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Mogens BayThank you Jeff and good morning everyone, and thank you for joining us. I trust you have all read the press release, so I will focus on some of the highlights for the quarter. The main driver of first quarter results was operating leverage across the board. Irrigation and Utility businesses were particularly strong. The current markets for these two industries continued to show good strength and our factory is operated well and productivity was high. In the Irrigation segment, the macro environment is probably as positive as we have ever seen it. The North American farm economy remains strong, dry weather in the Midwest, this winter raised concerns about soil moisture for spring planting and slowed sales. An increase in the global demand for feed grains is being probably driven by growing emerging middle class in Asia. Demand is keeping global crop commodity prices firm. Farm income at high levels and investment in productivity enhancing tools attractive for the farmer. When you look how decades from now, global population growth would put enormous pressure on agriculture to grow enough food to meet demand. Laid on top of this, basic demands, the dietary improvement that accompanies economic growth then as societies’ desire for more energy from biofuels and you must conclude that it is clear that production of agriculture faces challenges to continue to meet the demand. Add to this the competition for fresh water between the needs of agriculture industry and households and you are left with a very compelling scenario to have a positive outlook for the long term goals of our Irrigation business. Having said that, cyclicality is probably not a thing of the past in agriculture. Short term influences such as growing conditions, weather patterns, demand fluctuations, agriculture policy and general economic conditions throughout the world will continue to dictate short term results.
Currently, most aspects of that external environment are favorable. In the utility support structure segment last project shipments for the North American transmission grid drove our results. The size of the opportunity in Utility market continues to grow. It is estimated at thousands of miles of new transmission infrastructure will be added to the grid over the next 10 years. This comes as no surprise, this opportunity is attracting new competition and capacity as a consequence while the pricing environment is improving it still remains competitive.Internationally, we are investing to expand current and to develop new markets. We consider the global transmission and distribution line markets as significant long term growth opportunities for our company. Profitability in the Engineered Infrastructure Products Segment improved due to increased sales and the associated operating leverage further supported by moderating input cost. One of the challenges facing this segment remains lack of sponsorship for long term highway investments in North America. At the state level, there seem to be not enough funding available for long term projects without federal matching funds. In Europe, although volumes improved in our pole businesses, the markets remained challenging. Our industrial gratings and access systems in highway safety products businesses in the Asia-Pacific region further contributed to the improvement in segment results. Significant investments in the mining industry in Australia are a strong driver of the industrial economy in the region. While we are not happy with the current level of profitability in this segment. We are encouraged by the improving performance and expect further improvements in the profitability of the Engineered Infrastructure Products Segment as the year progresses. Our North American Coatings business benefitted from increased volume, good productivity and some what low input costs. International coatings revenues and earnings improved due to favorable comparisons in Australia. Last year the Australian coatings business was negatively impacted by severe weather during the first quarter. This segment continues to execute very well in an economy which is still very sluggish in many parts of the world. The performance of those businesses categorized in our other also improved compared over last year. Our tubing business in the US had a record quarter and the grinding media business in Australia also showed good improvement. Read the rest of this transcript for free on seekingalpha.com