Good afternoon, ladies and gentlemen. My name is Martina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Williams Controls Fourth Quarter and Fiscal Year End 2011 Conference Call. 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) I would now like to turn the call over to Dennis Bunday, Chief Financial Officer of Williams Controls. You may begin your conference.

Good morning, everyone. Welcome to our fourth quarter and year end fiscal 2011 conference call. Before we begin, you should note that the following discussions and responses to questions reflect management's views as of today, December 8, 2011, 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 2010 annual report on Form 10-K, our fiscal 2011 quarterly reports on Form 10-Q, and our fiscal 2011 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 regulations, 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 morning, everyone. And welcome to our fiscal fourth investor conference call. This morning we released our financial results for our 2011 fourth quarter and year end. We are holding our call today from the New York Stock Exchange where we had the opportunity to ring the opening bell yesterday. We move from the NASDAQ to the NYSE Amex because we believe that for our stock the NYSE Amex platform may reduce spreads and increase trading volume making it easier for investors to own our stock. Sales for the year ended September 30, 2011 increased $9.6 million or 18.4% to $61.9 million from $52.3 million for the comparable period last year. Net income for the year ended September 30, 2011 was $3.3 million or $0.45 per diluted share, compared to net income of $1.4 million or $0.19 per diluted share for the year ended September 30, 2010. There were number of one-time costs in both fiscal ’10 and fiscal ’11, and Dennis will cover those later in his call, later in this call. Over the last five years we have made a conservative effort to broaden our product offering and expand our international footprint. Overall, in fiscal ’11 55% of our products were sold in United States, 9% in Canada and Mexico, 22% in Europe and 14% in Asia. Also in fiscal ’11 over $3 million in sales came from new products introduced in the last year. We expect to see similar results going forward based on over $18 million of new business that we won in the last two fiscal years. Many of these new products wins were for off-highway customers where sales were at a record level this year $14 million or 24% of our total sales. In fiscal ’11, we were specially pleased with…

Thank you, Pat. Net income for the fourth quarter was $1 million or $0.13 per diluted share, compared to $510,000 or $0.07 per share in last year's fourth quarter. On a pre-tax basis fourth quarter net income improved $553,000 last year to $1.3 million this year. Looking at the full results, net income was $3.3 million or $0.45 per share, compared to $1.4 million or $0.19 per share last year. There were several one-time unusual items in fiscal 2010, which largely offset each other. However, included in this years results were after-tax charges of approximately $395,000 or $0.05 per share related to a potential acquisition that we decided to determinate during the second quarter, while in due diligence and a legal settlement in the second quarter of a long outstanding claim against the company. Looking at a sequential comparison of the third and fourth fiscal quarters of this year, sales were essentially unchanged. However pre-tax operating income was down $780,000 or $0.07 per share after-tax, an unfavorable sales mix accounted for $200,000 of the difference. The third quarter sales mix was better than normal and the fourth quarter was worst than normal. We had a one-time unfavorable inventory adjustment of $165,000 in the fourth quarter. Labor and overhead were higher as we continue to ramp-up India and incurred over time to respond the inconsistent customer delivery requirements in the U.S. and Europe. Finally, component purchase prices were approximately $100,000 higher in the fourth quarter than the third quarter. For the current quarter the basic EPS share count was 7,302,339 and the fully diluted share count was 7,480,222. For the full year the basic EPS share count was 7,296,490 and fully diluted EPS share count was 7,471,215. At year end we had 7,302,339 shares outstanding. Gross profits for the quarter were…

(Operator Instructions) Your first question comes from the line of John Nobile from Taglich Brothers. Your line is open. John Nobile – Taglich Brothers: Hi. Good morning, fellows.

Thank you. How are you, John today? John Nobile – Taglich Brothers: Pretty good. Thank you. First question on the NAFTA market, I know, for the quarter you mentioned it was up 43%? And I’m just curious now, if you give an idea, what even on the quarterly basis not for the full year, what the NAFTA sales make up of the total sales margin?

Well, I think, what I said in my comments, John, was that last year the NAFTA production, this doesn’t go into spare parts and all that, but the actual NAFTA production was about 20% of our sales. John Nobile – Taglich Brothers: Last year, meaning, ’11 or 2010.

2011. John Nobile – Taglich Brothers: 20, okay, so 20% of sales. Okay.

Production, now there is always parts and spares, and all that kind of thing that add, additionally to that, but about 20% is the production. John Nobile – Taglich Brothers: Okay. But basically over the last few years, you would say…

That’s the one, yeah, that’s the one that variable with the Class 5 through 8 production. John Nobile – Taglich Brothers: Okay. And approximately 30% of the fiscal 2011 growth was from new product introductions. So I could back out of that that existing product sales…

What did you say John, you said 30… John Nobile – Taglich Brothers: 30%, the press release says approximately 30% of our fiscal 2011 sales growth came from…

I think, it’s a $3 million, isn’t it?

Yeah. John Nobile – Taglich Brothers: The question is, actually, I got…

…quarter, okay, okay. John Nobile – Taglich Brothers: Fiscal 2011, 30% of that growth, so at least fiscal year was from new product introductions. So if I back out of that, looking at…

Yeah. John Nobile – Taglich Brothers: … existing product sales up about 30%, okay, back out of the 18.% growth, which 30% was from new product introductions, so 30%. I’m just curious, if you see pent-up demand as a reason for existing product sales that possibly grow at greater rate in fiscal 2013?

Well, I don’t know, John, I mean, that’s pretty hard predict. I mean, it depends, I mean, you see some fluctuation that with the difference between aftermarket products and production products. But, there is a very significant backlog at this point, especially in the Class 8 market and the customers, our customers are going to be working that off going forward. So, I guess, the answer is, I don’t see a big pent-up demand there, that’s going to change kind of our outlook. John Nobile – Taglich Brothers: Okay. But, I mean, there is a significant backlog, I would imagine, looking at say existing product sales, your electronic hand controls up 13%, with that kind of significant backlog I would assume maybe even greater than it was last year, that these sales would be had a greater rate in 2013, I just kind of make…

There is, the backlog, that mean typically look at, pretty clear evidence of it, the one in the truck market. And the customers have been very reluctant to expand capacity to any significant extent, right. They don’t want to, so what they are trying to do is they managing the backlog, let say, yeah, they are trying to schedule things in as close as possible, and they are working that backlog off a little bit, but it also a function of what the new orders are. So I don’t see any -- to any extent I don’t see a larger, much larger rate of production, there’s going to be some fine tuning, but like, the production they have ramped up over the last year and to the extent that we’re going to take, we are going to build some more product, they are already in pretty good run rate to reach that level. John Nobile – Taglich Brothers: Okay. And just one final question, I can pack up, actually you have time in the short fall, which, if there is anything new that with regard to the forced feedback title, I’m just curious, if it still not track the launch in 2012, I think, you might have mentioned this on the previous call but you…

Yeah. I have John and that’s an exciting new product. We are still working on it. We’re introducing a number of different customers. We are scheduling very selective meetings at OEMs to introduce that technology. And generally this is kind of on the leading edge and we are excited we think that it’s a technology that is going to be well adopted in the future by some of these OEMS. John Nobile – Taglich Brothers: Okay. And regard to the full fiscal year, first half, second half, so we pin-point one, this might be introduced?

I would look into later half of the year and it’s one of those kinds of things, John, this is a longer term program and it’s not likely that I’m going to go into high serial production in 2012, it’s likely that we’ll build units, they will be on some test with OEMs, it’s a real system kind of product where the customer actually have to come up with some electronics and software that work with that pedal to meet the results. Now these units are up, so we have some units on test now. We expect to put more units on test. But I’m thinking this is going to be year so out before we reached the point where we going to do introductions with that product. So we are going to, we have capability of building it and we are going to build it and we are going start these programs with our customers. John Nobile – Taglich Brothers: Okay. So, I could safely say by 2013, fiscal 2013, we should see…

You’ll see… John Nobile – Taglich Brothers: … topline accretion…

Yeah. John Nobile – Taglich Brothers: … from this?

Yeah. In ’13 you will see. John Nobile – Taglich Brothers: Okay. Thank you very much.

Okay.

(Operator Instructions) Your next question comes from the line of Matthew Berry from Lane Five Capital. Matthew, your line is open. Matthew Berry – Lane Five Capital: Hello, gentlemen. How are you?

I’m good. How are you?

Hi, Matthew. Matthew Berry – Lane Five Capital: Good. Good. And good fun yesterday. Thanks for inviting us. It’s a great day.

Okay. Lots of fun. Matthew Berry – Lane Five Capital: Yeah. Okay. So, guys, couple of things, I -- as I was sort of little bit, trying to get a sense of the mix that in truck and off-road and I have to make sneaking suspicion that that’s not by accident. Is there a way you could break down roughly NAFTA, Europe and Asia, in terms of truck and off-road the mix?

Well, we have that data, I don’t know, we could do it on the phone. Matthew Berry – Lane Five Capital: Okay.

I mean, some of my -- if you go back in some of my comments, I kind of talk about the North American off-road. I don’t know that we talked about the European off-road, but we do talk about the Asian off-road and I think, there are in my comments. I’ll tell you what I can talk to you afterwards about that. Matthew Berry – Lane Five Capital: Yeah. Yeah. Okay.

And I might just add.

You have it Dennis.

Well, I have something, but that I might add that, of our off-road, I think I understood what you are getting that, but of our off-road business, the NAFTA is still the preponderance of that and Asia, it has grown and it’s probably 20% plus minus of our total off-road business, still the largest portion of the NAFTA but and NAFTA is only growing nicely but, we’ve also seen the growth in Asia and Europe is probably about 10% of that. Matthew Berry – Lane Five Capital: Yeah.

Off-road, is that what you are getting at? Matthew Berry – Lane Five Capital: That is what I’m getting at.

Okay.

Okay. Yeah. Matthew Berry – Lane Five Capital: So, the other question guys, when I look back we were, I was little bit surprise and by the gross margin number that we got this time, I know gross margin can jump around a little bit?

Yeah. Matthew Berry – Lane Five Capital: But I was expecting some a little bit higher and obviously, it’s not entirely predictable, but is, obviously, there’s thing going to go on in terms of India and China in the Cuesta. Is there, when I look back, let say, 2004, 2005, when you guys were growing quite rapidly and you’re getting up to similar levels yourselves you are at now, you were putting at 32% to 33%, 34% gross margins, and so I was, but obviously the product mix was different and India and China wasn’t really there. So what was the, and can you give me a sense of on the underlying basis now sort of excluding India and China, where your gross margin at?

Yeah. Now, I’m going to give you some approximation, so we don’t have exactly with India out of here, but I would say that without India, we are in the low 30s on our margin. Matthew Berry – Lane Five Capital: Okay.

India is sitting us from two ways, first of all, we have the overhead in there, because we are starting up and that’s quite frankly the overhead has spread relatively smaller sales volume, because we were startup. The second thing is Pat talked about, is we are still searching components with our reliable established clients until we give that use of product base establish and that was not by accident, we really mention that, we could have a good solid launch and we did want to just do start-up and localization at the same and that costs us 25 percentage points, let say, plus minus in higher material costs. So the India is a relatively, I guess, I would say, significant drag on earnings this year.

One thing I want to point out about that, Matt, I don’t know if I made this very clear in my comments. We are in a very, we understand how to do this kind of sourcing out, and we’ve done this in China and we are doing exactly the same thing in India and kind of the real focus sourcing strategy and once we get our plan established, we got up in production, then we put a conservative effort on finding the right kinds of vendors that can produce products day in and day out for us. Matthew Berry – Lane Five Capital: Yeah.

We have identified those guys, we actually have, we’ve actually two of the number of them, and we are in the process of validating their components right now, and this also includes our sensors for this specific at least the high volume products in India that we are going to be manufacturing there, and the components that go into those sensors. We expect to have this all done by May of 2012, at that point it takes 25% out of the costs of the components that we use in the product, which is going to make a big difference in our margins in India, but we are willing to take that risk to start that up with the, we just did not want to have with this major OEMs over there and the high volumes that we’re in with this light commercial vehicle we didn’t want to take higher chance of having a vendor give us a problem, shall we one with establish vendor which costs us 25% of sales. Matthew Berry – Lane Five Capital: Yeah.

And one other things that we found in India that, we actually surprise that we’re binding cost in India in source there lower than some of the costs that we had in China, so and then you take out the shipping as the 20% import duty, it make us very competitive in the country in India, and it makes it more difficult for our competitors who are trying to ship product into India. Matthew Berry – Lane Five Capital: Yeah. In the mature, and so, I can say, in mature business, what sort of percent your costs of good of sold tends to be as I had labor and materials?

Matt, we don’t disclose that for competitive reasons. Matthew Berry – Lane Five Capital: Okay. Okay. All right. And…

And one other thing I want to, Matt, is we just did a real competition in the (inaudible) low 30 is a fair number and also the number also had a point in there because of that inventory pricing adjustment, we had about a $165,000, if we put that on a $160 million or so, that’s about one-third on your margin, right there in the fourth quarter. Matthew Berry – Lane Five Capital: Okay.

That’s the one-time deal. Matthew Berry – Lane Five Capital: Okay. So when you say like these does not include the 16…

Yeah. Maybe, we look to give you an idea, if you pull just India out, we have heavy overhead in China too, because that market has ramped up, but if you pull here India out we were just north of 32%, we add another percent on to this inventory adjustment here, 33% and these are approximation. Matthew Berry – Lane Five Capital: Yeah.

I mean, kind of get up in those ranges.

Yeah. I think, one other thing I should point out is that we alternatively going forward expect higher margins with our joystick plant. Matthew Berry – Lane Five Capital: Okay. Like six miscalled and then that all.

That makes quarter dissuasive.

Higher.

Higher. I got you little careful, Matt. I’m – they are all listening here on the call. Matthew Berry – Lane Five Capital: Okay. All right. That’s it from me for now. Thank you.

Thanks, Matt.

There are no further questions in the queue. I turn the call back over to Mr. Bunday.

This concludes our fourth quarter and year end conference call. We would like to thank everyone for attending today. Have a good day.

Goodbye.

Bye now.