Good afternoon, and welcome to the Williams Controls host third quarter 2010 results conference call. My name is Jessica and I will be facilitating the audio portion of today’s Interactive Broadcast. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) At this time, I would like to turn the event over to Dennis Bunday, Chief Financial Officer.

Good afternoon, everyone, and welcome to our third quarter fiscal 2010 conference call. Before we begin, you should note that the following discussions and responses to questions reflect management's views as of today, August 4, 2010, and may include forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements. 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 2009 annual report on Form 10-K, our 2010 quarterly reports on Form 10-Q, and our fiscal 2010 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 costs of materials and labor, and general economic conditions in the United States and abroad. I will now turn the call over to our CEO, Pat Cavanagh, for his comments on the quarter.

Thank you, Dennis. Good afternoon, everyone, and welcome to our fiscal third quarter conference call. This morning we released our financial results for the third quarter of fiscal 2010, looks like we have a large following on the interview [ph] today. Sales increased for the fourth conservative quarter from our low point in the third quarter of fiscal 2009 as our markets worldwide have continued to recover and we’ve launched a number of new programs and are introducing several new products. The quarterly sales of $13.8 million were up 63% over last year's third quarter sales of $8.4 million, and up 9% from this year's second quarter. For the first nine months of the fiscal year, sales are up almost $10 million or 35% over last year to $38.1 million. While we don’t break out revenues in individual markets, I wanted to share with you some relevant sales comparisons and market projections. For both our quarter-over-quarter and year-to-date comparisons, a significant portion of the sales improvements came from new products and new program introductions, including off-road and military applications, stand-alone sensors, electronic hand controls and continued increases in the penetration of electronic controls in India and China. For the first nine months, approximately $3.3 million or one-third of the sales improvements came from these new products and programs. During the worse of the downturn last year, while some of our competitors were making cuts in engineering and marketing capability we decided, with the support of the Board and a sound balance sheet, to invest in new product programs, global customer acquisition, and manufacturing capability while running the business at cash flow breakeven. We are seeing the results of some of these decisions in the third quarter. In addition to new products, all of our markets were stronger both in the…

Thank you, Pat. Net income for the quarter was $903,000 or $0.12 per diluted share on sales of $13.8 million compared to a loss of $333,000 or $0.05 per diluted share on sales of $8.4 million in the third quarter of 2009. Included in this year's third quarter results was a $320,000 or $0.04 per diluted share after tax gain from the sale of stock obtained in the settlement of an environmental claim. The improvement in net income is a direct reflection of our new programs and the improvements in the truck and off-road markets worldwide. Comparing sequential quarters, if we exclude the gain from the stock sale this quarter and the Cuesta settlement last quarter, we went from approximately a breakeven in the second quarter to $0.08 per share income this quarter on $1.1 million higher sales. You may recall the Cuesta class action was brought against Ford and Williams in Oklahoma over five years ago relating to pedals produced by our automotive group in Florida, which we sold in 2004. Although, we have always felt this case to be without merit, we also feel that a settlement is a reasonable outcome. The settlement has been signed by all parties and the class has been notified of the settlement. If the settlement is approved by the court, which we fully expect will occur later this year, we will finally close out this distraction. We recognized a $478,000 or $0.07 per share after-tax charge in this year’s second quarter for the cost of this settlement. For the first nine months of fiscal 2010, our net income was $866,000 or $0.12 per share on $38.1 million in sales, and of course includes the $0.07 per share charge for the class action settlement. In the first nine months of last year, our…

(Operator Instructions) Our first question comes from John Nobile at Taglich Brothers. Your line is now open. John Nobile – Taglich Brothers: Hi, good afternoon and needless to say –

Hi, John. How are you? John Nobile – Taglich Brothers: Good, good, good. Very good quarter, especially sequentially. Never mind quarter over quarter. It appears that things look to be shaping up obviously, especially in the NAFTA market and of course overseas in China. I just had a couple of questions. Actually, I wanted to get back to the guidance; the fourth quarter guidance of $4.3 million to $4.7 million, is that correct – obviously per month, I am sorry. That looks to be kind of flat with what you just turned in in the third quarter. If you would take the average of that guidance it’s just about calling for a flat sequential quarter. The way things have been trending obviously over the last few quarters, do you see more of a pickup in this fourth quarter or is there something that we need to look for?

We are conservative, John. That’s kind of with the schedules I see right now, that’s kind of what it looks like. The forecasters, especially the folks on the NAFTA market, are calling for higher quarter in our calendar fourth quarter than we had, but I haven’t quite seen it yet. Could it be more? Yes. But it’s our best estimate at this point in time. We get a lot of drop in orders during the month and quarter. That sometimes has a way of skewing this kind of thing. It’s hard for us to tell how much we are going to get during the month added into the schedule. John Nobile – Taglich Brothers: All right. From what you see now obviously, and better to be conservative than to put something out there that maybe won’t be hit.

Yes. We like to run the business on a conservative basis and so we don’t get too carried away with expenses. We like to keep those in line with what we think a conservative sales estimate is. John Nobile – Taglich Brothers: Okay. Fair enough. A question regard to your gross margins. I was curious if there were any special items in your cost of sales. I know – I am looking back on actually lower top line numbers and your Q1 gross margin was 30.6%. Q2, when you factor out the special items, was 30.2%. So I thought we might see at least a little bit higher gross margin. Was there something in this special item wise or otherwise?

: If you take a look at this quarter, you take a couple hundred thousand dollars of additional freight costs, plus a more normalized material costs, that’s why we didn’t see a higher gross margin percentage. I would say that the gross margin percentage has depressed a little bit. We also had another charge in there on warranty that I didn’t mention, but that was about another $100,000. So there were some things in there that depressed the third quarter but I would have to also say, in all fairness, that the first quarter was probably a little bit uncharacteristically favorable as the material as a cost of sales because of our sales mix. John Nobile – Taglich Brothers: Okay. With the supplier problems in the just released quarter, what was the dollar – I think you said previously the dollar amount that cost you extra cost of sales of dollar amount on that?

Yes. It was about $200,000 this quarter. John Nobile – Taglich Brothers: Okay. That could right there explain the difference on that.

Yes, that’s 2 percentage points right there. John Nobile – Taglich Brothers: Yes. Okay. All right. I just wanted to make sure. The drop in the administrative costs, let’s see, you went from – you had about $1.3 million, and then $1.5 million. This quarter, you go down to – on higher sales you go down to $1.2 million. I was just curious if this is a level we can anticipate going forward on this level of revenue?

Yes. That’s probably a touch low, maybe more. If I were to look forward to it, I would say more in the 1.3 range, maybe 1.350 [ph] range in the going forward quarters. We were running pretty heavy in the first two quarters on our admin costs mostly because we are wrapping up this Cuesta deal and we were in heavy negotiations with Ford and with Plaintiffs. So we wrapped up some pretty hefty legal fees there to get this Cuesta deal behind us. So you are not seeing those obviously in the third quarter because that was pretty well wrapped up by the end of the second quarter. So I think that we might just be a little bit low in the third quarter from what we would normally see. But we are not going to keep up in the 1.5 million, 1.6 million ranges either. John Nobile – Taglich Brothers: Okay. At least at this level, like you say, 1.3 million, it might be 1.35 million.

Yes, and put that in your model. Sure. John Nobile – Taglich Brothers: Okay. I am curious if you are seeing any pick up in orders from India? I hope the new emission standards, is it still in schedule for – I think it’s October, you had mentioned last call, for the emissions to take effect?

The answer is yes and yes, John. We are seeing a pickup in orders. We are having a major OEM asked us to start production early, serial production. And it is still on schedule. John Nobile – Taglich Brothers: Okay.

So we are working very diligently – and I should say bring it up in production in India. John Nobile – Taglich Brothers: Okay. Just a follow-up question to that and actually my final question. If you could put out there how many units you believe that you would be able to sell to India in fiscal 2011? In another words, how big of a market in terms of units?

Well, John, it’s a little bit speculative on my part. I don’t have that data at hand, but I will compile some information. I don't like to give forecast on this kind of thing because in these kinds of markets things are pretty volatile. But in the next call I will try and give a little more specificity on what we are thinking there in India for the next year. John Nobile – Taglich Brothers: Okay. In terms of the size of the market, unit wise, what do you think – how big of a market that is?

Well, the heavy truck market is in the $200,000 units a year range. But the light duty market is higher than that and pretty significant. And in that particular market, because of our introduction of the new light commercial vehicle pedal that’s going to be – the production is going to be in India and that unit is going to be targeted for light commercial trucks. So the volumes out of that facility will be relatively high compared to some of our other facilities. John Nobile – Taglich Brothers: Now it looks to be at least from the numbers that you’ve had just – on the heavy market of $200,000 unit range, a very promising market alone in India just in comparison to NAFTA right now.

Yes, it’s a pretty significant market. It’s a little different than other markets because it’s pretty much shared by two manufacturers. So I don't know, I mean, it’s one of those kinds of things – and I don't want to make this specific to the heavy market – their heavy market is a little bit broader than ours, it goes down a little bit lower. So in that – that market is shared by two manufacturers as opposed to North America and China, which has multiple suppliers to the market. It’s a little bit different in dynamic. John Nobile – Taglich Brothers: Okay. All right. Thank you.

(Operator instructions) Our next question comes from Chris Sansone from Robotti & Company. Your line is open. Chris Sansone – Robotti & Company: Good afternoon.

Hi, Chris.

Hi, Chris. Chris Sansone – Robotti & Company: Hi, quick question about the dividend. It just seems, I guess, somewhat unusual, the size of the dividend. Can you talk a little bit about what the thinking was behind it? Especially why now, why did the Board think that now is the right time to pay out dividend of that size.

Well, several things Chris. One, we’ve had a number of patient investors and through a pretty difficult period. And as I said earlier in my comments, we could have been very draconian in our cuts, we weren’t. We ran the business what we targeted is cash flow breakeven, so that we could continue to invest and we had the balance sheet to do it. So several months ago, we started looking at, we had excess cash. Credit markets were loosening. We were able to get a credit facility. We’ve found that there was really no ability for us to buy back stock in any significant volumes without having a major – putting major volatility into the stock price. So we thought a dividend was the best approach to reward the investors. We also saw the improvement in the market coming. So it’s kind of where we stood on it. Chris Sansone – Robotti & Company: Great. Thanks.

There are no further questions at this time. I’ll turn the call back to the presenters.

Thank you very much everybody for attending today, and this concludes our third quarter conference call. Thank you and we will see you on the next call. Bye.