Right, good morning to you. Ladies and gentlemen and welcome to the Third Quarter 2013 Stoneridge Earnings Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of today’s conference call instructions will be given for the question-and-answer session. (Operator Instructions) As a reminder, this call is being recorded today, Thursday 31 of October 2013. I would now like to turn the call over to Kenneth Kure, Corporate Treasurer and Director of Finance.

Good morning, everyone, and thank you for joining us on today’s call. By now you should have received our third quarter earnings release. The release and accompanying presentation has been or will shortly be filed with the SEC and has been posted on our website at www.stoneridge.com. Joining me on today’s call are 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 statements. Forward looking statements include statements that are not historical in nature and include information concerning our future results or plans. Although we believe that such statements are based upon reasonable assumptions, you should understand that these statements are subject to risks and uncertainties, and actual results may differ materially. Additional information about such factors and uncertainties that could cause actual results to differ may be found in our 10-K filed with the Securities and Exchange Commission under the heading Forward Looking Statements. During today’s call, we’ll also be referring to certain non-GAAP financial measures. Please see the Investor Relations section of our website for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. John will begin the call with an update on the current market conditions, operating performance highlights, our growth strategies and business development, and his thoughts on future initiatives. George will discuss the financial and operational aspects of the third quarter and our outlook. We prepared and published an earnings presentation to provide more detailed schedules to help your understanding of our third quarter results and trends for a continued improvement. A copy of these items can be found on our website at www.stoneridge.com in the Investor Relations section. After John and George have finished their formal remarks, we will then open up the call for questions. With that I would like to turn the call over to John.

Thanks Ken, good morning everyone and thank you for joining us on the call today. We’ve seen continued improvement across most of our business segments over the last three quarters and this quarter kept our momentum progressing. As we continue to improve operations, reduce cost, generate better cash flows and reduce debt levels we’ve been able to leverage this quarter-on-quarter up tick in activity with improved financial performance. Our third quarter results remain consistent with the lower end of our expectations and the annual guidance that we previously discussed. We will go in a more detail on this later in the call. Consolidated revenue of $234 million as seen on Slide 4 increased by 6.5% from the third quarter of 2012 to the third quarter of 2013. This improvement was the result of new business sales for control devices in North America and commercial vehicle exports and product launches in the Europe despite the overall European industry volume weakness. PST sales improved 12.5% local currency although the weaker riyal versus the dollar offset the increase in our U.S. dollar basis. The riyal depreciated from 2.03 to 2.28 or 12.5% versus the dollar during the third quarter of 2013. Our market mix of automative and ag in North America and aftermarket in Brazil helped us improve our sales performance despite flat commercial vehicle markets in Europe, continued delayed recovery in the commercial vehicle market and customer share shifts in North America impacting volume expectations. Control devices and electronics continued to exceed our corporate growth targets as they did in the second quarter as did PST. Wiring’s performance was impacted by continued weak market conditions and customer demand adjustments. Our year-to-date operating margin nearly doubled to 4.6% this year compared to last year on slightly lower sales. Stoneridge excluding PST posted operating…

Thank you, John. As the markets have been generally improving over the last five quarters, we have been able to benefit from the actions that we implemented during 2012 to improve our operations, reduce our costs, generate positive cash flows, reduce our debt levels. Our third quarter 2013 performance was significantly better than the third quarter of 2012 was consistent with our expectations of improved profitability for the quarter. Our sales for the third quarter increased by 6.5% compared to last year which was mostly driven by control devices and electronics. Our sales were down by 3.8% compared to the second quarter due to commercial volume in North America driven largely by key commercial accounts and share market loss and PST due to the currency devaluation of the riyal. Our third quarter improvement continues to trend showing quarter-on-quarter sales, gross margin and operating margin improvement over the past four quarters. Revenues in the third quarter were $233.5 million, an increase of $14.2 million or 6.5% over the third quarter of last year driven primarily by higher market activity in North America and new business sales in North America and Europe and stronger export sales Europe to Brazil with our largest European customer. Revenue in the third quarter of this year decreased by $9.3 million or 3.8% over the second quarter due mostly to seasonable summer shutdowns in North America and Europe and the decline in production increases forecast from a key customer account in North America. The trend of the market has been improving over the last five quarters and from the improvements in our margins we’ve been able to leverage these revenue gains over the last three quarters. From our experience, our sales decline in the third quarter and the current production forecast of North American market will indicate…

Thank you. (Operator Instructions) First question today is from the line of Jimmy Baker of Riley & Company. Over to you Jimmy. Jimmy Baker – B. Riley & Co. LLC: Hi, good morning and thanks for taking my questions.

Hi, Jimmy.

Hi, Jimmy. Jimmy Baker – B. Riley & Co. LLC: So I was just hoping we get start with a couple question on the cost side. Can you maybe just speak to the sequential gross margin trends at the core business? Is the compression there all wiring related and then just talk about the sequential compression in gross margin at PST as well?

Yeah, in the core business, it is wiring business. The margins are where we want them to be for both electronic and control devices and they have improved, and so they’re maintaining what our targets are to those businesses, so it really as an issue with wiring. On the PST business, the margins that really is a mix shift that we look at the higher end products, higher margins products like the alarm systems and like tracking systems versus I’d call mid margins products of audio. So as we see more audio sales, you’re going to see a pressure on that. And in this quarter, what we’ve seen because of the Brazilian economic uncertainty, we’ve seen some impacts to our service business, which is very high margin. And then you might recall that business is where we selling alarm system and a person wants to have the ability to track their car – on tracking system they want the ability to track their car. But we provide that service and collect a fee for that. As we’ve lost some business in that market primarily due to a insurance company reducing their exposure to that markets. Those margins have moved down a little bit. Jimmy Baker – B. Riley & Co. LLC: Okay, that’s helpful. And you’ve made a lot of progress in your consolidated business; really it’s on a progress. But wiring obviously does remain a challenge and I understand you expect that to improve in 2014. Can you just speak to what gives you conviction that 2014 will be different there? It seems like this segment has been a focus of attempted improvement for a couple years now, but just by its nature or customer concentration it seems challenging to battle the volatile nature of that business?

Right, yeah, the issue there really for us in the wiring business as we said is as we’ve seen share shifts in the – North American manufacturers and those share shifts have impacted us to a large degree. We think that those share shifts are over with now and that there should be no further downward decline and we expect that we will see that with modest market improvement next year but perhaps may be some reversal of that share loss of some customers that that will improve for us and then also our latest look from the Ag market says that, that should be within our range of forecast which is again 40% of our business and the third quarter was up 5%, so we’re starting to hopefully see the further improvement there. Jimmy Baker – B. Riley & Co. LLC: Okay, thanks John. So last one from me I will pass it off and just hoping you can help us understand how you’re planning for Q4 on a sequential basis, I realized that PST is seasonally strongest quarter can you just speak to the magnitude of the expected seasonal uptake there and then what are you planning for in terms of volume at your commercial vehicle and Ag customers sequentially in Q4 versus Q3?

Well on PST it’s a while that is their strongest fourth quarter as you indicated we’ve really look at have to monitor how the distributors are buying inventory and at this stage the distributors appear to be fairly well stocked. What we do know is we are having problems with one large distributor in the order pattern because they put in a new system and that system is not performing for them and it lost control of their inventories and order patterns. So that could move the volume quite significantly as they either drop orders or add orders. We are cautious about Brazil because of the really the economic uncertainty of what’s going on in that marketplace, we had what I will call an acceptable Father’s Day buy in. So we’ll see as we go forward, we do expect some good audio sales out of that and we expect to see increases in our audio sales and the question for us will really be how the alarm sales perform and I don’t have a real good answer on that because I really can’t predict the demand patterns of that other than knowing that our distributors have bought their normal requirements and so we’re not seeing any increase in those requirements or any decrease in those requirements right now. And the other part was the, the commercial vehicle market in this marketplace I think the commercial vehicle market in North America – well on Europe it’s going to be some pre-buy there in Europe. We’re not going to there is going to be a modest pre-buy in Europe for commercial vehicles that will give us some benefits in North American markets the commercial vehicle market is really relatively I guess flat we don’t see any real growth into that market in the fourth quarter and it really depends on its customers pickup the shares that they’ve lost we’re not, we’re concerned about that because as we’ve said the third quarter, we have to provide the capability to ship product to the customer and you can’t take that out quickly. So the trends have not been favorable in that marketplace and so there is going to be a challenge for us in the fourth quarter there in the wiring business.

Our current forecast is showing that the North American commercial market is relatively flat in the fourth quarter compared to the third quarter. I think the forecast we are all starting to see now though is they are forecasting an uplift in 2014 especially in the first quarter. So we need to be somewhat cautious about that because that’s when you get these imbalances of labor costs and inventory position. So we’re currently going through that really evaluating that position right now. Jimmy Baker – B. Riley & Co. LLC: Okay. Thanks a lot George, thanks for the time John.

Thank you. Next question comes from the line of Robert Kosowsky of Sidoti. Robert Kosowsky – Sidoti & Co. LLC: Good morning, guys. How are you doing?

Hi, Rob.

How about yourself? Robert Kosowsky – Sidoti & Co. LLC: Yeah, doing pretty good, just building on the wiring business is to make sure you got few things clear given North America truck how do you fly into 4Q. So we assume that wiring will be pretty flattish from a revenue standpoint and we shouldn’t see much more degradation on the operating loss?

Yeah again I hate to give you that indication because as I look at what happened into the third quarter where we expected to see some increases and then saw the schedules cut in the middle of the third quarter, it really depends on what manufactures are going do to their production schedules they could be adjusted relatively quickly as they were in the third quarter catching us to having to adjust. So while the market looks flat and if everybody meets their expectations and we should probably follow those trends but again I would put a high degree of caution around the change in share, and the change in production schedules. Robert Kosowsky – Sidoti & Co. LLC: Okay, as far as that I will go at…

And Rob, we do see that the wiring will be a little bit under that same issue that a big flat or maybe even slightly down in the fourth quarter with the demand schedules we are seeing right now but the other businesses look like they will continue as they did in the second or third quarter. Robert Kosowsky – Sidoti & Co. LLC: Okay and then also within the wiring business, how do you feel about the actual operations of the business and I understand volume is like a major issue but as far as where do we stand on getting approval to make product on each of different plants and then in addition are you keeping extra labor right now just because if you do have that 2014 pick up you don’t want to be call like you were back in 2011 when you don’t have the right labor staffing?

Yeah it’s a very good question, we’ve largely complete, we are in the process of moving product to various plants that will continue through the first quarter of 2014 we are getting approval from the customers to do that we are rebalancing that so that’s going on so that process is moving well In addition we are changing we modified some of our trucks manufacturing practices which have been implemented on how we place demand on the floor. And so that in particularly in one plant so that’s going to help that and then as far as labor yes that’s the real challenge as we look at the forward forecast for 2014 as George indicated we are seeing some upturns in those forecasts if those forecast materialize and we have to be prepared to produce the product. So our challenge right now is to go back to our customer base and try to validate with them the reasoning behind their uptick in their forecast for 2014. In addition, one of the things we’ll do in the fourth quarter is as we’ve said all along because the peak season in Ag is really the first quarter, we will be building some inventory over the fourth quarter for that market and so that should help to minimize that but yeah we don’t expect to see a similar result that we had did this year in the first quarter. Robert Kosowsky – Sidoti & Co. LLC: Okay and then just building on to Ag how do that look into next year do you think that’s going to be kind of a growth market for you at least the pre-season sales?

I wouldn’t say it’s a growth market I would say its consistent with the forecast I mean we don’t see any decline in the forecast some people were concerned about that I said that we are looking at we’ll have another meeting with our largest customer here in December and we’ll get a real good outlook as to what goes on in their first quater but right now we are not seeing any softness in their schedules. Robert Kosowsky – Sidoti & Co. LLC: Okay, and then I guess two other questions one is on the direct material that it’s definitely been trending down over last year kind of picked up a little bit from the first half I was wondering if you can explain what that was and also more broadly with the improvements we’ve seen year-over-year, could you maybe tangle out pricing declines versus just your own material productivity improvements?

Well I think if you go back a couple of years you looked at the control device business segment we talked about it that we were impacted by things like railroad magnets were there was significant price increases and we get a lot of work over the last two years to one fine new sources of material and two to redesign the product around that. So that’s really one of the things is benefiting the material line on that that aspect. In addition, we’re doing a lot of redesign to use alternative materials. And then if you look at Electronics business, as electronic components age, they have a natural degradation of their costs. So the longer of component has been in the market, the lower to costs but it comes and tell us then to like and when you have to do a last time buy, so that also benefits us. And then I think on the wiring business, I think we’ve seen stability on the copper basis. So that’s kind of where we see everything right now.

And the uptick in the third quarter was really mixed more than anything rather than the wiring business. Robert Kosowsky – Sidoti & Co. LLC: Okay. And anyway of kind of frame how much was this, do you have the statistics for maybe just raw material productivity versus just kind of general kind of price declines for that or do you maybe just blockade, which is a bigger impact to the year-over-year declines?

Well, if you look at and we track and we have 11 commodities we work worldwide and we typically negotiate our contracts in the fourth quarter, which we are doing right now for the following year. Those plans are pretty well in place and they’re very consistent. So anything that you’re seeing and movement in the raw material costs of sales is being driven more by mix as opposed to specific actions or increases or decreases in raw material costs. Robert Kosowsky – Sidoti & Co. LLC: Okay, that’s helpful. And then finally SG&A look like it came in pretty as much lower than at least what I was modeling and I was wondering if this like $42 million to $43 million to sustainable, is there any like kind of like may this kind of an anomaly or kind of how should we look at that line item going forward?

Well, I think the biggest reflection you’re seeing as you can imagine was sum of where our earnings performance, the biggest modification went in there would be sort of our annual set of compensation. So that will sort of vary based on how we’re performing. And so right now that change, what I would continue to model is exactly what you are looking at in the first half for an ongoing basis for 2014.

And I would say just add on to George, when we set our incentive compensation, they are at high targets and so there is probably a correct proportion of that and so if we don’t achieve that than it rolls back in. Robert Kosowsky – Sidoti & Co. LLC: Okay, this quarter is maybe a little bit abnormally low. But first half of the year run rates are kind of?

I think we’ve been managing our SG&A fairly consistent so. Robert Kosowsky – Sidoti & Co. LLC: Cool, thank you very much.

Thanks, Rob.

Thank you. Our next question comes from the line of Brett Hoselton of Key Bank; over to you. Irina Hodakovsky – KeyBanc Capital Markets, Inc.: Hello, everyone this is actually Irina Hodakovsky on for Brett. How are you guys doing?

Hi, Irina.

Hi, Irina, how are you? Irina Hodakovsky – KeyBanc Capital Markets, Inc.: I’m doing well, thank you. Guys a couple of questions for you, you mentioned that North American customer reduced their production forecast. Can you speak to the level of the changes they need to do to schedule?

I do not have the specifics of the reduction, George I don’t think I don’t want to…?

No, Irina I guess to give you sort of because it’s happening both in the medium truck and the heavy-duty. And so if you look at our forecast for the year heavy truck class aid is down roughly about 10.5%. As you look at the share shift, our one key customer is down almost 19%. So there is an impact there and there was a forecast that we’d believe that we pickup the third and fourth quarter that is not materialized. So it’s not so much that the volume is down. It’s the anticipated forecast of increased demand. It’s coming in the third and fourth quarter. But as the share market did materialize both in Class 8 and the medium truck is the same and as you know the medium truck is up to tier 7.5%, but our key customer is down almost 6%. So that has created a swing where we’re building and planning based on forecast in the third and fourth quarter. The volume is fairly consistent, but it’s what we had to do prepare for production and inventory positions to support that. So as those schedules got adjusted in the third quarter, we are seeing the same trend in the fourth quarter. But I think as John and I shared a little earlier, we’re seeing fairly significant increases in early 2014. So that’s what we’re trying to measure and sensitize right now is how does that materialize this quarter-to-quarter because when you start running that through the four wiring plants it becomes rather complex in terms of how you made them both direct and indirect labor and also your inventory positions to support that demand. Irina Hodakovsky – KeyBanc Capital Markets, Inc.: So the following question John is with the wiring operation, which it seems like some of the issues maybe forthcoming in the fourth quarter and it could be the volume of these could be weaker in the fourth quarter than it was in the third or at the very least the same? And then with PST and uncertainty is there and the margins that business puts out your full year guidance was maintained. Can you speak to what are the positives that keep your confidence going that those margin objectives will be met?

Yeah, I think when you look at the North American automotive market that’s where our Control Devices participates. We had a very storng quarter in the third quarter there and we expect to see that trend continue. I mean the only thing that would impact that would be shutdown schedules for the holidays. But I mean I think that right now we’re forecasting to see continued strength in the North American automotive market and the Control Device business units performing very well. In addition our European Electronics business for the OEM market is performing well as we said because of product launches and we are seeing some pre-buy for the emission standard. Now that the degree of what that is we’re still watching that, but we are going to have some experience of pre-buy in the fourth quarter for that. So that gives us some confidence there. The one challenge really is what happens in North American electronics because we’ve got a large customer there that’s again not performing as one. But so that gives us some confidence. And then offset on the wiring business, I mean we continue to look at managing the cost structure of the wiring business and we are on a plan to continue to take out costs out of that wiring business. I guess the real challenge for us there is to how much costs we get out versus looking at the forward demand in the first quarter as George said and just by way of example, because it’s a material I mean labor intensive business, it’s usually takes us about I would say two months to get a person up to speed where they’re operating on efficiency. So the challenge becomes then and if you’re going to have an increase in the first quarter, do you take labor out in the fourth quarter, only to reintroduce labor in the first quarter at less efficient rate? And so that’s the variability that we’re dealing with. But I think to looking at right now the forecast for Brazil, looking at forecast for Control Devices, looking at the forecast for electronics, those two electronics and Control Devices look very good. Brazil as we said it’s a aftermarket business and so it could shift around. It could move aggressively around the Christmas holidays. But we have not seen anything from the distribution base yet that would indicate there is significant problem there. We’ll track that monitor that really happens during this month of October as they load up their products on October, November and then wiring is really the – how fast the customer share shift returns. Irina Hodakovsky – KeyBanc Capital Markets, Inc.: Well, thank you very much, guys.

Thanks, A. Rhem.

Thank you. (Operator Instructions) We have our next question from the line of Justin Long of Stephens, Inc, over to you Justin.

All right, guys. This is actually Brian Conley [ph] filling in for Justin today. Guys you have another strong quarter?

Thank you.

Thank you.

So my first question is on Europe, it sounds like Europe is getting a little bit better and I was wondering if you could provide an update on the percent of operating income coming from Europe right now and kind of where you think that percentage trends over the course of the next several years?

Brian we are going to be disclosing our Q here. I think we’ll follow tomorrow and I think in there you will be able to see the different margins each one of the segments.

Okay.

But it is performing very well like it did in the first, the second quarter even in the down market and John alluded the fact that we are starting to see some of the schedules actually late in the year and even some potential pre-buy. So Europe we feel pretty comfortable with where they are at and the things that they are doing.

Okay, great, thanks. And secondly and if I think about the capital allocation going forward it seems like the priority is an acquisition could you just comment on the activity you are seeing in the M&A market and the likelihood that we see something in the next year?

Well, we have a process underway where we are reviewing several different alternatives we don’t want to really get into a bid process that we don’t think win there I mean the last couple of times we’ve been through to those bid processes we couldn’t justify the valuation that’s maybe an investment firm could so we are reviewing a lot of companies right now we’ve got a process I would expect that we would probably be able to conduct a transaction sometime next year that would support our control device business as we look at that. But all as I can say that there is an active process on but we are being disciplined about it but we don’t want to pay too much still we want to try to get an accretive business onto the book so.

Right. Well that’s all from me, thanks for the time.

Yeah. Thanks, Brian.

Thank you. Next question comes from the line of Rhem Wood, over to you. A. Rhem Wood – BB&T Capital Markets: Hey, good afternoon guys.

Hi, Rhem. A. Rhem Wood – BB&T Capital Markets: Thanks for taking my question. A lot of mine have been answered, but real quickly do you talk about the Brazilian real it’s come down from its high point. But still kind of above your two or five number you plan do you have any thoughts on where that will grow and second part if you could 2014 guidance with that when would that be again?

Well, last year Rhem did it around the second week of February and I think it will be in that same range somewhere probably second week we typically don’t close till the end of February but I think most companies are out with some kind of guidance late January, early February so we’ll probably follow-up with the same kind of thing that we’ll do something around that second week of February. The Real it’s clear that is being influenced along with the Indian Rupee and buy would be U.S. policy an economic policy it’s being filed and so both of those have revalued over the last month or so. I think where how we view and I think there is a long-term consensus John and I were just in Brazil couple of weeks ago the feeling is that the Real will continue to devalue over the next couple of years in fact they have at going to around 235 over the next two years, I think the most important thing for us is two things one is that we import a lot of dollar components and when we talk about a 20% devaluation ultimately that translates into higher costs in the local markets. So we have to orderly raise prices and when it happens in a short-term it’s very hard to recover prices in a 30 day, 60 day period. But when it happened in 2012 it took us about 5 months to really get prices work through because of the inventory positions. The competitors were sitting on so, that will be our primarily goal as then when we do have disruption in the currencies can we get recovery in a fairly short period of time. to recover that and then the second thing that we’ve done is and this…

Well yeah its not like its always a on going process, it’s a continuous journey that we got to improve it, we have that process underway in all our facilities and so but our emphasis really has been on the wiring business because that would benefit the most from because of it’s high labor content as we have improve in the lean out those efficiencies since so we have some target set for them I think as we looked at our operating George what was that 3% that?

3.5% we’ve set a goal worldwide what we call controllable costs so that would exclude like depreciation and property taxes which are somewhat fixed but everything else we have that metric out there and it’s a little more difficult, as you can imagine the wiring business because it varies so much by the schedules that we have, the other businesses are very well on track for that in every other plant has got that those metrics in place though.

Yeah and as part of that one of our – while we don’t qualified as lean part of our costs management structures we have to move some product as we talked about we were moving some transferring some product out of our U.S. facilities down to our Mexican facilities in the Control Device segment and that program is underway and should be completed most of it completed by the fourth quarter of this year and then one probably one line going into the first quarter of next year, so we have that’s been another avenue that we are going down it’s not traditional lean, but it is reducing that cost structure. A. Rhem Wood – BB&T Capital Markets: Great, thanks. Keep up the good work.

Thanks, Rhem.

Thank you. And the question comes from the line of Robert Kosowsky, over to you Robert. Robert Kosowsky – Sidoti & Co. LLC: Yeah, just one last question, would you expect fourth quarter to be a cash flow from operations quarter?

From operations?

Yeah, it will be a good quarter Rob, because typically our sales go down in November and December that generally releases a lot in receivables. And we are working on reducing our inventories in the range of about $5 million to $8 million. So we would expect to see good operating cash flow in the fourth quarter. Robert Kosowsky – Sidoti & Co. LLC: Okay, so $5 million to $8 million potentially sequential of inventory drawdown?

Right. Robert Kosowsky – Sidoti & Co. LLC: Thank you, very much.

You’re welcome.

Thank you. And now I would like to turn the call back over to the management for any final comments. Thank you.

Yeah, well thanks for joining us on today’s call. I realized that we’re all in little uncertain about the fourth quarter, but I’d point out these facts of looking at going beyond the fourth quarter and looking into 2014, even if the commercial vehicle market in Europe doesn’t improve, we’ve proven this year in our Electronics segment in the OEM side of the business that we can operate in this reduced environment and operated good margin. So that’s a very positive factor for us, as we look at 2014. If the commercial vehicle market improves in Europe, we’ll get some benefit of that. As we look at the North American automotive market, the projections for 2014 are continued growth in that market and of course our Control Device business unit has performed very well this year so far and should continue to do so and it should look for both favorably for 2014 also. As we look at the wiring business, I would say that we seen as customer losing significant share. That looks like it’s at the bottom and it’s turning around, so if nothing else happens on the growth side of that business in terms of the market, we should see some benefit from that. So I think there are a lot of favorable trends going on for us in our business as we look forward and we’re trying to navigate through these quarters. But overall the direction I think consistently is a very positive one for 2014. So I like to again thank you for joining us on today’s call.

Thanks very much. Ladies and gentlemen that now concludes your conference call for today. You may now disconnect. Thank you.