Good morning. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Tennant Company's First Quarter 2015 Earnings Conference Call. This call is being recorded. There will be time for Q&A at the end of the call. [Operator Instructions] After the Q&A, please stay online for closing remarks from management. If you have joined our call today by a telephone and logged into the conference call presentation on your computer, please mute the audio on your computer to avoid potential quality issues during the call. Thank you for participating in Tennant Company's first quarter earnings conference call. Beginning today's meeting is Mr. Tom Paulson, Senior Vice President and Chief Financial Officer for Tennant Company. Mr. Paulson, you may begin.

Thanks, Chris. Good morning, everyone and welcome to Tennant Company's First Quarter 2015 Earnings Conference Call. I am Tom Paulson, Senior Vice President and Chief Financial Officer of Tennant Company. With me on the call today are Chris Killingstad, Tennant's President and CEO; Karen Durant, Vice President and Controller and Tom Stueve, Treasurer. Our agenda today is to review Tennant's performance during the 2015 first quarter, and our outlook for the year. First, Chris will brief you on our operations, and then I'll cover the financials. After that we will open up the call for your questions. You’ll notice that for the first time we are using slides to accompany this conference call. We hope this makes it easier for you to review our results. A taped replay of this conference call along with these slides will be available on our new Investor Relations website at investors.tennantco.com for approximately three months after this call. Now 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 of 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. Our earnings release was issued this morning via Business Wire and it’s is also posted on our new Investor Relations website. 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. We are pleased to report another solid quarter in which Tennant continued to execute well on our growth strategies. The company posted consolidated net sales of $185.7 million in the 2015 first quarter, up approximately 6% organically compared to the prior year quarter. This record revenue for the first quarter was led by robust sales to strategic accounts in the Americas region. We also saw continued demand for newly introduced products, including our T12 and T17 rider scrubbers and increased global sales of outdoor equipment. As the first quarter results demonstrate, our platform to accelerate organic sales is working despite headwinds from the global economy and foreign currency exchange. Further, we anticipate continued organic sales gains and improved profitability for the full year. We are on track to reach our organic growth goal of $1 billion in sales by 2017 and we remain committed to the goal of a 12% or above operating profit margin. You may recall that our growth strategies are based upon the following three core pillars. First, reaching new markets and new customers. Second, continuing to deliver a strong product and technology pipeline and third, not losing sight of the discipline we have established around improving margins and controlling expenses. Let’s take a look at Tennant’s first quarter sales by geography. We generated continued growth in our largest region, the Americas, where organic sales rose approximately 11.5%. As I mentioned last quarter, we had two leading US big box retailers renew their contracts with us and this business contributed to our strong results from strategic accounts in the 2015 first quarter. The Latin America sales declined in the 2015’s first quarter due to the challenging macroeconomic conditions there. In the important market…

Thanks Chris. In my comments today, all references to earnings per share are on a fully diluted basis. For the first quarter ended March 31, 2015, Tennant reported net sales of $185.7 million compared to $184 million in the prior year quarter. Excluding an unfavorable foreign currency exchange impact of about 5%, organic sales grew approximately 6% in the 2015 first quarter. As you may recall, organic sales in the 2014 first quarter grew approximately 10.5% excluding an unfavorable foreign currency exchange impact of about 1%. So we were lapping a very robust prior year quarter. For the 2014 full year, organic sales rose approximately 10.3% excluding an unfavorable foreign currency exchange impact of about 1%. We continue to be encouraged by the solid level of organic sales growth. First quarter 2015 net earnings were $5 million, or $0.27 per share. In the year ago quarter, Tennant reported net earnings of $5.8 million, or $0.31 per share. As anticipated, foreign currency exchange headwinds unfavorably impacted our 2015 first quarter financial results. I’ll provide more information about this in just a few minutes. Turning now to a more detailed review of the 2015 first quarter. Our sales are categorized into three geographic regions which are the Americas, which encompasses all of North America and Latin America; EMEA which covers Europe, the Middle East and Africa; and lastly Asia-Pacific which includes China and other Asian markets, Japan and Australia. In the Americas, 2015 first quarter organic sales increased approximately 11.5% excluding about 2% of unfavorable foreign currency impact. Record sales for the first quarter in North America were fueled by strong sales to strategic accounts including the sales of new products. In the 2015, firs quarter, Latin America organic sales declined approximately 5% as compared to organic sales growth of about 10%…

[Operator Instructions] Your first question is from Jason Ursaner with CJS Securities. Your line is open.

Good morning.

Good morning, Jason.

Just had a couple of questions on the organic growth trends. Last year in the Americas, you had a large order for the City School system that shipped, just wondering if we can get some sense for how large an impact that had on organic growth last year.

We did not disclose the absolute size of that Jason. We did comment that it was – if not the largest or one of the largest orders that we’d received in the history of the company thought. Suffice it to say that it was material, but we still believe we can continue to organically grow relative to those big numbers.

Okay. And then just this year - in the most recent quarter, the two big box retailers in strategic accounts, again, any sense for how big of an impact that had on the organic growth in the America? I guess, I am just trying to reconcile this with the back half-weighted commentary, particularly Q4 if maybe Q2, we should have more moderate expectations on organic growth.

A couple of things, I mean, one, we do believe that – if you look at our organic growth, it is likely to be larger in the back half of the year than in the front-half of the year and also the commentary around Q4 is not only on the strength of the organic growth that we anticipate, but it’s also the fact that that it will be one of the lower quarters from an impact from the foreign exchange impact on the quarter. We will see Q2 peak. We will see Q3 begin to moderate and in Q4 continue to moderate. So, that’s the other big element of why we are pushing people to say Q4 should be expected to be one of the better quarters of the year if not the best quarter.

Okay. And Asia-Pacific, just want to make sure, I heard clearly, did you say Chine grew 15% in the quarter or that was for…

That was actually last year; that was actually last year number. And we anticipate that – continue to see growth in China although we have – we did not see the type of growth we’d like to see in Q1, but we still continue to anticipate meaningful organic growth in China as well as significant Asia-Pacific total growth from an organic point of view.

Okay. Looking at the negative 1% plus organic trend there, any way to split out the growth between Australia, China and kind of the rest of the segment for this quarter?

Yes, I mean, just directionally, we did see organic declines in all three of – or the two big markets, Australia and China. We also saw a decline in Japan, but we saw significant strength in the Southeast Asian countries. So that was – we are still bullish on the territory. We are particularly bullish on China and we anticipate growth for the full year organically in Asia-Pacific.

Okay. Thanks. I appreciate the details. I’ll let others have a chance. Thanks.

Yes, you are welcome, Jason.

Your next question is from Joe Maxa with Dougherty & Co. Your line is open.

Good morning.

Good morning, Joe.

Hi, Joe.

So, on the organic growth in Europe and in Asia-Pacific starting, a little bit of a hold to get to the positive, how do you see getting it, the expectations to see organic growth for the full year, what’s going to drive it?

Let me comment on Europe first. We got off to a slow start in Europe but the order patterns really strengthened in March, particularly in the back part of the month and they are continuing to strengthen as we speak right now in April. And our pipeline is quite full. So we just – and we are bullish as we look out through the rest of the year. We feel that while it’s always tough in Europe, you never know for sure, we feel that Q1 was an aberration and I remain confident in what the year looks like as we go forward. In the case of Asia-Pacific, I mean, I’d never like that talk about lapping, but we lap a really strong Q1 and our pipeline is full, not quite as full as we like it to be, but we anticipate it to grow for the full year and I think we’ll see a stronger back part of the year in Asia-Pacific in total than we’ll see in the front-half. But again, we remain confident based on the quality of our pipeline and the quality of our new products that we’ll see organic growth for the full year there.

Right, I’ll also add on in the Europe, Joe, we’ve done a lot of work over the last two, three years, things like restructuring our French business which is beginning to pay dividends. It’s still early days. We’ve reorganized our entire strategic account effort in EMEA and that’s paying dividends. We have reorganized against our distribution business. And so, all of those things should continue to bear fruit and hopefully we’ll accelerate a little bit as the year progresses.

Do you see outdoor being a big piece of that organic growth?

Outdoor right now is one of the strongest – is the strongest part of our EMEA business and that should continue.

Okay, great. On the NanoClean business, back, I know, few years ago, you talked about the ec-H2O in the first generation. Now being able to clean about 70% of the environments you target. How does NanoClean change that? Does that get it up to 90%? How should we be thinking about that new product?

When we say 70% of the environments, you could into a retailer for example, but we couldn’t maybe clean all parts of that retailer. For example, the entrance ways where you have significant soil and salt that accumulates in the northern hemisphere during the winter, that was tough to clean. We can now clean that. So it’s a mixture of being able to clean more specific places within the facilities we are already cleaning with ec-H2O as well as, because it cleans more types of – it cleans better cleans more types of soil, we can also take it into new customers. I am not sure if that means we are cleaning 80% now, but it is incrementally a significant improvement. But we think that one of the big opportunities for us with NanoClean is as we try to attract new customers around the world, this is a great lead technology to capture their attention and win new business with.

Okay, very good. And lastly on the OS3, can you give us a sense on maybe your pipeline today versus six months ago or a year ago, just wondering how you are seeing that builds?

What we say is that, it continues to improve. I just continue to look at the leading indicators which is the prospect pool increasing, are we increasing trials and then importantly are those trials converting to sales and that continues to improve. I think, we talk about the win of Kisco Senior Living community that we won. I mean, how many of those types of communities exist in the United States, and this is one of the high profile ones. I think it has a lot of influence on other senior living communities around the country. So clearly, this is an area where we’ve had an early win and we hopefully we can leverage that. This is really the second big win with the OS3 that we talked about. We did say that OS3 was a part of the large school district win that we had last year as well. And we hope that these two are the first of many to come.

Thank you.

[Operator Instructions] Your next question is from Scott Graham with Jefferies. Your line is open.

Hey, good morning.

Good morning, Scott.

So, my only – I have two questions and they are pretty straightforward. If – I know you are talking about the 1.7 – I am sorry the $1 billion sales target is on track for 2017. But, with currency sort of minus 5 at this point, is that realistic still or are you thinking that the organic is going to offset that between now and that period?

Yes, what, to be real clear about that Scott, I mean, our assumption as we march from across the four years was that that we needed average organic growth of 7%. We are tracking ahead of that so far, but it would be really difficult to get to the $1 billion without the dollar going back to the – where it was in relationship to other currencies. So, it’s more important for us that we are focused on that we need to grow organically at 7% and if the dollar doesn’t weaken, we could very well achieve our organic growth target and not get all the way to a revenue of $1 billion. But we would still consider that success. But we are not smart enough to know what’s going to happen at currency. We are focused on the organic side.

Yes, I’m with you. I think that would be – that’s required.

Thanks, thanks, Graham for that question.

So, the other question is about, it’s obviously, pretty big hits on – as we talked about last conference call for currency and taxes. So, at that time, you say, you were looking at some things on the cost side – are you looking at anything structural right now where, sort of fixed cost take out. I think a lot of companies are – and I’ll say this maybe somewhat boldly under a false sense of security that things are going to maybe go back to where they were with various markets and certainly with currency. I guess, my question simply is, if you cut cost on the variable side, well, that's nice, but it doesn't always read through if you don't make your variable number - your sales numbers. Are you looking at anything structurally within the organization where it's a permanent cost takeout that we could really - sort of circle and add that to EPS?

Not yet. I mean, we really believe that we are going to wait and see where currency goes to and it’s not to say that we won’t make a different decision at some point in the future. But for now, we are trying to do things that improves our capability of growing the business organically and we are doing real things like creating the capability of manufacturing some of the same products that we only make in the US today and now having the flexibility to manufacture them in Europe that can be advantageous for us to export out to Europe and to other markets. So those are real tangible things we are looking to add some different hedging programs at the current time. We haven’t made any decisions. It’s very expensive and very complicated and without any real economical benefit. But we just believe we are going to watch currency to focus on organic side of our business and continue to invest to drive share and we think that’s the right long-term strategy. It could dictate at some point in time that we make a different decision, But for now, we are going to ride with it.

Fair enough. All right, hey, thank you both.

You bet.

Thank you.

Since there are no further questions at this time, I’d like to turn the call back over to management for any closing remarks.

All right, thanks Chris. The new growth strategies we outlined at the beginning of 2014 are working and spurt organic sales gains in each quarter of 2014. We are encouraged by Tennant’s performance against our growth agenda in the 2015 first quarter. We remain on track to reach our organic growth goal of $1 billion in sales by 2017. And as I noted earlier, we remain committed to the goal of a 12% or above operating profit margin. We are hosting our Annual Shareholders Meeting this Wednesday in Golden Valley, Minnesota. Please join us if you can, otherwise, we look forward to updating you on our 2015 second quarter results in July. Thank you for your time today and for your questions. Take care, everybody.

Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.