Good afternoon ladies and gentlemen thank you for standing by. Welcome to the Raven Industries fourth quarter 2008 earnings conference call. Today’s call is being recorded. At this time all participants are in a listen only mode. Following the presentation we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. I would like to remind everyone that this conference is being recorded. With that, I’d like to turn the conference over to Leslie Loyet of the Financial Relations Board. Please go ahead.

I’d like to thank everyone for joining us today. Earlier in the day we sent out a press release outlining the results for fourth quarter and fiscal 2008. If anyone has not received the release please either call [Hahn Hoy] of Financial Relations Board at 312-640-6688 and she will send you a copy or visit Raven’s website at www.RavenInd.com to retrieve a copy. Joining us today from management of Raven Industries we have Ron Moquist, President and Chief Executive Officer, Tom Iacarella, Vice President and Chief Financial Officer and Don Rykhus, EVP and Flow Controls Division Manager. Management will provide an overview of the quarter and year and then we’ll open up the call to your questions. Before we begin we’d like to remind participants that the information contained in this call is current only as of the date of this call March 12, 2008 and the company assumes no obligation to update any statements including forward-looking statements made during this call. Statements made by the company that are not historical facts are forward-looking statements and are subject to the Safe Harbor disclaimer in today’s press release. At this point I’d like to turn the call over to Ron. Please go ahead.

Good afternoon everyone and welcome to our fourth quarter conference call. Thank you for joining us and as Leslie mentioned we released our fourth quarter and yearend results this morning and they were pretty close to what we expected when we last talked in November. For the full year sales were up 8%, net income up 9% and earnings per share were up 10%. It was a respectable year in a difficult market environment and the extraordinary gains we made in our flow controls division were largely offset by the weakness in our engineered films division. The agriculture market was a lot stronger and the difficulties in engineered films market went deeper than we projected. We went into the year knowing those trends would affect us but to the degree that they did, that was not forecast. Our fourth quarter sales were up 14% and net income was up 3% from the previous fourth quarter. I think going into the quarter I was thinking maybe a penny more in earnings per share which comes out to the equivalent of $300,000 more pre-tax but that’s cutting it pretty fine to be talking about a penny a share short fall. So, the fourth quarter came in close to the earnings we were projecting but the composition of those earnings, the way we got there was quite different. As you look at the fourth quarter results I think three numbers really stand out, the drop of almost $1 million apiece in operating income in the engineered films and electronic systems from last year’s fourth quarter and a $2.5 million earnings gain in flow controls. And then Aerostar’s numbers were about where we thought they would come in. Over the past three quarters when talking about engineered film sales we reminded everyone of quarter-to-quarter…

(Operator Instructions) We’ll pause for one moment to give everyone the chance to single. We’ll take our first question from Mark [Hogwild] with Spectrum Advisory Services. Mark [Hogwild] – Spectrum Advisory Services: I have a question about your defense business and electronic systems. I would think that would be one area where you’d have more growth opportunities. Can you give me just some idea of our prospects in that business? You obviously don’t have the issue of offshoring in that business.

Actually, in the electronics systems division we don’t have any direct government business. We’re dealing with people who are building complete avionics systems. So maybe that is where the confusion comes. We are providing subsystems to major systems which for example are going into the new Airbus super liner and into the Boeing 787 dream liner. So, we’re big in avionics, industrial controls, secure communications. Now, some of these things do in fact end up in military hands, some of the avionics ends up in military hands of course, because both Boeing and Airbus do build military aircraft and some of the secure communications that we sell to a large electronics company also could end up in the military. But, we don’t have any direct government contracts. Mark [Hogwild] – Spectrum Advisory Services: I recognize that but is there not a security requirement when you’re working on these projects? Or is there not?

Not. There’s not, no. Mark [Hogwild] – Spectrum Advisory Services: Would there be any prospect of your trying to get into some of the security projects where they can source this? In other words the avionics and some of that business technically could be done overseas, is that correct?

Well, no because the winning bidders for those two aircraft both Airbus and the Boeing, winning bidders for avionics have already been chosen and we’ve been selected as subcontractor so that’s in place. Secure communications that could be something that could take off and we’re involved in that with a major customer. But, I’m not sure exactly where you’re going but we probably would not be bidding any government contracts direct. Mark [Hogwild] – Spectrum Advisory Services: Okay. You indicated confidence in that businesses growth prospects.

Yeah. Avionics and secure communications are good prospects and industrial controls. Mark [Hogwild] – Spectrum Advisory Services: But what is your competitive – well obviously you explained this business to us many times but what gives you optimism that this can be a growth business once some of your existing contracts begin to slowdown? And of course, this year you already had some slowdown for the reason you mentioned.

Well, mainly because of the backlog of new airplanes that both Airbus and Boeing have. They have a huge backlog and they’re falling behind in both the new Airbus and the Boeing plane are both over a year late in delivery. So, there’s a building backlog at both of those companies that gives us confidence that the demand is going to stay high for several years to come. Mark [Hogwild] – Spectrum Advisory Services: And one other small question, are you satisfied with the progress that you’re making in Brazil? A couple of years ago you spoke very highly of the potential down there. Has that worked our reasonably well up to your expectations? Or, is there something holding you back there?

I’ll start off by saying it hasn’t grown as fast as I’d like it to but it’s gaining momentum. Financing is an issue down there, it’s not that our product isn’t well accepted, it’s not that there isn’t demand for it but the Bank of Brazil is the bank of almost not choice but the bank for farmers and agricultural people in Brazil and the Bank of Brazil isn’t really friendly to products that are imported into the country so they are more likely to finance products that are built in Brazil. We’re working through that with some financing possibly selling our receivables or doing something that gets us out of that problem of having to work with the Bank of Brazil but I’ll let Dan follow up on that because he’s a lot closer to it than I am.

As Ron said we’ve made some good progress in Brazil and Argentina in particular. We have a lot of opportunities. We’ve been growing down in those regions primarily by extending our product line through master distributors in each of those countries and also taking advantage of some OEM relationships that we have down there. So, we’ve gotten nice growth on a percentage basis but total dollars are lower than what we’d like to see. That market, at least in Brazil, showed a real nice turnaround this past year and Argentina was very strong all the way through the last couple of years. But, we’re going to be continuing to invest more resources in building that market out not only people in terms of sales and support but also product customizations to make our products more in tune with the marketplace in terms of waterproof and all kinds of things that are different down there. We’ve made the language support changes and a lot of the obvious things but there’s another layer of localization that we need to put into a certain part of our product line. Then, Ron touched on the financing. So, we’ve made good progress and we better understand the things that we need to address to continue to succeed more down there.

We’ll take our next question from John Rankin with Barocco Management. [John Rankin – Barocco Management]: My question, I was just wondering flow controls can you give us a little more detail of the sales momentum going forward. I see that corn is 550 all the way out to December of 10 and I’m just curious on how much more pent up demand there is out in the farm sector? Knowing farmers as I do, they all think it won’t last but it is going to last at least through 010 and I’m just curious, the products you sell it’s not like seed corn, you know the renewable resource, I mean once you buy a precision steering device you’re not going to buy a new one every year. So, could you help us a little more about the pipeline, the momentum? And lastly, can we expect the growth this fiscal year that we did last year in flow controls?

I’ll let Dan handle this but the other thing you have to know is what the current penetration is and on steering the current penetration is very low so there’s still a lot of folks out there that need that equipment. But, Dan you go ahead and take that one.

Like Ron said, I guess that’s the start of our answer. In much of our technology the adoption rate industry wide is quite low, the steering and even the manual guidance rate of adoption I’ve seen recently estimated at as little as 35%. So, there’s tremendous upside in steering and guidance products and we also bring other technologies that are at a much lower rate of adoptions such as section control and products that enable farmers to handle their very wide and large agricultural implements in finer detail turning on and off sections of those implements as they enter areas of the field that they’ve already either planted or sprayed so there’s great upside in those products for us as well as steering. The control systems our traditional product line continue to grow like Ron mentioned in his opening remarks anhydrous ammonia control systems have been extremely popular as the corn acres have increased and farmers want to do a better job of controlling the very expensive fertilizer input costs that they have. So, one thing that farmers continue to do is invest their cash flow back into making their operations more efficient. So, I think we’re going to continue to benefit from that. Our challenge is to continue to develop technologies and products that can make those farmers more competitive and really make those products that we have in our current portfolio more simpler to use and improve the straight forwardness of the return on investment for those products. We know from our backlog, our orders are very, very aggressive right now which gives us great confidence for this year and beyond that I still feel quite confident in the farmers that I’m talking to, they feel great about being able to lock in rental rates at numbers that are extremely high compared to a year or two ago but they’re also locking in their forward contracting their crop just like you mentioned as well as their fuel and their fertilizer cost. Other than the yield they have a pretty good idea of how much money they’re going to make and they’re going to return that into their operations. [John Rankin – Barocco Management]: Just a real quick follow up, because of the profitability out in the farm sector, have you been raising prices for your product? Or, do you feel like this increased volume and keeping prices the same will accomplish the same means?

We typically raise our prices on an annual basis and as the conditions are as they are now we’ll be as aggressive with price increases as we feel like we can be. We have not been sort of up leveling our demand utilizing sort of a monthly or more frequent pricing change philosophy, it just doesn’t work very well in our market conditions. We’re not quite that level of a commodity, so no I guess is the answer. We’ve enjoyed the price increase that we put into effect last August and intend to pass along a price increase again this summer.

(Operator Instructions) We’ll go next to Tom Hayes from Piper Jaffray. Thomas Hayes – Piper Jaffray: I was just wondering if you could provide a little bit of visibility of your thinking around the resin prices in the engineered films and your thoughts on likelihood of getting some more prices passed through as resin prices seem to be fluctuating quite a bit going into the Q1 and the balance of this upcoming year.

Plastic being a byproduct of natural gas is got that issue because as natural gas goes up then the tendency is for plastic and olephin and polyolephin resins to go up. But, there’s a couple of other things that are going on that mitigate against that and these things are, for example, cars take tremendous amounts of plastic, it’s unbelievable how much plastics goes into an automobile and automobile sales are going to be off and there’s a lot of other areas construction, home construction, homes take a lot of plastic parts and whether they’re extruded, whether they’re blow modeled, whether they’re vacuumed formed or whether they’re blown film as we do, it’s still basically plastic and the chemical companies have some leeway as to how they’re going to take their raw materials and what plastics they’re going to make out of that. Then, you’ve got some other interesting issues happening on a worldwide basis one that is shocking to me because with all the pollution in China you wouldn’t think they’d be worried about thin film grocery bags but in China they have banned thin filmed grocery bags, totally, 100%. That’s got to take resin out of the demand system. So, there’s a number of things that are happening. On the flipside of the coin, the weak dollar makes our stuff look pretty attractive to Europeans, for example and others. Whereas, they might not be important American plastic resins and shipping across the ocean, our weak dollar has made some of these prices look pretty attractive to them. So, you’ve got some pros and cons. You’ve got the plastic usage in the United States manufacturing sector going down, you’ve got the Chinese situation but you’ve got the strong Euro and the weak dollar also working against you. So, that’s why I’m not able to give a definitive answer, it’s going to be volatile. It wouldn’t surprise me if it goes down, it wouldn’t surprise me if they tried to jam some more price increases down the system. Thomas Hayes – Piper Jaffray: The international growth, do you see the rate of grow internationally similar to the rate of growth to the flow that you’re seeing domestically? Or, is there a variance there?

Yeah, there’s a variance there because flow controls products are small, compact and easily transported. Films are shipped by or transported by cargo ship. Thomas Hayes – Piper Jaffray: Right. I guess I meant the international opportunities that you see for flow devices compared to the opportunities for flow devices domestically?

I’ll let Dan handle that one.

Well, as we just talked about the domestic opportunities are wonderful over the next couple, three years they look to be strong. However, the international market for us is really much bigger than even the US market and it’s an area that we started emphasizing a couple of years ago and investing pretty aggressively in building or presence in Europe, Australia, South America and Canada. So, my expectation is that we’ll grow our business at a higher percentage rate in those international markets in some than we will our US markets. So we’ll continue to increase the percentage of our overall sales which are 26% now and as far as Ron said in his opening remarks we believe that we can grow our international sales at a rate of between 30% to 50% on an annual basis for the Flow Control division.

And we’ll go next to Jeff Barnett with Granite Point Capital.

I have a couple questions for you, first of all using the cliché about strong tide lifts all boats, it’s fabulous that Flow Control is doing well and I really congratulate there, it was a great year. Playing devil’s advocate for the moment, when you think about commodity prices as it affects this business how would you put that against the dynamic of competing in the GPS base against other competitors primarily Trimble, so I guess the easy way to look at that is how do you think of market share and did you pick up any share this year at least in the areas where you directly compete with them? And then a separate question I’ll just ask now to get it out of the way, when you look at the electronic systems the loss of that $7 million contract, how do you think about contracts in that business or help me to understand how I should think about them especially with regard to timing. If you had to say what the average length of a contract is in that business what kind of visibility do you have, is it one year or three years or what is it? And just to give us a sense of again whether there might be potential for nasty surprises in that business or whether it’s actually other than this one surprise relatively stable. Those would be the two questions.

The visibility on a company that might be exiting us and then what would that visibility be, is that the question? Or on a new customer who’s joining us?

No, I think on the overall business. Sorry you’re on speakerphone now because I wanted to type, but yes. Well you could really answer both ways. Both new contracts but also the existing contracts, what kind of visibility do you have on those that remain and again also in the context of seeing obviously they must have a fair bit of flexibility that if one of your customers’ business slow down they have the ability to slow down their contract with you so they don’t take a lot of product they don’t need. So I’m just trying to get a sense of what a contract means there, what kind of visibility you have.

The customary loss is really an anomaly. That sort of thing just doesn’t happen very often and one of the reasons it happened, and I didn’t bring this out in my talk but it was a very simple, our model is low volume high mix. In their case it wasn’t exactly high volume but it was low mix. It was a fairly simple process, it was a simple several boards that they could move out without a lot of disruption. Most of the customers we have we’re so locked together, we’re so intertwined that it’s difficult on both sides to unlock and so we don’t see customers coming and going because it’s way too difficult. It’s way too difficult to set up a new supplier and get them to learn your design philosophy, your processes procedures so we just don’t see that happening. On the other side on the flip side of the coin to take on a new customer from the time you’re making the sales call until the time you’re building product can take a year to two years. So it’s not a quick turnaround, you just don’t simply grab somebody and flip them and start building their product in six months. There’s a lead lag both ways, you don’t lose customers fast and you don’t gain them fast, but what you try to do at all times is have new customers in various stages of the sales pipeline. Some of them you’re calling on just for the first time, some of them you’ve called on for six months to a year. Some of them are ready to order, and then you’ve got your existing customers who you continue to expand with because we’re dealing with very large multi-national companies that have many divisions and as you do well in one division you have the chance of getting business in another division. So that’s the kind of the lay of the land as far as electronics systems is concerned.

If you could just talk a little bit about the competitive dynamics.

Oh, sure, the Trimble thing. Dan, why don’t you cover that, the market share issue on the GPS.

We’re in such a small niche market there isn’t any great industry wide statistics to look at. You can take a look at what Trimble’s business unit did that’s most similar to ours and that is what their field solutions I believe and they reported a 62% increase in sales for last year, we reported an increase in sales in a similar, not quite that aggressive. That was their fourth quarter increase, the 62%. Their year to date sales are about 44% which were similar to ours. On an overall basis we did similar and we’ve talked about this in conference calls in the past, we tend to introduce products and they respond and in some ways they’ll introduce products that then take some share back and there goes the cycle. So with our new product introductions with the Cruiser and the Invizio PRO in the fourth quarter with our joint release of what we call the Farm Pro System with Auto Farm, another player in our marketplace we believe that we are taking some market share and that some of our growth in the fourth quarter in particular came at the expense of some of our competition.

We’ll take our next question from Patrick Forkin with Tejas Securities.

Ron, assuming that your intermediate term assessment of the ag sector is relatively positive, are you guys looking for opportunities within the ag space that could leverage your core competencies to continue to grow?

Absolutely. If we could find the right acquisition and to buy it at intrinsic value, fair market value, that’s the stumbling block all the time, isn’t it? Can you buy it at a price that makes sense where you can get to reasonable returns on your invested capital and then for me that’s always the issue. I’m not going to do it for ego or to get bigger, it’s got to make sense both from a strategic standpoint and from a financial standpoint, but boy we’d love to expand our product offering, we’d love to expand our geographic reach if we could find somebody in the right locale on an international basis, so yeah, we’ve got the cash and we’ve got the desire to pick something up.

And then on the numbers on Flow Controls your operating income margin for 08 was about 30%. Assuming you stay at the same run rate or do better in the next year or so can we look for those operating margins to stay at roughly that same level?

I think our margin was more like 29% and our expectation is we prepared our budgets and our look for this year is to run at that same level.

We’ll take our next question from Ben Alexander with Alexander Capital Management.

During an economic climate which is a tremendous challenge for most companies you all certainly shine through. I wanted to ask you about the ESD division in terms of this new customer pipeline that you talked about, can you give me any better feel for visibility or timing of potentially getting some new customers in that area and the secondly can you talk a little bit about any plans you might have to think more vertically integrate that business where you’re making more products that you in fact would sell?

The visibility I’d give you on ESD as far as new customers for the short term where we’re going to see the growth is in avionics and secured communications with existing customers as I mentioned. Avionics, airplane construction the backlog is extremely high, the demand is there especially from buyers that maybe you don’t consider as large buyers, buyers in the Middle East and buyers in Asia that are picking up large numbers of aircraft over the next few years and so avionics is going to be a very strong area as will secure communications. That’s an important issue for our military to have secure communications and to have rapid deployment of secure communications and that’s where our Aerostar division comes back into play that we can provide rapid deployment of communications so in Afghanistan for example there may not be a communications system existing but with two or three of these tethered blimp systems you can very rapidly within a day deploy a very functional communications system. So getting back to you ESD though our growth in the short term is going to come from existing accounts expanding their business with us and it will continue to work on adding one or at most two new customers a year. You simply can’t take on more than one or two a year without getting yourself into a situation where you’ve got too much low profit or no profit products coming into the system too quickly. And then as far as the vertical integration and starting to design and build our own products we’re looking at GPS accessories, line splitters, up down converters, products of that nature that we know something about and we feel that that might be a nice niche for the Electronic Systems Division to have their own proprietary products in those areas.

And on the acquisition front did you say that nothing is imminent [inaudible] but very hard because there might be some opportunities given the valuations that I’m sure have improved dramatically but nothing imminent. Is that the way you’d describe it?

Nope, we’re looking and we’ve got leads as everyone does but nothing is close. But getting back to the strategy, the thought was although obviously we’ve got a pristine balance sheet I didn’t want to have to go the bank to get the money, I wanted to be able to move quickly because I think that’s going to be important this year as acquisitions become maybe more in the range that we’re looking at and where we can move quickly and close a deal without a lot of contingencies and buy the company for cash. So that’s why we hung onto our cash and as I mentioned if we don’t have something that looks pretty solid by midyear we’ll start developing strategies to return that cash back to our shareholders.

One other thing, there have been some suggestions in the analytical community that change in administration might be a drag on for example Aerostar which depends on military contracts and military budget, do you share those concerns?

No, because the types of contracts we have are, these are fairly fundamental type contracts that our troops simply need whether they’re in training, whether they’re back in the States, whether they’re in Iraq or Afghanistan, they’re going to need some of these things. We’re still going to need parachutes, we’re still going to need surveillance, we’re still going to need the capability to set up and deploy rapid communications systems, not just in foreign countries, we should have been able to do it after Katrina in New Orleans. This would have been a perfect place for a rapid communications system to be deployed and we could have done that in probably 48 to 72 hours and had their cell phone system back up and running. If we’d had the equipment then that we have today, and plus our contracts are fairly long term so we go out two and three years so in the near future we don’t see any problems with any drop in government funding. Now what happens in four years, I don’t know.

One last question if you’ll indulge me, in the films area, do you feel like we need to see a rebound in the housing market for the competitive landscape to change there?

There’s no question it would be a huge benefit but again the flip side of the coin is these new products we’re coming out with have no penetration, to our knowledge nobody is selling a radon barrier for example of the type we’re talking about, no one is selling a methane barrier the type we’re talking about. So we’re starting at zero with a lot of interest and so the construction market as down as it is, is still a huge market and every sale we get is one sale more than we had previously so we think we can make some substantial inroads and get those revenues up fairly quickly even in a down market. Now if it goes up so much the better, but one of the neat things about the fact that that the market has been down two years ago we wouldn’t have been able to even to talk to anybody. They were so busy and they were so backlogged and they didn’t want to hear about new products, they didn’t need new products, they didn’t need to differentiate themselves, they didn’t need anything other than to get more workers and build more structures and now when you talk to them you can tell that they’re looking for products that differentiation ways of making themselves look greener and healthier and so we find a much more receptive customer than we might have two years ago.

We’ll take our next question from Jeff Evanson with Dougherty & Company. Jeff Evanson - Dougherty & Company, LLC: Ron, could you talk about how much energy is a percentage of your engineered films costs? It was real good to get the 60% figure for resin, how much is energy?

Tom, do you have that nearby?

The actual energy costs?

Did you say energy costs or the amount of product we sell into the energy industry? Jeff Evanson - Dougherty & Company, LLC: No, energy costs as a percentage of total cost of goods sold in engineered films?

No, I don’t have that.

I don’t have it offhand either. It’s important but it’s not a big driver in terms of our overall cost structure. Jeff Evanson - Dougherty & Company, LLC: Would 10 to 20% be a reasonable guess?

It would be much less than that.

I would think less, yeah. Jeff Evanson - Dougherty & Company, LLC: Five to 10?

I could only say less than 10 just off the cuff here. Jeff Evanson - Dougherty & Company, LLC: You mentioned Ron $0.80 per pound for resin, it’s helpful to know that. Where’s the market right now in terms of pennies per pound?

Well they continue to probe and push and talk about increases at 85 and now we push back and so for the last couple of months it’s been fairly stable at around that $0.80 mark. Will it stay there? Boy that’s something we don’t. I know the chemical companies and the resin companies are pushing to try to get another nickel or dime out of it but for the last couple of months we’ve held that off. So that’s where we’re at today. Jeff Evanson - Dougherty & Company, LLC: In the quarter did you have any gas membrane sales, these methane oxygen radon barrier membrane sales –

No Jeff Evanson - Dougherty & Company, LLC: - any geomembrane sales?

Oh, yeah, a number of geo-membrane sales but what we had to do is to go through an extensive testing procedure to test for permeability and that took us about six months to get those tests completed. They’re now completed and that’s why we were able to attend the show in Orlando last month and begin the marketing process. So we’ve got the test results in and they’re sound and they’re solid and that gives us the opportunity to hit that pretty hard. If we’ve sold something it’s been in sample quantities, nothing in high production. Jeff Evanson - Dougherty & Company, LLC: And how about what you’re classifying as geo-membrane? What was that in the quarter and how much was it up year-over-year?

Tom, do you have that sheet for the year on geo-membrane?

Geo-membrane is actually a little bit lower than it was a year ago and part of that is we have reorganized our sales by markets and we’ve combined some different products into what we’re calling geo-membranes now that maybe would have a year ago so it would include things like our landfill covers and that sort of thing and that business was down about 10% for the year. Jeff Evanson - Dougherty & Company, LLC: And what was the level in the quarter?

Less than $1 million. Jeff Evanson - Dougherty & Company, LLC: Dan, I don’t know what you’re seeing but my sense I’m seeing that higher accuracy, machine control systems for ag are growing faster than stuff that’s kind of half meter plus, the question is are you seeing that at all and what do you guys have as competitive of offerings in that area or what are your plans for the future?

First off, I think you know that’s not been our area of emphasis historically in the steering business lacking a large OEM partner and also having made a choice to not develop the dual frequency RTK systems ourselves, that hasn’t been an area that we watch closely from our own product perspective. We can say that the submeter and the decimeter demand has been growing at a much more rapid pace than it has in the previous two to three years. That’s what I can tell you from our own perspective. One of the things that we’ve done that we’ve announced it must have been a few months ago that I know you’re aware of is our collaborative agreement with Auto Farm and Auto Farm has a strong position in the high accuracy steering marketplace in the US and we have been able to co-develop a system that capitalizes on our Viper control system and brings greater application functionality to the product that they offer through their distribution channel so they can now offer technologies like the section control that I talked about earlier and the single product and the multi-product control and all the other things that we offer through their channel and then we can also offer the high accuracy system through our channel. So that’s gone extremely well for us especially utilizing their channel and getting more Viper PROs out into the grower market as their channel is much more geared towards the growers than ours and we’ll see some success in the channel that we have with the high accuracy systems but as you know our channel is really geared traditionally towards the sprayer and spreader segment of the precision ag marketplace and over time we have made improvements there but those machines don’t call for that high accuracy as much as the tractors of course. Jeff Evanson - Dougherty & Company, LLC: I guess what I’m wondering is do you see that as a market you want to diversify into?

We are, we are in several different ways. We have that technology now in our lineup, we have a dual frequency RTK system that we’re offering to our marketplace. We’re also through our collaboration with Hemisphere and Auto Farm and a product that we’re selling to Deere and out through their channel we’re reaching growers at a much more effective manner than we have in the past in an indirect way. In addition to that we have set up some dealerships throughout the US that are more oriented towards tractors sales and service. So, yes we’re growing the grower segment of our business but mostly through an indirect fashion. Jeff Evanson - Dougherty & Company, LLC: Maybe then that filters into my next question, maybe I’m wrong about this but my sense was maybe the incremental margins in Flow Controls this quarter were not as strong as maybe we’ve seen in the past, say maybe a year or two ago –

The gross margin from new sales? Jeff Evanson - Dougherty & Company, LLC: Yep, exactly.

It’s hard to take a look at our – Jeff Evanson - Dougherty & Company, LLC: It seemed like the upside in your revenue didn’t quite flow through to the operating margin as much as I would have expected.

It could probably look that way. I think when you start to dissect the fourth quarter, and I’m not going to get into a whole lot of detail, but we did have some charges that we dealt with in terms of some warranty issues that we brought to a resolution, we also had some R&D expenses that were a little ahead of the rest of year in the fourth quarter, so those would pull down the overall look. I’m not concerned at all about the contribution of our new products in terms of their gross margins and that they’re going to dilute our overall gross margins going forward. Jeff Evanson - Dougherty & Company, LLC: Even under this shared economics with Auto Farm?

Well there’s lot of different ways that we sell through Auto Farm. We sell them a control node, we also sell the Viper and the Invizio PRO in the future so we have our traditional strong margins there. And as we sell their technology back through our channel it’ll certainly be at a shorter margin, but that’s not a tremendous part of our product offering at this point. Then again we have several other new products that we introduced in the fourth quarter that generated immediate demand and are carrying margins that are typical for us. Jeff Evanson - Dougherty & Company, LLC: Sure, if you look at your for example Cruiser sales in the quarter, given that it was a ramp up quarter for that product did you feel like you did basically three-quarters of a full quarter of that product or a half a quarter of that product at full capacity? What’s kind of your thought on that?

I don’t know if I can answer it in those terms, Jeff. Our demand for Cruiser in the first two months of its availability which is about where we’re at, two and a half months has been significantly ahead of our projections. Jeff Evanson - Dougherty & Company, LLC: And is the sell through of that good?

Yes. Jeff Evanson - Dougherty & Company, LLC: Then my last questions, Dan, you kind of alluded to some one-time items in the quarter and then I think Ron had mentioned some one-time items related to warranty and inventory issues in Electronic Systems, Tom, what were kind of the one-time charges in the quarters in those two divisions?

Jeff, when I related those in my initial comments, I was talking about what happened two years ago with Flow Controls how they had some of those issues and how our sales people became service people and weren’t able to do an effective job in the field. So I was comparing what we were dealing with two years ago versus this past year when I was talking about that particular product warranty issue. Jeff Evanson - Dougherty & Company, LLC: For Electronic Systems?

I don’t know if I got into any, I don’t recall talking about warranty issues in Electronic Systems. Jeff Evanson - Dougherty & Company, LLC: Here’s what I have in my notes, I have in Electronic Systems I thought you’d said yearend warranty and inventory issues impacted gross operating margins in that division. Am I mistaken?

We did have some inventory write downs but they weren’t greatly significant and while they certainly had some impact on the margins we don’t really like to get in the philosophy like a lot of companies do of saying we had a bunch of one-time items that affected our results and we’re not going to try and quantify those and let you carve them out and that sort of thing. Because we just don’t want to go in that direction.

And they weren’t warranty issues and I know the statement that you’re referring to now, Jeff, and I apologize, I didn’t recall that. But that was more an adjustment to something that happened previous. It was not a warranty issue in the traditional sense of what you’re thinking about, a product coming back and having to fix it so it wasn’t that type of thing at all. And by the way I’ve been reminded that we in fact last week sold a truckload of radon barrier film so the first olive is out of the jar.

We’ll take our next question or follow up question from John Rankin from Barocco Management. [John Rankin – Barocco Management]: Just to completely switch directions, I was just curious have you folks thought of moving over to the New York from the NASDAQ to hopefully increase liquidity and some volume?

That’s not something that’s been on our radar screen. We’ve have pretty good service out of the NASDAQ, volumes actually have increased substantially over the last couple of years and we really just haven’t seen a strong need or a lot of demand from our shareholders to make a move at this point.

And we’ll take our final question from Trey Snow with Priority Capital. Trey Snow – Priority Capital: I’m trying to understand the seasonality and maybe linearity of the Flow Controls group and I can see based on macro data and your comments that this year should be fairly strong on back of another strong year, last year, but you had a pretty amazing first quarter a year ago, is it likely that business in this first quarter could be equal or slightly below that or would you expect to see strength in that group all year?

Well the first quarter will be far in excess of last year’s first quarter. The momentum continues and the momentum that was picked up during the year continues into the first quarter and you’ll see substantial increases in the first quarter, quarter-over-quarter basis. We’re talking first quarter last year versus first quarter this year? Trey Snow – Priority Capital: Correct.

It’ll be a substantial gain. Trey Snow – Priority Capital: And then just a quick question on the balance sheet, I see that your receivables and inventory were up fairly considerably and have been I guess for two or three quarters, is that related to one particular division or something in general? What’s the story behind that?

The receivables go up because we give dating in agriculture, that’s just the way it is in agriculture. You sell something in December and you might give them April terms for example. So when Flow Controls is driving the train you’re going to see receivables go up because they have dating programs in their area. Inventory somewhat related to Flow Controls but to be honest with you we didn’t do a good job in managing our inventory. In my opinion we’ve got $4 million too much inventory and we’re going to do everything in our power to get it down because that’s $4 million of cash that I’d like to put in the bank and not have sitting on my shelves. So that’s the short answer to that, we’ve got too much inventory. Trey Snow – Priority Capital: Are there concrete plans to get that inventory down?

Absolutely. Trey Snow – Priority Capital: And on the receivables have you changed any of the terms in Flow Controls or is it pretty standard year in, year out?

No, that’s the standard program that we’ve had out for 25 years.

You’ll see our receivables come down starting in the second quarter. Trey Snow – Priority Capital: The second fiscal quarter?

At this time I would like to turn the conference back over to Mr. Moquist for closing remarks.

Well some good things went our way last year as well as some negative things but overall I thought we managed the market conditions we faced fairly well, our Flow Controls division and Aerostar subsidiary are poised for a big year, Engineered Films has some short term issues, but long term they have tremendous potential for growth and then Electronic Systems is in somewhat of a transition and will struggle short term but we’ll get them back on a growth track. We’ve got the best group of leaders at Raven I’ve ever been around and that gives me great confidence in the future. Thank you all for joining us today and we hope to see you at our annual meeting in May. Thanks.