Welcome everyone to the Williams Controls third quarter 2009 results conference call. (Operator instructions) Thank you. Mr. Bunday, you may begin your conference.

Information concerning risk factors and other factors that could cause actual results to differ materially is included in our filings with the SEC including our 2008 annual report on Form 10-K, our fiscal 2009 quarterly reports on Form 10-Q and our fiscal 2009 current reports on Form 8-K. Specific factors that may cause such a difference include, but are not limited to, availability of adequate working capital, domestic and international competitive pressures, increased governmental regulation, increased cost of materials and labor and the general economic conditions in the United States and abroad. I will now turn the call over to our CEO, Patrick Cavanagh, for his comments on the quarter.

Thank you, Dennis. Good afternoon everyone and welcome to our third quarter conference call. This morning we released our financial results for the third quarter. I will make a few comments on the quarter and then discuss what we are seeing as we enter the second half of the calendar year. Sales in the third quarter were $8.4 million, down 7% from the second quarter of fiscal 2009. As a direct result of lower sales we incurred a net loss of $333,000 or $0.05 per diluted share. The net loss in our fiscal third quarter was $867,000 less than the net loss we incurred in the second quarter on higher sales of $9.1 million. This was a result of fully implemented cost reductions taken in the first and second quarters. Year-to-date through the first nine months of our fiscal year sales are down $20.3 million or 42% to $28.2 million from $48.6 million in the same period in fiscal 2008. The net loss for this period in fiscal 2009 is $2.3 million compared to a net income of $5.83 million in fiscal 2008. Sales in our third quarter were the weakest we have seen in this economic downturn. For the first nine months of our fiscal year, sales were down in every region, market and product segment compared to the same period a year ago. Sales in Europe led the downturn partly due to over production in 2008, weakness in the Eastern European market for used trucks and a rapidly weakening economy. When compared to the second quarter of this year, sales were down in all segments except Asia where sales in China and India were improved from the second quarter. In the North American market, the calendar year-to-date production through June for classes 6 and 7 was down 46.6%…

Thank you Pat. Third quarter sales of $8.4 million were 7% lower than the second quarter 2009 sales but that rate of decline is only about half of the prior quarter-to-quarter sales decline, the first time this year the rate of decline has slowed. Quarterly comparisons to last year are still dramatic with sales down 51%. In the current business environment, examining quarterly trends to get some indication of when markets may recover has become more important than comparing with the prior year’s quarters. In my comments today, as in the press release, we are comparing more to the prior quarter than the prior year’s quarter. We will save the year-over-year comparisons to our year-to-date comments. For the first nine months of this year sales were $28.3 million or 42% lower than the first nine months of last year. These sales declines are solely the result of our customers’ order rates. Market share and pricing remain stable. The current quarter’s sales decline included most geographical and product lines although there were a couple of bright spots. Third quarter sales to Asian customers were up 31% from this year’s second quarter with China up 71%. NAFTA Bus sales showed some small strength being up 16%. Sales to India were also up but from a smaller base. Unfortunately, third quarter sales were down in our key NAFTA and European markets. Sales to NAFTA truck OEM’s were down 8% quarter-to-quarter and European truck OEMs were down 16%. For the first nine months of fiscal 2009, sales were down in all major geographic areas and across all product lines. European truck OEM sales were down 71%. NAFTA OEM truck was down 44%. Asia was down 49% and the worldwide off road sales were down 39%. Although we reported a loss in the third quarter,…

(Operator Instructions) The first question comes from the line of John Nobile – Taglich Brothers. John Nobile – Taglich Brothers: At the conference in May you mentioned that the fleet age is at a record level of over six years old. Typical truck lasts approximately 8 years. Do you believe pent up demand could result in record revenues in the next couple of years?

It is hard to say. One of the things that is going on too is this has been more than discussed in the industry. The issue is that while the trucks are at a record age at this point many of those trucks have very low mileage on them. What you are seeing is reflected in some of the used truck pricing. It has deteriorated substantially over the last six months. I think comments I made here I think there is going to be a time to work off some of this over capacity. We have got to see the freight tonnage come back up which there have been signs that is happening. Those trucks at some point are going to be old but they have a useful life based on their mileage and I think they are going to have to be used to the point that they want to retire them or second tier those trucks. John Nobile – Taglich Brothers: I’m curious, you have plans for Q4. With the improvement in orders, at least the press release alluded to improved orders and shipments as compared to Q2, what do you believe we can expect in Q4 sales?

I don’t think we said that in our financial release. I made the comment in my remarks we are seeing improved schedules by our customers both last month in July and this month. It is a little bit early in my view, and maybe I am too conservative, but in my view it is a little bit early to get that things are going back to normal. We are seeing improved order patterns by our OEMs and I think that is the good news. How long it is going to last or how big it is going to be, I don’t know. John Nobile – Taglich Brothers: Compared to what you just reported, the third quarter results to Q4 if things continue the way they are should be better than Q3?

Yes. John Nobile – Taglich Brothers: The current level of SG&A. Is this a level we should expect going forward?

When you say going forward, I would say in the short-term. John Nobile – Taglich Brothers: At the low level of sales.

At the low level of sales, pretty close. There are some things we may have been a little bit…we were burning off some things. Our repair and maintenance was very low, for example. We were redoing some of our shipping stock so some of those costs were much lower in the quarter than what normally would happen. So the third quarter might be a little bit better than what you might see in the fourth quarter. Materially yes. Same direction. John Nobile – Taglich Brothers: You had mentioned you are looking to start building light truck pedals, I believe that was under 5 ton capacity. I’m curious if you could shed some light on the competition. How competitive this market might be compared to the heavy truck market.

It is probably more competitive and the volumes are higher and probably the margins are lower if you are looking at the model. Typically these are high volume small trucks. A lot are produced in Asia. Typically we would be competing with automotive based suppliers. Many of the programs are new programs so we are going head to head with these guys. Our experience has been we understand this market pretty well and we knew where we had to be to be successful in this market from a price point. That is how we designed this product and leveraging our substantial sensor capability at this time gave us a real leg up on doing that. So we expect to be fully competitive. Is it going to be more competitive? Yes. Does that scare us? No. From our standpoint we feel our manufacturing capability in China for these kinds of lower cost items is up to the task and we have designed it to be that way. Just one more comment on that, we have the flexibility of doing this in lower volumes than our automotive competitors. We think where we shine and where we differentiate ourselves is because of our high mix, lower volume capability to produce products like this at a lower cost in slower volumes which sometimes gives the automotive guys a real headache.

The next question comes from the line of Michael Taglich – Taglich Brothers. Michael Taglich – Taglich Brothers: So this is the worst quarter you are going to see in the rest of your career?

That depends on how long the career is. You never know. Michael Taglich – Taglich Brothers: That could be a shorter career potentially. That was a half a joke. You think this is behind you now right?

It is hard to say with what is going to happen with the economy. What we have said is we think we are in a bottoming process. We think the truck market has come close to that bottom or is bouncing along the bottom. When it starts up again that is anybody’s guess. We are seeing improved schedules for July and August and hopefully that will continue to improve. Michael Taglich – Taglich Brothers: Following through on the smaller truck pedal, how big is the market on this thing? Do you want to give us an order of magnitude of where you think you are going to take that business over the next five years? What percentage of the market you hope you will get?

You never know. It is obviously from a volume standpoint the market is much bigger. We are going to be very selective in the applications or opportunities we take advantage of. We think our competitive advantage is in a certain area and we are going to exploit that to its fullest. Is it in the millions of dollars? Probably. It is going to depend on how successful we are and how many new programs come online. Our opportunity really in this market is really with new opportunities or new programs or new trucks. It is very difficult to replace an existing supplier in this market. So you really look for opportunities on new platforms. That is what we are doing. So it is going to be a gradual ramp up but it is a substantial market. My comments are the margins will probably be lower. The volumes will probably be higher. The price point is a lower price point than what we are seeing right now. Obviously we think it is worth our pursuit and we think it will contribute to the growth of the company. Michael Taglich – Taglich Brothers: In the markets you are chasing after, what are the unit levels? If I remember correctly it was awhile back but those are relatively small compared to class 8 unit markets right?

No, in the LCV market these are opportunities that are typically well over 100,000 units of platform a year. Michael Taglich – Taglich Brothers: In those markets. Worldwide right?

We are seeing single platform opportunities at one manufacturer well over 100,000 per year. It depends on how many of those we can capture. That is a higher volume than what we are seeing in the heavy truck market. Michael Taglich – Taglich Brothers: At a much lower price. Right?

Yes. Substantially lower price. More in the automotive pedal line. Kind of where automotive pedals are. Like I said earlier, with our strength in sensor capability here we were able to leverage that to really be competitive in this market. We did a lot of market research to see where the automotive guys are in this market and then we want to selectively take opportunities that fit our capability the best. Michael Taglich – Taglich Brothers: You are looking worldwide?

What I want to say really is I don’t want to load up our production capability with a bunch of low market business. I want to take business that is at a premium margin and sometimes that is the lower those volumes typically the price is a bit higher. We have the flexibility to do that very easily. Michael Taglich – Taglich Brothers: Is this worldwide as far as looking at this market or are you looking at North America?

Absolutely looking globally. No question about it. In fact, the major opportunities particularly now are in Asia with some of these small delivery vehicles and such.