Good morning everyone and welcome to the LGL Group Q3 2013 Earnings Report. At this time all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. (Operator Instructions) This call also has a visual PowerPoint component in addition to the conference call. To view the PowerPoint, please click the Join the Meeting link you received in your invitation and included in the press release announcing today’s call. (Operator Instructions) I will be standing by, if you should need assistance. It is now my pleasure to introduce LGL’s Vice Chairman, Michael Ferrantino. Please go ahead, sir.

Good morning, everyone and thank you for joining us today. As some of you know, I joined the company on October 1st of this year as Vice Chairman of LGL and Executive Chairman of MtronPTI. With me today is Greg Anderson, our Chief Executive Officer; LaDuane Clifton, our Chief Financial Officer, Jim Williams, our Corporate Controller. I will now turn the call over to LaDuane, who will go over our agenda for today’s call. LaDuane?

Thank you Michael and good morning everyone. As the operator mentioned, we prepared a slide presentation for your reference that maybe viewed as part of today’s web conference. Presentation materials are also available from our website at lglgroup.com. We ask that you locate these and use them as a reference for today’s call. Please not that this call will also be recorded and available for playback later on our website. Other financial information and recent press releases are posted on the website. And please note that our comments are covered by our Safe Harbor Statement. (Operator Instructions) And so at this time, I’d like to introduce our CEO, Greg Anderson.

Thank you LaDuane and good morning investors. Again thank you for joining our third quarter call. This morning I will start with the first Slide 3 in your deck, which really talks about a snapshot just a reminder of who we are as a company, but around the long time we have one operating subsidiary MtronPTI. Our trailing 12 revenue is about $28 million. Our mix is about 50-50 within the U.S. and outside of the U.S. Stock price as of yesterday was in the 5.80 range. Strong balance sheet, strong cash position over $9 million in cash and we served a very large market. Some of our highlights, today we have – the subsidiary has a balance demand, about two thirds of our revenue though comes from the Aerospace and Defense industry, about one third from the internet communications industry. Where we drive our IP, is we have a crystal technology that really is still the base for a lot of core precise timing through our networks as well as control systems, with that goes to oscillator technology. And then of course, we have in the RF/microwave arena, we have some filtering capability and we have some IP in that area. And that really is why our clients come to us for really engineering. We have an enabling platform, we have a global footprint, offices around the world, manufacturing around the world, a couple of U.S. sites, we can leverage some cost. Our margins – most of what we do is performance related and sort of in a corner of a niche of a very large market, things that provide value either in performance or in harsh environment so that helps really protect us on the margin side if you will. Long product life cycles and we strive to…

(Operator Instructions) And we will go first to the side of [indiscernible]. Please go ahead.

Hi, last time we spoke back in June, it sounded like you had about three to 10 parties that are interested in acquiring the whole company or part of the company. I think you mentioned around three to 10 and it sounds like the focus has moved off of that and more into restructuring, I was wondering why that is. And also you mentioned that there is some restructuring in order to save some money, but we’ve been seeing this difficulty in the market through last two to three years already. Why haven’t those initiatives been in place years ago?

Both fair questions, I’ll take them one at a time. So the first one about the expressions of interest from external parties of acquiring all our portions of the company, certainly we have those, the strategic committee took those into consideration. Frankly speaking, I don’t believe that that they probably matured at least at this point to where they felt that was the best action to take and, so it doesn’t mean that they are off the table, it just means that, but they just frankly never materialized to a maturity that that at least at present the Board chose to move forward. So in the mean time, we just took some additional steps when it came to restructuring, probably and it leads into your second question why weren’t those – I’ll call it restructuring changes made two years ago. I think the reality is that things change. And so two years ago, we saw some strength in parts of our business that we don’t see today. And so we are just restructuring and pointing us towards where we have our strengths and where we think we can get the chance to grow. And so if that makes sense, we’re probably reducing structure where we didn’t think we could grow and that that is different than two years ago or profitably grow. And so that’s I would say the answer to your second question.

Okay, thank you. I mean it’s frustrating to see every quarter the revenue is declining, margin is decreasing, backlog is decreasing and I think there was some hope as an investor that we would see some sort of sale and it’s sort of frustrating to see this continued weakness.

Yes, I understand.

(Operator Instructions) We’ll go next to the side of Hendi Susanto. Hendi Susanto – Gabelli & Company, Inc.: Good morning Greg and LaDuane.

Good morning.

Good morning. Hendi Susanto – Gabelli & Company, Inc.: First question is for LaDuane. Gross margin dropped to 20% level, lower than expectation and this is the level that we have not seen since Q1 2012. You mentioned that the weak gross margin was primarily driven by volume. How should we think of gross margin levels going forward given your costs of restructuring improvement and like weak markets out there?

Yes. No, Hendi, I will reiterate what Greg said. The change in gross margin sequentially was completely related to volume in this case. We continue to have favorable operating efficiencies and contribution margin has been actually flat. Looking ahead, we don’t give very much guidance of course, but I think that these circumstances will continue and then we expect that as we get into 2014, we should begin to see continuous improvement as we go to each quarter. Hendi Susanto – Gabelli & Company, Inc.: And then Greg, where do you see share gains in aerospace and defense?

Well, the picture is well we’ve actually seen some gains sort of up and down the line. I’ll start with some contracts that we did in one and what we call they would be timing products and they go into essentially they are the clocking signal for microcontrollers and things that go on planes. And they would be controlling various aspects of functions that are in plane than you think from cabin pressure control to I’ll call it flight and wing kinds and moves to wheels up and down to maybe the engine fuel controls. And so we’ve got a fairly strong offering there. We are – we believe we’re undersold in that area even though we’ve got a decent business. We think we can grow it. It’s not quick in a lot of ways because the design cycle is long. But we are seeing some notable gains on what I would call the timing aspects for digital controls for avionics. Really up and down the filtering line. We’re positioning ourselves either in both navigation communication and we’ve got a number of offerings there where we just think we have a compelling advantage. We are gaining some share of those accounts. So the time to revenue from the – when you do the engineering, so when you actually realize notable revenue is two to three years. And so it’s not a fast process, but we believe internally that our business planning and forecasts are pointing up really from share gains where we’re taking some position or some share away from competitors either by engineering it or at bringing new products and ourselves that we didn’t have before. Hendi Susanto – Gabelli & Company, Inc.: And Greg, you often like to talk about software-defined radio…

Yes. Hendi Susanto – Gabelli & Company, Inc.: Excitedly, and I’m wondering whether the current external market may push out the opportunities of software-defined radio, what is your insight on that?

Well, the answer to that is certainly yes, I think question is how much Hendi, and we – the only thing I’m trying to measure my enthusiasm as well. We’ve been in the design cycle with several major clients in the software-defined radio market for I’ll just say well over a year. I will confidently tell you, we’ve not received negative news, which is a good thing. On the other hand, orders have pushed to the right, probably a quarter more than we were expecting. We are expecting some of our first orders in the fourth quarter of this year than our peers, but that’s on the slide into 2014. We’re still pretty optimistic measuring when we’ll actually get that business is just hard for me to commit publicly. I can tell you that with high confidence, we’re having success on the engineering front. We’re having success when we actually make the prototypes and the client interest remains high. So we do think that’s a growth engine. It’s certainly not a near-term, but certainly mid-to-long term. It can have an impact in the company. Hendi Susanto – Gabelli & Company, Inc.: And then, would you be able to elaborate more on the restructuring target of reducing structural costs by at least 10%? Where should we see cost saving in terms of cost of goods sold versus OpEx, and how much of that will go toward reinvestment versus how much will go to the bottom line?

I’m not sure I can – I would say – LaDuane, can you talk about the split between COGS and OpEx and structural cost and then...?

Yes, so the fixed cost portion of cost of goods sold is going to benefit some from that reduction, but there is a fair amount that will come from the OpEx line, I’d say the majority is going to come out of OpEx. We intent to still reinvest, so places that you’ll continue to see investment will be in engineering and in our sales efforts, and so that’s going to continue to be a place where we have a focus as I’ll just support what Greg saying, we have some very strong engineering opportunities in front of us that we’re working to invest. The design cycles are long and so but we’re committed to that reinvestment. To the extent how much of that comes to the bottom line, our intent is that we’re reducing the breakeven level of the company by doing this restructuring, and so a part of it will follow bottom line obviously, so. Hendi Susanto – Gabelli & Company, Inc.: Would you be able to share what’s the new like rig is on target for the company?

Well, we are at a run rate of about $28 million here if you take this quarter and you project that out of $6 million a quarter that might 6 times 4 is 24, we need to breakeven at prevailing business levels. Hendi Susanto – Gabelli & Company, Inc.:

I don’t know but we’ve talked about a hard timeline. Once you open the strategic review process, it tends to link and I’ll just use those words. I think we started in May and I’d like to say within the calendar year or maybe a calendar year of – in a quarter, we would be – we would close up and so Mr. Ferrantino joining the board certainly his experience will play into the steps that we intent to take. And so I’ll just leave it like that Hendi. Hendi Susanto – Gabelli & Company, Inc.: Like the calendar year and the quarter?

Yes, so we started last or this May and probably put us into mid next year sometime. Hendi Susanto – Gabelli & Company, Inc.: Okay. So it’s [indiscernible] quarters. Got it. Okay, thank you.

(Operator Instructions) At this time, we have no further questions. I would like to turn the call back over to Greg Anderson. Please go ahead.

Well, I would like to thank the investors for joining in on the call. I appreciate the questions. A very difficult quarter for the company, I hear the frustration and management feels that as well. There is still some goodness in the company, we’re going to extract that, in the meantime we’re going to be very focused on conserving cash and investing where we think we can grow. We appreciate you – I guess I’ll use the word patience as we look to transform the company as well as get it back on a growth plan. We’ll look forward to making public any changes that we’ve got and coming forward. We also have our Annual Meeting in Stockholders meeting in New York in the 10th of December…

December 12th…

December 12th and we certainly welcome you to attend that and of course the tough questions can be asked at that time as well. So we look forward to seeing you there and look forward to your attendance in future calls. Thank you.

This ends The LGL Group’s Q3 2013 earnings report call. If you have any further questions, please send an email to Greg Anderson at ganderson@lglgroup.com or to LaDuane Clifton at lclifton@lglgroup.com. Have a great day.