Good day and welcome to the CTS Corporation Q1 2014 Earnings Release Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Mr. Kieran O’Sullivan. Please go ahead, sir. Kieran O’Sullivan: Thank you. Good morning and thank you for joining us today and welcome to CTS’ first quarter 2014 conference call. In 2014, our focus remains on continued strong commercial and operational performance as well as strengthening our core business to generate future profitable growth. Joining me today is Ashish Agrawal, our Chief Financial Officer. So before I begin, Ashish would take us through the Safe Harbor statement. Ashish?

Before beginning the business discussion, I would like to remind our listeners that this conference call contains forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Additional information regarding these risks and uncertainties is contained in our press release issued yesterday and more information can be found in the company’s SEC filings. To the extent that today’s discussion refers to any non-GAAP measures relative to Reg G, the required explanations and reconciliations are available in the Investor Relations section of the CTS website. I will now turn the discussion back over to our CEO, Kieran O’Sullivan. Kieran O’Sullivan: Thank you, Ashish. CTS again delivered incremental performance and improved our adjusted EPS in the first quarter of 2014 over the same period in 2013. We continue to simplify, focus and drive comparable growth as we transition our company. In the last quarter, we continued to execute to our strategic plan while also adding key competencies and talent. We are strengthening our focus on organic growth and continue to drive our operational performance which is reflected in our margin improvement. The careful focus and improvement in other operating costs are also enhancing our performance. Our strategy is delivering results and we expect to continue this improvement trend as we build our foundation for innovation to support organic growth. Additionally, we continue to refine our focus on potential inorganic opportunities around our core sensor capabilities. Last evening, we reported our first quarter 2014 financial results. Our component and sensor sales of $100.7 million increased by 2.7% from the same period last year. Our automotive products grew at 6% as we saw OEM market growth at 5% to 6% in North American production, 7% in…

Thank you, Kieran. As Kieran already mentioned, our first quarter 2014 sales were $100.7 million, up 2.7% compared to last year’s sales from continuing operations. Gross margin for the first quarter of 2014 was 30.4% versus 29.5% from continuing operations in the last quarter and 27.3% in the first quarter over year ago. Margins increased as we made progress in improving performance in certain product lines and additional improvements from material and labor productivity projects. Our first quarter SG&A expenses were $13.6 million, down $4.1 million from continuing operations in the first quarter of 2013. This reduction from 18% in the first quarter of 2013 to 13.5% in the first quarter of 2014 as a result of cost savings generated from restructuring actions, a reduction in pension expenses and a gain on sale of certain assets as we outsourced some production. The first quarter of 2013 also included $700,000 in CEO transition expenses. We do not have any CEO transition expenses in 2014. In line with our strategy, we are enhancing our sales and marketing capabilities by adding resources closer to our target customers. This resulted in higher selling and marketing costs in the first quarter this year. This cost increase was more than offset by the reduction in general and administrative expenses. R&D expenses were $5.6 million in the first quarter of 2014 compared to $6.3 million in the first quarter of 2013. R&D expenses were lower compared to the first quarter of 2013 due to timing of expenses as we repositioned R&D resources. We remained committed to investing in new products for organic growth and as Kieran pointed out are making good progress. In the first quarter, net interest and other expenses were unfavorable by $800,000 compared to the first quarter of 2013. Our interest cost was lower…

And ladies and gentlemen today’s question-and-answer session will be conducted electronically. (Operator Instructions). And we will take our first question Hendi Susanto with Gabelli & Company. Hendi Susanto - Gabelli & Company: Kieran and Ashish good morning and thank you for taking my questions. My first question is CTS is targeting to grow the manufacturing footprint from 50% in best cost location to more than 80% by 2017. Given the already announced restructuring plans, where do you see your best cost location manufacturing footprint by the end of 2014? And furthermore, what does it take to bring it up to 80% in the long run? Kieran O’Sullivan: I would tell you Hendi, first of all thanks for your question, we're well on the way in the simplification phase, we’ve announced several locations and Carol Stream, we've announced other locations in Scotland and transfers obviously now with the Canadian change as well. And so, we would see our sales substantially along the way. And most of the work is in progress and of course we've been very careful to make sure we don't interrupt our customers as we go through this transition as well and keep our quality levels right there. This will take us probably just north of 70% in terms of the desktops, so you can see that we're substantially on the way. Hendi Susanto - Gabelli & Company: Okay. And then Ashish, would you be able to share how should we be thinking of operating expenses for the remainder of the year? Specifically, I'm wondering whether CTS may see like further increase in sales and marketing.

Hendi, thanks for the question. The sales and marketing expenses will generally grow some more as we add resources in those areas throughout the year. But as we did in the first quarter, we expect savings from G&A expenses to more than offset the increase in sales and marketing cost. So I'm not expecting a significant increase in the overall operating expenses of the business. Now, keep in the mind in the first quarter, we did have a gain on sale of some assets that was recorded. So you will see SG&A expenses overall in the second quarter increased slightly from the first quarter. Hendi Susanto - Gabelli & Company: And is fair that it will further increase in the second half of 2014?

In the second half of 2014, I expect that the savings from our restructuring actions that were announced in June last year, we will start realizing those savings. So I would expect that we should maintain or reduce our SG&A expense. Hendi Susanto - Gabelli & Company: Okay, yes. And then Kieran, I would like to inquire more insights into your end market. First, may I know in which markets frequency products were [sold] and whether there is some visibility into like when it’s going to see some recovery? Kieran O’Sullivan: Yes. Really on the component side, Hendi, we had 4% drop in sales. We’d already been seeing that the high precision frequency products in the portfolio were losing some demand. So we've already got new products in the portfolio that were working on low power and OCXOs and also integrated subsystems that we're expanding in. So you're going to see them come into our product portfolio overtime here. And then the other thing that you would have seen is we talked last year but HDD, we had some delays there, we still have those delays. Two things I would say about that are one, our customers delaying the conversion of some platforms, it’s not that they’re not going to do what they are. And also remember in terms of where they are in their process, they are probably 50%, 60% to the way, so we still have some growth there as well. Hendi Susanto - Gabelli & Company: Okay. Are you still maintaining the expectation that the delay in HDD will clear out by the end of the first half of 2014? Kieran O’Sullivan: I think we have some softness for the overall year and we need to get clear signals in terms of when the launch dates are going to be. So that's probably best information I can give you at the moment. Hendi Susanto - Gabelli & Company: Okay. And then perhaps… Kieran O’Sullivan: So just to answer to you, you are not going to see any drop off in the levels we are running out at the moment. Hendi Susanto - Gabelli & Company: Okay. And then in terms of exposure to the HDD market, I am now considering that you have given like percent of sales for like various markets in your 10-K, but I am wondering like what’s your exposure to HDD market in general? Kieran O’Sullivan: We were very focused just in terms of the [Tierra] Solutions and that are part of the conversion at fuel stage actuation arm. So, our suppliers are the sub-suppliers of the Western digital’s and other companies out there that play in that space. And so, the range of the sales is probably -- Ashish have you got the number besides or closer to….

We have normally not guided Hendi, specifically on the volume of our HDD sales. But they can range anywhere from $10 million to $20 million. Hendi Susanto - Gabelli & Company: Okay, got it. Per year or per quarter?

Per year. Hendi Susanto - Gabelli & Company: Okay, got it. Thank you. Kieran O’Sullivan: You are welcome Hendi.

(Operator Instructions) Mr. O’Sullivan, we have no further questions at this time. I would like to turn the call back over to you for any closing remarks. Kieran O’Sullivan: I’d just like to thank everybody for joining and we emphasize that we are extremely dedicated to our strategy to simplify focus and drive profitable growth. Everybody in the management team our locations are driving in this direction, so you can be assured that we will continue to drive improvement in all aspects of our business. And look forward to talking to you on the next earnings call. Thank you.

Ladies and gentlemen, this does conclude today’s conference. We appreciate your participation.