Good day, ladies and gentlemen and welcome to the Methode Electronics, Inc. second quarter 2009 earnings conference call. At this time all participants are in a listen only mode and a brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. This conference does contain certain forward-looking statements which reflect management’s expectations regarding future events and operating performance and speaks only as of the date hereof. These forward-looking statements are subject to the Safe Harbor Protection provided under securities laws. Methode undertakes no duty to update any forward-looking statements to conform the statement to actual results or change Methode’s expectations on a quarterly basis or otherwise. The forward-looking statements in this conference call involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in Methode’s filings with the Securities and Exchange Commission such as our annual and quarterly reports. Such factors may include without limitation the following: 1) dependence on a small number of large consumers within the automotive industry; 2) rising oil prices could affect our automotive consumer’s future results; 3) the seasonal and cyclical nature of some of our business; 4) dependence on the automotive industry; 5) dependence on the appliance, computer and communications industry; 6) intense pricing pressures in the automotive industry; 7) increase in raw-material prices; and 8) customary risks related to conducting global operations. It is now my pleasure to introduce your host, Mr. Don Duda, President and Chief Executive Officer of Methode Electronics Inc.

Thank you, Peter, and good morning everyone. Thank you for joining us today for our fiscal 2009 second quarter financial result conference call. I am joined today by Doug Koman, Chief Financial Officer, and Ron Tsoumas, Methode’s Controller. Both Doug and I have comments today and afterwards we will be pleased to take your questions. Despite an increasingly challenging economic situation and the severe downturn in the worldwide automotive industry, we are pleased with our second quarter results. Increased penetration in the human machine interface, sensor, and power markets in the first six months of fiscal year 2009 was encouraging notwithstanding the severe downturn in our automotive segment. Specifically, in Methode’s second quarter, net sales decreased $11.9 million or 8.9% to $121.3 million from $133.2 million in the second quarter of fiscal year 2008. In the second quarter, net income decreased $6.1 million to $2.7 million or $0.07 per share compared to $8.8 million or $0.24 per share in the second quarter of fiscal year 2008. The decrease in net income is largely due to restructuring charges of $6.3 million incurred this quarter compared to no restructuring charges in the second quarter of fiscal year 2008 plus lower sales attributable to the softening of the global economic environment. Excluding the restructuring charge and the benefit of any Chrysler related price increases, Methode achieved net income of $5.4 million or $0.15 per share in the second quarter compared to $6.6 million or $0.18 per share in the same period of fiscal year 2008 again excluding any Chrysler-related price increases. While we have made much progress diversifying Methode away from our legacy automotive products and customers, the events of the last few weeks necessitate that we will increase our efforts to further lessen Methode’s dependence on this troubled sector. To that end…

Thanks, Don. Morning, everyone. Let me start by reviewing sales and gross margin activity for our reporting segments. The automotive segment had second quarter net sales of $75.2 million compared to $89.8 million last year. That’s a 16.3% decrease in automotive product sales. For the six month period the automotive segment had net sales of $159.9 million compared to $172.7 million last year. That’s a 7.4% decrease in net sales. The decrease is due to lower global vehicle sales, especially for North American auto makers, and also reduced volumes due to our decision to exit Chrysler business. Automotive sales were also impacted by price increases on Chrysler product of $2.2 million in the quarter and $7.3 million in the six month period. This compares to last year’s second quarter where we had $3.7 million of price increases and $5 million of price increases in the six month period last year. The stronger US dollar negatively affected sales from our foreign operations by about $0.5 million this quarter and by $3.9 million for the six month period. In the second quarter gross margins for the automotive segment were $15 million or 19.9% of sales compared to $18.5 million or 20.6% of sales last year. For the six month period gross margins were $32.1 million or 20.1% of sales compared to $34.9 million or 20.2% of sales last year. The decrease in gross margin as a percentage of sales is primarily due to higher costs related to lower production volumes and a decline in sales volumes. The Chrysler price increases impacted gross margins for both the quarter and six month period for both this year and last year. The interconnect segment had net sales of $32 million in the second quarter which is up 5.6% from $30.3 million last year. For the…

Thanks, Doug. Peter, we are ready to take questions.

(Operator Instructions) Your first question comes from David Leiker with Robert W. Baird. Analyst for David Leiker - Robert W. Baird & Co., Inc.: Can you just talk about how your business is kind of attracting this quarter so far versus the third quarter? Obviously the global economy has kind of slowed down pretty meaningfully in November and December here. Are you seeing that show up in your businesses or how is that tracking?

As we said, we’ve seen a decline in order intake really across all our segments and around the world. It’s certainly not unique to the west. We’ve seen the power segment down, appliance, interconnect. Auto is probably the most meaningful but it certainly trumps all segments. Analyst for David Leiker - Robert W. Baird & Co., Inc.: So is it reasonable to expect it and I guess your revenues are going to be down in all your segments?

I’m trying not to give guidance here but suffice it to say Methode is probably going to follow the macroeconomic environment as we go into 2009. Analyst for David Leiker - Robert W. Baird & Co., Inc.: You’ve talked a little bit about looking at taking out of their [cut it] auto and maybe needing some more restructuring as things along those lines, is that in your kind of target for what your restructuring is going to be through 2010 or was that on top of the $5 million to $10 million you guys gave as a figure?

What we’re doing, where we are, with all of our units based on what we anticipate to be a prolonged recession, so you take a look at any of the divisions and here in our third quarter and into our fourth quarter we’ll look at should there be some additional restructuring. I don’t think because auto is the largest that if we had costs it would approach, what was the number that we gave originally, 20 some million.

Up to $25 million.

I don’t think we’d get anywhere near that, but we’re certainly going to take a look at all of Methode to see where we need to strengthen ourselves to traverse... it’s going to be a pretty tough business environment for the next 12 to 18 months and we would announce any... Analyst for David Leiker - Robert W. Baird & Co., Inc.: I guess what I’m trying to get at, I think you said you’re looking at reducing your dependence on auto further. Would that require restructuring beyond what you’ve kind of laid out already?

I think what we’re saying there is we’re looking and talking with our customers about the reduced volumes and which necessitates some actions on our part. Whether that’s price increases or moving product or other, that’s what we meant by that. I suppose in an extreme case that might trigger additional restructuring but it was really that we recognized the need to speak with our customers about their significantly reduced volumes and the effect that had on Methode. Analyst for David Leiker - Robert W. Baird & Co., Inc.: Can you talk about what your receivables exposure is [inaudible] OEMs at this point? It sounds like Chrysler should be pretty low by now. Is that fair?

Yes, that’s fair.

Right now it depends on the payment schedules. Most of the OEMs pay once a month but on the average it comes out to about 45 days but right now General Motors is probably in a range of $3 to $3.5 million. Ford’s probably somewhere $7 million to $8 million. That includes a lot of Ford Europe. The Chrysler is currently tracking less than $1 million. This wouldn’t include any... we’ve got customer tooling products, that kind of stuff, those aren’t in these trade numbers that I just gave you the ranges on. Analyst for David Leiker - Robert W. Baird & Co., Inc.: What was the Chrysler number again?

The Chrysler number is less than $1 million right now. Analyst for David Leiker - Robert W. Baird & Co., Inc.: I think you said in the press release that US was a tax loss in this quarter, you have the tax benefit, is that something that’s probably going to stick around for a couple of quarters?

No, it’s primarily related to the restructuring. Analyst for David Leiker - Robert W. Baird & Co., Inc.: Right, but you guys talked about doing another $5 million or so a quarter of restructuring last couple of quarters?

Right. As we get the benefit towards the restructuring, that obviously is at a much higher tax rate than we see outside the US. Analyst for David Leiker - Robert W. Baird & Co., Inc.: So as the recession keeps pulling through, we could see additional losses in the US until that concludes?

Yes either losses or a net benefit from the deduction, correct.

Your next question comes from Jeremy Holmen with Singular Research.

I was wondering, I don’t think I saw it anywhere and went through the Q kind of quickly this morning, but did you break out anywhere what the revenue contribution was in the quarter from Hetronic, you had it in for a month there.

We did not break it out. We typically generally don’t report on the business units. I think the only indication we usually give would be the trending earnings when we announced the acquisition.

Kind of working down the income statement, the SG&A expense was up because of some costs related to the acquisition, how much if any of that was non-recurring, you know, legal fees or what have you, that might come out this quarter and forward?

The bulk of that Jeremy is actually related to when we do the final purchase accounting and the customer relationship intangible is identified... that typically has a higher amortization in the first 2-3 years and then it will taper off. It’s more like a bell curve than straight line, so that’s where we’re seeing some increase in selling and administrative.

So that will stay with us for a little while then, right? Kind of speaking kind of qualitatively about the strategic landscaping, I would think from an outsider’s perspective that a lot of what will happen will be determined with the Big Three here in the US obviously, but are you seeing a lot of competitors who might have some strategic potential. Would you characterize the competitor marketplace as challenged with respect to their balance sheets or can you just kind of give us some flavor of how things stand out there?

Speaking specifically about auto?

No, not necessarily I guess about auto, we kind of segued out of auto, I guess, sorry for the lack of clarity there, but just in general. You look at a recessionary economy, there are always going to be typically the weaker end up being victims of the stronger. I’m wondering if you’re really seeing that play out.

We hope to see that played out but having been through this once or twice before, you have to go through a period of time with your competitors, your weaker competitors, where there’s, for lack of a better word, a desperation phase where you’ll actually see prices drop for a bit because some cash is better than no cash and they try to keep the doors open by bringing in some business. You have to go through that phase. It may happen quicker because there’s not readily cash available from the banks but I think we have to go through that phase first. We’ve reviewed each of our competitors in most of our businesses and we’ll take a wait and see approach but I think we’re in that phase of having to go through maybe a couple more months of turmoil before you see some fall out from that or some opportunities. I firmly believe there’s going to be some opportunities.

When you were talking about some of the steps that you’re working on that may need to be considered with the strike in the auto business, I know you guys have had some platform when you’re looking to be included on in 2010 and so forth. Are you seeing anything that has been having towards the side of being canceled or volume reductions or... I know you could have said you didn’t really want to get into much detail there, but --

We are reviewing around the world all of our auto programs. As the press talks about the US auto market, but you’re seeing declining sales in Europe and Asia, so we routinely go through the programs and look at costs and [inaudible]. Now we’re going through probably much closer and trying to anticipate what the reductions are going to be. Clearly there’s going to be some reductions there and we’ll have discussions with our customers based on what we see. I don’t know how all the programs worldwide for any auto maker or supplier are going to stay at the numbers that were projected a year or two ago.

If you’re looking at the next administration and varying stories around about what kind of stimulus will be brought to bear and to what quantity, where is your, beyond just auto, but looking at your business all inclusive, if there’s a real heavy renewable and that sort of thing, you have some products to go into varying components and such. Do you stand to be very large beneficiary, it will help, can you characterize that to any extent?

If you look at auto, everything, the bailout money’s probably helped to protect receivables and I still think there’s reduced volumes and that’s just forestalling the inevitable. Is there a benefit to that? Probably not in the US. There might be in Europe or as the European countries help the automakers. We may see a benefit up from that. A probably bigger benefit might come in the power segment, renewable energy, it really depends on how the administration spends their money and how quickly. It’s one thing from the past, another thing to get the money to go out the door. I think they’ve only spent half of the money on the financial bailout. Will it have an effect in the next 12 months? I wouldn’t think so, I think it’s probably 12 to 18 months out.

(Operator Instructions)

Peter, if there are no further questions, we will conclude the call and wish everybody a good day.

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. Thank you again for joining us today.