Welcome to the First Quarter 2008 Stonebridge earnings conference call. (Operator Instructions) I would now like to turn the call over to your host for today’s call, Ken Kure.

By now, you should have received our first quarter earnings release. The release has been filed with the SEC and has been posted on our website at www.stoneridge.com. Joining me on today’s call is John Corey, our President and Chief Executive Officer, and George Strickler, our Chief Financial Officer. Before we begin, I need to inform you that certain statements today may be forward looking. Forward-looking statements include statements that are not historical in nature and include information concerning our future results and plan. Although we believe that such statements are based upon reasonable assumptions, you should understand that these statements are subjects to risks and uncertainties and actual results may differ materially. Additional information about such factors and uncertainties that can cause actual results to differ may be found in our 10-K with the SEC under the heading forward-looking statements. During today’s call, we will be referring to certain non-GAAP financial measures. Please see the investor relations section of for a reconciliation of those non-GAAP financial measures to our most directly compatible GAAP measures. John will begin the call with an update of our results and his thoughts on our 2008 outlook and market conditions. George will discuss the financial details of the quarter along with our guidance for the rest of the year. After John and George have finished their formal remarks, we will then open up the call for questions. With that, I’ll turn the call over to John.

I would like to provide you with an update on our progress in the first quarter 2008 and to discuss our expectations for the reminder of the year. For the quarter, our sales our sales $203.1 million, increased by $18.1 million or 9.8%. This is the first time the company has reached sales of greater than $200 million in any quarter. This increase was a notable achievement in the face of a significant decline in the North American light truck and commercial vehicle production. Our operating income totaled $14.1 million compared with $9.7 million in the prior year, an increase of $4.4 million or 45.4%. Our 2008 first quarter operating income included $2.5 million in restructuring changes which were the results of our Mitcheldean, UK, and Sarasota, Florida, restructuring efforts previously announced in October 2007. Finally, our diluted earnings per share totaled $0.28 in the first quarter which included approximately $0.09 a share for the restructuring expenses compared with $0.21 cents a share in the prior year, an increase of $0.07 per share or 33%. We are pleased to continue our progress to improve our quarter-over-quarter performance. In regards to our market environment, the conditions in our end-markets performed as expected. Productions in North American commercial market declined 26% while the North American light vehicle production was down 13% at traditional domestic manufactures. On a positive note, our largest North American commercial vehicle customer’s production declined approximately 15% in the first quarter which created a slightly more favorable impact for Stoneridge relative to the overall market. Despite these challenges in North America, Stoneridge reported higher sales and earnings during the first quarter. This was attributable to our balanced end-market exposures and new business wins. During the quarter, we posted strong results in our European commercial vehicle business, our Brazilin joint…

Before we review the first quarter, I’d like to share a few financial highlights in the quarter. Our restructuring programs continue to track the plan. We are pleased with the committed effort made by Stoneridge employees at both the Sarasota, Florida, and Mitcheldean, UK, facilities. Our hedging programs are allowing us to partially reduce our exposure to commodity and currency price volatility. We have hedged approximately 20% of our projected copper buy for the year to reduce the volatility of one of our major commodities. The cost of our manufacturing inefficiency, though still too high, has continued to improve. In the first quarter of 2008, this improved by approximately $700,000 compared to the first quarter of last year. We have commented that we want to improve our cost of capital. During the first quarter of 2008, we repurchased $11 million in long-term bonds that had a coupon rate of 11.5% and an additional $6 million in April. We have purchased $17 million of our long-term bonds through April of this year, and we will continue to pursue opportunities as the capital markets recover. We will continue to control our costs as a way to offset the lower production levels in North America to improve our financial results, and we will continue to focus on cash flow and improving our return on invested capital. As part of our restructuring program, we are working to sell our Sarasota manufacturing facility which we are targeting to sell in the second half of the year. I would now like to cover the first quarter results in more detail, and then we will open up the call for questions. Revenue of $203.1 million in the first quarter represents an increase of $18.1 million, or 9.8 percent. Our year-over-year improvement in revenue was primarily attributable to…

(Operator Instructions) Your first question comes from Katherine O’Connor - Deutsche Bank. Katherine O’Connor - Deutsche Bank: Could you talk a little bit about what your expectations are for you end-market goods through the second half of the year? And then how do you think you match up versus end-market performance whether or not you have new business coming online that would help you outperform or have business that would be rolling off that way you might sort of underperform what the end-market will do.

I don’t think there’s any business that we have that would roll off. Of course if there is some de-contenting, that might be, but I don’t think we see anything in our plans or anything from our customer that would have things rolling off that we haven’t already factored in. We’re looking at the markets and we’re looking North American production of cars and light trucks to be down around 14.3, which is below what we had our original plans together for. Our operations are looking to make sure there is structure to a level of around that $14.3 million. I think the bigger issue is the mix, and the issue for us will be the examination of left impact of the switch from trucks. You saw GM’s announcement of the GMC-900 and the production cuts, and we’re going to assess that impact on our operation because we knew that product could go on into those platforms. On the commercial vehicle, I think as we’ve indicated, we see that performing in the range that we talked, 25% to 35% decline. One of our bigger customers internationally happens to be doing slightly better than that right now. We expect that to continue and we expect to get some benefit from that. On the European side, that market still remains very robust and we’re anticipating well, but we don’t see any significant downside in that market either. Katherine O’Connor - Deutsche Bank: I know that the first half the military sales should be stronger than the second half. Could you just give us an update on that, and then speak to whether or not the content you have for military sales, do you have content with all the OEMs or only certain OEMs where there are end-market contracts?

We have had an initiative here to expand our presence into the government sales but they include military sales through the opportunities that we’ve afforded ourselves that first came on the military platform. We don’t have a significant exposure, although across the broad front we have many customers on that as we discussed before. We do think you will see continuing emphasis on our part to expand our presence in government sales, and so we would expect that maybe this year, we might see some decline in the second half based on the builds in the first half. Overall, we think that’s going to be a growing channel for us. Katherine O’Connor - Deutsche Bank: For the vehicle I think you have the content on, I think there are three major OEMs that provide that vehicle to the US government. Are you on one, two, or three of those different OE platforms? Could you just give us some color on that?

We’re with one now, but we are always honing others. Katherine O’Connor - Deutsche Bank: Then, in terms of the shift you were talking about, the mixed shift, cars versus trucks, can you remind us on the light vehicle side, where your mix was, cars versus trucks?

We’re about 30% passenger car and light truck, and we’re about 50% in medium and heavy-duty truck. Katherine O’Connor - Deutsche Bank: I guess when you were speaking about the light vehicles in North America, when you were taking about the effect of a negative mix shift and GM taking down truck production, I was speaking more to that. Within the light vehicle segment, do you have what your mix is, truck versus car?

I don’t have that with me here where we split it down to that level, but we are evaluating the recent releases from General Motors to understand what that potential impact could be. Katherine O’Connor - Deutsche Bank: Moving on to the bonds you repurchased, in total you repurchased $17 million.

That’s right. Katherine O’Connor - Deutsche Bank: Do you have plans to continue to do that in the open market?

Well, I think its all part of our overall capital plan that we said before. I think our intention is we wanted to refinance our debt, but we felt that the rates were attractive and we have a limit, and I think we’re pretty at that level with what we’ve repurchased so far, and we’ll reevaluate our position. Katherine O’Connor - Deutsche Bank: In terms of the Brazilian IPO filing, I know that you can’t really speak to the actual filing, but I just wondered did you actually ever say what the use of proceeds were, or what is the use of proceeds stated in that filing because it’s in Portuguese obviously, so is there anyway you can tell us?

For the Brazilian company, what they were going to use the proceeds for

The initial filing which was made does not have that requirement. We were to the point of the next filing, generally that is one of the requirements in that final filings which we never got it through, so none of that was ever disclosed, and as you can understand, we can’t really address that.

Your next question comes from Brett Hoselton - KeyBanc Capital.

George, the sales increase in the first quarter was very substantial, much better than I expected. I know you’ve identified some of the factors there. I was hoping you might be able to bucket some of those factors that drove the improvement in sales.

Katherine asked the question about the government business. That certainly had an influence in the first quarter. The European medium and heavy-duty truck had a significant influence on that, so I would say it’s really in those two key area, and the ag market, so those three contributed for most of the increase, and then I think we did talk about the foreign currency which amounted to about $4 million, so it was really wrapped in those three key areas for the top line.

You’ve got a year-over-year increase of about $18 million. $4 million was due to FX, so you’ve got $14 million left. Would you bucket it evenly across the other three items, military, Europe, and agriculture?

Well, I think we talked about it. Ag was up roughly about $3 million, so that would be $3, and $7, that’d be 11, and then I think you can just about split those between the two.

As you look at your guidance for 2008 and thinking about higher commodities cost, can you speak to what are some of the commodities that you see yourself having more exposure to in terms of risk to your guidance and what kind of thoughts have you factored into it.

The primary one is really copper, and we just did a reassessment of that, and it’s hard to tell you but part of what’s driving it is the dollar. The consumption that we have in copper is our primary one. Zinc, we’ve got that fully hedged for the year, so copper could influence. We purchase about five million pounds a year in copper, so you can sort of swing the factor based on the price.

Are you kind of assuming that copper remains at the current pricing levels? I guess what I’m wondering is you are not anticipating copper pricing and being able to get any more coverage from your customers that might be a risk or anything along those lines.

I think John mentioned that we don’t get it from a direct, but what we do is I think our organization focuses on product design and redesign, and we tend to recover that way. We have had some success in some of our markets doing that in the past.

This concludes our question-and-answer portion of the call.

As we said when we started here and now this is our second year anniversary of the call, we put a process together and we’re following that process. First and foremost in that process is the people and the team, and I think the results that you’ve seen us being able to produce over this period of time are results of that team, that getting focused and paying attention to the details, and it’s really just very basic. We focus on the operational execution. Final execution of the market and execution of the team does it all, so I’d like to thank the team for that. We are working in difficult markets right now. We don’t see any relief from those markets, but I think appropriately we’ve been able to mitigate the impact of those markets because of some of our initiatives. We continue to see opportunities for this business both operationally and in the growth areas and we will continue to focus our efforts on those things. We are very pleased with our performance so far. We’ll continue to work on that. Again, we’d like to thank everybody for their hard work in our organization.