Good day and welcome to the Bel Fuse Third Quarter 2014 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference to Mr. Dan Bernstein. Please go ahead, sir.

Thank you, Jonathan. I would like to welcome everybody to our conference call to review Bel’s unaudited preliminary third quarter 2014 results. For those that don’t know, I am President and CEO of the company. I expect that we do have new people on the phone today. Before we start, I’d like to hand over to Colin Dunn, our Vice President of Finance. Colin?

Thanks, Dan. Good morning, everybody. Before, we start I’d like to read the following Safe Harbor statement. Except for historical information contained in this call, the matters discussed on this call, including the statements regarding potential growth and opportunities to reduce costs and enhance efficiency in the future, are forward-looking statements that involve risks and uncertainties. Actual results could differ materially from Bel’s projections. 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 sectors that rely on our products; the effects of business and economic conditions; difficulties associated with integrating recently acquired companies; capacity and supply constraints or difficulties; product development, commercialization or technological difficulties; the regulatory and trade environment; risks associated with foreign currencies; uncertainties associated with legal proceedings; the market’s acceptance of the company’s new products and the 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. Now, turning to the numbers; summary of recent acquisitions, on July 25, 2014, Bel closed the acquisition of the Emerson Network Power Connectivity Solutions business or, as we calling it, CS from Emerson. Bel acquired the Connectivity Solutions business for approximately $98 million on a cash and debt-free basis. The small portion of the CS transaction located in China closed on August 29, 2014. On June 19, 2014, Bel completed it’s acquisition of the Power-One Solutions business of ABB Limited. This business is now known as Bel Power Solutions or BPS. Results of both CS and BPS have been…

Thank you, Colin. Jonathan, can we open up for questions please?

(Operator Instructions) Our first question comes from line of Harsh Kumar from Stephens, your question please. Harsh V. Kumar – Stephens, Inc.: Yeah. Hey, Dan and Colin, quick question, operating margins look really good expanding nicely from March and the June quarter timeframe. Would you be able to point out if majority of the cost that you hope to take out from the acquisitions are out or is there room for further expansion?

I think there is room for further expansion but we’re hoping to really by – no later than – we’re hoping to knock out as much as we can by the fourth quarter. But we think we’d probably be 90% there and then by the end of the first quarter, we should be at 100% (indiscernible) we should be taken out.

I think Harsh just to add a little bit there too is that our existing businesses performed quite well. The traditional business performed quite well particularly our Cinch operation in North America through the quarter. So they have also added.

I mean, the big thing that we don’t understand, again, regarding the transition agreement we have with both companies that account for a substantial amount of money how much can we cut that back down once we bring them in-house ourselves and that’s going – we’ll be able to know that exact figure into the – probably March timeframe. Harsh V. Kumar – Stephens, Inc.: Hey, that’s a totally fair. I appreciate the color guys and then if I can ask one more in terms of, as you get into the December quarter could you maybe not specific to December 2014, but historically, give us a view on how seasonality is for December and then maybe in the March quarters?

That is a good question. Generally, March quarter – the first quarter next year, generally gets hit because of Chinese New Year and the February is such a short month that it tends to be little bit softer, and then the fourth quarter – and the fourth quarter historically has tend to be a pretty short quarter for us. But again, there is just so much uncertainty in the marketplace today, it’s difficult to say. Harsh V. Kumar – Stephens, Inc.: That’s fair. I think these are pretty standard trends for most of the tech companies. And then, as we look out, now that you’ve got these acquisitions (indiscernible) about for a quarter, little over a quarter. Is 8% sort of a standard operating number that you’ll target and maybe expand upon that, but is that the new base for us to think about as investors?

We’re not going to standardize Harsh on a specific number. We certainly out there trying to drive – everyday we’re trying to drive through a better number if we can. But I think there is still quite a bit of scope to go and I’m not too sure if that is the right number to focus on. Harsh V. Kumar – Stephens, Inc.: Okay, fair enough. I get it, I think. And then my last question and I’ll give up the floor here. Your tax rate went up quite a bit, could you maybe talk about what happened and how we should think about taxes in the future?

Well, there is a lot of adjustments go into taxes on a regular basis and some of them relates to additional tax provisions, some of them relate to expiring periods when taxes might be payable. It’s very difficult, almost impossible, to look at any one quarter for taxes. On a sort of – more of an annualized basis and a steady state basis, we do expect our tax rate will have gone up a little bit year-over-year and most of that is due to the fact that we will have a lot more business. And we are running a lot more business in North America where the tax rates are higher, i.e. the Connectivity Solutions business that we acquired from Emerson is a primarily North America Cinch which is doing much – really all those things that we hope to get from relocating the factory a year and a half ago, couple of years ago have now come to fruition and while there is still some fine tuning to do, they’ve hit their stride and doing very well and that is again, primarily North American. And obviously the Power-One business, Bel Power Solutions is doing quite well in North America and putting quite a lot of income here. So we will have, on a blended rate, a higher corporate tax rate going forward, there is no doubt about that. Harsh V. Kumar – Stephens, Inc.: Got it, understood guys. And thanks so much, a nice quarter and nice – great execution on the acquisitions.

Thank you.

Thank you. Our next question comes from the line of Sean Hannan from Needham & Company, your question please. Sean K.F. Hannan – Needham & Company LLC: Yes, good morning. Can you hear me?

Yes, Sean. Sean K.F. Hannan – Needham & Company: Okay, great. So first question here, wanted to see if you could talk a little bit about the pieces of legacy Bel business, it looks like, first, the overall business was down about 8% year-over-year and it sounds like that was essentially attributable to TRP. So just want to see if we could get a sense about the state of that business today, the market conditions, whether you expect revenues and margins are stabilized here. Now with that, any perspective there would be helpful. Thanks?

Okay. I think the key with TRP is they have very limited customer base. They are dealing with the three or four top networking companies and they saw a softness from them. So we do think that should improve. Again, just so you have a number, they went from and I think we had a problem; it was last year at this time we did $25 million and then we went from $19 million, $16 million, $17 million, $18 million. So we tend to think that $25 million the first quarter we bought, that was an aberration, just a people being worried getting orders in and so we think that going forward that it should be in that run rate of anywhere from $16 million to $19 million. And that’s why – so again I think what we’ve compared to last year that was somewhat abnormal. And then on Bel’s traditional business, everything is pretty flat. As we said, I think we’re overall up $1.5 million on our Bel organic business. But we know that there is no visibility out there and we may still wait and see, and again that (indiscernible) cautiously optimistic. However, I think optimistically is becoming a little smaller than, and more caution. Sean K.F. Hannan – Needham & Company: Okay.

And I just wanted to ensure that we have stated that we do believe that with the Power-One acquisition that we do see starting next June, and I think we’re leveling out now at a run rate maybe a $200 million, $210 million. That we think by next June with the steps we’re taking that we do think we should be able to get top-line growth of 7% and 8% and that's really going to be the driving force going forward. Sean K.F. Hannan – Needham & Company: Yeah, that’s helpful and that actually gets to my next question, so wanted to get a sense of the performance for the two acquisitions versus a year ago, and of course we realize there has been shrinking that’s been occurring within that – the power business. So just wanted to see if we could get a little bit more perspective on how that is expected to move right now until we get to say that June period. If you can help to clarify our thoughts on what all is moving around here and how to think about those businesses?

Okay. So, Sean, in the power business, it was about $61 million last year third quarter and this year was $47.652 million and we think that's pretty well leveled off. We are cautiously optimistic that we should start seeing improvement. We do think that it was a period where the strike in China affected people placing orders, so we lost our – an order churn there, and then some of the quality issues that have [enveloped] (ph) in other things. But we do think going forward, you know as we mentioned in our press release there is two key Bel customers that in the past have done over $30 million with Power-One and those sales are substantially less now because of the relationship that new management have with Power-One. We do think that we can get that back on the path. Both companies have been very positive to Bel stating that on – going forward any new AC to DC opportunity, that they would consider Bel, and in the past year and a half, two years that was not the case with Power-One. So I think, again, we do think pretty confidently that even if these products do take six to nine months, six months to a year to get back to get some good sales on them, we do think we can start turning the tide very quickly. Sean K.F. Hannan – Needham & Company: Okay, so that power business though should still shrink a little bit more so from here before we start to move up?

We are hoping not, but if it does, it doesn’t shock us. If we go below, we are hoping we get to $50 million and at least maintain a $200 million run rate and sort of seeing some improvement quickly. Sean K.F. Hannan – Needham & Company: Okay, and then on the connectivity?

On the connectivity, again this business has been a pretty stable business. Quarterly, you know it's been running the last three quarters $18, $19, in the $19 million range. So we think again that you know we lost an opportunity with one of the major customers, but we should be at that $18 to $19 million going forward. And if we do, we are not expecting great growth here. This is definitely more to [round out] (ph) our product line and it tends to be a very profitable business, and with the steps we have already taken, taking out $2 million of sales, be consolidating the group in England and then consolidating the – bringing both operations (indiscernible) that are located in Chicago that a lot of course, you know it should be a somewhat more profitable group than it is today. But from – it definitely won't be a sales-driving type of company. Sean K.F. Hannan – Needham & Company: Got you. Okay, last question here and I’ll jump back in the queue. So the $5 million in cost savings you’ve mentioned, it sounds like you want to get about 90% of the way through with that by December. In the press release, there is an indication that you’ve identified I think more opportunities. So just trying to understand if that’s in expanding beyond the $5 million or if that is – you're satisfied with the $5 million.

I think is expanding the $5 million or our goal probably is end up at $7 million, $7.5 million. We really want to try to do if at all possible. We are not big believers in GAAP and non-GAAP and we are going to do everything we can to make sure the GAAP and the non-GAAP number are pretty close aligned and that’s what we are trying to do is smooth it up for everybody and try to make sure that we have – if at all possible, we can eliminate any surprises that are out there and make sure that going forward – we are hoping, the first quarter, but realistically in the second quarter those are the numbers that we should be looking at going forward and they should be pretty solid numbers and there shouldn't be anything out there that surprises us. And the only thing that really that we see in the rise and that might come out and bite us is some of the quality issues that might be still lingering out there with Power-One that we don’t know about. Sean K.F. Hannan – Needham & Company: Well, and that – it sounds like the addition of the businesses certainly is being very additive to margins beyond where I was thinking and the additional cost savings is going to be pretty meaningful next year. You’ve got a very sensitive model, so congratulations.

I think we all agree here that even though taking on debt, and as you know Bel has been a debt-averse company, I think we are all very confident that we are a substantially stronger company today at the lot more diversified markets and products and customers. And so I think we are all very confident and our future looks substantially brighter today.

Thank you. Our next question comes from the line of Randy Saluck from Mortar Rock Capital. Your question, please. Randy Saluck – Mortar Rock Capital: Hey, how are you. Question for you on your capital structure. What is your sort of targeted capital structure in terms of debt coverages and stuff like that? And how are – if it's lower than where it is today, which I believe it is, are you planning on raising equity, naturally de-levering with free cash flow? What are you looking at? What do you think your options are and what are you trying to get to in terms of capital structure?

Colin?

It's – let's say it’s a little bit the state of flux. Our leverage ratio at the moment is – at the end of September was 3.53%. We’ve – that’s pretty cheap at the moment. It's – our effective interest rate had been 2.25%. It will go up a little bit, but it's still fluctuating, you know plus or minus a little bit around the 3% range. So with interest rates like that and a very healthy cash flow, the idea of selling stock when we – particularly at the moment when we feel the stock is not fully appreciated it makes it a little difficult. But it's certainly on the table, and I could say, Randy, we haven't – the board hasn’t made a final decision as to what it wants to do yet. But it’s probably going to flush out over the next three to six months.

As you know, I think we had a shelf registration in the past. And again, it’s the big question. You know at our board meeting yesterday I would say that was the major topic of conversation as you know addressing the debt and looking at alternatives of offerings and converts and other things and what’s best for the company and our shareholders. So it’s – it definitely was a major topic of conservation, that’s all I can tell you. Randy Saluck – Mortar Rock Capital: Well, I would just add that given where your stock is and how cheap that is and your free cash flow profile over the next several years, it may make sense to naturally de-lever as opposed to doing equity offering, which would be dilutive. And I don’t see the – given what I think is the free cash flow profile of the company, it would seem like you wouldn’t need to issue equity.

That's what half the board said. And I can tell you, it's split right down the middle. Randy Saluck – Mortar Rock Capital: Well, let’s have a conservation with the other half.

Yes, we did. Randy Saluck – Mortar Rock Capital: All right.

Thank you. Our next question comes from the line of Lenny Dunn from Freedom Investors. Your question, please. Lenny Dunn – Freedom Investors Corp.: Yes, good morning, great quarter, a little better than I expected frankly and I have no complaints at all. I have mentioned in the past that sometimes these things are hard to read because of the GAAP, non-GAAP, and you did address that with an earlier caller. I’m hoping that the non-GAAP and GAAP at least are fairly close going forward. Would that be your expectation?

I don’t know if you were on the – [listened to call] (ph), but I said, I’m sorry to a caller two [calls] (ph) ago, it’s always been our goal to keep GAAP and non-GAAP as close as possible together and we don’t like surprises, but to be honest with you, I think for the fourth quarter, there will be a substantial difference between GAAP and non-GAAP most likely and then hopefully, by the first quarter, it should be a pretty narrow. And so, our intention by the second quarter, it should be as clean as possible. The big thing again is we have certain [cause] (ph) we are streamlining the organization and we are trying to again just work through it. Lenny Dunn – Freedom Investors Corp.: And I do agree strongly with the previous caller that with interest rates where they are and with the stock price this low relative to its earning power that just paying down the debt naturally makes sense and if the share price gets into the high-30s, well, then maybe, you do a little equity, but if doesn’t, then you just keep paying it down. I think that carrying debt at these rates is not a bad thing and the half of the board that doesn’t agree with that [has a depression and raw] (ph) mentality, that’s just my opinion.

I don’t think they would – I don’t think they would disagree with you. Lenny Dunn – Freedom Investors Corp.: So just, it will get paid off. The rates are very low, it’s tax deductable money. If you are paying two-and-a-quarter and you are saying after taxes, that’s even lower, makes sense to me anyhow. So that’s my two sense. And the other question I’ve asked on previous calls has [not] (ph) been given to flattening out the share – your – the A and B shares to make things a little simpler, there are investment places that we not buy stock with two classes, again, this is not for a motor company, so I feel –

Well, again, [for] (ph) the question that we always had, if you look back in time when were sitting about six months ago with a $110 million of cash and no debt, I would say we were right for a takeover, and if we didn’t have the A&B stock, we definitely would be taken over. Also, in the past, that we did look at acquisitions, some of the companies have did look at were privately held companies, and if we did end up buying them through stock, we would use non-voting shares. So, this way they wouldn’t control us. But we have stated on three different acquisition opportunities a) when we looked at buying Power-One in 2009, when we look at buying Pulse Engineering and conversations we have had with some major companies regarding merger talks, we have always said that A&B is not something that – it’s something that we would look at and we did state publicly that we – if we did acquire Pulse with a merger, if we did acquire (indiscernible) maybe eight years ago with a merger that we would [go after] (ph) A&B stock. So at this time, I just think it gives us a lot more flexibility and allows management to take a longer term review of how we want to run the company. And I think that’s really helped our shareholders in the long run. Lenny Dunn – Freedom Investors Corp.: Still no, but with the debt now where you are not – [you received] (ph) a takeover.

I would hope that that debt would disappear very quickly and that we will be in a strong cash position within three or four years. Lenny Dunn – Freedom Investors Corp.: Well, that’ll be my expectation too, we would have an equity offering, but still my two sense again here would be (indiscernible) A&B structure.

We appreciate. Lenny Dunn – Freedom Investors Corp.: Okay. Thank you.

Thank you.

Thank you. Our next question is a follow-up question from the line of Harsh Kumar from Stephens. Your question, please. Harsh V. Kumar – Stephens, Inc.: Yeah, hey, Dan and Colin, you guys have had very good success with some of these recent acquisitions. I’m curious for us in the investor base, if you could lay out sort of your key criterias as you look at acquisitions, what are some of the things you look at? And then, also are you done for a while, you’re going to take a breather or is there further expansion plans and what would trigger you to go and acquire somebody?

Okay, initially I think when we look at acquisitions again we do try to focus on our existing customer base and now that’s a little broader. And then historically, we’ve always been very strong for most of our acquisitions on a value play. I think we really do pride ourselves as the [Go-Do] (ph) company for any $1 billion company that’s looking to divest a group that want to find a good home for their customers and their employees, we feel that Bel does have a very valued add proposition. We can offer the sellers with a track record of dealing with the [Emersons, ABB, PE, Air France] (ph) billion dollar companies, they don’t want to stress about these type of divestitures. And I think because of our background and we do tend to get a good shot at these companies and we love to buy them at a pretty fair price. So historically I think that’s been our sweet spot. And then recently with the Emerson acquisition, we had to pay a pretty high multiple for Bel, that is a market that we wanted to get more entrenched in naturally, the military aerospace market and [military] (ph) distribution. But going forward, I really believe that we have the resources, the talent to grow the company organically to get to $1 billion. At one Power-One was $450 million, and they now are running at a run rate of $200 million. I’m pretty positive we can get it to $350 million without killing ourselves, and I think from there, we can grow pretty nicely. So from an organic growth, it’s a $1 billion market, which I think we strive for, is our goal to be in 2015, it was our goal to be $0.5 billion, it’s our goal today by 2020 to be $1 billion company. Going forward, there is no question that we’re really on a focus on paying off the debt and [going] (ph) through our organic growth. And however, if we do see an acquisition, we do hope that our stock is strong enough that we could look at companies to an acquisition, either by a secondary offering or offering stock to the company that we would like to acquire. I do think we have enough on our plate for at least nine months to a year to really get the full value out of these two companies that we acquired. But then again, if something comes across my desk, I’m saying – I would say 90%, we wouldn’t buy anything, but there is always that 10%. Does that help? Harsh V. Kumar – Stephens, Inc.: Got it. Got it. Yeah. Now, totally helpful, I really appreciate it, Dan. Thank you.

Thank you. (Operator Instructions) And our next question is a follow-up from the line of Sean Hannan from Needham & Company. Your question, please. Sean K.F. Hannan – Needham & Company LLC: Yes, first, just a housekeeping question. Colin, could you repeat some of the specifics around accounts payable, receivables in the quarter and inventories, I don’t know if it was an issue with the broader caller, it was just my line that may have missed that. And then second, I’m going to have a question around a reference within the release to new beta opportunities. And I’ll get to that in a moment

I think. Okay, Sean, I think it might have been the [horizon front] (ph) that was right outside our window here as we are on the call. But – sorry about that. We just run through the numbers again. Receivables net of allowances were $103.7 million September 2014 compared to $63.8 million December 31, 2013. Our accounts payable at September 30, 2014 was $63.9 million. Is there anything else you needed? Sean K.F. Hannan – Needham & Company LLC: Inventories.

Inventories at September 2014, were $113.5 million. Sean K.F. Hannan – Needham & Company LLC: Okay, great. And then in terms of the reference within your press release, where you folks were recently approved by two key customers to bid on new products, new power product requirements. Just wanted to get a sense of, is this aspect of the business within Power that you’re also eluding to that helps you to get to a better number by June or is this incremental, and how incremental could these programs be versus where your expectations are for the business today? Thanks.

This is again is – it goes to that 7% to 8% growth rate that we’re starting to project for next – starting next June, the third quarter of next year and so that’s the way we look at it, just again, having opportunities and both these customers are key customers of Bel and they were key customers of Power One, but then because of the way Power One’s management decided to go forward with these customers, they will basically blacklist it and that has changed completely. So again, we still have to perform, we [still have built samples] (ph) faster than our competition. We still have to have competitive price and we still have to have good quality, but at least, we can participate at these companies and both these companies have a substantial [TAM] (ph) for power products and probably in the networking community that’s probably in the top three or four using power supplies. Sean K.F. Hannan – Needham & Company LLC: Okay. Are both of those customers within the networking community or is one within computing?

I’d say both (indiscernible) associated with networking. Sean K.F. Hannan – Needham & Company LLC: Okay, great. Thank you so much.

Thanks, Sean.

Thank you. (Operator instructions) And this does conclude the question and answer session at of today’s program. I would like to hand the program back for any further remarks.

Just we thank everybody. It’s a very exciting time at Bel and we’re looking forward to delivering our improved numbers and paying off our debt, so it should be exciting couple of years here and we’re looking forward to it, and thank you for your interest in our company.

Thank you, ladies and gentlemen for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.