Ladies and gentlemen, thank you for standing by and welcome to the Benchmark Electronics third quarter 2008 earnings conference call. (Operator instructions) At this time then, I'd like to turn the conference over to Mr. Don Adam. Please go ahead.

Good morning. Welcome to the Benchmark Electronics conference call to discuss our financial results for the third quarter of 2008. I am Don Adam, Chief Financial Officer of Benchmark Electronics. Today, we will begin our call with Cary Fu, our CEO providing a few comments on the market and the performance of Benchmark this quarter; and Gayla Delly, our President, will provide a more detailed discussion of third quarter activities for Benchmark and our outlook for the fourth quarter. I will then continue with a discussion of our financial metrics for the third quarter in greater detail. After our prepared remarks, Gayla, Cary and I will take time for your questions in our Q&A session. We will hold this call for one hour. During this conference call we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We would like to caution you that those statements reflect our current expectations and that actual events or results may differ materially. We would also like to refer you to Benchmark's periodic reports that are filed from time to time with the Securities and Exchange Commission, including the company's 8-K and S-4 filings, quarterly filings on Forms 10-Q and our annual report on Form 10-K. These documents contain cautionary language and identify important risk factors which could cause actual results to differ materially from our projections or forward-looking statements. We undertake no obligation to update those projections or forward-looking statements in the future. Now I will turn the call over to Cary.

Thank you Tom. Welcome everyone and I want to start out today with a few comments about our market and talk about the performance of Benchmark team this quarter. As you, the overall market experienced a significant slowdown. We are currently in the time of uncertainty because of liquidity and the financial crisis which is impacting virtually all the businesses around the globe. As we note in our press release today, we saw a suddenly slowdown of orders from our customers in late September. This was a broad-based downward trend impacting our revenue in reaction to the financial crisis unfolding at the end of the quarters. We have seen approximately 10% reduction in demand during the first weeks of October. Although just this week, we are beginning to see the trend stabilize and now are seeing some increased orders. It is very difficult to forecast with precision any impact our overall markets fall off and each of our customers. But we believe that we are going to see in the technology sector we will continue in a near term. This is a marketplace and an environment we are participating today. So let me talk about how Benchmark is positioned to take advantage of opportunity going forward in spite of our result of this unusual time. I'm generally pleased with our Q3 performance. We appreciate it and thank our people's diligence and commitment. The Benchmark team delivered improved operational metrics even in this down market. Our operations margin percentage was flat sequentially, a great result giving a $41 million reduction in the revenue when compared to our previous quarters. Earning per share excluding the special items was within the guidance and with better product mix and revenue slightly under our guidance. Our EPS per share of the quarter also met consensus. Benchmark continues to maintain a very strong balance sheet and net cash − net increase in cash and long-term investments above $45 million during the quarter after stock buyback. Cash flow from operation is approximately $76 million for the quarter. Bookings in the third quarter continued being very strong. We also see robust new outsourcing activity in the pipelines. The new business bookings on what [ph] potential opportunity will further diversify our customer base and provide a good foundation for revenue growth in 2009. Our team is continually focused on aligning the resource anticipating and meeting the customer needs. We also will take the opportunity to improve our efficiency and also expanding our capability. Now, let President Gayla Delly talk about third quarter activities. Gayla?

Thank you, Cary. We were pleased with our overall operating performance. As Cary mentioned, we came in just slightly below revenue expectations for the quarter and experienced better revenue mix in Q3. That when combined with our operating efficiency improvement and our continued focus on maintaining our little cost structure allowed us to produce the solid results for this quarter. Our revenue diversification and the new program wins, which we had spoken about over the past few quarters, have been strong. But they were not strong enough to offset the macro downturn. The overall market slowdown began in early 2008 with reduced IT spending by financial institutions and has since spread. Strong inventory control and preservation of cash are priorities in many of the computing sectors and customers. This has impacted the predictability and the accuracy of forecasting from our customers in that sector. During Q3, similar trends experienced in Q2 were seen. We continue to see decreases in the computing and test and instrumentation sectors. Sequentially, when comparing the quarter ended June 30 to September 30, revenues from telecom sector increased 6%, revenues from industrial control sector increased 1%, and revenues from medical sector declined 2%, and the computing sector declined with 12%. Test and instrumentations were down 26%. Our new program bookings continued to be strong and the trend in bookings is consistent with what we are seeing in sales with no new bookings in the computing or test and instrumentation sector. While we have seen the significant and continued deterioration in the computing sector, we have seen stability and growth opportunities from the non-tech sectors. During Q3, we booked 13 new programs with an estimated annual revenue of $87 million to $115 million. These new program opportunities are with both new and existing customers and from the…

Thank you, Gayla. We completed the third quarter of 2008 with revenues of $642 million and earnings per share of $0.36. Excluding special items, earnings per share were $0.32 per diluted share. Our earnings per share and operating results for the quarter were within the guidance provided with our revenues slightly below guidance. Our earnings per share results were also within the consensus for the quarter. Please note that the Q3 ‘08 financial results contain four special items; they are as follows. Stock-based compensation expenses of $384,000 or $306,000 net of tax, amortization of intangible assets $446,000 or $284,000 net of tax, restructuring charges of $253,000 or $228,000 net of tax, and a discrete tax benefit at $3.4 million. To provide a more meaningful comparative analysis, we will present certain financial information excluding these special items during this conference call. We will also call your attention to the fact that these items are excluded when we do so. In today’s press release, we have included a reconciliation of our GAAP results to our results excluding these items. Our operating margin for the third quarter was 3.6% excluding the special items noted earlier. The margin was consistent with the second quarter even with a reduction in revenues of $41 million. Again, these solid operating metrics were due to better revenue mix during the quarter and our aggressive cost control focus. GAAP net income for the third quarter of 2008 was $24 million compared to $22 million for the third quarter of 2007. Excluding the special items, net income was $21 million this quarter compared to $17 million in the third quarter of last year. Again, diluted earnings per share for the third quarter was $0.36. Diluted earnings per share excluding special items were $0.32. Diluted earnings per share for the third…

(Operator instructions) And our first question comes from the line of Amit Daryanani with RBC Capital. Please go ahead. Amit Daryanani − RBC Capital: Thanks. Good morning guys.

Good morning.

Good morning. Amit Daryanani − RBC Capital: It's really a question of – I think you were talking about starting to see a few signs of auto stabilization if not a little bit uptick. Could you just talk about, is that trend sort of broad base across your end markets, is that more dominant in the non-tech segments?

It’s pretty broad based and of course when you see the sudden slowdown in September, I think that a lot of customers kind of over-reacted to the situation a little bit. And then they after reviewed the situation and demand from their customers, we now see people have new orders coming back in. Amit Daryanani − RBC Capital: Got it. And then, could you maybe just talk about what’s your capacity utilization at this point? And if you do see further auto deterioration, let’s say, over the next few quarters, are there any thoughts on restructuring potentially?

We have about − the capacity of utilizations right now is probably at low 60% and the –as you are aware, we’ve been very focused on cost and the realignment throughout 2008. So at this point of time, I don’t anticipate any major realignment − cost reduction at this point of time. But, we would do the cost control matters from time to time. Amit Daryanani − RBC Capital: Here is a final question, I may have missed this, but what was the CapEx for Q3 and what do you expect that for Q4?

$6.5 million for the third quarter. For the balance of the year, we are about $35 million, so $5 million to $8 million for Q4. Amit Daryanani − RBC Capital: Got it. Thanks a lot.

Thank you and our next question comes from the line of Jim Suva with Citi Investment Research. Please go ahead. Jim Suva – Citi Investment Research: Great. Thanks very much. I think I heard or maybe I misheard, Gayla, did you mention that you said you thought 2009 sales would grow? And if that's the case, can you just help us rein in expectations? I think consensus is a double digit growth there. Are you saying that's stronger and how do we triangulate around growth in '09 when it seems like a lot of your new business and new business bookings have been outside of computing and test and measurement or – I'm sorry, outside of the computing and telecom, which tends to make up the majority of your sales?

Jim, I don't think I would be unique in saying that the times we're facing right now are a bit unprecedented. And so, as we said and I believe many others have said in the marketplace forecasting and predictability is a bit challenging at this point. Simply so that probably because of what Cary noted, you see a very quick reaction to reining in forecast immediately at the end of September, and then just in very recent days have seen some readdressing of what that appropriate level is for the marketplace in today's environment. And then I guess the next thing to consider is what level of deterioration if any continues into 2009. But given a steady state based on the bookings that we have and the relationships and growth progress that we're supporting, we believe that we will return to growth. I don't have that scoped in size right now. As to a percentage, I do believe that we and our customers are readdressing that. If you look out across several of the different industries, I do believe it will be muted in comparison to prior years. But I don't have a sizing of that now. I think different people have called it modest in comparison to prior years, but I don't think there's been a definition nor do I have one to give you. Currently at this time, what we are basing it on is the bookings we've had and that those programs are continuing to be supported and are expected to ramp to revenue and there are not cancellations or panic seen by your customers. So that's the positioning that we are utilizing when we refer to the growth in 2009. Jim Suva – Citi Investment Research: Great. That is extremely useful. And maybe as a quick follow-up, would that then imply that margins will probably bottom or trough out in the December quarter if I triangulate some modest growth in '09 for sales and the utilization that Cary pointed out to? Would that lead one to believe that margins should kind of trough out in December quarter?

I believe with the range of revenues that we have given for Q4 and the guidance that we've given that we do not anticipate further deterioration in 2009, again barring any additional further deterioration in the overall marketplace. Jim Suva – Citi Investment Research: Okay, thank you very much and congratulations on hitting good profitability.

Great, thanks. And our next question then comes from the line of William Stein with Credit Suisse. Please go ahead. William Stein – Credit Suisse: Thank you. Regarding the credit markets, some people are concerned about the company's ability to make payments. And your receivables, your days outstanding were good in the quarter. I'm wondering if you saw that change at all in October so far in the month to date and if − just if you've seen any trends that are abnormal in that part of your business?

We certainly always kept a close eye on that and we're not seeing any changes in the payment terms or customers stretching out payments or what have you. It's really been characterized as sort of business as usual at this point.

William, one of the things that you will notice, we have quite a strong portfolio of customers. And we probably since 2001 have almost been approaching our book of business similar to the banking industry kind of post bubble that became very important for us to look at the credit risk that we were undertaking when we were signing up for inventory and receivable cycles with customers. William Stein – Credit Suisse: And in talking about the bubble and the immediate post bubble, can you compare the 2001 environment to today with regard to predictability and your ability to forecast the business?

The primary difference of course is the financial institutions card being thrown on the table. In 2001, that wasn't the issue, there was the ability for strong companies to look to the banks to support their growth needs and their funding requirement. Nowadays, they look to their banks, they may not find anyone picking up the phone, so the environment is very different. In that regard, I think the end result of how that plays out is going to be a little bit different for each entity because although we see very strong balance sheet, the way in which each company determines is appropriate to extend that cash maybe very different and I think the investment in R&D is very important and we've seen many customers continuing that in the technology sector. William Stein − Credit Suisse: Let me just try that a different way, if you think back to let's say March-June 2001 versus today, can you compare the amount of let's say the length of backlog or forecasting that your customers were giving to you in a reliable fashion and that's something you felt you could rely on, is that a shorter time window, less visibility today or more?

Well, let me kind of answer this question this way, okay? If you look in the 2001, when the tech bubble hit, we saw like Gayla will say, we saw a lot of cancellations immediately and this time we're not seeing that. We see a lot of hesitation, very conservative in the way they place order, but we're not seeing broad based cancellation like we saw in 2001. I recently recalled, I don't remember the date, maybe well Gayla it's March or whatever the time it was when they hit, we definitely see quite a bit the immediate cancellation and try to reconcile the inventory and liability and so on and so forth. At this point of time, we have not seen any of those activities happening yet. William Stein − Credit Suisse: Okay, thank you.

Thanks, and our next question comes from the line of Kevin Kessel with JP Morgan. Please go ahead. Kevin Kessel − JP Morgan: Hi there guys. What I was just trying to reconcile here is, when I look at the overall business, I see it down 8% on the year-to-date basis through three quarters. But then, I think what I note as interesting is when you parse out your largest customer, the business − the list of the largest customer is down 32% again year to date three quarters versus three quarters whereas the rest of the business is only down 1%. I know you are going through product transitions with that customer and I also know that some of your larger platforms are going to go end of life in the beginning of January. But at this point, it doesn't appear as if you've won the next generations of maybe some of these platforms based on at least the guidance that you're providing for December. Can you just help me understand the real disconnect there between what's happening there versus the rest of the business?

As always, Kevin, I'm going to avoid talking about any specific customer because I don't think that's appropriate. What I do think that you will see is specific to IT spending is that there is a severe level of pricing pressure in the competing segment for the solutions that are being accepted, whether it's a server storage, whatever. And in some cases, I think those are probably trending to ODM type solutions and targeting more kind of software solutions being offered by some of the solution providers. And so, I do not have a specific breakdown and understanding of the revenue trends for each of the customers, but I do believe that there is a trend towards commoditization in that specific sector. Kevin Kessel − JP Morgan: And just so I understand, Gayla, I mean would it be possible for Benchmark to offer that value-added design resource that the ODMs are offering for some of these servers, if you already have the capabilities around the configuration and the direct order fulfillment?

I think it probably depends on how low you go on the scale of the type of server. I mean, some of the servers and solutions on any IT product will closely look toward the PC type of a product very soon. And as it gets down to that realm, I think that there will be solutions that are very competitive that we will not participate in. Kevin Kessel − JP Morgan: Okay. And then, would it be possible just to give an idea then to investors, like you guys have done in the past, in terms of where you expect the largest customer to trend over time, so maybe (inaudible) expectations can kind of be somewhat aligned? It's obviously come down now to 14%. I'm wondering if you guys see it eventually becoming a less than 10% customer or if you in fact think it will stabilize or what the situation is?

Again, I'm not going to go into specifics, but I can see two paths that can be taken depending on what kind of product offerings any of our top two or three customers in the competing structure will take. Depending on what decisions they make in this very difficult time, I believe we can continue to have strong relationships and offer solutions if they have some products that are well suited for Benchmark or if they choose to go to more of a commoditization then I can see our revenue declining. So I think the path is probably unclear at this point, but given the current market and how long that provides pressure to that marketplace, I could see it right now but I don't need to be dealing with customers either. Kevin Kessel − JP Morgan: I got it. And then just on margins, you guys mentioned a couple of times (inaudible) was favorable to you in the quarter and your margins held up very well. And looks like even in your guidance, they're also holding up very well considering the top line pressure you are seeing. So, when we think about mix, should we then be thinking about your telecom, industrial, medical or more, your telecom and industrial segments or the other areas where you have an overall richer mix of business?

If you look at Q3 and Q2, I think certainly our percentage amongst those has increased. You get a bigger value add component on those type of products which lends itself to better margins.

Okay. And then just lastly on the new wins that you mentioned, Gayla, I think I'm also trying to reconcile where − if any of the wins that you guys have described in a material way have been either delayed, the ones that have been mentioned over the last four quarters, or potentially maybe in some cases things get canceled, I don't know, but sounds like that hasn't been an issue. But you guys have won close to $0.5 billion over just the last four quarters. So you would expect that to be helpful going forward, but at the same time, it was even a greater number if you look back to the four quarters prior and that doesn't seem to have materialized even considering some declines that we've seen.

Okay. And then just lastly on the new wins that you mentioned, Gayla, I think I'm also trying to reconcile where − if any of the wins that you guys have described in a material way have been either delayed, the ones that have been mentioned over the last four quarters, or potentially maybe in some cases things get canceled, I don't know, but sounds like that hasn't been an issue. But you guys have won close to $0.5 billion over just the last four quarters. So you would expect that to be helpful going forward, but at the same time, it was even a greater number if you look back to the four quarters prior and that doesn't seem to have materialized even considering some declines that we've seen.

So, I think, couple of points there, Kevin. I think in general, what we have seen, as you noted, is not cancellations, the projects are continuing to go on path. And also, one of the areas of note is that we have been more involved at the very front end stage of products and the design engineering phase and those are longer cycled projects. But we do see some longer ramps to volume plays that we're participating in as we get involved at the front end. So, some of those revenues are still to come in the pipeline. And in some cases, to the extent that they were in the computing sector and potentially even test and instrumentation, those sectors have been so hard hit with the demand declines over the last nine months that volume has not come to fruition. So, the third point probably to make is that we are seeing in the mix of the new programs that we've announced some very strong new customer names that we're adding to the mix that we are seeing opportunities to participate in that really give us the momentum for growth going forward. So that's just playing out between the industries. And I do think that, yes, it is taking longer to ramp to volume, primarily because of the stage at which we're entering into the relationship.

Thank you so much.

Thank you so much.

Thank you. Thanks and our next question comes from the line of Brian White with Collins Stewart. Please go ahead. Brian White − Collins Stewart: Hi. If we look at the December quarter, what markets do we think will grow sequentially?

I would hesitate to forecast specifically by industry, and in this current market place, typically we would all say, okay, computing is stronger in Q4. In this environment, it may show some increase but I don't know it's going to show the growth that we would tend to have. But outside of that, I don't know that I'm prepared at this point to specify the industry momentum, but we do still have fact that the industries where we have booked new business, industrial controls, medical and telecom, that those will continue to be kind of stronger in the next. Brian White − Collins Stewart: Okay. And then when we look at 2009, you said you think you can grow in 2009. What end markets do you think will grow? Where is that growth going to come from next year?

The same, I feel like I'm a broken record, but it's going to be the same. It's the same industries that we're going to continue to see growth in because that's where our bookings have been. Now, that's all predicated upon, as I said, my not indicating that there will be growth in computing. Hopefully, maybe I'm actually wrong and computing actually shows some strength in return. But at this point, that's not what the factor is. Brian White − Collins Stewart: Okay. And just where are we on capacity expansion plans? I know Cary, you had spoken about further expansion in China. Where are we in that process?

Well, our China facilities should be online this month. And again, that is a trading − moving from a leased facility to our own facility. It really gives us better capacity and not really increase of full point [ph] significantly. And actually, it's not a way you can share your cost, be sure you line your resources and the capacity to the customer needs. And our Thailand facility was done in the first part of year 2008. That's already done and the only new facility would be the new-leased facility coming online would be Romania, would be first quarter next year. Again, that's another − a newer, a more modern facility we will move from the old leased facility to the new one. So I guess the focus is try to get a very efficiency full point and not increase the full point significantly. Brian White − Collins Stewart: And how big is the new China facility?

It's about 200 − I believe it's 250. Brian White − Collins Stewart: Okay. And where is that, Suzhou?

It's right in the Suzhou Business Park and we would definitely see a tremendous increased demand in our China facility. I guess the way we look at is, we can see a lot (inaudible) report talk about China slowing down, everybody move out of China. But for the higher mix production, that's actually more demand in China because there's more and more end user using the product in China. So, our facility in China would be supporting not only the PCBA, as well as the final system build for the customer product to be used in China. Brian White − Collins Stewart: And what type of market is it going to focus on?

Well, it's the same thing we talk about the industrial controls and then even some medical customers and some tel accounts and not so lot of computing yet. But the interesting thing, we definitely see a good demand for medical and industrial control in China. China is expanding there, there would be a requirement for health, as well as the industry new building requirements. Brian White − Collins Stewart: You're saying you're going to sell this into China or is it for export?

It's scaling (inaudible). I think we give them more product to be used in China. Brian White − Collins Stewart: Okay. And just finally, what is capacity utilization right now?

I would like to say below 60%. Brian White − Collins Stewart: Okay. Thank you.

Thanks. And our next question comes from the line Sean Hannan with Needham & Company. Please go ahead.

Yes. Thank you. So earlier, Cary, you had indicated that the business activity is picking up and I just wanted to see if I can drill into that. How is it that you folks actually qualify this? Is this code activity and how are you actually measuring that, is that kind of versus the last couple of months or sequentially or versus year-over-year? Needham & Company: Yes. Thank you. So earlier, Cary, you had indicated that the business activity is picking up and I just wanted to see if I can drill into that. How is it that you folks actually qualify this? Is this code activity and how are you actually measuring that, is that kind of versus the last couple of months or sequentially or versus year-over-year?

Well, new business activity is based on two things. One is the business we book. Second thing would be the opportunity in the pipelines and the level of interest from our costumers, okay. I've been in this business for a long time. Whenever you came to a slowdown period of time, at a certain point of the cycle, the outsourcing trend is actually picking up and what we are seeing today. We are seeing customers looking at their internal capacity and decide to outsource even partially or completely, and because of the cost controller approximation that they have to do. So based on the activity we got and the program we are seeing in this quarter, we definitely see a very robust opportunity come out in the Q4.

Okay. Thank you. The reason I ask is that if we look back over the last number of quarters, I think that you folks have seen some challenges in meeting your top line guidance. And so what I was trying to get a sense of is, what further comments you can provide in lending some confidence to what you are outlining for expectations on the top line for December as well as perhaps in growth then in '09? Needham & Company: Okay. Thank you. The reason I ask is that if we look back over the last number of quarters, I think that you folks have seen some challenges in meeting your top line guidance. And so what I was trying to get a sense of is, what further comments you can provide in lending some confidence to what you are outlining for expectations on the top line for December as well as perhaps in growth then in '09?

Well definitely it's a challenge to forecast and this is very difficult environment. And I think we are conservative where we have been trying to predict the market situation. And as I discussed in the early prepared statements, we saw apart from the 10% reduction of demand estimates in two weeks, right after September slowing down. But it's difficult to get those number into your forecast and we try to be as conservative as we are, but this point of time, we definitely see business − some of the new orders come back in and hopefully we are conservative with the capture of the overall market sentiment. It's difficult, we get close to 100 customers out there and everyone have a different requirement and different business climate at this point of time. And obvious, my model today is focus on what we try do and adjust your cost behavior very quickly to the market demand. I'm fully convinced with all the new business that we're booking and as well as the opportunity on the table, and even some with the – the longer term projects will be maturing out or some of the new acquired that could give some revenue potential, that should lead to a potential increase in revenue for 2009.

Okay. Thank you. And then lastly, since engineering or some of the R&D and development projects are becoming a larger number within some of bookings and wins, is it possible just to provide us with a little bit more granularity to understand the make up of these wins that you had in the quarter? You had outlined a couple of segments, is there a way to provide some numbers around those segments and then specifically whether they were engineering or programs? Needham & Company: Okay. Thank you. And then lastly, since engineering or some of the R&D and development projects are becoming a larger number within some of bookings and wins, is it possible just to provide us with a little bit more granularity to understand the make up of these wins that you had in the quarter? You had outlined a couple of segments, is there a way to provide some numbers around those segments and then specifically whether they were engineering or programs?

It's certainly difficult and I don't really have the information in front of me. But if you look at certain programs, we definitely have a number of those opportunities in engineering development phase. The interesting thing like Gayla talked earlier all (inaudible) programs are come from non-tax sectors, none that come from computing sectors as well as from the test and installation sectors. That means that's the direction we're going with and hopefully it will give us additional revenue for the coming years.

That's great. Thanks very much. Needham & Company: That's great. Thanks very much.

Thank you.

Thank you and our next question comes from the line of Sherri Scribner with Deutsche Bank. Please go ahead. Sherri Scribner – Deutsche Bank: Thank you. I was curious if you could give us a little bit of guidance in terms of the SG&A. I know you’ve done a number of restructurings and you’re taking cost out. Should we – I mean, I see looking at the trends SG&A has been coming down, should we expect SG&A to continue to trend down or is it sort of at the level that you would expect it to be going forward and into '09?

I think our – in terms of the fourth quarter, I would anticipate that the SG&A would be relatively flat with what we saw in Q3. Sherri Scribner – Deutsche Bank: Okay.

I want to point out our SG&A percentage has stayed pretty close to the 3.3% range throughout the year; 3.4% in Q1 and 3.3% in the last two quarters. So, I would expect no significant changes in SG&A for the upcoming quarter. Sherri Scribner – Deutsche Bank: Okay. And then in terms of cost savings, do you expect to see further cost savings in the operations from actions you’ve taken in the past or have we pretty much seen the cost savings that we’re going to see at this point?

It’s something that we look at continuously. If we don’t identify cost settings then that’s the end of it. We continue to evaluate our operations and always look for ways to identify efficiencies and that process won’t stop. So, as Cary just mentioned, when the market changes, our teams are ready to go and make those changes rapidly. Sherri Scribner – Deutsche Bank: Okay. Because I guess I’m trying to figure out, are we going to see gross margin expand anymore. It sounds like gross margin was helped this quarter by mix and it sounds like going forward, the mix particularly the telecom and the medical and the non-compute stuff is going to help the gross margin. But are you also getting a benefit of that from cost savings or is that truly a mix issue?

Cost savings also, as I mentioned, we’re going to have both cost savings and efficiencies that are going to be driving the improvement. So, I guess the other way to frame it, Sherri, is the fact that yes, we have had ongoing actions to align our costs and some of that would happen such that the benefit is in forward quarters. Sherri Scribner – Deutsche Bank: Okay. That’s helpful. And then just a final question, in terms of the strengths that you’re seeing in the telecom market, is that an end-market comment or is that more your positioning in the costumers you have there and the products that you’re providing? Maybe a little more color.

It’s primarily costumers taking market share and expanding with new customers. So, I don't see, yet kind of when we step back even and look at it, you got a telecom? No. It’s really is the result of us growing in that segment, not telecom itself having great strength. Sherri Scribner – Deutsche Bank: Okay, thank you very much.

Thanks and our question then comes from the line of Steven Fox with Merrill Lynch. Please go ahead. Steven Fox – Merrill Lynch: Hi. Good morning. A couple of questions. Can you talk about the amount of end of life activity you saw during the quarter and whether it was unusually high? And as you look out to growing sales next year, I guess one of the concerns would be that if the environment stays like this and a lot of new products that you may be involved with just see a slower ramp to market, can you comment on the risk of that happening also?

I guess if I understand your question correctly, what is the timing risk of ramps in a soft marketplace? I think that the reality is ramps may take longer just as the market readiness may change during the time period in which it is being launched. As to end of life, I haven’t yet seen any changes in the products as to what was expected for end of life. As we’ve said in previous calls, end of life timing always seems to be challenging for customers. Sometimes, we get through end of life two or three times and products don’t seem to really end of life once, what but I haven’t seen a flight to where customers are currently trying to end of life a new level of programs as a result of the downturn. If I am anticipating what your question really was, no, I haven’t seen that customers are just flashing and burning products right and left. Steven Fox – Merrill Lynch: Okay. And then just, can you just revisit or reiterate your plans for cash? Now, it seems like a number of CFOs are pulling in their horns on previous expectations for use of cash whether it be buyback, acquisition. Given the environment, what would you say about your priorities for use of cash?

Well I think, as we’ve mentioned throughout the call, certainly preservation of cash is important. Given where we are now, our expectation is to generate another $25 million to $50 million in Q4 plus our revolver availability. We certainly think we have an abundance of cash to, number one, certainly meet the operating needs; and number two, satisfy our customers as to our ability to provide them a continuous supply. So, in terms of questions, again just anticipating, in terms of the stock buyback, we’ll continue to evaluate that like we always have and again, just look at what we expect to generate in cash and where we are today.

So, the question from an M&A standpoint of view, we are looking very aggressively to whether there'd be some good assets out there and because of the solid financial position, we have a luxury. I’ve been looking to some activities from other players and − so that’s something we are also looking very closely. And the recent liquidity crisis today, we’ll probably see more opportunity coming up in the first part of next year, if this liquidity situation does not improve. And that will give us some opportunity to take on some assets which will long-term value to the company. Steven Fox – Merrill Lynch: Thank you.

Thanks. And our next question then comes from the line of Mike Neary with Neary Asset Management. Please go ahead. Mike Neary – Neary Asset Management: I would just like to applaud you, first of all, for the stock buyback and based on what you're saying versus what the stock market is saying with regards to your stock price, it seems to me that it is a good value at this point and I will encourage you to keep buying back stock. Next year, if you're wrong and revenues decline, wouldn't accounts receivable and working capital turn into even more cash on your balance sheet?

That is correct. Mike Neary – Neary Asset Management: So, and what is your base level of CapEx for the next three to five years if you weren't to grow?

Generally, $30 million to $40 million. Mike Neary – Neary Asset Management: Okay. So, you have substantial excess cash on your balance sheet still?

As we mentioned, in today's environment, cash is certainly very important to us and as well as our customers. Mike Neary – Neary Asset Management: Okay. And I have another question. In terms of ─ you mentioned this a little bit. In terms of the general outsourcing trend, how much of the market has been outsourced versus how much is remaining to do? And what is the pace of that happening currently?

That is really dependent upon the specific industry sector that you're addressing. So, if you look at computing, that's very mature in its outsourcing. Telecom is probably more mature in its outsourcing. Industrial controls, medical, test and instrumentations, those vary but have not been fully outsourced. So, I don't have a blanket answer that applies to all of the industries but that is just a snapshot of how we view each of them. Mike Neary – Neary Asset Management: Okay. So, if you were to say computing and telecom are pretty much done, the remainders, are they half done? Are they a quarter done? I mean, how far along are they?

I'll pick a third. I really − it varies dramatically and I guess, one way to think about it is look to the OEMs that you know and see how many of them still have manufacturing sites as part of their portfolio. It varies greatly. Mike Neary – Neary Asset Management: Okay. But, just on outsourcing piece, so if the macro economy does whatever it does, let's say it's flat over next three years. So, computing and telecom don't grow and there's no additional outsourcing to be done, but then medical, industrial controls, test and measurement, you're talking about a third of your business that could very well double over that period. Am I looking at this correctly?

Yes, I guess in one regard, but remember even in computing and telecom, even though they're mature, as I've stated earlier, telecom I mean that's growing for us because of new opportunities and new customers. So, while I say that they are more mature in outsourcing, we're still seeing good opportunities there. So, there's not one easy way to address it or answer it because we see whether it's the scope of services or whether it's the level of outsourcing. I guess, it's maybe too simplistic to say that until the organizations, OEMs are more of a virtual company, there's additional opportunities for us. So, it really is about what level of service we can provide and solutions, value-add opportunities we have there. Mike Neary – Neary Asset Management: Okay.

Hopefully, another point of view from the allocator [ph] would be, if you look at it, most of our customers are capital equipment type of customer and those types of customers outsourcing is kind of lacking behind the customer-related products. So, from the outsourcing opportunity, because the type of customer we're engaging with, we definitely have a better opportunity even in these lower times. Mike Neary – Neary Asset Management: Okay, because the stock market is valuing, you not only as if you're not going to grow but as if your working capital isn't even worth what it's on your balance sheet for. And I'm trying to understand the disconnect because you seem like ─

We are sensitive [ph].

Well, I guess − we visit a lot of customers and the several of our customers (inaudible) same question. And I cannot (inaudible) what the stock market is doing. Our cash per share today $6 a share. It doesn't make a whole lot of sense to me, but again, whatever it is, it is. We just need to be focused on what we're doing and deliver the results and handle this sensitive environment better than anybody else and that's our focus. I cannot ─ we are not going to run the company because the Wall Street end up and down. We're going to continue to focus on what we are trying to do and deliver results and expand our capabilities and upgrade our teams, and when this all ends, the market rebounces again, we'd have a better team to handle the growth. Mike Neary – Neary Asset Management: Well, and not to predict the stock market but if you feel that you have a good business and it's worth at least what it is on your books for, I would encourage you to continue to buy back stock and do that like you have been. Thank you very much. Thank you very much.

Thank you for believing we're strong.

Thank you. And our last question then comes from the line of Brian White. It's a re-question from Collins Stewart. Please go ahead. Brian White − Collins Stewart: Yes, I just had a question on the tax rate, what should we be using for the fourth quarter and then '09?

For the fourth quarter, probably use about 10% to 11% as our estimate. For the next year, at this point, I would estimate 10% to 11% again. Brian White − Collins Stewart: Okay. Just clarification, you guys mentioned potential growth in '09. We know it's a tough market for potential growth, does that have any acquisitions or is that organic?

We look at organic. The reason that I am saying that is that we definitely have several interesting opportunity for our customers, consider taking the internal opportunities outside (inaudible). You get probably a lot more scale [ph] in the bid opportunity when the market is slowing down, not all OEM will look at additional outsourcing opportunity. And so we're looking for organics potential to the growth. But nevertheless is that we're still looking at the acquisition too, but that's not included in the number we talked about. Brian White − Collins Stewart: Is there a particular market that you're looking at for the acquisition in terms of served market to get into?

Well, I'm not going to get into a buying capacity or buying a location, I'm more looking for a unique capability which is expanding our service scope. That's what we're looking at. Brian White − Collins Stewart: Okay, thank you.

Thank you. And we have no further questions in queue then at this time.

Thank you.

Thank you.

Thanks. And ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T's executive teleconference. You may now disconnect.