Good day, ladies and gentlemen. And welcome to the Stoneridge Fourth Quarter 2013 Conference Call. My name is Sue, and I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Ken Kure, Corporate Treasurer and Director of Finance. Please proceed, sir.

Good morning, everyone, and thank you for joining us on today’s call. By now you should have received our fourth quarter earnings release. The release and accompanying presentation has been or will shortly be filed with the SEC and has been posted to 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 maybe 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 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 maybe 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 and growth strategies, business development and his thoughts on future initiatives. George will discuss the financial and operational aspects of the fourth quarter and our 2014 guidance. We prepared and published an earnings presentation to provide more detailed schedules to help your understanding of our fourth quarter delivery results and trends. A copy of these items can be found on our website at www.stoneridge.com in the Investor Relations section. After John and George are finished their formal remarks, we will open up the call to questions. With that, I will turn the call over to John.

Thanks Ken. Good morning, everyone. We have seen continued improvement across most of our business segments over the last three quarters. However, the fourth quarter was disappointing regarding the performance of Wiring and PST. As mentioned in our release of February 5th, we incurred higher cost for premium, freight and labor in Wiring as demand changes impacted production. Weakness in the Brazilian economy and supplier quality issues had a significant negative impact on our results in the fourth quarter. 2013 fourth quarter consolidated revenue as shown on slide six was $235.8 million, an increase of 5.9% from the fourth quarter of 2012. Sales for Control Devices in North America combined with commercial vehicle product launches and limited pre-buy affect in Europe were positives to the revenue line. PST sales improved 13.7% in local currency, though the weaker Real to the dollar offset this increase on our U.S. dollar basis. The Brazilian Real depreciated from 2.06 to [2.2128] Reals to the dollar or 10.7% during the fourth quarter of 2013. So while we are benefited from the solid performance in North American automotive and ag markets, we still not seeing the sustained recovery in the commercial vehicle markets, so our Electronics business growth in commercial vehicles is due to added content in new program sales. Control Devices, Electronics and PST continued to exceed our corporate growth targets as they did in the second and third quarter. Wiring’s performance continues to be impacted by weak market conditions for Class 8 trucks, thus waiting customer production schedules and a drop in the medium-duty businesses as a result of the key customer in North America. Our full year operating margin grew to 4.2% this year, compared to 3.1% last year on slightly higher sales. We reported $0.56 per share for the second -- for…

Thank you, John. As the markets have been generally improving over the last six 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 and reduce our debt levels. Our fourth quarter 2013 performance, though it was not to our expectations, lower than expected payrolls and favorable mix and higher cost affected our performance. Revenues in the fourth quarter were $235.8 million, an increase of $13.1 million or 5.9% over the fourth quarter of 2012, driven primarily by higher market activity in North America and new business sales in North America and Europe and stronger export sales from Europe to Brazil with our largest European customer. Revenue in the fourth quarter of 2013 increased by $1.3 million or 2.9% over the third quarter due to the increased sales of audio and improved PST. The trend at the market has been improving over the six quarters and from the improvements at our margins, we’ve been able to leverage this revenue gains over the last four quarters. We also believe that with further operational improvements, especially in our wiring business as John discussed, we continued in our Control Device and our Electronics businesses. We can leverage our earnings further. We believe we are positioned well to improve gross and operating margins as the markets continue to recover. Our earnings per share in the fourth quarter of 2013, was $0.01 per share compared to our fourth quarter of last year of $0.10 and down significantly from our $0.19 per share recorded in the third quarter of 2013. We posted operating margins in our Stoneridge business excluding PST of 2.9% compared to 3.2%, with sales being higher by $4.4 million. For consolidated Stoneridge, including PST, our operating margin…

(Operator Instructions) And your first question comes from Justin Long, Stephens Inc. Please go ahead.

Hey guys. Good morning.

Good morning, Justin.

Hey, you’ve talked before about target of 6% to 8% organic growth in the top line over the next few years and it’s something you mentioned in the prepared remarks as well. And I was just curious based on the contracts you’ve warranted, it sounds like there has been some pre-significant contract wins in 2013. How much visibility do you have in that target? Is it a pretty significant portion of that 6% to 8% that’s already locked in or is there still more work?

Well, when we do our net new business, Justin, we have a lot of visibility to the -- I would say the next two to three years as many of our contracts we do the over work at two to three years in those contracts run for anywhere from three to eight years. When you look at our growth in 2014 as it come in and you just take the midpoint of our cadence that we have in our release, in our presentation, it will come in around $23 million and jump around $37 million, in ‘15, it goes about $48 million. Most of those contracts already and we’ve alluded to, have been shipped by wire. We have some EDT contracts and some instrumentation. So for the next three years, we don’t have high visibility and pretty well on track and we don’t see really EDT much from the cadence that we share with you in our net new business outlook.

Okay. That’s helpful. Thanks George. If I look at your 2014 guidance, on an EPS basis, it’s a pretty wide range. I know there are a lot of moving pieces and that makes sense but if you think about the major swing factor that would cause you to either come in at the low end or the high end of this guidance. What would they be?

Well, I think there is probably two is that we do believe that in the commercial market in North America, we’ve seen the trough, especially with our key customer in the third and fourth quarter and that continued throughout the second half. There are probably -- we've seen some uptick in Navistar with our customer here in the first quarter. I think the negative that we’re seeing right now is that in the ag market there has been releases that now we would project the fourth to go back probably in the later quarter or the fourth quarter. It looks like the ag market would be up, maybe 2% to 3% for the year. It now does appear that it’s going to be down 5%. So I think the extent of the drop in the ag market would be one risk. I think where we come with our largest customer in North America in both the class A and quite frankly the medium truck which is even more important and the ag market is up last year and we were down very significantly and it’s really driven by our key customer. And then Brazil, I think we’ve shared with you that our quarterly trend on sales have been very good in local currency. We were up roughly about 30% in the fourth quarter. We’ve been up quarter-to-quarter over the last six quarters but its already under the influence, you get GDP running at 2%. We’ve continued to see the devaluation of currency fairly significantly which has offset a lot of a local currency growth. So I think as Brazil sort of moves forward, it’s really how does that economy react where it’s at. It seems significant devaluation and I think as we shared with you in the past is that we’ve done a lot of work to balance our currency exposure but the key thing is as we still import roughly $3 million a month to our components primarily in the security alarm system, really in the audio. That only, it says you have take price increases in the market. And we found in 2012 that became a little difficult because there were number of competitors, certainly that’s helped because our largest Chinese customer declared bankruptcy five months ago. And Sony exited that end of the market. So I think some of these product lines will be influenced by the overall economy and where the currency sort of moves forward. And they raised interest rates to offset that which has a potential to slow growth in Brazil and GDP is down running around 2% which is half of what it was two years ago.

Right. And if I look at your assumptions in your 2014 guidance for Brazil specifically, what are you assuming on both the top line and from a margin perspective?

Well, I think the top line is in the range of probably 6% to 8%. It could be a little higher than that. It depends on the audio volume that we have. In the margins, we believe we shared with you that we are working on changing some of our sourcing patterns for the audio equipments or the potential to improve that margin but that would be mostly for 2015. But if the mix stay about where it is, you saw in the fourth quarter, we’re down around 38, I think our targeted range is right in the 40% to 41% for Brazil with the mix of products that they have.

Okay. Great. That’s helpful. And then my last one was on the cadence of earnings throughout the year. It sounds like there were clear recent near-term headwinds in the fourth quarter. Some of those might persist into the first quarter. How should we think about your earnings progression throughout each quarter 2014 getting to that guidance number for the full year?

Well, I think the good way to look at it is that it’s clearly going to be second half loaded, both from a demand side and the commercial side. And I think you’re going to see a sequential in PST as you know it’s cyclical in nature and it tends to have a better second half from the first half. So I mean, if you look at historically in the first half, we’re probably looking in the range of more 30% to 40% of the guidance and then the rest of it will be in the second half of the year.

Great. That’s a helpful detail, George. Thanks so much for the time. I’ll pass it along.

You are welcome, Justin.

Thank you. And your next question comes from Brett Hoselton, KeyBanc. Please go ahead.

Good morning everyone, this is actually Irina in for Brett Hoselton. How are you this morning?

Hi Irina.

I had a couple of questions for you guys. Your guidance looking at your revenue, you raised your revenue mid-point by 2.5% but margins and EPS range all remain the same. There are two parts of the question, what drove the increase in revenue guidance and why do you not anticipate that higher volume to roll through to the bottom line?

Irina, we are see two things. We are recovering from the wiring business and found that the volume real comes in, in the second half. And we are still trying to work as we alluded to in the fourth quarter, we are balancing our customer demand with our production schedules and that was a little bit out of sync in the fourth quarter. We still have a little bit of that going on. So that's going to tend to dampen some of the profitability on the sales that's what we experienced there. But I think we will have that trued up by somewhere in the second quarter. And then Brazil, their mix of the products has continued and so that's lowered the overall margin and as we share with you before the audio tend to be run down in the gross margin around 25% to 28%, somewhere where we talk about the design houses, have the ability to raise that margin by anywhere from 2% to 4% but that is going to become -- that won’t really be fully in effective for 2014 -- ‘15, I’m sorry. So I think it’s the mix of the products in Brazil. Its going to lower the margins a bit even though their volume have gone up because there is a major launch in Brazil in audio. We are the number two audio manufacturer in Brazil now behind Panasonic with the departure of the imports in China and also we exited some of the high end component guys that got out probably about 12 months ago. And I think it’s really just matching of the wiring progress in the sales side going up and the balance in the demand and the production schedule we have to match them.

Got it, thank you for that detail. If I can ask you from backlog, you mentioned a few minutes ago or at the beginning of the call that you have a $176 million over the next five years. Now that was the backlog expectations before which were including 2013 through 2017, so is this over the next five years meaning shifting it out through 2014 through 2018?

No, Irina, how the schedule works is that ones it comes into net new business that we created in 2013, it’s now under base period for the following year. So it is a continuation looking over at the five years. I think that one thing that we haven’t included in there will be assessing that is we continue to gain on the actuation side but we haven’t really changed that overall net new business, in fact, it continues to grow. Just it’s -- we gained in 2013. It looks like it’s going to be about the same in 2014. And then we really start to see some lift both in actuation side. We shipped by wire in our EDT and that's really coming in strong in ‘15 and ‘16. So we are really comfortable where we’re going in our net new business. And I think, when you look at the schedule once you go through the net new business, it goes into the base for the following year. And we may update that some with our ship by wire because we are working on some other platforms with our two key customers in that side.

Can you tell us if any of that new business is going into your commercial vehicle segment on the wiring operations?

Most of our -- in fact if you look at the and there is a chart of our last release that we had on the net new business, the wiring -- we had some new customers coming in there but for the most part, our growth is really coming in electronics, control devices and PST. Now as you know we don’t include the growth in PST in that growth chart of $176 million in mechanics. So almost all of that growth is really coming in control device and electronics and I do want to remind you, this year we exceeded our net new business down to 20% in ‘13. And so we feel pretty comfortable where we are going in ‘14 and ‘15 as forecasted.

Thank you for that detail. And the last question I had for you, PST you mentioned delayed shipments in audio due to supply quality issue. Can you tell us, are there any anticipated cost associated with that quality issue, like a potential warranty cost or other forms of financial responsibility. And the second part of that, did you expect these delays to continue and when do you expect normal shipments to return?

Yes Irina, well the quality issue was related around a transistor that was intermittently defective. So it was difficult to determine whether there is a real failure mode or whether there was just -- and it took us some time to figure that out. We went back to our supplier. The supplier didn’t believe that this was a problem because they couldn’t detected in there in the board. They were sending to us. So it took us some time to do that. So we pulled the product off. In the meantime, they were shipping products to us that potentially will impact us into the first quarter of this year because we are not sure those products are valid of viable products to put into the audio line. So, I expect that we will see continued supply disruptions that start to, which will phase our by the end of this quarter because of that product. And I think the team down there did the right thing. I mean, if you follow the progress of our audio line, they’ve done a very good job in building that audio line. And as George said, it’s now the number two audio line. But in addition to that, as we are growing and we are gaining that volume, we are now starting to leverage that volume which is the next phase of that project, which will drive the cost savings that George mentioned going forward because we are now into the design houses and using more common components and we are getting volume purchases on those components. So the quality problem was contained. We don’t expect any significant warranty cost from that quality problem. We do still have and see a slight supplier problem through the first quarter of this year.

Thank you very much. That's all the questions I have. Thank you very much and good luck in managing through all of this.

Thanks, Irina.

Thank you. And your next question is from Robert Kosowsky with Sidoti. Please go ahead.

Good morning, guys. How are you doing?

Good morning, Rob.

I had a question on the wiring business. So you’ve spoken about how we can get 4% to 6% operating margin in wiring, is this exclusively a volume/utilization problem or do we need to do more work on the cost structure side?

Well, it is really a combination of three events. One, it is a lot of volume-related improvements that are necessary. If you look at the volume declines, we have had in that business over the last couple of years from the one significant customer, they’ve gone about 40% decline. So we’ve got to replace that volume. In addition, we have a separate -- we built the separate plant for this, so the timing of that was unfortunate. So there is a combination of volume improvements that need to come back into that business. More importantly, the volume improvements will give us some schedule stability. And that is important when we look at how we man the plants and that's the issue we are focusing on right now, is trying to get the proper manning in those plants related to the demand patterns that we are seeing from the various customers so that. And then in addition, I would say that we may have to look at different initiatives to recover cost through charging for certain of the -- what I will call, services that we provide to the customer. And in some cases when a customers breaks into a schedule with a hot lead item, we are going to figure out how we get paid for that. So there will be a combination of, I don’t want say pricing because I don’t want everybody to get excited but there’s going to be a large price increase on it. And there will be a combination of recovery, cost recovery through customer payments. Then, there will be a volume improvement segment and additional cost reduction as we go through, because our cost have been a little bit higher than we expect in the business.

Okay. Can you give a sense of what your utilization is right now versus what utilization you need to get to that to 4% to 6%, or better than that, what truck and what market share assumptions are needed to do?

So, the real way to look at it, if you look at the business historically, we need to run around at 10% to 11% on the labor line and about a 15% to 16% on the overhead line. That will equate to, I mean, do you look at -- it varies by plan on utilization and then again it varies by platform. So, our utilization runs as high as 80% and our most complex product, probably runs around the 45% range. Overall, we would sit there and say we’ve got the target to be on average at about 60%. And again, remember when you compare this to automotive wiring manufacture, there are much, much higher volume, much, much less variability. So their utilization rates can run up into the 80% and 90% range. But in the commercial vehicle line market where there is low volume, high variability, utilization rates tend to be lower.

Okay. Does that translate into like a $400 million annual revenue line item for wiring, just to get sense of revenues from?

No, I don’t think that revenue is not going to be at that range. As we look at the mix of products, so we’re going to be less than that. I think we’re going to see a modest growth in this year in 2014 and then we’ll continue from there. But we are being maybe more selective in how we’re looking at business, so it’s not a volume-based business, it’s a profit-based business now for us.

Okay. And then just sort of numbers questions, can you give any idea what tax rate we should be assuming for the year and what CapEx?

Well, the tax rate, it inched up effectively, it sitting right around 18% to 20% right, that’s where the lot of profits coming from both Brazil that has effective rate and it varies between about 19% to 20% and Europe is about 22%. I would suggest that they continue to be somewhere in the range of about 18% to 20%. And then cash taxes will only be, this year it’s about $5 million to $8 million and it will be about the same for next year. And CapEx will stay in the range that we have one -- it's about $21 million to $23 million for the base business of Stoneridge and then Brazil is got roughly about $6 million to $8 million, but a lot of that, 60% of that applies to tracking devices which is include in the service agreements and then we recover that cost over the life of the contract is tend to about 12 to 18 months.

Okay. And then, finally, is the debt refinancing still on the table for, I guess, later this year, you meant to funding on that?

It clearly is and I think so far as we watch the markets, the markets are holding well. So we’re encouraged that our first opportunity that is to refinance it by November and we, John and I spend a lot of time in that area and that’s something that we are planning to do this year.

Okay. Thank you very much and good luck.

You’re welcome, Robert.

Thank you. (Operator Instructions) And your next question is from Jimmy Baker, B. Riley & Co. Please go ahead. Jimmy Baker - B. Riley & Co.: Hi. Good morning, everyone.

Hi, Jimmy

Hi, Jimmy. Jimmy Baker - B. Riley & Co.: So just a quick follow-up to all that Wiring commentary which was really helpful, but what’s the timeframe to get to that 4% to 6% operating margin target and what have you assumed in the 2014 guidance?

The way this would unfold, it will be more backend loaded I think, John, got some other input into that also.

Yeah. I think that because of the way we see the commercial vehicle market. Right now we’re seeing, as George indicated, we’re seeing some softness in the ag market. We’re seeing some strength in the commercial vehicle market. Modest rate but it has to get stronger in the second half. So I would say we would start to see that more towards the second half of the year and definitely because of some other actions that will happen at the beginning of 2015, we would be positioned them to achieve that target consistently. But a lot of depends on the volume demand we see coming back this year and how fast that demand comes back. Jimmy Baker - B. Riley & Co.: Am I thinking about…

(Inaudible) it will be at the low-end of the range. I think 4% to 6% will be going more into 2015. So I think we can reach bottom end of that range in the second half and then in the, that 4% to 6% range will be more in 2015 level. Jimmy Baker - B. Riley & Co.: Okay. Perfect. Understood. And also the change in distribution channel for the PST JV. You’ve talked about that fairly, extensively how that’s evolved over the years. Can you just give us a little bit more color about what drove that shift? And then as you look it out over the next year or two, are you anticipating any additional major changes in term of distribution mix there that you might have to tackle?

Yeah, as we looked -- as we looked historically at PST, they held the dominant position in the alarm market in Brazil and Latin America. We were looking at the future growth of that market and as we saw in alarms market was that we didn't see them getting the significant share increases because they already have rather large share of the market. So we started -- they started looking around for alternative areas for growth. One was to continue to follow that alarm methodology and we brought in the track and trace system which is actually tracking cars and disabling cars if you buy the service. And from that we went into the cargo tracking system which have been George alluded to again. It requires a little more customization and we originally understood for the fleets but once you do the customization then you are on a fleet, you get some good revenue streams off of that. So that follows the alarm kind of scenario. And then beyond that goes to the home alarm scenario which we’re just starting out in the marketplace on that. All of those elements have a potential service element to a call center element, where you subscribe to a monthly service and paid a fee and then you call and use the service as needed. So that’s one avenue as how we progressed or how we will progress through that. The second side is as we looked at that, we saw some opportunities to leverage the brand name of Positron in the Brazilian market because it’s a very highly regarded name because of their work in the alarm systems business because of the quality of their product in those markets. They were initially the reason -- their kind of reason for success was that…

Yeah. Jimmy, we’ve no benefit into our guidance, actually refi, because it’s so late in the year, it will be roughly November. I think what all things we are doing is as you can imagine that there is a lot of opportunities in market, we are looking at both long-term indentures, we are looking at both bank debt markets that’s being very interactive right now. And I think what we are going to do beside that depending on what we believe is we can also do some bolt-on acquisitions. So there has been through capital structure and the flexibility in that. And one other thing that we are valuating is that as you know the company generates significant cash flow. So we want to make sure that we also have the bond of flexibility of our debt, so that we have the ability, if we generate the cash and we can still handle like bolt-on acquisitions, the flexibility take down some debt accounts both. Those are some of the things we are looking at to provide the flexibility to our capital issue, but there is no, nothing build in the guidance refinancing and the most of benefit will come slowly in 2015 as we are providing. Jimmy Baker - B. Riley & Co.: Very helpful. Thanks George. Thanks for your time, John.

You’re welcome, Jimmy.

Thank you. And your next question comes from Rhem Wood, BB&T Capital Markets. Please go ahead. Rhem Wood - BB&T Capital Markets: Hey. Good morning, guys.

Good morning.

Good morning, Rhem. Rhem Wood - BB&T Capital Markets: So, first question, just, what exchange rate for the Brazilian Real, are you using for your 2014 guidance?

We are in the area of 2.35, Rhem. Rhem Wood - BB&T Capital Markets: Okay.

Right now, as you know the market was actually about 2.42, it’s been right around 2.33 the last week or so. So it’s seem to have stabilized again somewhere in that range, but every time we say that it’s start to change again, but we in that 2.35. Rhem Wood - BB&T Capital Markets: All right. Okay. And then, secondly, Navistar per share and really picked up in January and February and into March. I mean, you guys starting to increase your production schedules there, are you starting to see that already or when do you expect to see that specifically?

Well, we have actually, if you had look at our first month, we saw some improvement Navistar’s business and so we do believe in the first quarter, we will see continued improvement in their business, but we are not going out beyond that quarter, because the second quarter and the third quarter. I mean, we haven’t really looked in-depth of those quarters yet based on the forecast their giving us. We are trying to focus mainly on what’s happening in the first quarter and in January we see some improvement. Now again we did budget, we took Navistar’s projections and we discount them a little bit, so we are running ahead of our projections and I am not sure if those are exactly on what Navistar’s projections would be or slightly above or slightly below, but we are running ahead of our projection somewhat. Rhem Wood - BB&T Capital Markets: Okay. That’s good. That’s helpful. And then, so do you have the correct amount of labor down there to accommodate any kind of ramp this year, is that correct?

Any kind of ramp? Rhem Wood - BB&T Capital Markets: Based on, what you expect to see Navistar?

Yeah. Right now, I mean, that is one of the things that we are addressing. We do have the labor right now, matter of fact, if you look at our production facility, we produce for Navistar at our three plants, we produce out of our Portland, Indiana plant, our South Hill plant, our Chihuahua plant. And that depends on the truck, of course, medium-duty and heavy-duty truck. But right now we don’t have any issues with the -- with labor and based on the schedules we have seen from them, we are not having any problems with that manning, so we are not planning to really man up a lot on these schedules because we actually ended the year, as we said, with more man power than we normally would take over the year end but that’s because, if you look at for instance the December results, we would be down probably, $5 million to $8 million in December from what the January results would be and so we just kept the man power on, so we should be good for the first quarter. As I said, we will go through a detailed review here, matter of fact, next week to determine what staffing in many levels should be. Rhem Wood - BB&T Capital Markets: Great. Thank you.

Thank you. I would now like to turn the call over to John Corey for closing remarks.

Well, I would like to thank everybody for joining us on the call. We closed the year much better than 2012, not up to our expectations and so as the management team goes forward in 2014. Our focus is on improving the performance, continuing to improve the performance of the company. And as we look at it, as we said that will see the year unfold with greater improvements towards the second half not only due to market improvements but also due to some programs that we will have kick in then. So with that I would like to thank you all for joining us.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.