Good afternoon ladies and gentlemen and welcome to the Advanced Energy’ fourth quarter 2008 earnings conference call. With us today are Dr. Hans Betz, President and Chief Executive Officer, Mr. Larry Firestone, Executive Vice President and CFO, and Ms. Anne Leschin, Investor Relations. (Operator instructions) I’ll now turn the call over to Ms. Leschin, you may begin.

Thank you, and good afternoon. Thank you for joining us this afternoon for our fourth quarter 2008 earnings conference call. By now, you should have received your copy of the press release that we issued approximately an hour ago. If you would like a copy, please visit our website at www.advancedenergy.com or contact us at 970-407-4670. I would like to remind everyone that except for historical financial information contained herein, the matters discussed on this conference call contain certain forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, the volatility and cyclicality of the industries we serve, the timing of orders received from our customers, our ability to benefit from the continued cost improvement initiatives currently underway and unanticipated changes in our estimates, reserves or allowances. These and other risks are described in Form 10-K and 10-Q and other reports filed with the SEC. In addition, we assume no obligation to update the information that we provide you during this conference call, including the fourth quarter guidance provided on the call and in our press release today. Guidance will not be updated after today’s call until our next scheduled quarterly financial release. I would now turn the call over to Hans Betz.

Good afternoon everyone and thank you for joining us. Ending an already difficult year due to the ongoing troubles of the semiconductor markets, Advanced Energy was also impacted by the worldwide financial crisis and resulting macroeconomic challenges that took hold in the second half of the year. We nonetheless achieved our financial targets for the fourth quarter with sales of $67.5 million and a GAAP loss per share of $0.45 including $0.43 valuation allowance for deferred tax assets. We ended the quarter with a strong cash position of $180 million including our auction rate securities. We ended 2008 with sales of $328.9 million a decrease of 14.5% over 2007. We generated approximately $25 million in cash from operations, introduced new products, and continued to penetrate key growth markets such as solar to extend our position as the overall leader in power conversion technology across our markets. Sales to the solar market doubled in the year to approximately $56 million from $26 million last year as we concentrated our efforts on diversifying our offerings and expanded non-semiconductor sales in order to limit the effect of cyclical semiconductor sales. With the deteriorating economic conditions continuing into the first quarter we found ourselves faced with a broad based downturn effecting all customers regardless of the industry. As a result we took proactive steps again recently to improve our operations, reduce costs, and lower our break-even point while continuing to invest in the future. In particular we continued our rate of R&D investment at $13.4 million in the quarter reflecting our strategic focus on power conversion. Having the market hardest hit during 2008 the semiconductor market has continued to drop to unprecedented levels in the last few months. With a growing number of order push outs and cancellation from Tier 1 OEMs, we have…

Thank you Hans and good afternoon everyone, I will review the results for the fourth quarter of 2008 and discuss our guidance for the first quarter. The challenging economic environment and continued weakness in the semiconductor market drove our fourth quarter revenue to $67.5 million in line with our guidance but down 19.5% from $83.8 million in the same period a year ago. During the quarter we achieved a healthy 38.4% growth in our non-semiconductor revenue over the same period last year and our pleased that in this challenging environment our non-semi sales exceeded our semi sales indicating that strength in our newer markets was helping to offset the weakness in the semiconductor market. For the full year 2008 revenues were $328.9 million down 14.5% from the same period last year. The $84.9 million drop off in revenue from the semiconductor market was a primary concern for the overall decrease while nearly $30.5 million increase in the solar market helped to offset some of this decline. In the fourth quarter sales for the semiconductor market, semiconductor capital equipment market represented 33.4% of total sales in the quarter at $22.5 million down 20.2% from last quarter’s $28.2 million due to order declines and push outs at key OEMs. Non-semiconductor sales remained healthy at 48.3% of total sales similar to the previous quarter. Non-semi sales for the quarter were $32.6 million compared to $40.7 million in the third quarter of 2008. Sales for the solar market were $16 million below last quarter’s record revenues of $19.3 million. While solar sales were lower as we began to see the effect of the global economic crisis on project financing, they represented a record percentage of revenues at 23.6% versus 22.8% last quarter. Architectural glass sales were similar to last quarter partially driven by a…

(Operator Instructions) Your first question comes from the line of CJ Muse – Barclays Capital CJ Muse – Barclays Capital : You hinted at inventory at the OEMs I was hoping you could expand on that, how we should think about that business and timing of a recovery there, if and when we see a recovery at your key customers.

Just addressing the first half on the inventory side we see our OEM customers with work in process that they’re keeping flexible in reconfiguration to use for any orders that they have so that’s actually had an impact on inbound order volume and pulls from the just in time side of our business. As far as how long that’s going to take before it points to a recover, I don’t think we have visibility on that. CJ Muse – Barclays Capital : In terms end markets how do you envision 2009 playing out on the mix side for revenues between semi and non-semi.

We don’t have forward guidance on that. CJ Muse – Barclays Capital : On the EPS guide, can you break out the one-time charges that are embedded in that GAAP EPS guide.

I can’t, its— CJ Muse – Barclays Capital : Well you told us there was restructuring, can you remind me what that was for Q1.

Yes, its going to be $1.3 million for restructuring in Q1. CJ Muse – Barclays Capital : And is there any write-down of inventory within that number you guided.

No, not additionally. CJ Muse – Barclays Capital : Any other charges then we should thinking of.

No, well the additional cost reductions which we haven’t yet defined will come in as one-time charges in restructuring. Those are not embedded in these numbers.

Your next question comes from the line of Jay Deahna – JPMorgan Jay Deahna – JPMorgan : On the inverter market, it sounds like you doubled your installed base sequentially in 4Q if I heard you correctly, is that correct and—

Yes. Jay Deahna – JPMorgan : Okay, and can you give me a sense as to where you see that going, is that a sustainable quarter to quarter phenomenon, is that kind of a big pick up off the bottom and I’ve been trying to quantify what this means to your overall business and I don’t know that you really talked about it, was wondering if you could put some meat on those bones.

You have to consider the following things, because we sold in the meantime 45 inverters, 28 of them are already on the grids so its hard for us to give some kind of forecast when the customers put the rest of the inventory on the grid. But in general terms I think introducing the 400 kW will be very beneficial for the business in general because of the fact that we do have the European version ready in Q3 and still even have the stimulus package as the European market is still the most attractive one in particular the German market. So therefore we do have some in the pipeline but its hard for us to see how it unfolds in terms of revenue in particular how quarter to quarter. Jay Deahna – JPMorgan : So can you give us a rough estimate of an average selling price in your inverter business.

Its between $0.30 and $0.40 a watt. Jay Deahna – JPMorgan : In the last call I believe you said that you expected the [amorphous silicon] equipment market to grow in 2009, do you still believe that to be the case and if not why, and then are you seeing any of your smaller competitors disappearing or your big customers fearing that they might disappear?

Did I understand you right, I said that the silicon equipment market is growing in 2009? Jay Deahna – JPMorgan : On the last call I asked you if you thought the amorphous silicon solar—

The solar side, at the time when we had this call you had asked me the question I think the situation even solar was not as bleak as it is right now. And there’s another trend which may delay the amorphous silicon a bit because as you may know the silicon price for poly silicon and [crystal] silicon has dropped substantially and all of a sudden its shifted towards more application of this material rather then the amorphous silicon so in essence bottom line is I do not believe that we see a growth in 2009 on the amorphous silicon side from our business perspective. Jay Deahna – JPMorgan : The second question was are you seeing any of your smaller competitors disappearing or on the ropes?

I think so to be frank, because what we see is a very dramatic situation on the supply chain in general and I have the feeling that our big OEM customers are really scared about the fact that some of those guys will get out of business and if I look at the entire year 2009 with no substantial recovery at least in the semiconductor side I would wonder if all the players are still around at the end of this year and this is the reason why I think its not all that bad for Advanced Energy because having a solid balance sheet and having concentrated at the beginning of the strategy we concentrate on power conversion, I think we are on the [inaudible] scale would probably be, because the amount of money into R&D which allows us to gain market share and there’s another point which goes in this direction as well. Because of the fact that this downturn will last in my view probably through 2009 if you don’t have a solid balance sheet you are in big trouble and as we see not all of them have a very strong balance sheet. So therefore your question I think so.

Your next question comes from the line of [Chris Bancar] – Banc of America [Chris Bancar] – Banc of America : In terms of 2009 can you just tell how you think the service business is going to trend, how much is it going to be down if you can quantify that, it would be helpful.

I think as we pointed out in our script, I think the service business is down because of the fact that people are trying to cannibalize the rest of the equipment not being used and put it on the equipment which is running. So if there’s no pick up, not at all during 2009 the service business will be down but don’t ask me how much. But as soon as we see some kind of recovery even if you don’t see it on the FAB utilization yet but you will see it probably very soon on the service side so it may or it may not but one thing is for sure if service picks up then we see some kind of starting that the recovery may begin. [Chris Bancar] – Banc of America : In terms of Q1 2009 if I look at your guidance is it fair enough to assume that the OpEx is pretty much flat Q over Q and if that is the case is there going to be a similar number of shutdowns in March quarter versus December.

That’s correct. [Chris Bancar] – Banc of America : In terms of the inverter business, actually more in terms of the overall solar business, last time you said both commercial and residential is slowing but utility side of the business is holding up, is that still the case right now.

I think its not fully this case right now because what we see that the large area farms or the large high power farms are more dependent on the financing then the commercial is and the fact that utilities could in principal finance from their cash flow these projects but they are most of the time, if you are knowing utilities, they are slow movers. So what we see right now to be frank we see the commercial side as the sweet spot at this point in time. The residential side is growing but on the other side its not a very attractive market because they are very local, they are very fragmented and the big player which are very solid in mass production are getting in so for us as a [inaudible] there are two areas which is commercial and utilities but at this point in time commercial is a bit better then utilities. [Chris Bancar] – Banc of America: What’s the break even exiting June, $65 or $55 million.

Exiting June is currently $65 and it will be $55.

Your next question comes from the line of Timothy Arcuri – Citigroup Timothy Arcuri – Citigroup : Could you talk about in terms of transition to China manufacturing is that pretty much done, or is there more to go for that and how will that impact your gross margin in 2009.

Its, for the high volume products its pretty much at the tail end. We still have some additional products to transition. I think we’ve talked in the past about the transition of some legacy products to China which are still yet to go so in our plans for 2009 we still have some transition plans that we’re working on. Timothy Arcuri – Citigroup : And just to double check the tax guidance is like zero percent for 2009.

Yes.

Your next question comes from the line of Jim Covello – Goldman Sachs Jim Covello – Goldman Sachs: On the model you mentioned that OpEx next quarter is going to be pretty flattish, just curious as we go through the next couple of quarters are there still some costs that you can take out of the OpEx line or should we expect most of that to come out of COGS.

No, there is still costs that will come out of the OpEx line as we get past the end of Q1. Jim Covello – Goldman Sachs: How much is left to take out if we think about the overall cost reduction program that you announced earlier.

Its going to come out of several areas. We’re going to have some that’s going to come out of direct labor and overhead and essentially cost of goods sold but I can’t yet give you the breakdowns on those. Jim Covello – Goldman Sachs: I was just curious how much was left after Q1 that you can still take out that hasn’t been implemented yet.

Its going to be in total, total cost reduction targets is going to be about $7 million a quarter starting Q2, Q3, and Q4. So its still a very big amount. Jim Covello – Goldman Sachs: Just a clarification on your guidance does the EPS guidance include that $1.3 million restructuring charge.

Yes. Jim Covello – Goldman Sachs: On the revenue guidance for Q1 how are you thinking about your semiconductor business versus the non-semi business as it relates to the guidance for Q1.

We don’t really break that out and haven’t broken out directionally on a market-by-market basis so I don’t have further granularity for you on that. Jim Covello – Goldman Sachs: Would you expect though the semi side of the business to be down more on a relative basis.

Yes.

Your next question comes from the line of Tim Summers – Wunderlich Securities Tim Summers – Wunderlich Securities : You mentioned that you expected the downturn to last through 2009 and I’m curious are you saying that from the first quarter level you don’t see any increase in revenue on a quarterly basis going forward or could you characterize that another way.

I think to be frank if you look at the 2009 you’ll probably find nobody who gives you some guidance in this granularity. This is, just at this point in time we do not see any indications for a recovery in the market. I’m not saying completely its out of range that in the second half there will be some increase but its, if it’s the case I don’t think it will be a robust or a strong increase. But I think the visibility to be frank is pretty lousy. Tim Summers – Wunderlich Securities : The guidance for revenue is $30 to $36 million you’re going to be exiting Q2 with a break-even rate of $55 million, why not take the break-even down to something closer to the first quarter level.

I think the reason is because $55 allows us to gain a lot of this kind of savings out of improving efficiency without hurting or damaging any kind of strategic important projects. If we go further down I think we have to face the situation that we take some of the projects which may come as a revenue stream in 2010 and 2011 out of our R&D program which we don’t like to do it on the other side, what is the benefit of having a very strong balance sheet, the benefit is that you can keep your important projects running and finance through a situation which we see into Q1. If it turns out that Q1 is the measure for the rest of the year then we have to take another action but if its one or maximum quarters and looking at our cost savings projects so then I wouldn’t like to take those steps right away.

Your next question is a follow-up from the line of Timothy Arcuri – Citigroup Timothy Arcuri – Citigroup : Just clarifying again on the break-even so what would will be the break-even exiting Q1.

The break-even exiting Q1 is probably closer to this $70 million range, just a little under $70. Timothy Arcuri – Citigroup : And so previously you were targeting—

Q2 is when the $65 kicks in. Timothy Arcuri – Citigroup : So exiting Q2 you will be at $65 not $55.

No, we’ll be at $55. We’re currently at $65 exiting Q2, let me just restate, exiting Q1 we’ll be closer to $70, exiting Q2 we currently have laid in for $65 but we’re going to implement additional cost reductions to take us to $55. Timothy Arcuri – Citigroup : And so Q2 onwards that additional cost reductions are basically roughly $7 million a quarter.

Correct. Timothy Arcuri – Citigroup : Q2, Q3 and Q4 you said, right?

Correct. Timothy Arcuri – Citigroup : So wouldn’t it reduce it further even then.

No because it depends on where its coming out of.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Thank you very much everybody and we’ll talk to you on the next call.