Good day, ladies and gentlemen. Welcome to the First Quarter 2013 Commercial Vehicle Group Earnings Conference Call. My name is Dave. I’ll be your operator today. (Operator Instructions). As a reminder, the call is being recorded for replay purposes. Now, I would like to turn the call over to Mr. Chad Utrup, Chief Financial Officer. Please proceed, sir.

Thank you, Dave. Thanks everybody for joining the call today. As usual before we begin the call, we do some Safe Harbor language. Merv will then give a brief company update and I’ll take you through our results for the first quarter of 2013. And then at the end, we’ll take time for your questions. With that, I’d like to remind you that this conference call contains forward-looking statements; actual results may differ from anticipated results because of certain risks and uncertainties. This may include but are not limited to expectations for future periods with respect to cost saving initiatives, tax positions and estimates, financial covenant compliance and liquidity, new product initiatives, economic conditions and the markets in which CVG operates, fluctuations in production volumes of vehicles for which CVG is a supplier, risk associated with conducting business in foreign countries and currencies and other risks detailed in our SEC filings. With that, I’ll turn the call over to Mervin.

Thank you, Chad and thanks to all of you for joining the call. From an end-market standpoint, our first quarter played out as expected and it’s basically uneventful. As we projected business volumes in the first quarter of 2013, ended up very similar to the fourth quarter of 2012 and in fact were down slightly from a build perspective. We continue to believe we will see a sequential uptick in Class 8 build rates from Q1 to the second quarter and second half of 2013. Our 2013 estimates for North America Class 8 build remains in the range of 250,000 to 260,000 units. As indicated in our last earnings call, we felt that the weakness in construction market would linger for another quarters or so and then began to pick up till the second half of 2013, this two prediction -- as construction revenue remain relatively flat in the fourth quarter of last year continued. We think the global construction markets would be strong over the coming years but it currently experiencing short-term softness due to the need to deplete excess inventories. Our military aftermarket OEM service order showed a little improvement during the period compared to the fourth quarter of 2012. The closure plan for our Statesville, North Carolina facility continues on schedule and it’s expected to be completed by the end of this quarter. The products made there will be absorbed into other CVG facilities. We expect to see approximately $2 million to $3 million in savings from this consolidation effort for the full year 2013. Also, as a cost savings measure, we are continuing to operate with reduced labor force. As anticipated, our overall cost control efforts improved our financial performance in the first quarter compared to the last quarter of 2012. Although, this is not where…

Thanks Merv. As Merv did indicate, the first quarter of 2013 was rather uneventful from a market standpoint, on our fourth quarter earnings call in February, we indicated that we expected the first quarter Class 8 market to be up slightly from the fourth quarter and that we thought the Global Construction Market would be relatively flat to the fourth quarter. As it turns out, our estimates were fairly accurate although Class 8 production was down slightly versus the fourth quarter of last year. From an end-market perspective, our first quarter looked like similar to the fourth quarter of last year with the exception of our two acquisitions. Looking at the first quarter of 2013, our revenues were 177.8 million, which is a decrease of $59.2 million or 25% from the first quarter of 2012. Our OEM truck revenues declined approximately $41.7 million or 34% versus the first quarter last year. We also saw a decline in our Global Construction Market revenues versus a year ago of approximately $16 million or 30%. Collectively, our other end markets including bus, ag, military and aftermarket declined from Q1 of last year nearly $7 million or 11%. These market declines were moderately offset by incremental acquisition based revenue of over $5 million which was also down slightly from our expected levels due to weaker market conditions. On a sequential basis compared to the fourth quarter of 2012, our revenues increased approximately $4.5 million. This increase is primarily related to the incremental revenues from our acquisitions. Our OEM truck revenues declined modestly by $2 million on a sequential basis and we’re generally aligned with build level changes. And our construction revenues relatively flat. The moderate decline in truck revenues was offset by slight improvements in our aftermarket recreational and after end markets. Overall, again,…

Thank you very much. (Operator Instructions) And your first question comes from Ann Duignan at JPMorgan. Go ahead please.

Hi, there, Mike Shlisky, filling in for Ann. Good morning.

Hi, Mike.

Hey Merv, best of luck to you but I just want to ask you guys have any sort of update on maybe your search for a new CEO (inaudible) anything we can learn there?

Basically, we have three strong internal candidates and we have a few external candidates that are going through the interview process currently and looks like we’re going to have very strong field to choose from.

That’s great. That’s great to hear. And then moving on to your North American truck outlook, I mean you guys mentioned pick up in build rates in Q2 and going forward, but I do know you guys have a bit of reduced work force. So, I was wondering if you can really just share with us your plan for, how you are going to ramp production with fewer people to help you to do so?

Well, part of our historical way we manage our company is when we go to a downturn, the first thing we do is to take out over time. That’s immediate. Second thing, we do is to take out temps, which is a little bit slower process and so when we start back up, the first thing we do you know when we see a ramp-up upcoming till we feel it out if it’s going to be a long-term or a longer term ramp up is we start with our over time. And then when we run a few weeks and we see that is not going to be just a few weeks up and drop back down again which are our market can do is that we start adding, bringing in temps and start the training process. And then we slowly build up to where we level out the over time a little bit and run with temps and over time to lesser a degree on over time. And then when we start back down then we first time we do take out the over time back down like I discussed.

Yeah, I think to add to that Mike, Merv is exactly right. So what you are talking about if we are thinking of Class 8 just for example is, in the 250 to 260 range and we had 55,000 units in the first quarter. You are talking about maybe a 15% to 20% uptick from Q1 into run rate through the balance of the year. So just to put it in perspective, if you got 10% temp and 10% over time, it doesn’t equate needing to double the size of the work force to meet the demand.

Got it. That makes sense. And then, I mean, finally, the CAG contract. It sounds like some of this is new projects having to work with before but I was wondering if you can give us, kind of view on just how much – how big that contract is, just we can sort of get our (military) as to what might be growth beyond just the market growth?

Well, we can do half of that for you. It is products that are new to the U.S. market for us. And overall new to our company in this particular product line but the technology is not new technology to us, its existing technology. And what its doing is strengthening the North America product portfolio as well as customer base or seats because I think, what to explain about our company is, we have been on seating we have been very concentrate in North America Class 8 market and so what – one of the things that we have done is focused very much on trying to expand that marketplace in North America to construction seats as well as ag and things like that. And this is our first really good nice contract in North America for construction for (inaudible) seats. So then you know obviously our goal is to move into the rest of the world with Class 8 seats which we have done a really good job of into the Asian market including Japan and China.

Okay. Well, thank so much.

Thank you, Mike. Your next question comes from the line of David Leiker at Baird. Please go ahead.

Good morning, everyone.

Good morning, David.

Good morning, David.

Merv, I was wondering if you could give some insights in China what the truck and that construction sight hearing varying words, (inaudible) they are going to increase production in China, Volvo on the other hand and there is no sign recovery. Do you have any insights in the – what’s going on in the construction side. And then on the truck side where you are in launching your programs there?

Well, I just read the Komatsu statement right before, you guys came online. And that was kind of – we are not seeing that yet. So they are leading us a little bit faster than what we are seeing the turnaround, we are still seeing excess inventory has been burned off and

Yeah,

Thank Will for a little while. The one thing that I saw that was kind of interesting that I have not – that I just read yesterday was the – lessening of or the – I’m sorry the changing in some political stances in India which is opening up the mining which – so there is some growth that we are seeing that or we are hearing that’s going to start coming in mining where they are lessening up some rules in regulations to allow the mining to pick-up in India. So that side of the business, the mining – I hoping that is going to develop into more revenue dollars for us again on that side, which also would increase the bus market over there which helps our Vijay (sic) Vijayjyot Seating that we just talked about. But as far as China in construction we are seeing something I’m not seeing at all – any signs of yet. So and I forgot last pat of your question.

An update on where you are on the truck side launching seats in the truck market in China? I think the one piece of business you have is pushed out a little bit, right?

Yes. And that is one thing I didn’t want to talk about a little bit. When we announced these programs and that sometime is reasonable we’re little hesitant about given that dollar number is sometimes they get layered into models like, it is a $60 million program, $15 million a quarter.

Right.

And it just does not happen that way. But what we are still seeing is a slowing of the Class 8 market over there. We still have not seen that pick back up to any kind of levels that would increase our build. And it is just still kind of pushed out a little bit on the business awards that we talked about in China. So we are still not seeing the -- guys, you need to do everything you can to pull this launch forward, its still being – they are still got the stiff arm type of thing about taking product right now.

Right. And then, just one last item here. Maybe Chad as you look at the military business with FMTV going end of life here in the second half of the year, when does that start to impact your number? And how much of it impact do you think that has?

Yeah. We are in our third consecutive quarter of military decline David. So, I think we are in the midst of that. Now, military still not big, it is $5.5 million and revenue for us in Q1. So it is not significant in the scheme of things, but we do see that continuing to taper-off through the balance of the year.

Okay. And then, lastly, Merv best wishes from me. I know we will stay in touch there. Okay.

Absolutely. Thanks David and thanks to all of you guys there that have shown so much support over the years.

Absolutely. You take care.

Yeah.

Thanks a lot. Next question comes from Robert Kosowsky at Sidoti. Go ahead please.

Hi. Good morning guys. How are you doing?

Hey, Rob. Good morning.

I was wondering, Chad, you have a idea what is the market outgrowth might be this year as a percent of sales? And may be kind of, is it going to be a little bit more aggressive into 2014 now that you may be get Photon orders coming though a little bit more so?

Yeah. I think there is two ways to look at that. Great question. There is two ways to look at that. One is I know some people on the call they look at it from a terms of percentage of one it is awarded and how much that value is worth. But what we really need to look at is when it actually gets into production. So when it actually becomes a financial impact. So we are still targeting that 4% to 6% this year. Rob I would tell you it is probably going to be on the lower side of that. And exactly to your point as we get into later this year in some of those SOP dates come into play and really start to impact 2014, we would expect then to see a much higher number than the typical range that we give. So we are still looking at that 4% to 6% range because we are targeting things and aftermarket growth. And we are targeting things in bus and India side of thing. So we are still targeting that level but when you have program like Photon, some of these larger ones that gets pushed out say 6 months or 9 months. That can certainly have an impact on that as a percentage of market out growth.

Okay. That’s helpful. And then I guess, as the quarter progress, how did you see, I guess monthly revenue, North America truck, did you see it step up with build rates and what happened on the construction side as well?

Honestly when we talked with everybody on the call two months ago, taking aside the monthly progression question. I mean, we basically put out there everybody with our truck would be relatively flat maybe up a little bit and we thought construction will be flat. And so i.e., the best way to read into that is, top-line is probably going to be flat. And that’s exactly what happens. So our revenues throughout the period without having the exact numbers (inaudible) they track pretty well to the build rates. And our internal tracking does aside from some swings with market shares (inaudible) larger content for us. It generally tracks with what you see in the build rates that come out and get published. And construction really no change, I mean, its just China has been way down, India has been down for us and North America has been down from where we expected say 6 months ago. So it's been relatively flat through the period.

Okay. But would you expect to see construction step up in the second quarter based up on what CAG was saying earlier this week?

Our current expectation is that through the second quarter we will see a gradual ramp and then the last half of the year as we sit here today things are going to be pretty strong in terms of new build production for both truck and construction. Not that major to speak of right now for short term but as we look through say the second half of the year, we are going to see it gradually building up in both those markets.

Okay. And then I guess, this one last question, I know, I appreciate the fact that you think that the market down to right now is transcend temporary and we are starting to see signs of life from some of your customers. But I’m just wondering if you needed to, where do you think you could bring breakeven down to on the company, if it was kind of a bad economic environment you needed to really turn the screws on cutting cost?

Well, I think the best way to answer that is, is in two parts. One is, let’s look at Q4 to Q1 without acquisitions, sales were flat and we improved the bottom-line $2 million. Some of that is FX and some of it's this and that but we improved to $2 million. And what Merv mentioned earlier we mentioned on the last call is we are already in the process of closing and consolidating our North Carolina facility. We expect $2 million to $3 million of savings from that. So what you are really talking about is, is a little bit of overhead and some capacity reductions which obviously don’t happen overnight but they are already in process. So, there is several things that we can and are doing. And I think all you have to do is look at Q4 to Q1 to see the impact of that and look at what we are planning on already for the balance of this year.

Okay. Thank you very much.

Thanks Rob.

Thank you very much. There are no further questions for you gentlemen. So I would like to turn the call back over to Mr. Merv Dunn for closing remarks.

Come on guys you have all really let us off easy today. Thank you. Either we are getting clear about describing our process or something. Anyway really, really want to thank all of you for taking your time this morning to call in. And thanks for the ride and appreciate all of the plan we have had with everything. So Chad will be here to carry things on. Take it over Chad.

Thanks guys. I appreciate it. Obviously if you have questions, John Hyre is the right guy to get hold off, be happy to talk for anything you need. Thank you for joining today.

Bye.

Thank you both gentlemen. Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a very good day.