Welcome to the Bel Fuse Third Quarter Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator instructions) As a reminder, this conference is being recorded Wednesday, October 29, 2008. I would now like to turn the conference over to Mr. Dan Bernstein. Please go ahead, sir.

Thank you, James. And I would like to welcome everybody to our conference call to review of Bel’s Third Quarter 2008 results. Before we start, I would like to hand it over to Collin Dunn, our Vice President of Finance, Collin?

Good morning everybody. Thanks for attending. I would like to start off by reading the Safe Harbor Statement. Except for historical information contained in today's conference call, the matters discussed including statements regarding the impact of price increases, cost reductions, and acquisition possibilities are forward-looking statements that involve risks and uncertainties. Among the factors that could cause actual results to differ materially from such statements are; the market concerns facing our customers, the continuing viability of the sectors that rely on our products, the effect of business and economic conditions, capacity and supply constraints or difficulties, product development, commercializing or technological difficulties, the regulatory and trade environment, risk associated with foreign currencies, uncertainties associated with legal proceedings, the market's acceptance of the Company's new products and competitive responses to those new products, and the risk factors detailed from time to time in the Company's SEC reports. In light of the risks and uncertainties, there can be no assurance that any forward-looking statement will in fact prove to be correct. We undertake no obligation to update or revise any forward-looking statements. With that said, I will now move on and discuss our performance. First, I’ll start with sales. For the third quarter of 2008, our sales were $66,964,000, which was 1% higher than the $66,379,000 in the third quarter of 2007. The $66,964,000 was 7% lower than the $72,454,000 of the preceding quarter ended June 2008. Sales for the third quarter was higher in the Modules product group that includes DC to DC converters and custom modules. In the Magnetics product group, it includes integrated connected Modules and in the Interconnect product group, while the Circuit Protection was down slightly. Profits and cost of sales going out of the quarter on a GAAP basis with net after-tax earnings of $1,946,000 after…

James, we would like to open up the call now for questions if we could.

Thank you. (Operator instructions) And our first question comes from the line of Johnny Brown from Stephens Inc. Please proceed with your question. Johnny Brown – Stephens Inc: Thank you. Hi, Dan. Hi, Colin. I was wondering about just in terms of the general economic slowdown. It seems like it could be two sides of the same coin here. Obviously, on one side, you don’ want your revenues to come down or the growth revenues to slow down too much. But at the same time, it seems like it could free up some complicity and lower your pressure to pay so much overtime. Wonder if you could talk about how you see that impacting your margins going forward?

I think Colin can go through the margins. But I think psychologically for us going forward from this point, if we do schedule overtime because of the new laws and regulation, it went from 1.5 to 2x. So, we believe that we have passed over the overtime to the customer. What we are also trying to do is look at areas where the overtime, you don’t have to pay an overtime rate. So, hopefully, I don’t think when it get there in the next quarter or two but hopefully within six months. If we have to increase our production, we can do without overtime. Colin, from the margin standpoint?

Yes, we had been spending in premium labor costs. I do – we’ll be back up. First, we have to work some overtime. If you are not working some overtime, you are not going to have any workers’ to start with. So, part of the balancing act we have to go through is to try and turn, which I think we got now is what’s the minimum amount of overtime we can work and keep the workers’ particularly in the areas where our factories are right now. And that’s more important also in areas where the workers’ are housed in dormitories, the migrant workers’ and they don’t have to go home. So, one other things we are trying to look at going forward is to try and find input production to areas where more in local villages where the non-migrant workers’ – instead the workers’ aren’t housed in dormitories where they do go home and may be they live in small farms also. So, they are more keen to go home. So, we won’t have this issue with basically mandatory overtime to keep the workers’ – mandatory overtime will have fun not the workers’. So, the total what has been costing us was fairly close to $0.20 a quarter in labor premiums over the last few quarters. Now, we don’t, we don’t – that’s not going to go away completely. But we hope we without reductions to overtime which basically came into play affective late in the third quarter, where we are now only working half a day on Saturday for example. That we might be able to get that in, that premium down in half going forward. Johnny Brown – Stephens Inc: Okay. What about the slowdown in China in terms of your ability to retain workers’? I mean are you seeing any more loyalty there?

I think that the problem here that we know the Governor [ph] for a long time. The past year, we’ve really tried to move people and move that factory down to southern China to northern China. On the recession we know now the government is concerned regarding the toy industry and the textile industry, how to keep the workforce hired. I think we do have the Chinese New Year. You really can’t get a reason for how things are looking. I think another problem now is because we are so close to Chinese New Year, very easy to maintain your workforce, and then coming back after Chinese New Year, the workers’ look for what’s the best possible deal, and how aggressive they –want to look for jobs. So, there is a downturn as we hear in China, and we think that the workforce should be more stable. Johnny Brown – Stephens Inc: Okay. And with respect to margins, with commodity costs coming down, Colin, what is your inventory make up look like, how long before you see those cost savings impacting margins significantly?

This is – we haven’t got a lot of – the bigger issues are a big wavier for us over weight [ph]. And while we’ve got copper and steel and petroleum based products n there, we are not seeing any – so far although on the world markets, it surprises it came down. That hasn’t started to come through on our pricing decreases yet, and I don’t think it will for a little while. So, it’s going to be quite a while, we think – I would say and to burn off the inventory we got. We are probably looking at up to six months I think before we are likely to see any thing. If we see a lot come through on those products coming down in pricing significantly. Johnny Brown – Stephens Inc: Okay. And just overall demand, your backlog I think last few quarters has been about $57 million to $60 million. Is it looking like that still in the current quarter?

Just your estimate – in the $52 million, $53 million range now. Johnny Brown – Stephens Inc: Okay

And again we are heading to the fourth quarter that tends to drop when people try to clean up the inventories for year end. So, that’s not unusual for us. Johnny Brown – Stephens Inc:

And perhaps seeing up close $40 million I think we would be panicking but $52 million has been like this since the beginning of September. So, it’s been pretty stable. Johnny Brown – Stephens Inc: And is it consistent with the third quarter, lower proportion of Circuit Protection and higher proportion of Modules and Magnetics?

Yes, it’s been pretty consistent that way, yes. Johnny Brown – Stephens Inc: Okay. Thanks a lot guys.

Thanks a lot, Johnny.

(Operator instructions) Our next question comes from the line of Sean Hannan from Needham. Please proceed. Sean Hannan – Needham: Yes. Thank you. Good morning.

Good morning.

Good morning, Sean. Sean Hannan – Needham: So, I suppose – first if I can just dive into pricing for a moment, you have some of these increases were implemented at the end of the quarter. There is a – I think one of your competitors also had looked entering the September to increase some of its prices. I think they had a second period where they actually implemented another round of increases. Is it something that’s perhaps on the table for you and can you perhaps elaborate on that a little bit?

We have had one – we have basically two rounds of pricing. I think those – I think a lot depends on where we stand on the recession and labor situations in southern China. And once again if you had asked me that question about five weeks ago, I would say that there is high probability would have another price increase. But the way that the raw materials and oil is going down and the uncertainty that the labor might be flattening out a little bit in China. I think we will hold off on it for now. Sean Hannan – Needham: Okay. So, what degree – what has been your general feedback from your customers’ on these price increases?

They go wild. They jump up and down. Sean Hannan – Needham: The question is has this led to any lost business?

I think it’s difficult to say. It depends on the product where we stand, whether the product is single source or second source, the customers’ are staying with us. And if it’s a commodity like a fuse, Circuit Protection device where there is more than two or three competitors or is going to put price pressure as much as possible. We have seen companies in the past go to quarterly tight reviews. Just recently we heard that Dell Computer is planning to go through a year contract. We know that customers’ are positively looking at that. It’s just reduced to tremendous amount of uncertainty out there. But once again, any time you give a customer price increase, they are going to do everything possible evaluating you and who the other vendors are to see what the true story is. That doesn’t give good taste in anybody’ mouth, that’s for sure. Sean Hannan – Needham: Sure. I understand. That’s helpful. You discussed some of the performance for your different product groups. And I think that the comparison with year over year, is it possible if we can get some color in terms of the performance versus the June quarter?

I think it’s leading – I think overall we always say, if you look at the three groups, the mature groups are above, the Circuit Protection, the Interconnect and the Magnetics. We always talk in the range of 3% to 6% growth. We hear the big driver for us going forward is going to be the Module group, and this got hit a little bit in the last quarter because we have a major project with IBM on a Blue Jean computer. And so, we had a big run up last year and that not been a – and IBM is not going to sell too many Blue Jean’s anymore. So, we are reducing going forward. We are hoping 2% to 5% in the mature product line and we are hoping to get back 10% to 15% in the Power group. Sean Hannan – Needham: Okay.

Other group I should say, Sean. Sean Hannan – Needham: Sure. That’s helpful. And then perhaps could you provide a little bit of color around lead times where you are today –?

Okay, lead time – Sean Hannan – Needham: – for the firm?

Sure. Lead time when we are having our problems four or five months ago, our lead times stretched out to 18 weeks to 20 weeks and currently our lead times are about 10 weeks and may be dropping a little bit before next month or so. But I think at this point because of the uncertainty, we are definitely keeping our lead times where once again when we are more concerned at this point with our margins and cutting down lead times, and that’s why we eliminated the overtime. So, I think at this point we are thinking that 10 weeks is a good point to be at until we get a little more clarity on what’s going to happen with the world. Sean Hannan – Needham: Okay. And that 10 weeks is just specific to MagJack?

I would say MagJack’s modules, Circuit Protection and generally the Interconnect products, those two groups anywhere from stocks six, seven weeks. Material content is not that difficult. When we look at the other groups, we are doing a lot more with longer stretched out lead times in different – the components are almost stretched out. Sean Hannan – Needham: Okay. And then lastly, if I could perhaps get a little bit of color, did you have a 10% customer again in the quarter?

Yes. I think we might have more than one. Sean Hannan – Needham: Would it be possible to check this 10% customer at least an indication in terms of what that end market is that that customer is in?

I think everybody knows the customer is Cisco (inaudible) Sean? Sean Hannan – Needham: Cisco being the number one and –

Yes. Sean Hannan – Needham: And the number two being the –?

I don’t know. I’m not going to tell that. Come on Sean. Sean Hannan – Needham: Just a way to get a sense of the market which – are we talking about computer storage?

It’s computer, computer peripheral and telecommunication. Now the problem that we have again is losing the – of a networking companies or the telecommunication companies or the same companies. The actual product is that networking, telecommunication type of companies. Sean Hannan – Needham: Okay. That’s very helpful. Thank you.

Thank you, Sean.

There are no further questions at this time.

All right. Once again we appreciate everybody for calling us up and thank you for joining us and looking forward to speaking to you next quarter.

Ladies and gentlemen, that does conclude today’s conference call. We thank you very much for your participation and we ask that you please disconnect your lines.