Good day. And welcome to the Sypris Solutions Incorporated Conference Call. Today's call is being recorded. At this time for opening remarks, I would like to turn the conference over to President and Chief Executive Officer, Mr. Jeffrey Gill. Please go ahead, sir.

Thank you, Divona, and good morning, everyone. Brian Lutes and I would like to welcome you to this call. The purpose of which is to review the trends reflected in the company's financial results for the fourth quarter and full year 2013. For those of you who have access to our PowerPoint presentation this morning, please advance to slide two now. We always begin these calls with a note some of what we might discuss here today may include projections and other forward-looking statements. No assurance can be given that these projections and statements will be achieved, and actual results could differ materially from those projected as a result of several factors. These factors included in the company's filings with the Securities and Exchange Commission. And in compliance with Regulation G, you can access our website sypris.com to review the definitions of any non-GAAP financial measures that maybe discussed during this call. These qualifications in mind, we'd now like to proceed with the business discussion. Please advance to slide three. I will lead you to the first half of our presentation this morning, starting with an overview of the highlights for the year, to be followed be a brief discussion of each of our two business segments. Brian will then provide you with a more detailed review of our financial results for the quarter and year. Now, let's begin with the overview on slide four. The financial results for 2013 reflected the challenges faced by our aerospace and defense segment during the year, offsetting the continued strong operational performance by our industrial segment. Revenue, gross profit and operating income all declined when compared to the prior year period, while earnings fell to a loss of $0.51 per share driven large part by the impairment of goodwill during the year, which…

Great. Thanks, Jeff. Good morning everyone. I'd like to discuss with you some of the highlights of our fourth quarter and full year 2013 financial results. I’ll start at the consolidated level and then touch briefly on both of the segments. So if you will, on Slide 12, let me begin with our Q4 results. Consolidated revenues totaled $73.9 million. This was up about $6.4 million or 10%, driven by a 15% increase year-over-year within our industrial segment. We generated $6.4 million of gross profit. This was down $2.2 million from the prior year quarter, really a result of changed product mix and much lower revenue in our A&D segment. I'll touch on the details of that momentarily. When you look at gross margin, this came in at 8.6%. This was down from the prior year period of 12.8%, but stabilized in great part by the strength of the industrial segment, which, its margins expanded 120 basis points over the prior year period. EPS came in at breakeven or zero versus a loss of $0.05 in Q4 of 2012. And as a result of the $2.4 million non-cash tax benefit you heard, Jeff mentioned earlier, although partially offset by the A&D challenges that we talked about. For the consolidated 2014 results on Slide 13, you'll see the consolidated revenues totaled $310.7 million. This was down about $31 million or 9% from 2012, driven mostly by our A&D segment, which experienced a year-over-year decline of about 38% and a modest 3% decline in revenues for our Industrial Group versus the prior year. Gross profit decreased $13.7 million to $13.1 million, again driven mostly by the challenges you've heard Jeff mentioned with respect to our A&D segment. Full year gross margin came in at 9.7%. This was down 12.8%, or down from…

(Operator Instructions) And we will take our first question from Jim Ricchiuti with Needham & Company. Jim Ricchiuti - Needham & Company: Good morning.

Good morning, Jim.

Good morning. Jim Ricchiuti - Needham & Company: Wondering how we should think about the aerospace and defense business in 2014. Just given the current spending environment with the U.S. government, should we think of it as a flat year with potentially some growth depending on the timing of some of these new customer programs?

Jim, I think, clearly, as we come out on the decline from last year, we’re working hard. We see the funnel building, particularly with the existing new customers that we brought on board. We think we have good visibility to those programs and additional upside opportunity in 2014. Clearly the things that we are funding and the win of a Cyber Range is significant momentum for us, and we believe that there is momentum that we can benefit by as we progress throughout the year. But it’s still choppy waters out there as you know. Jim Ricchiuti - Needham & Company: Yes, okay. And so it will boil down do you think to the timing of some of the new programs, whether they…

Yes. I think that’s the way to look at it, particularly as you had heard Jeff talk about one of the -- our largest technology programs and the time spend or duration of that commencing to completion of approximate 18 months. So clearly, there is timing involved and the programs that we’re funding from a technology perspective, those that we are pursuing from an engineering funded programs, meaning programs that we’re actively hunting for that are funded through the government for key programs, certainly linked closely to cyber, the cyber space and certainly something clearly important to us is the core that we still have in our Aerospace and Defense segment, that being our electronic manufacturing services side of the business as well as continuing to drive opportunities for our secure communication handheld devices. Jim Ricchiuti - Needham & Company: Okay, thanks. It’s helpful. I had a couple of questions on the industrial business. First off, I was wondering if it’s possible for you to size the oil and gas petrochemical revenues in 2013. It sounds like it’s become more meaningful as part of the business.

It’s becoming more meaningful, but it’s really an extension of our -- what we maybe defined as our black magic, the machining and the forging, and these are highly engineering closures. So we really look at the company. This is just another facility performing products or building products for oil and gas exploration. So we really haven’t broken it out, Jim. Jim Ricchiuti - Needham & Company: But the business was up presumably from 2012 and you think it will be up again in 2014 this part of the business?

We do, yes, we do and really it's a source of diversification for us from what you see our traditional customers being on the commercial or the component manufacturing side. Jim Ricchiuti - Needham & Company: And the growth rate that you cited, the industry growth rate in the commercial truck market. I think I've asked this before, how does that -- how consistent is that with what you're hearing from your customers in terms of build rates and clearly, February was a strong orders month?

Yeah. February was strong as you heard Jeff mentioned. We see the commercial truck Class 5 through 8 being forecasted somewhere up north of 9%. Our order force fluctuating at different times Jim, but a true norm force at least in the time that I've been with Sypris is, it tends to work itself out and mere fairly closely ACT, FTR data. So we feel confident about the outlook. Part two of this, for your benefit is, as you’ve heard us talk about the efficiencies we are realizing and obviously, the year-over-year expansion in gross margins within our industrial segment grew things like Lean continues improvement, our first full year with TPS really position us well, because our maintenance and reliability of the equipment is far stronger today than it's ever been and therefore, the objective is really steel as the source and balancing that with the efficiency and overall upside conversion as we convert on higher revenue. So at least from where we sit today the prospects for 2014 for Paul and the team, and our industrial segment appear to be very, very strong. Jim Ricchiuti - Needham & Company: Okay. And last question just again with respect to industrial, it sounds like you might be seeing some tightness in capacity and so do you plan to bring on some internal -- some capacity internally or potentially look at some acquisitions and I'm wondering how that the timing of that might look as we look at over 2014?

Our core within our industrial segment, we at this juncture and based on the visibility we have today, we don't see any constraints with capacity. Obviously, as we resize the company coming out of the economic crisis, we feel that we can manage upside conversion very successfully as demonstrated in the first and second quarters of 2012, when that business was running at about an $83 million quarterly run rate in Q1, Q2, where I think you’ve heard, Jeff mentioned, as we continue to experience upside demand for our engineered specialty closures for oil, gas exploration, we are taking steps there to make sure that we're able to meet demand. Jim Ricchiuti - Needham & Company: Got it. Thanks for clarifying that, Brian.

Certainly.

And we'll go next to Tristan Thomas with Sidoti.

Yeah. Good morning.

Good morning.

Good morning.

First question kind of following on to Jim's question regarding industrial. Obviously since October order numbers have been fantastic? Do you think that's going to come back to us, maybe starting in second half of the year as we kind of return to more normalized order pattern?

Well, clearly, with 95,000 orders placed in the last three months or 380,000 units annualized outlook, its got to come back down. What we noticed yesterday is that ACT increased its outlook both for the year and for the outlook forward. So we’ll see, Tristan, its -- if it continues at this pace, production schedules are going to have to be adjusted.

Okay. And then what specifically are you seeing in the housing market, I know there are kind of consensus seems to be maybe 2% to 3% growth, I don’t know, I am curious what you and some of your customer are saying?

Yeah. I think that's right in the area. And two other big things that affect commercial vehicle production particularly in the lighter weight trucks are both housing and believe it not automobile production because you need to transport those carts from the factory. So the outlook for automobile production is good for 2014 and housing as well, so that should bode well for commercial vehicle.

Okay. Great. Now jumping back to the electronics for a second, just imagine that some of the -- one of your solid programs was in-sourced, I mean is that really the trend you are seeing with some of the new budgetary situations with the fact that the peoples have lots of money to play with and more people turning to us in their in-house development teams?

I think its in two respects, on the electronic manufacturing services side, Tristan, what we are clearly seen is that as the changes were are the turmoil was being fell within the aerospace and defense market. The primes were certainly looking in in-house knowing that overall funding was going down and you have this fixed overhead and how do you best absorb it, you keep work in-house. And therefore that's what it really define as resourcing, bringing it back in-house. So I think that's certainly one area. The second piece, I think, of your question gets to engineering and solving some of the world’s most complex problems and I think in our aerospace and defense segment, we see opportunities based on our heritage and its linkage to secure communications and encryption and how do we play that into the opportunities before cyber attacks. You are seeing the primes and others play in those technologies with dedicated engineering teams but we still see opportunities because of some of the strength that we carry with some of our technologies and obviously we are not going down the path alone. We certainly have core strategic partners in place for technology or marrying technologies that we need to make sure we have.

Okay. Great. And then just one final housekeeping question, R&D in the quarter declined pretty, obviously significantly year-over-year. I was just wondering, I would've made the assumption that with all the work you're doing to develop some of these A&D products, so that would've been a little higher?

A great question, if you go back to our -- let me recall our Q2 call, we did talk about our decision. As we came into 2013, we did accelerate the R&D spend in our aerospace and defense segment in Q2 of 2000 -- of course of the past year and that gave us the runway to move forward with some of the things that we’ve talked about, including the most recent win with our Cyber Range. So that’s why you saw the R&D profile trend down towards the fourth quarter.

Okay. What do you -- I’m sorry.

I was going to say, Christian…

Okay.

You should also expect to see that run in that, somewhat lower rate due to the customer fund.

Correct. And I was going to mention…

Okay.

Yeah. Go ahead.

I was going to say, Jeff, was regarding 2014, right?

Yes.

Yeah.

And we’ll take our next question from Jim Ricchiuti with Needham & Company. Jim Ricchiuti - Needham & Company: With some of the new programs that you discussed in the introductory remarks, how this new business -- is there anyway that you can give us a sense as to how much of that potentially could convert into revenues in 2014, and there are a few different projects and programs you’ve highlighted?

Jim, this is Jeff. The one that has the chance to convert to topline and interesting way, this is Sypris Cyber Range. The product is being delivered. We do have active quotations going on around the world on additional systems. So the Cyber Range is the one that would add to topline. With regards to the other programs, the other technologies that we’ve developed or developing, the potential impact there on the P&L in ‘14 is more on the cost side than the revenue side. Jim Ricchiuti - Needham & Company: Got it. And with respect to the Cyber Range, what has to happen as you go through the first half of the year? Is this something you would see more likely if it’s going to -- contributing in the second half?

Well, I think, we should see some contribution in the first half. But then, if we’re successful, we would expect momentum to build as we get into the second half. Jim Ricchiuti - Needham & Company: Okay. Thank you.

Yeah.

(Operator Instructions) And we’ll go to [Justin Putnam] (ph) with Talanta Investment Group.

Good morning, gentlemen.

Good morning.

Good morning.

I just want to step back for a second on your A&D business. You mentioned, you had some visibility in your pipeline there. And I was curious to know how that translates into your expectations for the business and I really have two questions about that. One, what level of revenue do you need to kind of get to profitability? And two, is that increase in revenue going to be driven really primarily from the new product that you’re investing in and that you see in your pipeline?

In terms of the breakeven point, let me address both of those Justin. In terms of breakeven point, largely determine it on mix. We really have three spheres to these businesses as we mentioned earlier, the electronic manufacturing services, our ruggedized secure communication devices, and the funded engineering and other bucket, meaning the Cyber Range and what we really defined as the core of focused R&D. When you put all of that together, it’s largely determined upon product mix. That’s the first part of the answer. As we look forward into 2014 and beyond, you heard Jeff mentioned and just as a follow-up to Jim Ricchiuti’s question, there is a piece of the Cyber Range that we would expect to help in the first half and clearly into the second half of 2014. But we have a number of active quotes with the intent and the belief that we’re going to be successful in selling other Cyber Ranges or Cyber Ranges to other nation states as well as to others, particularly as you see what happened at the end of the year and during the holiday season with Cyber threats. So it’s difficult to answer in the context of where we see our overall mix. But our objective is to return the business to something much greater than positive gross margins with the intent to return the business back to levels two years ago.

Okay. So given where you are now with level of those sales were in 2013. You believe that there is enough opportunity in your mix just to return to profit or to turn positive on your gross margin basis?

That’s what we’re working towards. That is the focus is to optimize the portfolio, the three legs of the stool if you will to return this business to profitability.

Okay.

Okay. Good. Well, I appreciate you taking time to ask the questions.

Okay. Thank you.

And it appears there are no further questions at this time.

Okay. Thank you, Divona. Brian, Tony, and I would like to thank you guys for joining us on the call this morning. We certainly welcome your continued interest and, of course, your questions about our business. Thank you, and have a great day.

Thank you. This does conclude today's conference. We appreciate your participation.