Welcome to the Methode Electronics Fiscal 2013 Second Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. This conference call does contain certain forward-looking statements, which reflects management's expectations regarding future events and operating performances and speak only as of the date hereof. These forward-looking statements are subject to the Safe Harbor protection provided under the securities laws. Methode undertakes no duty to update any forward-looking statements to conform the statements to actual results or changes in Methode's expectations on a quarterly basis or otherwise. The forward-looking statements in this conference call involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in Methode's filings with the Securities and Exchange Commission, which is our annual and quarterly report. Such factors may include, without limitations, the following: Dependence on a small number of large customers, including 2 large automotive customers; dependence on the automotive, appliance, computer and communications industries; further downturns in the automotive industry or the bankruptcy of certain automotive customers; ability to compete effectively; customary risks related to conducting global operations; dependence on the availability and price of raw materials; dependence on our supply chain; ability to keep pace with rapid technological changes; ability to improve gross margins due to a variety of factors; ability to avoid design or manufacturing defects; ability to protect our intellectual property; ability to withstand price pressure; the usage of a significant amount of our cash and resources to launch new North American automotive programs; location of a significant amount of cash outside of the U.S.; currency fluctuations; ability to successfully benefit from acquisitions and divestitures; ability to withstand business interruptions; income tax rate fluctuations; ability to implement and profit from the newly acquired technology; and the future trading price of our stock. It is now my pleasure to introduce your host, Don Duda, President and Chief Executive Officer for Methode Electronics. Thank you. Mr. Duda, you may begin.

Thank you, Kevin, and good morning, everyone. Thank you for joining us today for our fiscal 2013 second quarter financial results conference call. I am joined today by Doug Koman, Chief Financial Officer; and Ron Tsoumas, Controller. Both Doug and I have comments, and afterwards, we will be pleased to take your questions. Methode's second quarter sales grew 12% to $130 million, and in the first six months of fiscal 2013, net sales increased nearly 10% to $249 million. In both periods, improved volumes are driven mainly by increased sales of the Ford center console program and lead frame assembly products, new product launches in our European Automotive business, torque-sensing products sales for e-bikes, motorcycles and ATB's, as well as higher appliance and data solution sales. These sales improvements were partially offset by softness in our Power Products segment. As we announced this morning, we received half of the fund coming [indiscernible] the other half in January of next year. We recorded the entire gain in the second quarter in the income from settlement section of the income statement. Including the impact of [indiscernible] second quarter net income is $5 million or $0.13 per share from, $0.01 last year and its first-half net income is $8.8 million or $0.23 per share compared to $0.05 last year. The earnings improvement was driven by higher overall sales volume, lower selling and administrative expenses, the one-time reversal of accruals related to a customer bankruptcy, higher other segment income, commodity pricing adjustments and lower legal expenses. Second quarter earnings were negatively impacted this year by higher cost related to the design, development, engineering and launch of the General Motors center console program, higher income tax expenses, absence of the gain on the acquisition of AMD, from which we've benefited last year, cost related to…

Thank you, Don. Good morning, everyone. Let me add just a few additional comments to those Don has already made. Effective tax rate for the second quarter was 12.2%, which resulted in an income tax expense of $3.3 million for the second quarter. If the Delphi settlement were excluded from the second quarter of pretax income and from the tax rate calculation, effective tax rate would have been 25.1% and would have resulted in an income expense of $1.7 million for the quarter. Looking at CapEx, in the first 6 months, we spent $23.6 million. As we have said previously, most of our capital spending would be in the first half of the year. For the full year, we now expect capital spending to be between $28 million to $31 million. Depreciation and amortization expense in the first six months was $8.8 million. In fiscal 2013, we expect full year depreciation and amortization to be between $18 million to $20 million as we place a significant amount of assets in service in the last quarter of the fiscal year. As Don mentioned, consolidated net sales were up $13.9 million or 12% this quarter versus last year. However, sales were negatively affected by $2 million or 1.5% due to currency fluctuations, primarily due to the weakening of the euro against the dollar. For the 6-month period, sales were up $21.8 million or 9.6% over last year. Likewise, the 6-month sales were negatively affected by about $2.4 million or 2%, also due primarily to the weak euro. Operating cash was $22.7 million for the 6 months compared to $1.7 million last year. We had higher net income, which included $20 million from the Delphi settlement. However, $10 million of that is yet to be collected. We also saw improved working capital management in the first 6 months of this year compared to last year. We brought bank debt down $10.5 million in the quarter to $46 million at the end of the second quarter. You should recall that in the fourth quarter of fiscal 2012, we identified $38 million of undistributed foreign earnings from repatriation as a dividend. The cash was repatriated to the U.S. in the last week of our second quarter of fiscal 2013. A portion of this was used to reduce borrowings in the second quarter, and it will also reduce the amount of borrowing required for the remainder of the year and will otherwise be used for operating and capital needs. Don, that concludes my comments.

Doug, thank you very much. Kevin, we are ready to take questions.

[Operator Instructions] Our first question is coming from Jimmy Baker from B. Riley & Co. Jimmy Baker - B. Riley & Co., LLC, Research Division: The inefficiencies that dinged your Power Products margins here in the quarter, along with mix. Can you maybe talk about your expectation for continuation of those dynamics for the balance of the year? Or should we see more significant margin improvement in that business come fourth quarter?

At this point, -- let me back up, our military and aerospace products, in general, carry a much higher margin than our other products in Power, the data center products, as well as some of the telecom. So at this point, we're going to see that mix probably stay more towards the lower margin products. So for the duration of the year, I think we're going to see really more of the same. I think we've said that in the prepared remarks. And then we're taking a look at what steps do we need to take to adjust that business for what we think is going to be a continued downturn in the military spending going forward. Now we've got new products coming out, but I think this is a general softness that, that business is going to have a headwind for at least the next 6 months, maybe even 12 months. Jimmy Baker - B. Riley & Co., LLC, Research Division: That's helpful. And then just maybe more generally, your guidance obviously implies a pretty healthy fourth quarter. Can you maybe just talk about your comfort level with your European business there in April quarter? Just trying to get a handle on what level of visibility you have there and how conservative you've been?

In general, we, at least a quarter in advance, we have pretty good visibility into the releases. And in normal times, those [indiscernible] are fairly reliable. You don't see much variation. Europe is not unlike what we saw in, say, 2008, 2009 in the U.S. Automotive business where there isn't quite a bit of variability in the market as OEMs adjusted to their demands. So we've looked at our releases, we know we are launching more products and work with -- although they're going to launch at a lower rate. And we feel confident that those are good numbers at this point. But if we see further declines in the European economy, well then, that confidence is -- of course, it's much less, as we're at the mercy of what the OEMs are going to take from us. So let's say there's a degree of caution, there's also a degree of conservatism. And as we look at Europe and those numbers, and we're also launching the initial launch of K2, which will ramp. We will be building inventory beginning in our fourth quarter, and then ultimately, selling product, I think, in the last month is scheduled. So -- and the fourth quarter is usually our strongest quarter, it's 13 weeks, no holidays and it's a strong OEM build season. So that, we know that the fourth quarter will certainly be well improved over what we're selling in the third quarter. Anyway, the third quarter has December in it and the holiday shutdowns.

Our next question is coming from David Leiker from Robert W. Baird. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: This is Joe online for David. I just want kind of circle back on what you're saying with Europe. Can you give us a better sense of when you're seeing the production cuts come? Is it December? Are they going to take a full 2 weeks of holiday downtime? Is it more January? And then I'm wondering, is this broad-based weakness across all the automakers, because I know you typically kind of supply more than normal share of the superpremium segment with like a McLaren or an Aston Martin or even a Jaguar. So maybe is it broad-based across the automakers or more customer-specific to Methode?

It will be more customer-specific. We have Fiat, Renault, Peugeot. We're also seeing the volume on the Leaf vehicle, those are ramping at a slower pace. And the Volkswagen is up for us. I mean, really, if you look at quarter-over-quarter, what automakers in Europe, what the fact is we're tracking that almost one for one. If Fiat's down, we're down. The premium, that hasn't seen a large downturn. But I would -- the significant reductions are on Fiat and Renault and Peugeot. And I don't have [indiscernible] I don't have with me what that effect is on a monthly basis, but we certainly have that. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. And maybe I can circle back offline. Just thinking about, I understand your business is normally strong because Q1 production especially in North America is normally strong. I'm wondering, are there any concerns given that GM has very visibly built up a lot of inventory that you really can now be sitting on declines there at the GM, so your normal Q4 is a function of how strong Ford might be?

That's a good question. But I would say, that will have -- a higher inventory will have an effect later on, GM, as well as Methode, will be doing a pipeline fill on the new pickup truck lines. So if there is an effect, I would think that would come later. And we're really in daily contact with GM and monitor -- I mean, we're nearing launch, so we're looking at volumes, we're looking at running rates. That could always change, but I think it would really affect maybe our first or second quarters of next year. And it's one month also. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Sure. And then my last one. As you kind of think about the K2XX launch, so you're incurring cost right now without any revenues. As we head towards your Q4, you'll start to get some initial volume, but probably not enough to absorb all your overheads. So I'm just wondering, when do we really hit full stride in the launch cadence so that K2XX is additive to your profits? When would you envision that run rate happens?

In the first quarter of fiscal 2014. At that point, truck is fully launched, and then later on in '14, SUV will launch. But truck will be fully launched. And again, that's all -- there's no take rate on that, it's all the trucks. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: And I guess, what would be the target margin by fiscal Q1 be kind of in line with the rest of your auto business or would you expect it to already be above given that, I guess, would you be doing the touchscreens on the initial truck volumes as well?

No. That touchscreens will be a running change. What did we say in...

2014.

2014. So that won't have an effect on next year. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay, got it. And then I actually just have a housekeeping item for Doug. Do you have a sense of what sort of tax rate you might expect towards the back half, given it seems like your income is going to be skewed more towards the U.S.?

Yes. I mean, we do take a look at what the full year effective for tax rate looks like. And based on where we sit today, I think we were at -- again, we had a couple of discrete items, but I think we were at 12.2%. So that's probably -- I get that would be the good rate for the full year to use.

Your next question is coming from Greg Macosko from Lord, Abbett & Company. Gregory M. Macosko - Lord, Abbett & Co. LLC: Just with regard to some of the programs like the launch of the laundry, the laundry platform. I guess which has been delayed. Is that -- I mean, I would assume that would be affecting sales, primarily in the fiscal '14, is that right? Or is that how we'd look at it?

Yes. The launch has been delayed at least the last 3 phases to our fiscal '14, and that should be ramping in our first quarter, then reaching its peak in the second quarter. Gregory M. Macosko - Lord, Abbett & Co. LLC: Okay. And that was originally expected when?

Really ramping now. Gregory M. Macosko - Lord, Abbett & Co. LLC: Oh, okay.

Launching now, ramping in the fourth quarter, so really shifted 2 quarters. Gregory M. Macosko - Lord, Abbett & Co. LLC: I see. And that's just recent, I assume, right?

Right. I think we announced that in November 5. Gregory M. Macosko - Lord, Abbett & Co. LLC: Okay. All right. Yes. Fine. And then with regard to the weakness in the Power Products, I guess that's primarily military-driven, right?

Yes. For the most part, but we also, we're providing Cisco a product for their high-end servers and that they took end-of-life sooner, but that wasn't anticipated and that was a good margin product as well. But it's really the military that is down. And we had an EV program that should have been fully ramped now, and that's much lower, and that's mainly because of the EV market not everybody anticipated. But again, the main factor is the military spending, but the other 2 certainly have an effect. And we're taking a look at what that business is going to be like over the next 6 to 12 months, and how do we position that so that we at least take into account what I think will be a slower spend in military for at least the next couple of years. Gregory M. Macosko - Lord, Abbett & Co. LLC: So you're -- in other words, looking at the manufacturing and capacity and those kind of things for the next near-term?

Yes. I mean, what we do, I think, fairly well is we adjust our expenses in line with the revenues that we expect, and the revenues aren't materializing as we once thought so we'll make the appropriate -- and then we've actually started to do that. Gregory M. Macosko - Lord, Abbett & Co. LLC: Was the military a surprise? Or was that a...

Well, I wouldn't say it was a surprise. The volumes in general were lower than we expected. But for months now, it's been in the process, these military spending cuts. And the new programs, which are funded, are ramping the volume much slower. I think we always talked about lessons learned in our business. I think as we go forward, we're going to look at these programs, and even though we certainly think we're conservative in what the volumes are going to be, we probably need to at least in our Power Products supply maybe even a lower factor or lower the adjustments we make and the volumes we get from our customers. Because across the board, we're seeing lower volumes. And a factory that's geared for a given volume, it doesn't take too much of a downturn to affect your income. Gregory M. Macosko - Lord, Abbett & Co. LLC: Of course. And...

We're certainly taking a look at that. Gregory M. Macosko - Lord, Abbett & Co. LLC: And then you talked a fair amount about the development cost for General Motors, which makes obvious sense. I think you mentioned the Ford D program or something. Is that another -- is that a new development program, so some of the cost maybe from the GM will roll into that, the development cost?

No. That -- we're fully launched on the 2 Ford platforms, D Car and U Car. We originally launched purchasing the painted bezel from a supplier. We had tremendous amount of issues with that supplier, incurred a lot of the premium freight overtime in our plants, and we've talked about that on several calls now. We chose to bring that manufacturing process in-house. We are probably about 80% complete doing that. However, Ford's volume is up, and so we've not been able to move away from the vendor completely. And that of course impacts our prime costs. Gregory M. Macosko - Lord, Abbett & Co. LLC: Okay. When -- is there an anticipated time on that vendor will be gone?

We are anticipating in probably in the next 12 weeks or so in this quarter, we soon should have it behind us. Gregory M. Macosko - Lord, Abbett & Co. LLC: Okay, good. So that will help the margins a bit then.

Yes.

[Operator Instructions] It appears we have reached the end of our question-and-answer session. I'll turn the floor back over to management.

Thank you, Kevin. We will wish everyone a very safe and pleasant holiday season, and say good morning. There's a lot.