Good morning. My name is Adam, and I will be your conference operator today. At this time, I would like to welcome everyone to Tennant’s Fourth Quarter and Full Year 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) As a reminder, today’s call is being recorded. Please remain on the line for closing remarks after the Q&A session. I’ll now turn the call over to Vice President and CFO, Tom Paulson.

Thanks, Adam. Good morning, everyone, and welcome to Tennant Company’s fourth quarter 2012 earnings conference call. I’m Tom Paulson, Vice President and Chief Financial Officer of Tennant Company. With me on the call today are Chris Killingstad, Tennant’s President and CEO; Pat O’Neill, our Treasurer and Karen Durant, our Vice President and Controller. Our agenda today is to review Tennant’s performance during the 2012 fourth quarter and full year, and our outlook for 2013. First, Chris will brief you on our operations, and then I’ll cover the financials. After that, we’ll open up the call for your questions. Before we begin, please be advised that our remarks this morning and our answers to questions may contain forward-looking statements regarding the Company’s expectations or future performance. Such statements are subject to risks and uncertainties, and our actual results may differ materially from those contained in the statements. These risks and uncertainties are described in today’s news release and the documents we filed with the Securities and Exchange Commission. We encourage you to review those documents, particularly, our Safe Harbor statement for a description of the risks and uncertainties that may affect our results. Additionally, on this conference call, we will discuss non-GAAP measures that include or exclude special or non-recurring items. For each non-GAAP measure, we will also provide the most directly comparable GAAP measure. There were special non-GAAP items in the 2012, third and fourth quarters, and in the 2011 second quarter. Our 2012 fourth quarter earnings release includes a reconciliation of these non-GAAP measures to our GAAP results. Our earnings release was issued this morning via Business Wire, and is also posted on the Investors section of our website at tennantco.com. At this point, I’ll turn the call over to Chris.

Thank you, Tom. And thanks to all of you for joining us this morning. As you saw on today’s earnings release, we are pleased that our efforts to lower costs and improve margins have gained significant traction. In the 2012 fourth quarter, our operational excellence initiatives helped generate our strongest gross margins since 1999. A fourth quarter double-digit operating profit margin for the first time in 12 years, and record fourth quarter adjusted earnings. Also worth noting fourth quarter operating profit increased 23% despite an approximate 2.4% organic decline in sales as compared to the prior year period. Overall our fourth quarter sales were not where we want them to be. But importantly the Company returned to revenue growth in North America as we expected. You may recall that Tennant sales in North America, our largest geography rose 4.7% in the 2012 first half, and then declined 3.3% in the third quarter. As economic uncertainty cause some customers to delay capital equipment purchases. In the 2012 fourth quarter we were pleased to see North America rebound to a 2.2% revenue growth. Turning to a few highlights across our geographic regions. Contributing to Tennant’s revenue in the Americas where sales to strategic accounts and continued double-digit growth in Latin America. Our strategic account business is a key revenue driver for us; sales in fourth quarter began to benefit from a global agreement to supply T1B Walk Behind scrubbers to the worldwide retail stores of a high end manufacturer of consumer electronics, computer software, and personal computers. During 2013, we plan to build on our positive momentum in the Americas by further increasing our share of business with strategic accounts, successfully launching 25 new products, and continuing to aggressively grow in Latin America. Tennant sales in the Europe, Middle-East Africa or EMEA…

Thanks, Chris. In my comments today, all references are earnings per share on a fully diluted basis. Also please note as I go for the result, I’ll generally not comment on the 2012 full year financials as those are detailed in the earnings release. In reviewing our 2012 fourth quarter results, I think it will be helpful to put them in context. As we recover from the recession throughout 2010 in the first half of 2011 Tennant had achieved on average organic sales growth of about 13% in each of those six quarters. We estimated at the beginning of the 2011 third quarter that we were back to pre-recession sales levels and we anticipate our organic revenue growth going forward would return to our traditional range of mid to high single digits as we lapels very high growth quarters. That was the case in the second half of 2011 with organic sales growth of approximately 6.5%. The organic sales growth of approximately 0.8% in the 2012, first nine months was lower than initially anticipated primarily due to organic sale decline in the EMEA of approximately 3% as a result of the continued challenging economic conditions in Europe. Based on the continued economic uncertainty in our third quarter earnings release, we lowered our estimated 2012 full year net sales to a range of $735 million to $745 million. Our actual sales for the 2012 full year were within that range coming in at $739 million. For the fourth quarter ended December 31, 2012 Tennant reported net sales of $187.5 million compared to $193.2 million in the prior year quarter. Sales declined approximately 2.4% excluding an unfavorable foreign currency exchange impact of approximately 0.5%. As Chris mentioned despite lower sales operating profit grew 23% and our operating profit margin was 10.1%. This…

(Operator Instructions) And your first question comes from the line of Joe Maxa from Dougherty & Company. Your line is open. Joseph A. Maxa – Dougherty & Company, LLC: Thank you, good morning gentlemen.

Good morning, Joe. Joseph A. Maxa – Dougherty & Company, LLC: Question on, so you talked about the seasonality that’s expected this year similar to 2011 where you had a pretty solid second quarter, and there you’ve seen order patterns suggest the similar thing?

More along the lines, Joe, of that we’d certainly expect growth in Q2 versus the prior year, but we would expect a stronger back half, so the way I think about it is, we’re going to look and see our momentum builds during the year. we think the tougher comparable is in Q1 and Q2 obviously, but we expect to see some strengthening in the back half of the year, we do expect revenue growth to be a bit higher and our absolute level revenue to be bigger in the back half, but not all the way back to kind of historical normal seasonality, but if you look at the flow by quarters in 2011, that’s a pretty good way to think about it. Joseph A. Maxa – Dougherty & Company, LLC: Right, okay, that’s helpful. And I wonder about the new product introductions, a number introduced last quarter and coming through this year, how much of that is incremental meeting new areas versus retrofits or upgrades of existing product lines?

Joe, this is Chris. I think that the T12 industrial marginally built scrubber, while it’s a replacement of an existing product, I think the changes we’ve made to it are substantial enough to have that be viewed as incremental, especially the fact that we are now able to move a product like that into China, and build an industrial there for the first time in our history, which will give us an advantage in terms of the right product at the right price point in a very fast-growing market. So I would say that’s semi-incremental to what we’ve done before the Orbital Scrubber and the B10 rider burnisher are completely incremental we did not have those products in our product lines before. What we found was that they were important products to certain parts of our customer base, while we may have been the majority supplier to those customers. We were allowing our competitors in with those products, because we just didn’t have them. So we’re excited about those prospects. Joseph A. Maxa – Dougherty & Company, LLC: Thank you. And then on the T12, I may have missed it that you’ve had an agreement or a contract for a large retailer, global retailer.

It’s actually, T1B is a small Walk Behind scrubber, lithium battery powered scrubber. Joseph A. Maxa – Dougherty & Company, LLC: Okay, thanks guys. I’ll jump back in the queue.

Sure, Joe.

And your next question comes from the line of Andrew Gadlin from CJS Securities. Your line is open. Andrew Gadlin – CJS Securities, Inc.: Good morning. Stripping out the effect of negative effects in your guidance for next year comes over the top line of 2.5% to 5% growth. Can you talk about some of the components of that stripping out pricing mix and volume?

Well, I’ll make a couple of comments and let Chris add on to that. I mean yeah, if we went down the middle of the range of our foreign currency impact, the actual organic growth would be 2%, a bit over 4.5%. So you have that right Andrew, if we looked at the most important elements that driving our organic growth that obviously new products are going to matter, that should be measurable within our business on a global basis. we expect to see growth in our ec-H2O business and very importantly, we expect some continued growth in North America and growth in our emerging markets of Brazil and China. We expect some return in portions of Asia-Pacific, and EMEA remains the question mark and in the best-case, we hope we can eke out some growth and see growth on an organic basis year-on-year. we can also obtain a scenario at the lower end of our range where that business could remain tougher. Andrew Gadlin – CJS Securities, Inc.: Right.

Andrew Gadlin – CJS Securities, Inc.: Great. And can you talk a little about the ramp in sales from new products with the back-end loaded?

Well, I think that we build momentum as the year goes on. We introduced a number of products in the fourth quarter, most of those start to ship in the first quarter of this year, and I think we just kind of ramp up the momentum as the year goes on. So I think, you’ll see every quarter that we will be showing a stronger new product sales growth. Andrew Gadlin – CJS Securities, Inc.: And for the strategic account that you signed in the fourth quarter, can you talk a little about how many quarters that you’d expect those orders to be spread over and if there’s a ramp in that quarter as well?

Yeah. There is a ramp; the ramp in this case, I think is something in the six to 12 month range. I mean we have some strategic accounts where we sign a deal and it can take 24 to 36 months before they totally roll over their product portfolio. In this case, it’s a new customer that we’ve never had before and they’re going to be adopting our T1B lithium-ion battery powered scrubber here over the next six to 12 months. Andrew Gadlin – CJS Securities, Inc.: Okay, great. Thank you very much.

You bet, Andrew.

Your next question comes from the line of Daniel Rizzo from Sidoti and Company. Your line is open. Daniel D. Rizzo – Sidoti and Company, LLC: Hi guys, just a quick question with the pension contribution, I know that was the first time, the long time, is that something we can expect going forward?

No, I mean we really took the opportunity that we had the excess cash obviously returns as money sit in the bank are pretty miniscule and we could take that opportunity to really completely de-risk our pension plan and we should not ever have to make another contribution and at the same time, it will lower operating costs going forward as we manage that. So it was a really good use of cash and a nice opportunity to use somewhat – use our balance sheet to our advantage. Daniel D. Rizzo – Sidoti and Company, LLC: Okay. And then you mentioned in EMEA that you saw a decline in ec-H2O would be something, so we call it our like – noticing like a trade down during tough economic times and maybe, they stopped buying that and stopped buying the lower price or not as part of new our like scrubbers or riders?

Well, it’s actually the reverse. we said was that our attachment rate in EMEA improved by 160 basis points. So ec-H2O actually was one of the best-performing products in the European product portfolio and Europe continues to have the highest attachment rate for ec-H2O of any geography within Tennant. Daniel D. Rizzo – Sidoti and Company, LLC: Right.

So we’re seeing deferrals of the purchase decision and they’re taking longer, but not a trade down in the types of products that they’re buying. Daniel D. Rizzo – Sidoti and Company, LLC: Okay, all right. Thank you, guys.

You’re welcome.

Your next question comes from the line of Scott Graham from Jefferies. Your line is open. R. Scott Graham – Jefferies & Company, Inc.: Hey, good morning.

Good morning, Scott.

Good morning, Scott. R. Scott Graham – Jefferies & Company, Inc.: Just wondering, you guys did a remarkable job on the SG&A line. you indicated I think in your comments, Tom, operating leverage, but my suspicion is that there was a lot more structurally going on there than operating leverage on a sales number that we can really grow that much. so just kind of wondering what you’re doing in SG&A right now to push that number down?

I mean we have one of the biggest things as we’re not adding the [halves] and we have created efficiency in our processes, we’ve begun to globalize, we made system changes, and that is lowering our operating – that is holding cost flat. We also executed against the project that we talked about in Eastern Europe, Middle-East and Africa that actually move the employees from our side as well infrastructure costs overdue our partnership in our master distributor agreement. And the other area that we’re seeing a benefit is from our indirect spending reductions. We’re using our sourcing organization to negotiate with our suppliers, and we’re beginning to see that catch hold on large purchases, that we are taking advantage that we’re seeing some of the same benefits flow through our indirect efforts that primarily flow through operating expenses as we’ve seen go through the cost of good sold over the last five or six years.

And I just add, lastly as we’d mentioned we’re beginning to see benefits start to flow through, and impact our financial results from our process improvement projects; the standardization and globalization of our processes. R. Scott Graham – Jefferies & Company, Inc.: Great thank you. The other question I had for you actually fairly simple, uses of cash for this year, you guys are always good cash generators or maybe can you just give us an idea of how you see that?

Yeah really no major change as we go forward I mean we will continue to fund our capital spending and our working capital needs as we obviously expect to grow, so we expect some working capital go into the business. We will continue our dividend. It is certainly our expectation, and we will more than likely continue to repurchase shares. We’ve been aggressive over the last couple of years relative to historical times, and assuming that the economics makes sense, we will continue to be in the market repurchasing shares, and using our authorizations, so wouldn’t be unreasonable to assume that we’d be buying back a similar number to what we bought back over the last couple of years, and also we will continue to look at modest acquisitions, and I wouldn’t expect us to do anything significant, but our two focused area is there are our transactions that would expand our sales and service coverage, like our previous Brazil acquisition Alfa, and also technology deals that expand our innovation platform or our sustainability platforms. Those will be areas that we would love to put our cash to use in and create growth opportunities. R. Scott Graham – Jefferies & Company, Inc.: Would you say Tom that given that your debt is lower and in the absence of acquisitions, which are always difficult to project that it would seem that share repurchase is going to be maybe the first place things stop apart of question from CapEx.

Stop or… R. Scott Graham – Jefferies & Company, Inc.: I mean that’s where the cash will go towards more than the other areas.

Yeah, it’s been a significant cash out flow over the last couple of years, and assuming the economics make sense, we will continue to go back go into the market and purchase our shares. R. Scott Graham – Jefferies & Company, Inc.: Great, thanks a lot.

You’re welcome.

(Operator Instructions) Your next question comes from the line of John Rosenberg from Loughlin Water Partners. Your line is open. John Rosenberg – Loughlin Water Partners LP: Hi. Good morning.

Hi John. Good morning. John Rosenberg – Loughlin Water Partners LP: A couple of questions, I might have missed something, you’ve mentioned how easy water grew 7% throughout the Company excluding EMEA, and then I believe, Tom you amplified that a bit, and talked about how EMEA was down around 3%, you mentioned attachment rates, what was the attachment rate for EMEA, is that growing?

Yeah, we said that it actually improved by 160 basis points, we didn’t give a precise actual number, what we can say is that, it’s north of 50%, I mean because we saw a majority of our scrubbers are being sold, and with ec-H2O on and Europe is the highest attachment rates, so it’s safely above a 50% attachment rate. John Rosenberg – Loughlin Water Partners LP: Can you give us an idea of, what the attachment rates are in other geographies or throughout the Company?

I would just say directionally Europe is the highest, and it’s comfortably above 50%, and call it 60% roughly, and other countries are similar, but below that level. John Rosenberg – Loughlin Water Partners LP: Okay. And in addition to that, regarding attachment rates, are you guys seeing any type of pattern in terms of adoption of ec-H2O, when you sell into a large account, are they tend to buy incrementally, and then go into the product or any particular patterns you could discern or talk about?

This is Chris. I mean, I think that our sales of ec-H2O are to a broad base set of customers. Right and we’ve had a lot of success in retail vertical market, we had a number of leading building service contractors in the U.S. and Europe also adopt the technology, but we’re also seeing smaller companies, who like the cost savings in the environmental benefits, taking on the technology as well, so it’s pretty broad based John Rosenberg – Loughlin Water Partners LP: Okay. Great

And the good news there too, is that overtime, we do find that it does get us in the door of new customers, who we have not done business with before, and so it helps us grow our market share, which is really been a nice thing, but I think it also protects our business with existing customers, when they come back in the next phase of the purchase cycle, this will please with what ec-H2O has done for them with we get that business in return. John Rosenberg – Loughlin Water Partners LP: Great. Well, thanks very much and good luck continuing with that. Thanks.

Thanks, John.

There are no further questions at this time. I’ll turn the call back to the presenters for closing remarks.

All right. let me finish up with our closing remarks. Our strategies are working as I noted, we achieved significant gains in our profitability in 2012. We remain focused on further enhancing profitability through our ongoing operational excellence, cost control and standardized global processes. We are pursuing growth through innovation in our core equipment business and a strong new product pipeline, which includes our upcoming launch of 25 new products in 2013 as well as advancing our water based technologies. Tennant is well positioned to drive additional profitable growth when the global economy improves and demand for cleaning equipment regains momentum. Thank you for your time today and for your questions, and we look forward to updating you on our 2013 first quarter results in April. Take care, everybody.

This concludes today’s conference call. You may now disconnect.