Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Amerigon Inc. 2011 Fourth Quarter and Year-End Results Conference Call. [Operator Instructions] This conference is also being recorded today, Monday, March 12, 2012. I would now like to turn the conference over to Ms. Jill Bertotti of Allen & Caron. Please go ahead, ma’am.

Good morning, and thank you, everyone for joining us today for the Amerigon Inc. 2011 fourth quarter and year-end results conference call. Before we start today’s call there are a few items I’d like to cover with you. First, in addition to disseminating through PR Newswire this morning’s news release announcing Amerigon’s results, an email copy of the release was also sent to a number of conference call participants. If any of you need a copy of the release you may download a copy from either the Amerigon website at www.Amerigon.com, or the Allen & Caron website at www.allencaron.com. Additionally, a replay of this conference call will be available via a link provided on the events page of the investors section of Amerigon’s website. Finally, I’ve been asked to make the following statements: Certain matters discussed on this conference call are forward-looking statements that involve risks and uncertainties, and actual results may be different. Important factors that could cause the company’s actual results to differ materially from its expectations on this call are risks that sales may not significantly increase, additional financing as necessary may not be available, new competitors may arise and adverse conditions in the automotive industry may negatively impact the results. The liquidity and trading price of its common stock may be negatively affected by these and other factors. Please also refer to Amerigon’s Securities and Exchange Commission filings and reports including but not limited to its Form 10-K for the year ended December 31, 2011. On the call today from Amerigon we have Dan Coker, President and Chief Executive Officer; Barry Steele, Chief Financial Officer, and Bud Marx, Chairman. Management will provide a review of the results after which there’ll be a question-and-answer period. I’d now like to turn the call over to Dan. Good morning, Dan.

Good morning, Jill, and thank you very much -- good morning to everyone -- for joining us on our fourth quarter Earnings Call for 2011. We believe we had pretty good results and we’re quite pleased with the events of 2011 which really have been a transformative year for Amerigon; and we’re quite excited about how things turned out and how things are looking in the future as well. The combination of all the positive news that we’ve seen including shipping our almost 9-millionth heated and cooled seat system, the introduction of our new heat and cool cup holder to very big success; continued progress on our heated and cooled mattresses, and the progress we’ve been making with our advanced teams on our thermal electric generators are all very positive signs and all bode well for our future. Of course the most transformative thing that happened with Amerigon for 2011 was the acquisition of WET. The combination of these 2 great companies is going to be very exciting rolling forward. We’re quite pleased that with the full-year combination of the companies we are now about $0.5 billion company. So all of this is quite exciting. We’re going to try to stick to our format and keep our enthusiasm down and let us deal with some facts. So we plan to do a very brief overview and then open the floor for questions, and I will now turn the comments over to Mr. Barry Steele, CFO.

Thank you, Dan. Fourth quarter 2011 represents the second quarter where the results of WET are included for the full period. Because this acquisition has such a dramatic effect on our statement of operations and balance sheet when compared to the prior year, I’ll keep my comments limited to observations related to the sequential comparisons of fourth quarter 2011 with third quarter 2011. Once again our operating results are impacted by effects of purchase accounting for WET and other non-cash and non-items. We have provided a table in the earnings release which helps show where these effects are included in the statement. Many of these effects appear in both third quarter and fourth quarter of 2011 with 2 exceptions. First, amortization from the purchase accounting valuation of WET’s backlog as of acquisition date and inventory step-up, which increased our cost of sales in selling and general & administrative expenses by $374,000 and $1.5 million respectively did not impact fourth quarter because they had been fully recognized by the end of third quarter, 2011. Second, the combined revaluation of derivatives and net foreign currency gains and losses, which are largely non-cash impact and which had collectively been a decrease in our earnings of $2.3 million during third quarter, turning into a gain during fourth quarter of $5.3 million. Our product revenues for fourth quarter 2011 were $131 million, which represented an increase of $5.4 million or 4.2% over third quarter 2011 product revenue. These results represent all-time records for both Amerigon and WET. $3.6 million of the increase came from Amerigon and $1.8 million came from WET. The growth for Amerigon was largely driven by strong North American production volumes, particularly on the Ford 150 Program; strong revenue on our new cup holder product; and new program launches. WET had also…

All right, well that’s actually a very good report, Barry. Thank you very much. And I’m sure you might have a question or 2 from the crowd, so let’s go ahead, Operator, and open the floor for questions, please.

[Operator Instructions] Our first question comes from the line of Steve Dyer with Craig-Hallum.

You mentioned the cup holder business -- what was the revenue run rate on that in the quarter? And I was wondering if you’d be able to sort of quantify how you see the next maybe year or 2 shaking out on that product line.

The revenue for the cup holder program for fourth quarter was approximately $1.8 million.

The prospects for the cup holder program -- we have, as you know, 2 platforms today that offer the heated and cooled cup holders as options. In the next year or 2 we are working with a couple of other platform teams and a couple of other OEMs so there should be some further expansion of that business over the next 2 or 3 years. It’s also going to be I’d say part of a complimentary product offering that will include a cooled storage box which we believe will be more popular than cup holder conditioning in the European market and possibly in the Asian market as well. So there’s other things to come out of this product line. This is the first kind of missionary product and there’s other things that we’ll be providing or the personal heating and cooling, particularly the cooling storage space in the automobile.

And when would you expect the first cooling box to affect revenue?

It’s going to be a while yet. We’re still at the early stages of the product validation right now, and we’re working on it.

Any sense as to the early take rates on the cup holder or is it too early?

It’s a little early to really pinpoint it, but I’ll tell you this -- the response has been much stronger than we’d anticipated and I think much stronger than Chrysler anticipated. It’s proven to be a very popular feature.

Okay. Jumping over to the beds, sort of where are we on that rollout? I think Mattress Firm, if my memory serves, has 3 different levels of the bed now. What is the sort of rollout schedule look like for that and what are your expectations?

Well, last summer we completed our market study where we expanded our presence in the Texas market and got pretty good response, and got the input that we needed to expand the bed product portfolio from just a single bed with heated and cooled technology to a group of beds. We needed additional comfort features and in the beds we now have those 3 features are out and beginning to sell fairly well; and the response has been very positive to the selection. I believe it’s Matt Firm’s strategy to expand the opportunity to buy a heated and cooled bed line that they market under the brand UV. Outside of Texas now we’re looking at getting into Arizona, Georgia, Florida -- some of their other major hot weather markets. So during 2012 I think you’ll see our exposure to the market greatly increase.

I’d like to add on the mattress, prior to fourth quarter our cumulative revenue on the bed was about $1 million. In fourth quarter we had about $300,000 in revenue but the interesting thing to point out is our price point went from about $1300 per unit to $700 per unit because we’re no longer selling the actual mattress. So our actual buy in has increased pretty dramatically in fourth quarter.

Okay, and those if I recall have quite a bit better margins than the core business -- is that right?

The margins are much more attractive, yes.

Okay. Our old friend tellurium looks like it has rolled over pretty hard relative to where it was a quarter or 2 ago. I’m assuming you didn’t see much of a benefit from that in fourth quarter but any ability to sort of quantify the sort of tailwind that may provide as we go through this year?

We saw no benefit in fourth quarter of the weakening of the cost of tellurium. We will probably not see much impact during Q1. You’ll probably see the first reductions of material from us in Q2 and third quarter. You know we place commitments going forward to protect ourselves from actually any kind of material or price variances. Right now the prices we’re being quoted are approaching $200 per kilo whereas at their height the last year they were in the low $400 per kilo. So we will see some improvement to our gross margin in the second half of this year for sure based on tellurium.

Okay. And then just operating expenses; I know fourth quarter itself, it sounds like there was some bonus payments in there. What should we think about -- what’s a good level to use going forward to x those?

I would think that the unusual things that you see in fourth quarter were about $2 million. I don’t want to say that you won’t necessarily see these types of things in the future. They could be replaced by different things. So I would expect that from a run rate perspective this is probably $1 million less going forward per quarter, but I think you should be prepared that as we investigate combining the company and doing a few different things to secure a long-term benefit that we’ll see some spending.

Okay, and then the last question and then I’ll hop back in the queue: the base Amerigon business always announced new product wins as they fit. Is that something you plan on doing with the combined company?

We spent quite a bit of time focusing on new product wins because it was a very easy and clear indication of success in the market for Amerigon. With WET it’s a little bit broader in the marketplace and there’s lots of shift in the basic business for them, so we’re not going to spend as much time concentrating on every win and loss throughout the entire company as we did in the past.

Our next question comes from the line of Anthony Deem with KeyBanc Capital Markets.

I have a few questions here. First, on your 10% revenue growth guidance for the combined companies, can you just provide an order of magnitude what’s incorporated within that expectation just related to production, pricing, content, and any other factors?

Actually, we’re not going to go into all the details on that. We’re reluctant to even provide guidance because it’s a tricky area. There’s a lot of uncertainty in the world, and when we look at our order logs and our internal projections of the market we see a good opportunity for us to grow our $0.5 billion business by about 10% in the first full year together, which is 2012. So we don’t really want to get into nits and nats about the plusses and minuses of all of that. So I’d really just rather provide guidance on the overall right now of about 10% for the year, and we will provide a timely guidance in each of the quarters as we go forward.

Okay, that’s helpful. And then as it relates to your quarterly revenue guidance from last quarter, Barry, can you shed some color on the delta between your top line expectations for fourth quarter back in November and the result you posted today? I believe your offset to revenues wouldn’t moderate sequentially from third quarter to fourth quarter, and I was just wondering what would you attribute that outperformance to? Was it the pull-forward of these orders from your Asian customers and if so, how much was that?

I probably won’t give you that exact number because we’re not actually certain of the amount, but there’s clearly a little bit of pull ahead on some of our Asian programs. The Ford 150 in particular was a lot stronger in fourth quarter because of the production levels. And I think we probably have some of our new programs a little bit heavier pipe filling. But that kind of goes into the concept of pull ahead for us. But to summarize it, it’s largely production driven I think.

Got you, that’s very helpful. A few more here -- Dan, on the last conference call you were hopeful on the full Germany regulatory approval. Can you just provide an little update there on what’s going on, what’s holding us up? Do you have any visibility as to when you potentially might get approval?

Well, yes. There is a long discussion that’s been going on with the German system with us being able to apply what we call the domination agreement. We have requested through the court systems in Germany permission to dominate the affairs of WET in that we believe we have greater than 75% of the shares available to the company and therefore qualify for the domination agreement to be put in place. We followed 2 paths: the first was the lower court regulations where you go through and have what I consider to be a long but thorough process of hearings and appeals that we anticipated would take a year, year and a half to get through. At the same time, you’re allowed to go to the Superior Court and request what’s called a Fast Track Hearing; in other words, they look at your case in kind of an overview summary. The Superior Court judged looked at the case and decided that he didn’t really see enough merit to issue a Fast Track bench decision and basically threw it back down to the lower court. So in the lower court now we are in the process. We will have a series of hearings and appeals. It doesn’t really matter how it goes; it’s going to take a lot of time. In addition to the legal proceedings that we’re doing, the German law also provides for us to work together with WET under what are called combination cooperation agreements, and we are currently working with the WET team to define the areas of cooperation that we would like to document and work together on. And there will be a series of these agreements that will encompass things such as product development, sales and marketing, maybe even joint ventures in certain selected markets; and also including what we currently… At Amerigon we buy all of our products currently from the outside. There will be opportunities for us to examine asking WET facilities to do contract manufacturing for us. So there are avenues of what we would call access to success for us that are not directly related to the court activities, and we plan and intend to pursue these immediately. So that’s kind of an update on the hearings.

This is Bud; let me just add a couple of things if I could. We had hoped we’d get a favorable ruling out of the Fast Track and we did not, and as a consequence we expect that the legal proceedings might go on for a while because whoever wins in the lower court somebody’s going to appeal. So we’ve taken steps and we believe we can realize the major benefits of having the 2 companies cooperate through agreements that do not require at the outset a domination agreement; and we’re pressing to achieve that over the next 6 months, let’s say. So what I’m really saying is don’t breathe in and breathe out on the legal part of this because we believe we can achieve what we want to achieve in the absence of that.

Okay. I appreciate the color on that. And then just my last question here: some of the senior manufacturers, the Delta Controls, Magna’s, Leer’s of the world preceding, it seems like they may be experiencing some slight margin pressure for various reasons. And I’m just kind of curious to hear from you all: are you seeing any incremental pressure within the supply chain there, particularly in Europe which could potentially impact WET?

To say that we’re feeling some pressure is understating the seismic events. It is a constant pressure in the auto industry to become more efficient and to pass through cost savings wherever possible to the Tier I’s and on to the OEMs. And we are a Tier II supplier both as WET and as Amerigon and we always feel these pressures, and we feel an obligation in fact to try to respond to make our businesses more effective and more efficient. So we are feeling pressures and we’re trying to respond appropriately.

Mainly on the pricing front, it sounds like?

They only want price relief, to them, but there are also other systems of trying to make ourselves more cost effective as a system and that’s something that we try to focus on as well -- not just trying to knock down the price but knock down the overall cost of the system as well.

It seems like the winners in all of this are those that can create the productivity and the efficiency to pass through part of that to their customers. The guys that are really going to fall by the wayside are those that aren’t able to both shore up their own business and provide a value proposition for their customers. And our track record and WET’s has been really very good at this over the past 5 years.

And maybe if they were really feeling that pricing pressure they would do, consider it to be down low single digits; down mid-single digits? What are the OEMs looking for?

We don’t really want to get into that I guess. I think we’ve stated in the past that our goal was to try to comply with their general requirements of trying to have a couple of points off each year as we roll forward sequentially.

[Operator Instructions] And our next question comes from the line of Adam Brooks with Sidoti & Company.

Maybe you can give us a sense as far as these thermoelectric generators, how quickly that opportunity develops and maybe where you’re at right now and where you see it going over the next 5 to 7 years?

Well, right now we’re still in the, I’d say the mid-level stages of product development and evaluation. We’ve been working on this for about 5 years. We’ve gotten some very good performance results from our prototype work and some of our developmental analysis. We began to share that last year with our 2 key partners -- Ford Motor Company and BMW -- and our sponsorship from the DOE, Department of Energy here in the US. We have taken a couple of I’d say big design leaps particularly in the areas of the form factor of the expected product. We believe that we have a manufacturable concept right now and we’ve built some early stages of that, the early elements of that to try to do tests and evaluate that to assure ourselves that we’re on the right path. The market is eager for this type of solution; in fact, they are quite insistent that we continue to push forward with this. In terms of when we see it, we will probably be another 3 to 5 years before we see any of these products in the marketplace and there they will be very specific vehicles that are keen to have the fuel economies increased by offloading some of the pressure on the onboard generators or alternators for the vehicle. So I think that right now we’d have to say that we’re still in the early stages of this product but we’re quite optimistic and quite positive that we have a unique solution and we have an interesting solution that will add some value to the OEM level when we introduce the product.

Okay, maybe switching to capacity real quickly: now that you’ve acquired WET, do you see any areas, any regions of the world where you need to add capacity? And how quickly would that need to come online?

Actually, we do see some. Both companies have been growing fairly nicely over the past few years. WET is in kind of the stages of recovering from a bit of the general automotive depression, and we will be expanding facilities during 2012. I think our first and most appropriate response is to expand our Asian manufacturing capability where the Asian, particularly the Chinese market has been growing like crazy for the past few years. And right now we need more capacity in the Asian theater, so we’re going to add capacity there and we will continue to right-size our manufacturing operations as the market demand requires it.

Okay, so maybe is it possible to get an initial stab at 2012 CAPEX?

Barry, you got any idea on that?

I’d prefer to defer that to our 10-K which will just be what the 2011 amounts were; and you’ll see fourth quarter which should be a pretty good indication for next year although we do have some expansion plans in China in particular that will bring that number up a bit.

And our next question comes from the line of Ailon Grushkin with Nano-Cap Growth Funds.

If I look in the 2010 Amerigon 10-K the only competitor mentioned is WET. So I’m wondering, do you now have a monopoly in the heating and cooling and ventilated seats in the entire automotive industry or is there some other competitor out there.

No, we do not have a monopoly nor do we expect to. In fact, I’d say probably the biggest competitors we have are OEM customers themselves. Several of the European companies actually design and supply heated and ventilated systems, and there are several other people in the marketplace who offer heated and cooled or heated and ventilated systems. None of them have been as successful as we have. We believe our products and our cost advantages bring a value to the market that make us the number one choice, but we don’t believe nor do we aspire to have a monopoly of any form.

All right. Do you know what percentage of the global automotive market you have?

Not exactly. We know we have a very good percentage of the marketplace but we don’t know exactly. We don’t track all the details of all of the non-aligned customers but it’s a good, healthy percentage.

Okay. And in terms of the total market size, do you have a figure on about what percent of the market has been penetrated thus far with the heated, cooling/ventilated seats?

It’s very, very early stages. We believe we have penetrated probably 10% of the total market, the total potential market for heated and cooled and heated and vent. We believe that market is going to be expanding pretty rapidly every year and so we’re going to have a hard time catching up with it. We are in a small position now and we believe that the overall global market is going to continue to expand at a very good clip.

Okay. And in terms of, I saw that WET does heated steering wheels? Is that a growing market?

We believe that is a very high-potential product. WET has spent a lot of time and a lot of effort developing a lot of good technology there and they are one of the leaders in that area, and we believe that there’s a very good market opportunity for that, particularly obviously in the Northern climates in Europe and North America -- they’re a very key part of our strategy going forward.

Can you give approximately how much in sales WET does in Europe off heated steering wheels?

It’s about $7 million, I’d say, on an annual basis -- $7 million to $10 million.

Yes, I think it’s in the $7 million to $10 million range and again, I think this is kind of in the earlier stage of product introduction for them.

Okay. And last question -- are we expecting any new, interesting products from DSST this year or sometime next year?

Well, we think all the products that were generated from our advanced teams are interesting and exciting. We do have to focus ourselves. Even at a $0.5 billion we’re a small company and we are trying to bring focus to the 2 key areas that we’ve identified in terms of power generation systems, both industrial and automotive; and then the heating and cooling technology. We’re involved in some early-stage programs where we are trying to further develop the ability to expand the use of thermoelectrics and resistance heating inside the auto and truck cabins for the future. So we’ve got a lot to do just with those couple of minor things that we’re playing with.

Okay. [indiscernible], has that product kind of fizzled out at this point or any new developments with them?

I’d say that that product has pretty well peaked and gone past its prime. It was a product that we had great expectations for and we saw a wonderfully, beautifully designed product. It was perhaps not as powerful as we would have all liked in its final form but we are not ruling out taking another swing at it and seeing where we go with it. But I would say right now your assessment is correct, that that’s a product that we attempted that didn’t work out as well as we had hoped in the market.

Okay. And any chance we may see heating and cooling airplane seats in the future?

There’s a good chance you’ll see it but right now we don’t have a clear path to that market. But we have built, I think I’ve said before we’ve built many airplane seat prototypes for heating and cooling. A lot of us spend a lot of time sitting in those cabins and they’re never quite warm or cool enough depending on which side of the plane you’re sitting on. So we think that’s a good opportunity but there’s a lot of good opportunities for delivering either heating, heating and vent or heating and cool applications for personal comfort including things like the bed.

[Operator Instructions] And we do have a follow-up question from the line of Steve Dyer with Craig-Hallum.

Barry, just one housekeeping issue -- stock comp expense in the quarter. Could you give us that?

Steve, I don’t have it at my fingertips but if you can call me back afterwards I can probably give you that.

And management, there are no further questions in the queue at this time. Please continue.

All right, excellent. Well, we thank everybody for joining us on our year-end call. This has been, as I said earlier, a very big and exciting year for Amerigon and for WET. We have found that bringing our 2 companies together is a natural alliance of strengths. Amerigon’s technology slant and innovative look at the technological solutions for heating and cooling and power generation are a natural segue over to the WET systems that they have in terms of manufacturing process, divine development, and product introduction worldwide as well as their manufacturing strengths. We are very excited about the opportunities in the combination of these 2 companies and how well we think we can do in the markets that we’re in today as well as introducing new and exciting products into new and different markets worldwide. We’ve stated that we think we can see a good 10% growth rate for 2012. We think that of course that assumes that all of the markets worldwide stay relatively stable but we think that as a much larger, more global company that we can establish the 10% rate for 2012 and we reiterate that we think our targets for growth in the larger company would be in the 10% to 15% range going forward. So again we’re very excited about it. We think our friends at WET are going to bring a lot to the party and we’re looking forward to working together, and we see a good, strong, well-financed company positioned to go forward and grow in the future. So thank you very much for your attention and we ask you to join us very soon for our Q1 2012 results. Thank you.

Ladies and gentlemen, this does conclude the Amerigon Inc. Fourth Quarter 2011 and Year-End Results Conference Call. Thanks again for your participation, and you may now disconnect.