Ladies and gentlemen thank you for standing by. Welcome to the Bel Fuse Incorporated Fourth Quarter Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator instructions) As a reminder, this conference is being recorded Thursday, February 12, 2009. I would now like to turn the conference over to Dan Bernstein, President and CEO. Please go ahead, sir.

Thank you, James. And I would like to welcome everybody to our conference call to review of Bel’s Fourth Quarter 2008 results. Before we start, I would like to hand it over to Collin Dunn, our Vice President of Finance, Collin?

Good morning everybody. Thanks Dan. I will start with forward-looking statements. Except for historical information contained in today's news release and in this conference call, as matters discussed including statements regarding the impact of price increases, cost reductions, and acquisition possibilities are forward-looking statements that involve risks and uncertainties. Among the factors that could cause actual results to differ materially from such statements are; the market concerns facing our customers, the continuing viability of the sectors that rely on our products, the effect of business and economic conditions, capacity and supply constraints or difficulties, product development, commercializing or technological difficulties, the regulatory and trade environment, risk associated with foreign currencies, uncertainties associated with legal proceedings, the market's acceptance of the Company's new products and competitive responses to those new products, and the risk factors detailed from time to time in the Company's SEC reports. In light of the risks and uncertainties, there can be no assurance that any forward-looking statement will in fact prove to be correct. We undertake no obligation to update or revise any forward-looking statements. That is end of the Safe Harbor statement. I will now turn to our results. First with the sales. In the fourth quarter of 2008, our sales were $58.1 million, which was 16% lower than the $69.3 million that we reported in the fourth quarter 2007 and 13% lower than the $67 million reported in the preceding quarter ended September 2008. Sales for the fourth quarter 2008, all product groups were lower than the same period in 2007. In the fourth quarter 2008 versus a third quarter 2008, sales were also down all products groups except for modules. Net loss and cost of sales, going in of the quarter on a GAAP basis with the net after-tax loss of $20.9 million following…

At this point, we would like to open up for questions. So, James, can you take care of that for us?

Thank you. (Operator Instructions) Our first question comes from the line Todd Cooper. Please proceed. Todd Cooper – Stephens, Inc.: Yes, Collin have you calculated the pro forma EPS number, that would exclude the various one-time type charges?

No, I haven’t got -- well, worked on it, but I don’t have it with me, right now. Todd Cooper – Stephens, Inc.: But would it be slightly -- a slightly profit?

For the quarter? Todd Cooper – Stephens, Inc.: Yes.

It's a slight plus. It would be slight plus, I think. Todd Cooper – Stephens, Inc.: Okay. And any comments on backlog entering the first quarter book-to-bill in the last quarter as it would relate to revenue guidance for the first part of the year?

Backlog is down, from a high, down -- I would say from the average last year, our backlog is down by 50%. I think we’re forecasting 30%. I think that 30% down in sales at this time. Look like down in sales for the first quarter. However, because of Chinese New Year late this year and last year, it's somewhat difficult to really predict another, I would say, another six weeks until we get a real handle on it. Todd Cooper – Stephens, Inc.: 30% down, is that sequentially, Dan? Or year-over-year?

Sequentially, yeah, Todd. Todd Cooper – Stephens, Inc.: Okay. And substantially lower gross margin in the quarter. Did that had to do with absorption on the lower revenue?

Yeah, it was absorption and we are lowering on all throughput. We certainly had -- most of the months in the quarter we had much higher labor rates. With only, really in the December quarter that we have really got away from all the more -- the worst of the overtime, we had a double time and triple time. Also the other thing that we haven’t had really come through yet, which we are looking hopeful, which is going to help us a lot is that, there was a still lot of raw material in both our out vendors and out chain going into the -- throughout the fourth quarter particularly related to copper and steel and other materials that we know we are coming down or have come down on a commodity basis but haven’t got through into our lower prices yet. So, there are all things that we will start to see some benefits from in the latter part of the first quarter. Todd Cooper – Stephens, Inc.: Okay. And regarding power business, are you seeing any different demand trends there from the rest of your business, or is it all just kind of gloom and doom at this point?

Of course, I do believe in the power modular business. Once again we are such a small player and we do see a lot of opportunities with our balance sheet strength. There are some concerns about some of our competitors out there, but we do seem somewhat positive in the power and the modular arena.

Yeah, actually, Todd, the whole Modules group, in the fourth quarter, we did have a sequential increase in sales over the third quarter in Modules group. That was the only group that we didn’t have an increase in it. We were coming up, we were hit somewhat. In the fourth quarter of 2007, we were manufacturing in very high quantities a one time project for a large U.S. computer company. And that project was just in 2007 and it didn’t continue through 2008 and that’s basically it was that program that gave us our second highest ever sales in December 2007, in the fourth quarter 2007. Todd Cooper – Stephens, Inc.: Okay. Do you expect a sequential decline in that business as well though in the first quarter?

At this point, it's -- I would say it's on the fence. Todd Cooper – Stephens, Inc.: Okay. So, that part of your business is holding up?

Again, once again, we’re such a small player and we have such, a lot more opportunities where before we're on there, a lot of our other products, been in the business for many years. So, we have been a more mature market place. Todd Cooper – Stephens, Inc.: In other parts of your business, are you seeing the proverbial light at the end of the tunnel with regard to demand picking up at all?

We see no light whatsoever. It’s a cautiously pessimistic instead of cautiously optimistic. Todd Cooper – Stephens, Inc.: Okay.

Now, at this point we don’t see any light whatsoever. And we're getting no good insights from many of our customers. Todd Cooper – Stephens, Inc.: Okay. Well, on that cherry note, I would say, thank you and get off the line.

Thanks, Todd, appreciate to help.

(Operator Instructions) Our next question comes from the line of Sean Hannan. Please proceed. Sean Hannan – Needham & Company: Yes, good morning.

Good morning, Sean. Sean Hannan – Needham & Company: So, is there a way if you could provide us a little bit of an update on some of the efforts that you have underway, I think you are trying to pull some costs or you continue to trying to pull some costs out of your model. Arguably this could require some facility ships further inland. Is there a way if you can perhaps provide us with maybe a little bit of a target for when you expect some of these efforts to be completed at least in light of the current demand environment, and how we should expect to see that in the model?

Okay, first the closing down of the Westborough facilities will be completed by -- is already completed and that was how many workers? Collin?

It is about 55 workers.

Okay, we are in the beginning stages of the process of combining our two major manufacturing facilities in Southern China into one facility. We should start seeing results from that, just in the beginning stages in the next two to three weeks. We hope we complete it very optimistically six months, conservatively nine months that we should be consolidated manufacturing to one operation. And the labor intensive jobs move. And ballpark savings, Collin you touch that one?

No.

The problem we have with that Sean is we don’t know we are hitting a target of -- it’s nice to say that we do all these things, we’re very comfortable and we’re profitable, but we just don't have a clear picture on the sales yet, and that’s what, we’re kind of a looking at. Steps we are taking is another example we are looking at. We had implemented for about a month freeze on travel throughout the company. So, I think every possible thing, to get our cost in line where new sales we're looking at. Accounts we're reviewing with our managers throughout the world. Sean Hannan – Needham & Company: Okay, so, then in that scenario is there -- do we have an opportunity to effectively stabilize the gross margin line? At least a percentage levels we look to the March quarter is that an opportunity where we look at that perhaps as a trough for your business, or is it going to being challenging to prevent this from declining even forward in the next few quarters?

First quarter, not particularly optimistic. Going into the second quarter as we start to stabilize the operation and hopefully as Dan just said we really have just no insight from our customers. But we would expect this once we get past Chinese, we effect to Chinese New year, companies has settled down and we’ll by the end of say March we should be able to add start to see some structures to what we’ve got going forward. As I said before with the more stable operations, the low labor costs, we are certainly not having the impact, again, if the renminbi like we did before, in a two place but it’s not getting any worse. Well, the U.S. dollars are getting worse at the moment. And if we decide to get some of these savings from material, and we get a little more steady stake I think we’ll be okay, overhanging there is of course is, there is a issue out there, that certainly plenty of access capacity in the industry. We're not alone. We're all holding this together. Our customers are in this and our competitors are in this. Pricing has been an issue. There was an issue last year. We never got to pass through over cost increases we had. Certainly, lower levels in our factories is not to help the absorption as much. We are taking steps to, additional steps to reduce overheads and consolidate overheads. And that will continue, but until we really get a flavor for what the short-term or mid-term outlook is on volumes. It’s going to be very difficult to really predict that where it’s going to end up.

I think, you know, as again, because January the Chinese New Year fell last year in February, this year fell in January. So, we are hoping from our mid-term point of view where we to be is looking at March from a backdrop standpoint and a sales standpoint, and really should give us a clear picture of where we stand on the P&L. And hopefully give the idea on the steps we are taking and keep us above the water for the month of March. If not, we have to take lot more drastic steps. So, I think for us, margin is really going to be accounting month for us. Sean Hannan – Needham & Company: So, at this point, as the savings will ultimately be a function of your revenue levels, maybe you can approaching this from another angle. Is there a way to provide a little bit of color around what you might be targeting for revenue breakeven are there from a model standpoint or from a cash standpoint once you have got through these efforts?

Our medium objective is to be breakeven from our cash level point of view. From a company objective that what’s set out to mange to over the next six to nine months. And that’s could be a function of -- if we are not managing to neutral cash and work better, the downside is neutral cash, then we will continue to make cash to our organization, we don’t want to ruin it for the future that’s obviously the thing we are trying to avoid. But with can't see any upturn in the going past for next six months, that’s what we are going to have to do. But so our objective -- so is not going to necessarily come from the top line, or the gross profit. It's going to be a fraction of a number of facts.

And we don’t want to get in the concept, Sean, that okay, $18 million is a golden top line number and then we cut price by 15% to 20%, and we end up loose with a lot more money. So, I think at this point we really focus more than anything else on being cash positive, that’s the primary goal that we were really striving for. Sean Hannan – Needham & Company: Okay. Alright, perhaps as the current environment, you made actually a comment just a little bit earlier I think it's related to last year regarding pricing. But is there a way to comments whether you’ve seen any irrational behavior and whether this has been specific to any of the product lines or any color there might be helpful.

At this point surprisingly so, we think prepared very rationally to perhaps help the pricing. And I think when again from the internet boom, again that the cut in pricing anything we do is kill your margins with people with unique pricing. So, at this point in time we really have not seen people go out to buy business. However, again it could change any day, but at this point in time we have not seen that at all. We had seen people be very rationale, customers are may be being little rationale. You know looking for a 4%, 5% price reduction and everybody in the industry is loosing money, I don’t think that rational approach to take if you are a viable customer, viable vendor base. So again is everything is pretty stable. Things can change pretty rapidly. One guy does it all of sudden everybody jumped down the bandwagon. Sean Hannan – Needham & Company: Okay. That's helpful. So, in the context of this current demand environment and your comments for March is there a way when you look at your four business segments, can you provide perhaps kind of rank order of where you see the greatest headwinds. How should we be thinking about where the greatest headwinds are affecting your business?

I think we are somewhat as Dan said before somewhat more comfortable with the modular business in total. That's we feel is probably, we had a tough run in the circuit protection business of late, so we would think that they can only go improve a little bit. We're not positive. We've had some real price pressure lot of carrier on some lower end fuses. And that's affected the sales. Sean Hannan – Needham & Company: On the connected business we think is soft and will remain soft.

Yes, that's the premise including premise wiring. But we think if there's some stimulation to the economy, packages and data centers start to build out again and we get some traction going there then. And final group is magnetics where we think it may be down or somewhat down, the big hits we think look like in the fourth quarter was Circuit Protection and also the Interconnect group. The Magnetics group was down and so, we were really concerned about Circuit Protection and Interconnect as going forward and we are keeping a watchful eye on the Magnetic group and hopefully, again at the power and module group can be a little bit of a shining light for us. Sean Hannan – Needham & Company: Okay. And then lastly, that’s helpful. Thank you. Lastly, if you can help whether there were any 10% customers in the quarter? Or were there two?

I think there's still two. One or maybe two. I was just looking at that last night. But I think it is still just to one. Sean Hannan – Needham & Company: I believe you had two in the prior quarters.

I think we discussed in the power arena, with the one customer? And I don’t think they're going to have any sales for a substantial sales last year.

Okay. But we'll know in the next, we know what it is. I just don’t have it in front of me. But, I think, it's just one at the moment. Sean Hannan – Needham & Company: Thanks Dan.

There are no further questions from the phone lines at this time.

Okay. Once again, I would like to thank everybody for joining us today. Hopefully, we have more positive results to talk about, in the quarter. And we are looking forward to speaking to you then.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask you please disconnect the lines. Thank you