that we ordered this to support our 2010 levels, the back half of our year. We will end up with a higher inventory level then what we had a the end of fiscal 2009 and basically that’s because of the fact that at the end of fiscal 2009 in January the entire industry was at the lowest stocking levels I think it had ever been at. Essentially the pipeline was empty and now we’re returning more to a traditional stocking level and we’re managing that with our interest free terms. Brent Rystrom – [Inaudible]: Have you seen any difference in comps by state? I keep hearing North Dakota kind of having difficult harvest conditions.

We don’t really break it out that way. Just in general what we see happening is on the AG side we had the flooding up in the Red River Valley which that had a negative impact on the comps for the first quarter, now returning more to a normal production cycle. We’ll see what happens with the weather now this fall, that’s why we always keep talking about looking at it on an annual basis because now we’re really going into the harvest portion of our production cycle. In the harvest portion again we need to look at the weather and how that will allow them to take that crop off. If it’s friendly to them and they can get it off quickly or if they have to fight for it and that can actually move our revenue and we can’t predict the weather, that’s why we have this geographic diversification where we can go all the way from the Canadian border all the way down into Iowa. Somewhere along there they’re going to be getting going on harvest. Brent Rystrom – [Inaudible]: I talked to some guys from AG Star and evidently they’ve gone out with a call internally to pull back on equipment and land financing. Have you sent hat from any of the other land banks?

Right now I haven’t heard of anybody out there that has good credit right now that’s been turned down. Like in any business if you have some marginal operators I’m sure they’re going to be conservative. For the most part the growers, a lot of the people out there that 20% of their growers are buying 80% of the new equipment, I’d say for the most part their balance sheets are in the shape that they can get credit from a number of sources like we talked earlier and we don’t see that as a problem right now.

Your next question comes from Paul Mammola – Sidoti & Company Paul Mammola – Sidoti & Company: Given the volatility in commodity prices right now, I think particularly in corn, I think we’re getting towards maybe a concerning profitability level there. Has that impacted orders for maybe some of the heavier equipment for the back half of the year. Have you seen any cancellations for combines or anything like that?

You have to look back and we’ve been in this business for over 30 years and it is a cyclical business. The one thing that happens in all the cycles, all the land does get farmed. Whether corn is $3.00 a bushel or corn is $4.50 or $5.00 a bushel the same number of bushels go through the combine. When you look at our business mix where we’ve got close to half our margin dollars are coming from our product support, parts and service side of the business and that’s driven on use, we try to think that we’re somewhat insulated from these fluctuations in the commodity market. If you look at right now we’re at the second highest level of farm cash receipts on the production agriculture crops it bodes well for our business. If you look at a 10 year trend line or a five year trend line they’re far above higher then average. What you need to look at is marketing opportunities that our growers, some growers they take the crop and I think there’s maybe a fallacy out there that crop goes right off the combine and into the elevator and gets sold at that price that day. People need to understand a lot of the crop is forward contracted in advance. Growers are picking their marketing opportunities and they’ll sell 5% of their crop at this price, maybe another 5% at another. As they do this prior to the production of the crop and as the crop is in its growing stages. There are other growers out there that every year harvest their crop, put the crop in the bin and then they look at their marketing opportunities after the fact and their balance sheets in the shape right now that they can do that.…

The revenue perspective is related to us bringing on these new construction stores with last year’s 15 construction stores that we acquired. In the construction equipment business rental is a much bigger portion of that and so we’ll continue to see rental revenue. However, we are analyzing that part of our business because of the increase in our rental fleet and we’re going to optimize that utilization and if that means that we decrease the size of our fleet to do that that’s what we’ll do. That would have an impact on that revenue as we go forward. Paul Mammola – Sidoti & Company: Do you have any sense or evidence that you might be taking share from say and RDO or a Butler Machinery in the parts service and used departments?

If you look at the different brands out there whether it is John Deere or if you look at the AGCO, CAT or the Case IH you tend to get that parts and service business to support the price for your brand. Depending on what the Parker is out in the field you’re going to continue. That really bodes well for us continuing to grow our market share and to grow the Parker equipment out in the field and then what you do is subsequent years then you’re going to get the parts and service business from that. Very seldom you’re going to see the Red equipment going into the John Deere shop or the John Deere equipment going into the Red Shop, you don’t typically see that. You’re increasing your products and services business, its going to be a function of the parker and equipment and your success in growing share in previous years is going to come back and give you that long term parts and service business from that equipment that’s in the field.

There are no further questions. I would no like to hand the call back to David Meyer for any closing remarks.

Thank you for listening on our call today and we look forward to updating you on our fiscal 2010 progress on our third quarter call in December. Also, we’ll be attending a few conferences in the back half of calendar year 2009 so we hope to see you there. Have a good day everybody and thank you.

This concludes the conference call. Thank you for participating. You may now disconnect.