Welcome to the Methode Electronics' Fiscal 2012 Second Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. This conference call does contain certain forward-looking statements, which reflects 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 the securities laws. Methode undertakes no duty to update any forward-looking statements to conform the statement to actual results or changes in 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 report. Such factors may include without limitations, the following: dependence on a small number of large customers, including 2 large automotive customers; dependence on the automotive, appliance, computer and communications industries; further downturns in the automotive industry or the bankruptcy of certain automotive customers; ability to compete effectively; customary risks related to conducting global operations; dependence on the availability and price of raw materials; dependence on our supply chain; ability to keep pace with rapid technology changes; ability to avoid design or manufacturing defects; ability to protect our intellectual property; ability to withstand price pressure; the usage of a significant amount of our cash and resources to launch new North American automotive programs; location of a significant amount of cash outside of the U.S.; currency fluctuations; ability to successfully benefit from acquisitions and divestitures; ability to withstand business interruptions; unfavorable tax laws; ability to implement and profit from newly acquired technology; and the future trading price of our stock. It is now my pleasure to introduce your host, Don Duda, President and CEO of Methode Electronics.

Thank you, and good morning, everyone. Thank you for joining us today for our Fiscal 2012 Second Quarter Financial Results Conference Call. I am joined today by Doug Koman, Chief Financial Officer; and Ron Tsoumas, Controller. Both Doug and I have comments, and afterwards, we will be pleased to take your questions. On a consolidated basis, net sales grew over 7% in the second quarter and nearly 10% in the first half of fiscal 2012 compared to the same period last year. The sales improvement was driven by organic growth in our North American and Asian Automotive business units as well as increased power product demand in North America, as well as Asia. These results reflect the impact of our new product introductions and higher market penetration. Sales gains were partially offset by sales declines in our Interconnect segment, a direct result of continued softness in the appliance market. We posted second quarter net income of $0.3 million or $0.01 per share compared to a loss of $0.5 million or $0.01 per share in the second quarter of last year. For the first half of fiscal 2012, we have net income of $1.8 million per share or $0.05 per share compared to $3.6 million or $0.10 per share in the comparable period last year. For both periods of fiscal 2012, net income was negatively impacted by foreign income taxes. In the fiscal 2012 second quarter, income tax expense increased $1.4 million, primarily related to income taxes on foreign profits and a foreign dividend on money we transferred out of China. Also impacting net income and gross margins in both periods were design, development and launch costs in both our Automotive and Power Products segments. Vendor production and delivery issues and increased sales of products with a higher prime cost further…

Thanks, Don. Good morning, everyone. I'm going to keep my comments brief today since we've provided sufficiently detailed information about the items affecting our consolidated and segment results in both the earnings release and the 10-Q, and many of those items were also covered in Don's remarks. Again just to restate, for the second quarter we reported net income of $300,000 or $0.01 per share compared to a net loss of $0.5 million or $0.01 per share in last year's quarter. One of the items that negatively impacted the quarter was a $900,000 tax expense for a $17 million dividend paid from our China subsidiary to our Singapore subsidiary. We did this basically to reduce the amount of cash concentration in China but we did need to record a tax expense for that event. On an earnings before income tax basis, the second quarter was very similar to the first quarter. The gross margin percent was 18.1% in Q1 and 18% in Q2. Sequentially, we saw an improvement in SG&A as a percent of sales. Q1 was 16.8% and Q2 was 15.8%. This was due in part to the increase in sales but also the first quarter had included severance costs that negatively impacted the first quarter SG&A percent by about 0.5%. For the 6-month period we reported net income of $1.8 million or $0.05 per share. This compares to $3.6 million or $0.10 per share in last year's 6-month period. Again, the release goes into detailed information about the positives and negatives affecting the year-to-date consolidated and segment results, so I won't repeat them here. I would like to point out, however, that the first quarter's tax expense benefited from a $1.1 million grant received in Malta. So this nearly offsets the $900,000 tax expense recorded in the second…

Thank you, Doug. Jackie, we are ready to take questions.

[Operator Instructions] Our first question is coming from David Leiker of Robert W. Baird. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: This is Joe on the line for David. Just to dig in to some of the cost items during the quarter and none of them are new but I'm just trying to get a sense of the cadence going forward. With the vendor supply and delivery costs, and you expect about $1.3 million in the second half, I'm just wondering that's going to equal what you did in the first half and given you went out and acquired Nypro, is there something with that contract or your agreement with your supplier where those costs don't moderate through the second half of the year?

No, it's just our -- the time to really set up the processes, gain approval from our customer and launch it. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then...

So you can't -- I mean, it's timing.

Yes, it’s not turnkey necessarily.

No, you wouldn't – well, in Automotive, it takes a while to move product around. It needs a fair amount of approvals from the customer, so that takes time. But also we needed to buy additional equipment, have that delivered, set it up. I can tell you that we ran our first part, but that's just a start. We are on schedule but I think we’ve said all along that won't abate itself until the end of the year. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. And on the launch and development costs for the GM program, by my calculation, you're over $2 million on that, and you've been talking about $3 million for the year. So are you expecting a step down in those costs during the back half?

We said $2 million to the balance of the year?

Yes.

So, I’d say that’s going to continue going up until launch, but that's anticipated in the guidance that we've given. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. I was thinking it was $3 million for the year and you're already over $2 million.

Yes, I think may have said early on, estimated was $3 million, but I think it looks like it just might be a little bit higher than but might that -- like the -- it's factored into our guidance. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then on Eetrex, it looks like you're going to, when your -- all is said and done, what you've guided to, you're going to be close to $10 million in costs related to developing that charger, and right now, you have one contract that's for $10 million and fully -- kind of fully launched annualized revenues. So I'm just wondering do you have some sort of return expectation for the $10 million or so that you've invested in the product that we can maybe factor into maybe a revenue potential for this product?

I don't know that we're ready to discuss that yet. There's a number of opportunities we're pursuing. We haven't announced any new awards. I -- it'd probably be premature to say too much about that. I did say the result of the suite of products from the charger to battery management to battery disconnect, even as we're pursuing stationary power, which that’s an excellent market for the technology. But at this point, I don’t think we really want to outline all of that for -- some for competitive reasons and some for customer confidentiality. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. So maybe asked a different way, do you have a threshold of like a return on capital threshold that you typically target when you're considering making your capital investments?

Yes, I think we've said that previously, Joe, that we target at least a 15% target on that. So yes, we wouldn't have bought it if the charger would be on the opportunity outflow [ph]. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: And then one last one and I'll hop back in the queue. Do you have any visibility into when we might get a first glance at your product for GM maybe at the auto show in January or some upcoming events?

I think after the only -- really, by our March call, we'll be able to provide some detail there. I could not confirm for this call when GM might be showing that. So we're still unable to discuss it, at least at this point, but I think we're getting pretty close. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. And that additional platform you picked up, that's going to be above and beyond the $100 million?

Correct. But in the chart that we showed at the Baird Conference, and then put on the 8-K, that is included in there. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. So it becomes incremental to the $100 million after the chart?

Correct. Yes, so that goes on from – for ‘15 and beyond.

[Operator Instructions] Our next question is coming from Jeremy Hellman of Divine Capital Markets.

Just thinking about the tax line for the back half of the year, and looking at the fact that you still have growth over in Asia, are you looking to be moving any more cash around that's going to result in any more probable dividend-related taxes in Asia?

Right now, we don't have anything going on. The -- but we to look at those opportunities, but right now we have other options that we're pursuing and we may come back and visit that later on, but not at the current time.

Okay. And then maybe another kind of related question, can you frame in some respects either on a relative basis or a percentage basis or otherwise how much cash you have in Asia and Europe, respectively, maybe relative to North America or otherwise?

Yes, I think if you look at our total cash outstanding that's about $75 million. About 25% of that is in Asia, another 45% is in Europe and then about -- what does that, maybe 10% left for North America. But in North America, that's where we have the bank borrowing, the $36 million bank borrowing, so

Right. Have you looked into -- and I understand [ph], but taking out any kind of a line in Europe? Is that something that's been explored? And also, I guess Asia for that matter as well?

Not really, Jeremy, because I mean that's where we have significant cash balances and unless, back to your first suggestion, if we’re going to borrow money to make a dividend payment. We haven't looked at taking on debt offshore.

Our next question is coming from David Leiker of Robert W. Baird. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: Just a few more quick ones for me. Doug, can you provide a dollar figure of what Nypro contributed during the quarter?

You mean as far as we -- well... David Leiker - Robert W. Baird & Co. Incorporated, Research Division: Revenues.

Revenues, yes, it's about $3.2 million, and that runs – because we said it would be about $20 million to $23 million, I think, per -- on an annual basis. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: And it's my understanding that business is supplying non-automotive customers that you aren't necessarily going to maybe pursue in -- over the long-term?

I think we'll keep our options open there because what it's doing for us right now is it covers overhead as we bring in the K2-X [ph] products and the Ford, and we do need to honor the agreements we have with those customers. So it’s -- ultimately it probably becomes a pure in-house factory. But I think right now, that's -- customers are happy with us and we're happy with them, so I think we'll maintain the status quo until such time that, that doesn't make sense, and we maybe let those programs go end-of-life. We'll also have the option of transferring them to Nypro if we want to. So I think we talked about that a little bit last quarter. It gives us some pretty good flexibility and avoided a pure start-up of a decorative painter. So that the amount – it’ll cost us about $0.02, I think we've said, over the next year.

Yes, it’s about that. Maybe…

So that's considerably smaller than what it would cost us if we had to do a greenfield, so. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: So you get to keep those people and utilize the facility to...

Absolutely. You got trained people. I've got parts sitting in front of me right now in the conference room here that were molded by them, first pass on the Ford e-car program, so we're very pleased with what that's done for us. And again, we get to pick up some customers. I think we said those customers are in -- there's some appliance a little out of local [ph] consumer-products.

Consumer products. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: And then my last one from -- I'm just wondering with the new -- with the incremental Ford business that is set to launch in fiscal '13, can you remind me how many models that's going to be with? And I'm just framing this in the context of the initial models you are on, reception of those vehicles has been above and beyond I think expectation. Do you have any, if you glance in your crystal ball, what kind of reception there might be for the new models that you're going to be on? I guess I'm wondering if there's potential upside to the CSM or HIS platform forecast that would be contributing to the revenue projections?

We won't know what our releases are going to be until we really move into probably January. So I don't think – I mean, we're still in our t-fab stage and preparing to launch. So we won't have releases from the customer for a little bit yet, but that's probably a better question in March than now. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: So do you know in absolute terms how many vehicles you're adding next year?

Well, yes, we can go to J.D. Power's data and get that. I mean, we haven't got it now, but... Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: So not like in -- not in units but like, you’re going to be on the Edge or the Fiesta?

Yes, Joe, I think it's -- check the presentation that we made at the conference, because I know it's the Edge, the Taurus and then those 2 Lincolns, I believe.

Yes.

But it's in that presentation, Joe.

We have a follow-up question coming from Jeremy Hellman of Divine Capital Markets.

I just wanted to check, I remembered something with respect to the Nypro business, that $3.2 million. Am I remembering it properly that the margins of that business were lower than your kind of historical norms at the corporate level?

On the existing Nypro business?

Yes.

Yes.

Okay. And then switching gears, we haven't talked about the white goods market at all, I guess focusing on more on the good stuff than the negative, but -- and speaking with the OEMs that you work with in the white goods area, what are you hearing about their channels? Are they relatively clear now? Just any kind of color on that would be helpful.

I don't know if we talked about it last quarter or not. I mean, Whirlpool has laid off additional people and is consolidating some plants. Right now, it's a very tough market for our end customers. They're down -- for us, they're down double digit year-over-year, and they were down last year from the year before. So it's a significantly lower market. That said, we continue to book programs with Whirlpool that ultimately should increase our business with them, but our existing business is considerably down and that's going to continue through at least this fiscal year and very much tied to the housing market. And there's also a fair amount of foreign competition today.

Right. I think we all expected that. But I guess, what I was getting at is if they're -- if we finally get to a bottom or any slight turn up, just wanted to double check again as they go through their restructuring efforts whether that -- and so leaving them with excess inventory that's going to clear such that there's a lagging effect before you see any real volume growth with them.

They have reduced inventory. I think some of that is still happening, certainly from an Electrolux standpoint I believe. They launched probably their suite of products here in the United States right at the beginning of the recession. So I think that both customers are still adjusting their inventory. So yes, we'll have a lag but I'm not so sure we're not seeing a bit of that now. But in our planning we're showing really no growth for those areas, other than new programs that we'll book and we'll talk about those as we book them.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to management for any closing comments.

Thank you, Jackie. With that, we'll thank everyone for listening today and wish everyone a safe and joyous holiday season. Good day.