Good afternoon, ladies and gentlemen. My name is George and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the Kimball International fourth quarter fiscal 2008 financial results conference call. All lines have been placed on a listen-only mode to prevent any background noise. As a reminder, today's call, August 7, 2008, will be recorded. After the Kimball speakers' opening remarks, there will be a question-and-answer period, where Kimball will respond to questions from analysts. (Operator instructions) As with prior conference calls please be aware that today's call may contain forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Risk factors that may influence the outcome of forward-looking statements can be seen in the Kimball Form 10-K and today's release. The panel for today's call is Jim Thyen, President and Chief Executive Officer of Kimball International; Bob Schneider, Chief Financial Officer of Kimball International; Dan Miller, President, Furniture; and Don Charron, President, Kimball Electronics Group. I would now like to turn today’s call over to Jim Thyen. Mr. Thyen, you may begin.

Thank you, George. And welcome everyone to our fourth quarter conference call. We hope you had an opportunity to review our earnings release issued this morning on the results of the fourth quarter ended June 30, 2008. As in our last conference call, our format today will start with my overview comments on the quarter, followed by Bob's financial review. We will then open the call to your questions. As in prior calls, I have asked Don Charron, President of our Electronics Group, and Dan Miller, President of our Furniture companies, to join us in support of disclosure, complete understanding of our results, and to provide you with the appropriate information. In today's release, we noted how our net sales for the quarter ended June 30 were flat on a consolidated basis when compared to the prior year. Electronics net sales were up 3%, while furniture was down 4%. Although consolidated net sales were flat, our earnings declined due to a reduction in gross profit margins in both segments. This has been the most significant driver of our earnings trend the last several quarters. Our gross profit margin declined from 20.4% in the fourth quarter of last year to 17.1% in the most recent quarter. As with all companies and markets at this time, we are experiencing rapidly changing economic and competitive conditions. These conditions along with higher commodity costs and freight costs are squeezing margins. Oftentimes, these conditions favor scale players initially because of their immediate leverage. We haven’t continued to closely monitor these costs. We’ve taken actions to mitigate the margin erosion with price increases, productivity improvements, and supply chain cost outs. Our gross profit margin improved during the fourth quarter compared to the preceding third quarter. The improvement was driven by both segments. The administrative restructuring announced…

Thanks, Jim. I’d like to drill a little deeper on a few areas of our P&L and balance sheet that may not be totally clear. I’ll start with the consolidated P&L review that we provided in today’s earnings release. Jim mentioned consolidated sales were flat in the fourth quarter compared to the prior year fourth quarter and that our gross profit margin declined 3.3 percentage points. This equates to approximately $11 million of lost gross profit during the quarter. Some of this is driven merely by the fact that our Electronics segment grew during the quarter while the Furniture segment declined. But the primary driver of the change is lower gross profit at each segment. A significant cause of the lower gross profit is higher commodity costs. We have been attempting to offset these cost increases with greater productivity, changes in our supply chain, and price increases where appropriate. We further attempted to offset the gross profit decline with reductions in SG&A costs. Our SG&A was 16.8% of sales in the fourth quarter compared to 19.2% in the same quarter a year ago. In dollar terms, our SG&A declined $8.4 million. Much of this reduction was driven by restructuring activities to take out cost this past year. While about $900,000 of the reduction was due to lower incentive compensation expense. As Jim noted, we are expecting to realize most of the benefits of our recent administrative restructuring in Q1 of fiscal 2009, which will further improve our SG&A percentage. We had only a part of the benefit in the quarter just ended. In summary, our reduction in SG&A expenses was not enough to offset the reduction in gross profit, resulting in the $2.8 million reduction in income from continuing operations excluding restructuring charges. I need to note that the $2.8…

(Operator instructions)

Okay, George, thank you. That brings us to the end of today’s call. Our results for the fiscal year and particularly the second half of the fiscal year are not acceptable. Our position relative to competitive benchmarks is not where we wanted to be or where we believe it should be. While our strategies are well received in our core markets, we do face significant challenges. Rapid shifts in the economy, reduced consumer confidence, as well as significant and rapid commodity cost increases affecting both our segments. These factors drove competitive and market pressures to which we should have reacted with greater speed. Corrective action has been taken and will continue to be applied. Our gross margins improved in the fourth quarter compared to the third quarter of fiscal ’08. We intend to continue this trend. Our RFQ activity, quotation activity and win rate remain high. Our open orders remain strong at this time. As we move into our new fiscal year, it’s much more important that we grow with healthy gross margins. We appreciate your interest in Kimball and we look forward to speaking with you on our next call. Thank you. Have a great day.

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