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Now I’d like to turn the call over to Mr. Dana Messina, your host for today’s presentation. Mr. Messina, please proceed.Dana Messina Okay, everyone. Thank you for being here for our first quarter conference call. I’m here with our CFO, Dennis Hanson, and our Corporate Controller, Donna Lucente. We’ll try and make this quick and get everyone through the quarter. Let’s look at the results. Our first quarter results were pretty good. Adjusted EBITDA came in at $8 million, which is more than double the first quarter of last year. Earnings were $0.17 a share. Revenues were down about 2% overall. Gross margins improved 450 basis points. And we continue to maintain tight controls of spending reducing operating expenses by 6%. For our bondholders on the call, capital expenditures were about 500,000 for the quarter and depreciation and amortization was 2.7 million. Overall, on the balance sheet, the first quarter we continue to improve our balance sheet. We ended the quarter with over 90 million in cash. Our piano inventories were down about 15% from last March so we’re in pretty good shape on that standpoint. Our bank lines are largely in touch, as we ended the year with 120 million of availability and our net debt was reduced to 67 million at the end of the quarter. In terms of our Piano division, the segment revenues were up about 5%. We had 10% improvement overseas, led by our divisions in Japan and China. Demand is still pretty soft in most of the rest of our markets. In terms of profitability, Piano gross margins improved to 120 basis points, as we work the entire quarter with a more normal production schedule. We also continued to tightly control spending, operating expenses at our Piano division. We’re down 5%. On the Band side, Band revenues were down 10% from the first quarter last year. As we said band dealers are ordering later in the year. We had a significant number of orders placed at the very end of March for shipment in the second quarter and third quarter so we expect our revenue to get caught up into past last year.
For the quarter, gross margins increased nearly 800 basis points to 28.8%. Our factories are now running more efficiently. Lower sales, discounts, and rebates also helped improve our gross margins for the quarter.For the rest of the year, we expect our piano business to remain somewhat soft and while we posted great results in Japan and China, most of our other overseas markets are still experiencing weak demand. Band dealers seem to begin in confidence and are placing orders. We expect to see band sales improve over the prior year, as band dealers take shipments in late spring and early summer. And if we can meet production levels our gross margins should remain in the mid-to-high 20s. Now, we’ll open up for questions. Question-and-Answer Session Operator Thank you. (Operator instructions). Our first question comes from Arnold Ursaner. Please go ahead. Arnold Ursaner – CJS Securities Hi, good morning, Dana and Dennis. Dana Messina Good morning, Arnie. Arnold Ursaner – CJS Securities My first question just is a mechanical one. The additional shares that you sold to Mr. Kim, did you have the cash from that in this reported results or did that occurred after that? Dennis Hanson The cash is in the results. Arnold Ursaner – CJS Securities Okay, thank you. You’ve been trying to work down piano inventories for a while and there’s a lot of seasonal issues, can you comment a little bit more about what is in your inventory and where do you stand relative to your goals or expectations? Read the rest of this transcript for free on seekingalpha.com