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

Thank you, Kyle, and good morning everyone. Tony Allen 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 second quarter of 2015. For those of you who have access to our PowerPoint presentation this morning, please advance to Slide 2 now. We always begin these calls with a note that 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 are included in the company’s filings with the Securities and Exchange Commission. And in compliance with Regulation G, you can access our website at sypris.com to review the definitions of any non-GAAP financial measures that may be discussed during this call. With these qualifications in mind, we’d now like to proceed with the business discussion. Please advance to Slide 3. I will lead you through the first half of our presentation this morning, starting with an overview of the highlights for the quarter to be followed by a brief discussion of each of our two business segments. Tony will then provide you with a more detailed review of our financial results for the quarter. Now, let’s begin with an overview on Slide 4. As we mentioned in our last call and in our Annual Report to stockholders for the year 2014, the discontinuation of the long term supply agreement with Dana at year-end was expected to have a material impact on the future outlook for our business since Dana represented approximately 59% of consolidated net revenue in 2014. We noted that the brunt of the financial impact…

Thanks Jeff and good morning everyone. I’d like to take you through the highlights of our financial results for the second quarter of 2015. I will begin with our consolidated results and ask you to advance to slide 11. Q2 consolidated revenue totaled $40.8 million, an increase of $3.8 million sequentially, but down $52.3 million compared to the prior year, reflecting the discontinuation of shipments to Dana effective January 1. The sequential growth from Q1 is primarily attributable to the ramp of new programs and the continued strength in the overall commercial vehicle market. Gross profit for the second quarter was right at breakeven compared to a loss of $3.2 million in the first quarter of 2015, but well below the $10.8 million gross profit in the prior year period, which included the Dana volume. The sequential improvement in gross profit from Q1 reflects revenue growth with our commercial vehicle customers and cost reductions implemented during both the first and second quarters of 2015 that was partially offset by a soft Q2 for Sypris Electronics as the Cyber Range commissioning and certain product sales expected during the quarter were delayed into the third quarter. The impact of these delays on revenue for the second quarter was just under $4 million and the estimated impact on gross profit was approximately $1.5 million. SG&A expense was lower in Q2 as legal fees related to litigation proceedings declined significantly from Q1 to Q2, which is reflected in the improvement of EBITDA of approximately $5.5 million that will be covered on our next slide. And finally, free cash flow for Q2 was a negative $6.3 million compared to negative $5.6 million in Q1. The sequential improvement in EBITDA and its impact on free cash flow was offset by the expected sequential change in working…

[Operator Instructions] We’ll take our first question from Jim Ricchiuti with Needham & Company.

Couple of questions. Just the shift of revenues, on the electronics side of the business, that $4 million going into Q3, it sounds like you are pretty confident about the commissioning of the Singapore Cyber Range, is that fair to say? Is that the bulk of that?

We are confident and knocking on wood at the same time. It’s actually scheduled for later this month. So hopefully when we get through the month, we’ll be all smiling and happy and that’ll be good. And it represents a little over half of the amount that we’re talking about.

And then regarding that other half, which it sounds like that might be more problematic, just given the timing and the various delays that you can run into with the agencies you work with, how confident are you of that portion of the revenue shift?

That’s certainly a fair question. What we do know is that in this case that the services have a need for the product that they’ve submitted their requisitions for the product, and in some cases, are clamoring for the product and it’s a matter of processing. And so we’re hopeful that those blocks get eliminated, we’re told that they will be, but as you know all too well, we’ve been told that story before. So we’re trying to be conservative in our approach, but optimistic in our hopes.

The loss that was associated with Morganton, $1.8 million I believe in the quarter, is that separate from the $4.7 million of annualized savings that you’re anticipating?

Yes.

And does that $1.8 million, it sounds like – you’re moving equipment and I’m just wondering do you anticipate that realizing the benefit of that full $1.8 million in the second half?

We certainly do, because we won’t be bearing that operating loss, we’ll have to spend a couple of hundred thousand dollars to move the equipment, but other than that, that should be a complete pickup.

And that equipment that goes into the other plants that you have, you expect to see utilization rates on that equipment fairly soon?

Yes, we’ve had a situation where we actually have – particularly in our plant here in Kentucky, we have more demand than we’re able to fill at the moment. And so by bringing this equipment up we’ll be able to both upgrade some of the cells we have as well as to add additional capacity. And so we should be able to take on more business as a result of putting the step in the service.

Tougher question, I don’t know if you’re prepared to answer. How should we think about margins in the two businesses going forward?

I’m sorry, I didn’t quite...

This is little bit more challenging question, I’m just wondering if you’re prepared to talk a little bit about how we should think about margins, gross margins in the two businesses going forward?

Sequentially, I think as we move through the third quarter and fourth quarter with the industrial group we’ll continue to see an improvement in gross margins as we step forward. So whereas we were negative in Q1 and slightly positive in Q2, we’ll continue to see that trend improve as we go to Q3 and Q4. On the electronics business, it’s certainly going to be impacted by the timing of some of those orders that we discussed earlier and with the cyber commissioning coming in, if that occurs in Q3 as planned, and subject to the timing and release of the orders on the classified products, we could see that business return to margin levels that are more in line with what we saw certainly in Q1 and then potentially improving beyond that.

Last question, just wondering if you can talk a little bit about what Reynolds would bring to the company.

In terms of margin, Jim, I’m sorry.

No, just in terms of revenue opportunity or just - you obviously want to move forward with this, what would this do to the business, additional customers, work with existing customers, new work with existing customers?

It brings a number of things to the table for us. First of all, Mr. Reynolds had done an excellent job with this business over the years and it’s truly a very modern, well-equipped, well run operation that is solidly profitable, very low turnover in people. In terms of what it adds to the Sypris equation, first of all, it brings some machining capability for products that is far better than what we used to have in Morganton, in terms of machining, diff cases, and bearing cages and things of this nature that go on the commercial vehicle. It brings an opportunity for us to expand, it’s located in Wisconsin, which is close to the casting manufacturers which makes it efficient from a logistics standpoint. There are customers that we have that have manufacturing operations in the Great Lakes area. And so therefore, it will be an opportunity for us to expand with those customers, again, because we won’t have the logistics of bringing the casting south and then turning around and sending them back to the north. So we’re very excited about that. The customer base includes our existing customer base, so there is a consistency there. Meritor, in particular, has been very supportive of the transaction and views it as a positive step forward not just for Sypris, but for the long term strategic relationship that we have with Meritor. So we’ve been very fortunate to have Meritor’s strong support. So I think it’s one of the situations where we’re very fortunate to be in the right place at the right time when Mr. Reynolds who is in his mid-70s now and would like to retire and spend more time down in Florida, it’s hard for us to blame him. But we’re looking forward to taking care of his business, and growing it once we close.

[Operator Instructions] And it appears we have no further questions in queue at this time. I’d now like to turn the call back over to the moderator for any additional or closing remarks.

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

This does conclude today’s conference call. Thank you all for your participation. You may now disconnect.