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On Wednesday, Titan Machinery, Inc. (NASDAQ:TITN) reported its fourth quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Brent Rystrom – FELTL: Great numbers guys. A couple of quick things. First of all, I have been visiting a lot of your stores the last week and your salespeople and general managers are telling me that they are getting a lot of traction with the fuel efficiency of these new Tier 4 engines, any particular comment on that?
Peter Christianson – President and COO: Well, I think it’s aligned with the preliminary Nebraska test, where they are actually seeing some really good fuel economy savings on these engines. So yeah, but we think it’s a real positive and I think CNH has got the right feel for the solution and we are just riding that bandwagon around. So, yeah it has been really positive and as this price of fuel keeps going up, our farmers are really telling our customers, they are saying yeah they are bringing some bigger savings back, every time they go with our fuel tank and the most important thing about this technology tool is the good performance as well as the power we are seeing these tractors with this Tier 4 technology. So it’s a positive all the way around.
Brent Rystrom – FELTL: From the perspective of the green tractor starting to see in the used lot I would imagine that’s a reflection of that, that bringing in different band to get the better fuel efficiency?
Peter Christianson – President and COO: Yeah, like I said, I think our growers are really seeing the advantage of our SCR Technology and what that’s doing for both power and fuel efficiency, and we’ve got some good products out there right now on a number of fronts. So I think that’s what you’re seeing some of that happening out there, Brent.
Brent Rystrom – FELTL: Then another quick thought and I’ll jump back into queue. But seeing a lot of data coming out about harvest issues in the CIS countries, particularly the combined technology is essentially 30 to 40 years old. So even when they have great green crops, they have a huge inability to get all that green in, harvest it and shipped. That has got to play very-very well into what you’re doing in Romania, Bulgaria I would assume.
Peter Christianson – President and COO: That’s one of the potential growth areas Brent, because they can see the results immediate. As they bring this new technology from North America when they are harvesting their crop, and they have existing old technology in the same field or the same operation, they can see the results. So that is one of the areas that definitely has potential for us as we build that business over there.
Robert McCarthy – Robert W. Baird & Co., Inc: First I want to ask about the fourth quarter results on the construction segment, if you compare them with the third quarter, your revenue is up substantially, yet pre-tax profit is down compared with third quarter numbers, could you just talk about the dynamics behind that?
Peter Christianson – President and COO: Well, the revenue has been driven primarily with our mild weather. We were able to have lots of these contractors who were able to run all through the winter and I think you probably look at sales mix being the primary driver on the second part of the question.
Robert McCarthy – Robert W. Baird & Co., Inc: Meaning, help me out here?
Peter Christianson – President and COO: Seasonality with your rental fleet and the rental business has got a higher margin associated with it and as you know, during that quarter, historically we see that being a lighter quarter on rental side of it and so I think sales mix is driving that.
David Meyer – Chairman and CEO: I was just going to add to it too Rob, just with the parts and service business in the winter time, it’s just a little bit lighter on that fourth quarter as well. So there’s little less of that higher margin business.
Robert McCarthy – Robert W. Baird & Co., Inc: So mix all around and my second question Mark, I wonder if you could remind us of how volume bonus payments affected comparisons in the fourth quarter?
Mark Kalvoda – CFO: Yeah, so we get the volume bonuses that are paid out pertaining to incentives related to market share and the like in the fourth quarter. Typical, very similar to last year compared to this year as far as the timing of that, and just as our business is bigger, that payment becomes – it’s a little bit larger as well, but for the most part, it’s in line with what we had in the previous year.
Robert McCarthy – Robert W. Baird & Co., Inc: Can I infer from that Mark, that it didn’t really have any influence on the gross margin comparison year-to-year?
Mark Kalvoda – CFO: You can look at our equipment margins, quarter-over-quarter, fourth quarter this year, fourth quarter last year and they are very similar.
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