Good morning and welcome to the Rexnord Third Quarter Fiscal 2017 Earnings Results Conference Call with Todd Adams, President and Chief Executive Officer; Mark Peterson, Senior Vice President and Chief Financial Officer; andRobert McCarthyy, Vice President of Investor Relations for Rexnord. This call is being recorded and will be available on replay for a period of two weeks. The phone numbers for the replay can be found in the earnings release the company filed in an 8-K with the SEC yesterday, February 1. At this time, for opening remarks and introduction, I'll turn the call over toRobert McCarthyy.

Thank you, Pollard. Good morning and welcome, everyone. Before we get started, I need to remind you that this call contains certain forward-looking statements that are subject to the Safe Harbor language contained in the press release that we issued yesterday afternoon as well as in our filings with the SEC. In addition, some comparisons will refer to non-GAAP measures. Our earnings release and SEC filings contain additional information about these non-GAAP measures, why we use them and why believe they're helpful to investors and contain reconciliations to GAAP data. Consistent with prior quarters, we will speak to core growth, adjusted EBITDA, adjusted net income and adjusted earnings per share as we feel that these non-GAAP metrics provide a better understanding of our operating results. However, these measures are not a substitute for GAAP data and we urge you to review the GAAP information in our earnings release and 10-Q. Please note that the presentation of our operating results include adjustments to GAAP recording for the impact of the RHF non-core product line in our Water Management segment that we are exiting in order to enable investors to better understand and assess our continuing core operating results. Today's call will provide an update on our strategic execution, our overall core performance for the third quarter of our fiscal 2017 and our outlook for the rest of the year. We'll cover some specifics on our two platforms followed by selected highlights from our financial statements, our liquidity and our cash flow. Afterwards, we'll open up the call for your questions. And with that, I'll turn the call over to Todd Adams, President and CEO of Rexnord.

Thanks, Robin. Good morning. Before I start I want to call your attention to some changes we will be making to our quarterly calls that we hope will provide everyone on the call with more information on the most critical aspects of our business. Today and moving forward, you will hopefully notice some changes to the orientation of our formal comments, as well as appreciate some changes to the accompanying charts and appendices that we hope provide, better, more concise information on the platforms. Our plan is also to provide quarterly updates on various topics like capital allocation, acquisition integration, significant project wins and new product launches, as well as some case studies on how we are leveraging RBS to drive significant improvements across all parts of our business. It has been a very busy quarter on a number of fronts. We have got a lot to cover. So let us get right into it. Starting on Slide 3. You have all hopefully had a chance to read the release from last night and Mark will take you through the financials in just a minute. But overall our third quarter was a decent quarter for us. Sales of $452 million were just a little light of where we had guided primarily due to translations stemming from a stronger dollar, and adjusted EPS of $0.25, was at the high-end of our guidance and that is inclusive of a penny of expense tied with the dividend from the mandatory convertible preferred offering we completed in early December. We are also affirming our operating outlook for the year based on the order trends throughout the third quarter and through the first month of our Q4. Mark will summarize both the consolidated results and the performance of each platform as part of his comments.…

Thanks, Todd. Please turn to Slide number 6. Our third quarter fiscal ’17 financial results were broadly in line with our guidance, although foreign currency translation was a slightly larger drag than expected. Adjusted earnings per share was $0.25, reflecting solid internal execution as our adjusted EBITDA was also consistent with our guidance despite the minor shortfall in total reported sales growth. Our tax rate was slightly lower than we have projected which added a penny to the EPS and offset the one penny impact of accounting for the preferred stock dividend in the quarter. Our outlook on an operational basis has not changed. When we were revising our guidance for fiscal ’17 adjusted earnings-per-share to reflect the capital market transactions we executed during the quarter. Our revised range of $1.27 to $1.33 reflects the $0.05 net impact of three factors. First the convertible preferred offering, second the $195 million of debt that we repaid with half of the offering proceeds, and third, the reduced coupon we secured with our successful refinancing with our outstanding debt to august 2023. Turning to Slide 7, we summarize our consolidated results in the quarter. Let us move to Slide 8, and discuss the first of two operating platforms, Process & Motion Control. Total sales increased 2% to PMC as a 6% core sales decrease was more than offset by the solid quarter turn in by Cambridge as our diversification in a more consumer facing end markets helped moderate the headwind in process industry end markets. Global aftermarket revenue declined slightly against a tougher comparison, but distributor sell through continued its generally stable trend in the quarter. In the bottom right corner of the slide, you can see that our end market outlook has not changed since last quarter. We believe that we can…

Thank you. [Operator Instructions] Our first question comes from Julian Mitchell from Credit Suisse, please go ahead.

Hi, good morning. Thanks for the extra detail. On PMC first of all, I just wanted a little bit more background of what you're seeing there, so I guess the macro indicator sort of seen better, most companies sound better in the last 10 days. The organic sales drop was obviously, it's deeper than in the prior two quarters. So may be given update of how demand in PMC has moved in recent months, feasibility looks a little bit higher, so I just wonder if you are willing to have any view on when sales may turn positive. A – Todd Alan Adams: Hi, Julian. Thanks. Couple things if we look at the quarterly growth this quarter compared the lastly sort of expected that based upon where the backlog came into the quarter. So I don't think we were all surprise by the core growth in the quarter. I would tell you that I would agree with your statement that [Indiscernible] is much better over the past, call it 60 days than the first part of the quarter. I would tell you that our orders throughout the quarter trended probably in line to may be a little bit ahead of where we had expected, we've built some backlog. We are to the first month of our fourth quarter and had a solid January, so I hope that you want to call it inflexion and I don't think you want to call to prognosticate what's going forward, but the clear improvement that we've seen in the past call it 60 days or so makes us a little bit more confident about our Q4, I think we're optimistic that as we head into our fiscal ‘18 which will start on April 01, we will post core growth during the year whether that’s for the first quarter of the year, I don't know at this point, but I think we are confident we are going to see core growth return to PMC and like the post core growth for the entire year, but that's sort of what we're seeing.

Thanks. That’s very clear. And then secondly on Water Management, as you said that it sounds like there were lots of project deferrals still going on particularly in the Middle East. I just wondered how the deferrals are one thing, but I guess when you are thinking about new orders and kind of the backlog movement, how was that being trending in different regions in the past few months? A – Todd Alan Adams: Maybe just to clarify Julian again, I think we had anticipated the growth performance in the quarter primarily based on project shipments from the prior year and so I would say that there is no new deferrals in the water infrastructure part of the platform in any way, shape or form. Moving to the order trends, the orders and the backlog in that part of the business is going substantial. And some of that is obviously growing, because we haven't shipped some of these orders this year, but if I just look at the underlying order growth in the business, it's very solid. We will build substantial backlog this year for our water infrastructure business and the order rates have been very good and we think that we really did in Q4 as well. So I would say no new deferrals, no new news, level of project activity is high, it's high but with smaller more projects than these larger mega projects. And so I would say a backlog is probably in a good in shape or better than it has ever been in the last four to five years.

That’s very helpful. Thank you.

Your next question comes from [indiscernible] please go ahead.

Yes. Good morning gentlemen. Maybe I will start with PMC as well. I appreciated all the audition on color there and your comment that better than 50% of this segment now is driven by aerospace and consumer and I suppose that perhaps you have better visibility on those two portions of the market. How do you think about growth in these two areas as you look at calendar 2017?

Well again, both are positive this year and we expect both to be positive next year. And I think make the one thing that you point out in aerospace we clearly have I think really good visibility based on the backlog of airplane orders as well as our content onward. So you will see continued good growth there on the consumer side of things. This is something we have really got after the last 12 to 18 months and so this year was a lot of building the capability to go out and do it as well as integrating the acquisition right. I think that is going to accelerate into next year. So I would say both firm with positive core growth heading into next year and the process side again I think we are seeing MRO stabled as well as and we think we see the drop in some of these process industries to be honest with you and the book of bill comes to that we expect in our fourth quarter in order to be the first backlog build that part of the business and probably through years.

If thank you Todd. I mean if you look back at your process exposure is there any way to sort of frame the last two to three years in terms of the organic the client that you have seen in that business to get a sense for kind of peak to trough movement here?

If you I will give you a rough range, I think that if you look when that probably our fiscal 13 or fiscal 14, call it March of 2014 when that was a lot of that had to do with backlog run out and everything else. So the order pick was probably March of 13. Since that time, that is down probably close to 50% and so as we have seen that cycle down to build the order they come into backlog you ship against that but your book to bill is probably the leading indicator what's going to happen over the next couple of years. In our case what we are saying is this year we think that book to bill and that part of the business is actually positive. So who knows but this into the cycle the down cycle it feels more like an inflation point than a head trade, and I think it also has a lot to do with what we are doing on our own. So some of these new first fit wins are also going back in the some of these process industries where they are still spending going on, there is still opportunity in winning some of those. So it's a combination of we think a little bit of a traffic as well as some self help. So I think we are probably more optimistic about that part of the business than we have been in a while. It's got to read out and I don't think it's going to explode back. I think it's going to move slowly back but I think positive nonetheless.

Okay. Thank you. I will jump back in queue.

[Operator Instruction] And our next question comes from Charles Brady from SunTrust Robinson Humphrey, Inc. please go ahead.

Hi guys this is actually Patrick Lou standing in for Charlie. Thanks for taking my question. In your comments about the first fit win initiative, can you remind us, can you maybe talk about the timeline of that and sort of what end markets are you looking and are you seeing or expecting a lift in expenses related to that?

No. I will start with the second question first. So this is essentially we started with sales efficiency break through probably about 18 months ago and that was to observe some of the work that was being done by our current field sellers and use automation and technology sort of drive some of that inside and reduce the cost and free up selling time. With that available selling time we pointed those resources towards again new to lots OEMs for end users that we felt like we could go out and take competitors. So the primary I would say end markets would be our process industries as well as consumer probably overweight consumer because that's got just that's slightly a better secular growth profile but at the same time some wins across the process industries. So that's really the timeline and the success we had in a relative short period of time.

Got it. And turning over to water management. Can you possibly walk us for us in terms of the margin decline relative to sales and mix and also I guess you talked about more expenses on the market expansion product innovation portion of it. And can you give us a little bit more detail on what those maybe?

Yes, this is Mark, I can walk you through it. So if you look at the this overall on the sales were down $9 million the EBITDA down in the quarter so a little of course half of that was just coming from the overall sales decline in the mix we have last year I mean I noted in my comments we had – down the business and in our non res side of the business. So the mix of the big piece of that you look at overall roughly the balance the next large piece is coming from just an expend time we had in the last year's quarter. Now if you look at last year's that margin of the quarter was not in the quarter and then last piece implementing that we had in the business of this year tie to our mission around primarily new product developments and lot of that is just going to rollout now really how bigger piece of the puzzle [indiscernible] spend because we have all the year this quarter. If you look at the quarter is really where we are expecting to land sequentially from our Q2 to Q3 until the sale decline margin about 32% this is where we expect. The year-over-year as we really more of what was last year's quarter to what's in this year's quarter.

Great and could you --

We have been talking about the detailed -- a lot more discussion around new product, [technical difficulty] because it's crucial and vital for their revenue earning. An OEM may not have the same view, they want the equipment to work well throughout a period of time, but ultimately they're not there as the end user and you open that revenue, the revenue generating application. So, they may opt a little bit more towards the mid-tier. In either scenario, I think as you all know, the margin that we generate on each the premium, the more premium brand product or some of the mid-tier offerings we have is roughly the same. So, our ability to compete with these OEMs with having a mid-tier product is far better than it's ever been by the introduction of it. But from a pricing standpoint, I would say still good margins are consistent with the feed average.

Okay, that's great. So, as these more of these first they come through in the process orders, sales come back, the margins incremental margins performance should be very consistent with the historical.

Yes. I mean, that’s our business. Right. We get in, we solve the problem for a customer and application, we hopefully do a really good job with servicing over the life cycle of the equipment and when it openly wears out, it gets placed like a really high percentage of the time. And that's been the foundation of the business, we are investing heavily in it as well as diversifying the end-market exposure we have. So, you get it, that's the business.

Okay, great. And that kind of leads me to my next question. So, and please come and correct me if I'm wrong, but my understanding of part of the SCOFR's plan, part of it is like moving some other footprints in Mexico. But I guess like part of the rationale is to have the lower more efficient cost base to support the mid-tier products so that you can sustain a similar kind of margins. But if you look at all these kind of potential headwinds in terms of carry offs or tax policy. How does that change in the economics of the mid-tier products longer term?

Karen, it's a really good question. I would tell you that we feel, first of all, we don’t have any privilege information what's going to transpire with carry offs and tax policy. But I would tell you that a portion of that, the portion of the rationale was that, not the entire rationale for the move was that. And so, we feel very comfortable with having to retain a very a global footprint to support customers in whatever region they may be in, obviously to the extent there are changes to that. We'll obviously have to review it, but at this point, nothing we see would lead us to on a path of thinking that the benefit or the decision that we made was going to at least be something that we would regret. But to be determined obviously bending on what happened, but I think we're very much a US manufacturer, but we have global customers and sort of global markets. So, we sort of have to manufacture in a lot of different places to be an effective participant in the market place. So, that's really part of the rationale. That's some, hopefully that answers your question.

Yes, definitely. And then maybe along similar lines, but its switching gear to there in a little bit. My understanding is that business very much around design and assembly. So, you source, I'm assuming you source a lot of components. Are you seeing any kind of price cost changes given that we're seeing some raw materials inflation in the past few months? So, I guess first part is on price cost on these components. And then in terms of the sourcing, can you give us a sense of how much of those is the kind of domestically sourced, how much would be sort of imported components. So, is there is like come changes in the tax policy, some of that be getting? That's it.

Yes. I would answer your first question first Karen. So, on the place cost side of things, I don’t think we're seeing anything adverse. Right, our ability to pass on some of that material cost increase through to the end market is very much intact and to be honest with the way we go about our sourcing program, we sort of feather in purchases. So, we have the ability to sort of I would say almost match any significant increases in cost on the price line. And also, productivity in our end, is the -- as the second question I think was on --

Sourcing.

Sourcing. You're right, we source product from all over the world. We have in most cases at least two if not three sources for almost everything we have and so, depending on again what transpires, we'll obviously be flexible. But this is something we've been doing for a really long time and I think we're confident in our ability to adapt to the changes in the market. And we'll have to wait and see but I think we're actually geared up and then well capable of handling whatever comes down the pipe I think.

Okay. So, if anything happens on the tax fronts, I mean, there are enough alternatives kind of domestically that you can switch to. If you have the --.

We certainly believe so Karen, yes.

Okay, got it. Thank you, very much.

Yes.

And we have no further questions at this time. I will now turn the call toRobert McCarthyy for closing comments.

Thanks everybody for joining us on the call today. As always, we appreciate your interest in Rexnord, and we look forward to providing further updates when we announce our fiscal fourth quarter of fiscal year 2017 and provide our initial financial guidance for fiscal 2018 in mid-May. Take care.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating and you may now disconnect.