Good morning to you ladies and gentlemen and good day. Welcome to your Stoneridge Third Quarter 2014 Conference Call which is presented to you today by your Corporate Treasurer and Director of Finance, Mr. Ken Kure. My name is Cathy and I'm your event coordinator during the call. During the call your lines are on listen-mode only. (Operator Instructions) Now I'd like to hand the call over to, sir. Ken, please go ahead, sir.

Good morning, everyone and thank you for joining us on today’s call. By now you should have received our third quarter earnings release. The release and the accompanying presentation has been or will shortly be filed with the SEC and has been posted to our website at www.stoneridge.com. Joining me on today’s call are John Corey, our President and Chief Executive Officer; and George Strickler, our Chief Financial Officer. Before we begin, I need to inform you that certain statements today may be forward-looking statements. Forward-looking statements include statements that are not historical in nature and include information concerning our future results or plans. Although we believe that such statements are based upon reasonable assumptions, you should understand that these statements are subject to risks and uncertainties and actual results may differ materially. Additional information about such factors and uncertainties that could cause actual results to differ may be found in our 10-K filed with the Securities Exchange Commission and under the heading Forward Looking Statements. During today’s call, we’ll also be referring to certain non-GAAP financial measures. Please see the Investor Relations section of our website for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. Now that the Wiring business has been sold, our financial reporting starting in the second quarter for control devices, electronics and PST will be reported on a continuing operations and Wiring also will be reported as a single line called discontinued operations. In addition, our balance sheets and statements of cash flow include the Wiring business through July 31, 2014. Our forward projections from this point forward would be for our remaining segments only as our historical results including the Wiring business are not indicative of future performance. John will begin the call with an update on significant events for the quarter, current market conditions in the third quarter, our growth strategies and business development. George will discuss the financial and operational aspects of the third quarter and the repositioning of the company from the selling of the Wiring business and the refinancing of the company. We've prepared and published an earnings presentation to provide more detailed schedules to help your understanding of the third quarter results, trends for our continued improvement and update on key initiatives to improve financial performance. A copy of these items can be found on our website at www.stoneridge.com in the Investor Relations section. After John and George have finished their formal remarks, we will then open up the call to questions. With that, I'll turn the call over to John.

Good morning. We completed the sale of the Wiring business on August 1st of this year. Net cash proceeds from the transaction were 71.4 million. These proceeds were used to de-leverage the company and we completed our refinancing on October 15th with the redemption of the remaining 157.5 million in senior notes. Our third quarter and fourth quarter results will include the recognition of the sale of the Wiring business, non-cash goodwill impairment for PST and refinancing expenses and amortization of the deferred financing cost. With the debt refinancing completed in October, we have established a capital structure that permits us to de-leverage the company by reducing overall debt at a lower interest rate. See Slide 6 for a reconciliation of the reported EPS and the impact of unusual items and our adjusted EPS from continuing operations. George will address the refinancing in more detail in his comments. The sale of the Wiring business also repositions Stoneridge business strategically and removes some of the volatility in our financial and operational performance. The Company's three business segments are technology driven with global reach and should generate higher profitability and free cash flow in reasonable market conditions. Stoneridge's consolidated revenue in the third quarter was 170.3 million, an increase of 8.8 million or 5.4% over the third quarter of 2013. Sales increased at control devices by 5.3 million or 7.2% and electronics by 10.1 million or 22.5%. Sales at the electronics increased by 4.9 million or 10.9% after excluding the sales of 5.2 million to Motherson which were previously accounted for as intercompany sales to wiring and are now recorded as third-party sales. Revenues in our passenger car and light truck category, which are predominantly control device sales, were 63.3 million in the third quarter, an 8.4% increase from the third quarter…

Thank you, John. With the completion of the wiring transaction on August 1st, we've repositioned the company. We've improved our risk profile and our geographic diversification is more balanced with North America sales representing 50.9%, Latin America 21.7% and Europe/Asia 27.4%. Our sales growth from our 176 million in net new business is being driven across all regions and this can be seen on Chart 8. Our customer diversification has improved with a balance between automotive and commercial customers as can be seen on Chart 7. PST has had a negative impact in the last four quarters, but our PST management team has been very aggressive in their cost alignment actions to correspond to the market opportunities by channel. Chart 15 lists the key actions that will generate net savings for PST of $2.4 million this year with an annualized benefit in 2015 of $12.8 million. If the real continues to weaken, which is currently being forecasted in the range between BRL250 to BRL260 compared to the dollar for 2015, then this could create a raw material cost increase offsetting some of our savings. With the completion of the wiring transaction, we paid off 10% of our existing bonds, nearly $17.5 million, and 1.03% of par using proceeds from the transaction on September 2, 2014. We've completed de-leveraging the company by paying down an additional 57.5 million of debt and refinancing the remaining $100 million of significantly lower interest rates. One of our main goals in the refinancing is to provide stability of long-term borrowing capacity while providing the ability to pay down debt which will offer flexibility at substantially lower interest rates. On September 12th of this year we executed a new $300 million senior secured agreement with our lending group. This agreement replaced our ABL agreement and was…

Thank you, gentlemen. (Operator Instructions) And your first question comes from the line of Justin Long from Stephens Incorporation. Go ahead, please, sir.

This is actually Brian Colley taking the call for Justin today. So my first question, now that the refi has been completed, how are you thinking about additional debt pay down in 2015 and beyond? So should we expect this to be the primary use of free cash flow and do you have a leverage ratio that you're targeting?

Brian, I think that we’ll continue -- the other side of that question is really what do we do with bolt on acquisitions. And in the absence of that, and we don’t have those in place, then we will continue to reducing our overall debt levels. And primarily, we’ve got to reduce debt levels in Brazil for one, but yes, we’ll take down our revolving credit agreement that we now have. We now have the flexibility to do that continuously. But I think at the level we’re at right now, because we’ll be approaching somewhere around 1.5 times debt to EBITDA, that’s way below what we normally typically run. We’re comfortable with 2.5 to 3 to 3.5, which we've historically run. But it really depends on how fast we can generate bolt on acquisitions. If we don’t have those in place, we’ll continue to reduce our debt.

And then looking at your guidance for the fourth quarter, could you talk about your assumptions for PST? And also, could you give an update on how PST is tracking quarter-to-date?

I think the key thing with PST, and its clear when you look at our results is that, it’s down against last year, but sequentially it appears that we’ve hit the trough in the second quarter and we are up sequentially quarter-to-quarter. So our third quarter was up almost 14.9% over the second quarter. We're looking at the same kind of percentage lift in the fourth quarter. It's clearly not to the level that we normally expect in the third quarter, fourth quarter of previous years, but it's a significant improvement over the second quarter. So I think the cost actions we have in place and the growth opportunities that both John and I mentioned between track and trace, what's going on in the new audio line and what we're seeing in OES accessories, that that trend will continue into 2015. So I think we're well positioned both from the cost side and also from the growth side and we're seeing that in our results here in the third quarter and fourth quarter. It's clearly not at the level we want, but I think we've adjusted the overall plan to meet what the economy is doing right now.

One of the other comments that's kind of been buried in the numbers, in our track and trace line, we're quite enthusiastic about because of the way the company's been able to grow that business. And when we originally started the track and trace business, it was really done through insurance companies. And one large insurance company in Brazil about a year ago, a year and a half ago, decided to go on its own with its own tracking system and partnered up with another company primarily for that. So they've been, as our contracts expire, they've been transferring that over to their own company. So we've kind of had this treading water experience. But if you take that contract out and we look at the growth of this line, we've probably looked at the growth of probably about 20% and we expect to see even more growth next year. We expect that the final contracts with this insurance company will expire in the first quarter or maybe as late as April, but will expire in the first quarter. And then the real growth aspects of this track and trace line will show up and will show up as much higher margins than our normal business. The other side, as we talked about, we have some new customers down there and one of them that we're particularly proud of is Hyundai. So that's on the OES channel and we're going to sell Hyundai some power window lift modules, some keyless alarm systems and parking sensors and those will start off in next year. So we've got some good growth prospects. So like the growth prospects in the market, that should help PST as we go forward even though the economy, general economy will have a lower rate. And then in addition in 2015, we're going to introduce new alarm systems probably in the second quarter. So we'll have hopefully something that will stimulate that market also. So we've got a series of activities that the PST management team is focusing not only on the cost reduction, but also on generating the top line revenue, which should help us in 2015.

And then just if I could get one last question. If we just look at where the balance sheet will exit this year, what are you expecting for a run rate on interest expense headed into 2015?

I don't think it's going to change much from where we're at. But our interest, as we mentioned today, is at 1.61%. I think it will stay in that range of 1.6% to 1.8% at the outside. So I think the question that behind that, and we're very active at looking at this, there are forward hedge opportunities in the marketplace and we'll continue to evaluate that and we should lock in some of the rate in fixed rate. So we'll run it with the current variable interest rates today, but we'll look at hedges for 2015 depending on where we think the overall markets are going and where interest rates are headed.

Thank you for your questions. And your next question comes from the line of Mr. Rhem Wood from BB&T Capital Markets. Please go ahead, sir. Rhem Wood - BB&T Capital Markets: Can we dig into PST a little bit more? It sounds like two of the businesses are doing very well, PST is still -- you're losing a little bit on the operating income line, but you talked about sequentially in the fourth quarter things getting better, doing a little more on the cost side. But, I mean, can you get to a breakeven on the operating income line in the fourth quarter? And then maybe along with that, like how much additional cost do think you could take out of that business at this point or is it just about recapturing the sales?

I think we're at the level of cost that we have, unless the market continues deteriorating dramatically beyond where we think it is, but I think we're positive on what we see. As I mentioned, in local currency terms we're up 14.9% second quarter, third quarter, and it looks like we're going to be in that same kind of a range in the fourth quarter. So volume takes us to roughly breakeven in the fourth quarter and then I think from there with the growth aspects that we're looking at and then we'll have to adjust cost depending on where we see the market as we open up 2015 and where it's really at. Because GDP has dropped to 1%, we were working with close to 2%. So yes, I think originally in the last analyst call we said that we thought we could get in the range of 5%. But based on the market levels we're seeing, that's not feasible at this point. But we will be breakeven in the fourth quarter.

I think the other thing on Brazil is that, Brazil is a highly inflationary work environment and so that's where we're having to manage wage cost rather aggressively, and these are more contractual than anything else. So as we're taking out some of this cost action, it's to offset some contractual wages increases. The management team is looking at additional action should the year 2015 not start or not turn out to be a strong year. But we’re also looking on the other side, which is, as I said, the drive, the revenue growth in some selected product lines, particular the track and trace because that’s got a very high margin. And so we may be adding some resources to further expand our penetration in that market. We feel very comfortable on what we’re doing with that product line in the market. We’re getting a lot of acceptance in it. We’re into the cargo tracking where we have disposable tracker as well as other trackers and we’re starting to win some fleets on that. As their old contracts expire, they transfer to ours. And one of the reasons is as we talk about our technology; we’re the only ones that have a technology that’s almost jam proof. And by that I mean if somebody wants to steal something, they can jam a GSM and a GPS, but some of our other technologies they haven’t jammed. And when they were tested, our product was tested; we were the only ones that weren’t capable of being jammed. That doesn’t mean they can’t jam it, but it’s got a much higher reliability rate. So that’s one of the things I think the fleets will like and we’ll continue to stress that in the marketplace. And again, I think the issue is really to start to drive top line growth above -- even though the economy is going to be weak, looking at these things that we’ve got with some of the OES opportunities, which are the awards are in place, we now just have to start the production next year, and then the new audio line where we get the cost to sell off. We’ve actually started this month with our first new -- the first of the new designed audio lines and it’s a deckless radio system in there. It’s going to fill out our low cost end, but we’re actually improving our margins on that product and expanding our capabilities and that’s what you see in the audio line as we go forward. We’ll be able to adjust prices to be very competitive in the market, but we’re going to expand our margins at the same time because our cost is decreasing. Rhem Wood - BB&T Capital Markets: And then just to stick with PST for a second, the inventory levels, I mean how long do you think it will take you to draw that down to where you want to be?

Well we phased - the principal driver of the inventory levels on the audio line is the sellout. And so we have a plan, the management team has a plan where we will start -- that inventory will be phased out over the first four months of next year as we sell through and then we’re ordering new inventory to come in on the lower cost. So we would expect, worst case scenario, that by April or May we’re out of all the old inventory. In that time frame though, we will be phasing in certain models, so we’ll be achieving some of the benefits from these models as they roll out over the first quarter of next year.

And that’s one of the reasons our profitability is not as high as what we originally anticipated, because we did not force and want to force price reductions to sort of lower the inventory. So we want to just to flow in a natural sense a more normal way and that’s why it’s a little more delayed in terms of bringing the new products.

Given the inflation rate that’s going on in the market, the foreign exchange, the valuation, the last thing we wanted to do was kind of communicate -- send a signal that somebody might misinterpret about cutting prices. That’s not what the market's going to need going forward if the exchange rates still stays low or still stays as weak and the economy stays less than robust. Rhem Wood - BB&T Capital Markets: And then, so you guys have about 50% of your business now that’s international. Can you talk a little bit about where you see the biggest opportunities in some of those markets and then maybe some opportunities where you think you have the ability to cross-sell between auto and commercial vehicle, some of the recent successes that you've been having? I know you talked about temperature and sensing as one example recently. Just any color on that?

I think when we look at the emissions segment of our portfolio that comes out of control devices, that is where we see a lot of ability to cross sell and we’ve had some success there in those market spaces. I think when we look at the electronics side, it’s really -- there is not the same cross sell for us to be in automotive electronics. We don’t see that as part of our portfolio. However, what we are doing in our electronics business is we are supplying electronics to our control device business unit and we’ll expand that. As a matter of fact, we’ll look at that as we go forward with soot sensor to expand the electronics for soot sensors from our own electronics. So that’s where you will see some kind of intercompany sales that will be hitting, but going into the automotive segment. In terms of geographic growth, where China is -- we’re launching our first instrument clusters in China next year. It’s been about a year longer than we anticipated. And where the EGT line is growing very nicely in there and we expect that to continue. So we see some good growth opportunities in China. In addition, in India, as we’ve talked about, the Indian market is recovering. We have two agreements now in India; one is our old agreement and then a new one for the new technology. So we’ll also get some benefit, some additional benefit to our bottom line when that new technology goes into that market. So I think overall, we’re well positioned in the North American market with control devices. We do have opportunities to grow in electronics in the North American market and we’ll have some program awards coming in there and some quotes going on there. And then in Europe we have some opportunities principally with the soot and emissions to grow in the European automotive market.

Thank you for your question. And your next question comes in from Mr. Jimmy Baker from B. Riley & Company. Please go ahead, sir. Jimmy Baker - B. Riley & Company: So I just wanted to follow up on the use of cash question from an earlier caller. So I understand that you want to reduce debt in Brazil, but I'm just a little bit surprised by your commentary regarding debt pay down in the core Stoneridge business absent any bolt on opportunities there. I would just think given your low cost of debt today and how under-levered the business has become, that you might consider using the excess cash flow to return some capital to shareholders here through a buyback. Can you just talk about weighing those two opportunities?

Well Jimmy, I think as we've shared with you before, it took us a long time to get our availability and float up. And that certainly is an alternative, but it's not our best alternative for increasing return on invested capital for the company versus buying back the shares. So we're looking at exploring a number of opportunities right now for bolt on acquisitions. I just don't want to give you an impression that we have any imminent right now. But we are active; we're looking at two or three opportunities. So, clearly our first, and I think John with his comments in relation to growth, we have some significant contracts coming on electronics in China now, we've got developments in India, we have soot sensing which are all commercial applications now really for the North America market. So there is a number of investments that we're seeing coming up with organic growth that will probably lift our capital expenditures versus what we have been running. So first one is increase our organic growth and that comes through the internal, both in product lines and geographic growth. The second would be bolt on acquisitions which supplement gaps that we have in the overall business geographically and with product lines. And then something like capital I think is a little ways out, because that doesn't make sense to us at this point. We have more opportunities to generate returns for the shareholder through investments of organic opportunities in bolt on than we do by buying back stock. Jimmy Baker - B. Riley & Company: And could you maybe just expand a little bit in terms of the M&A target funnel in terms of end market and size that you're looking at, understanding that maybe nothing is imminent, but just kind of where you're focusing? And then separately, I understand and appreciate the enthusiasm and belief that the PST can return to prior levels, but this is the third consecutive year that it's been a significant contributor to a mid-year guidance reduction. I'm just wondering what you would need to see there that might cause you to reevaluate that belief?

Well, I think that on the growth side of the business and where we're looking at, we're actually looking at some opportunities in Europe and in North America right now in various stages of investigation, meaning how far along we are with those. Those would be supporting both control devices and electronics. And so, but we're not ready to pull the trigger yet. We've still got some work to do. And as you know, in this market, multiples are fairly high and we want to be somewhat cautious that we're not buying something at a high multiple. But the deal size we're looking at too is somewhere around 30 million to 80 million in sales. So it's relatively something that fits in well with our size, with our credit capabilities and all that and those deal size tend to be running about 10% on op income, so you're looking at deal size anywhere from $30 million to $50 million to $60 million roughly, Jimmy.

And I think on PST, I think again trying to unbundle the portfolio, yes, it's been -- the market has really been the primary driver of some surprises down there and we have been repositioning the company down there. But I think, as I mentioned earlier, when we get a chance to go inside and look at the business model, what we've got coming, the track and trace business is a very effective business for us. And we're growing that, we're going to grow that business rather aggressively. As I said, what's happening right now is we're seeing some churn in that business as a former insurance company exits out, but we're still selling. So we're actually growing slowly at about 4% in that business, but we expect that growth rate to go up to 20% to 30% once we're out of there. And in that market space, just to remind you, Michelin paid a high multiple when they bought Sascar, which is a competitor of ours in that track and trace market. We have a better product than they do, so we think we're going to be able to grow this market and grow at a higher profitability. That and then the combination of the audio line. Now I can't change the economics of what's going on down there, but I think we can stimulate some additional revenue and have repositioned the company. We're just now getting ready to roll that out. Jimmy Baker - B. Riley & Company: And then last, I just wanted to clarify in light of the wiring sale, can you just update us on the current geographic breakdown of your commercial vehicle sales?

It's about two-thirds Europe and about a third North America with the sale of the wiring, because predominantly all the wiring was mostly North America. So of the commercial side, two-third Europe, about a third North America.

Thank you for your question. (Operator Instructions) Now your next question comes in from Mr. Robert Kosowsky. He's from Sidoti. Please go ahead, sir. Robert Kosowsky - Sidoti & Company: Just a few numbers questions first. As far as the 9.3 million of operating income you put on Slide 5, is that a clean number for the legacy Stoneridge? I'm just trying to figure out what a clean operating income number is for the Company for the quarter.

Yes, that’s a clean number, Rob. Robert Kosowsky - Sidoti & Company: Then if we look at Brazil, that's breakeven, that's pre-1.3 million of purchase accounting adjustments, and then there's also -- you've also included about $900,000 restructuring in that number as well?

Right. Robert Kosowsky - Sidoti & Company: So net-net, it would be about a $400,000 loss for PST?

Yes. PST, if you look at and you go back over the quarters; they lost about 2.5 in the first quarter, 2.5 in the second quarter. It’s a little higher than that. It’s a little over 1 million in the third quarter and they're breakeven roughly in the fourth quarter that we’re looking at.

We might be better than breakeven. If you look at the third quarter, sequentially they were getting better every month in the quarter. And of course we’ve got the transition cost, the restructuring cost of 900,000. And I think we’ve got them -- they’ve got their cost position pretty well adjusted for what’s in the market now. As George said, we’re expecting breakeven in the fourth quarter, but there could be a positive on that side. You are right, because the 900,000 is embedded in there. So it would have been about 400,000 of operating loss in the third quarter. Robert Kosowsky - Sidoti & Company: And then the breakeven would -- that would include that 1.3 million of purchase accounting, I assume, right?

Yes, it does. Robert Kosowsky - Sidoti & Company: And then one other numbers question. I assume in interest expense you're including $900,000 from the bond redemption and the debt discount as well?

In the fourth quarter you mean? Robert Kosowsky - Sidoti & Company: In the third quarter.

It’s actually - we actually have a schedule that shows the exact amount in the earnings release itself.

It’s running through interest expense, Rob. Robert Kosowsky - Sidoti & Company: And otherwise, just a question on what was driving the outperformance of electronics? Because even if you back out the sales that you made to Motherson, it was still up 10% and Europe was down 10% from a production environment, north America was up. But I think from a blended market standpoint, you're probably flat, but you had about 10% of market outgrowth. And what were the major drivers for that and how sustainable is that outgrowth rate?

Well as we said, those were -- we've been adding content to the vehicles and so that's really what was driving it. And really that growth was driven primarily out of Europe. North America was kind of, even though the classic market here is more robust because of our customers in that market, we didn’t get some of that robustness in the growth model. So as we expected, the North American market continues to improve and some of our customers improve and then we've put some new program awards in here that we’ll be able to continue to grow. I am not so sure that we’ll have the 10% growth rate going forward because we’ve kind of launched all those products, we’ve got a few more to launch next year and then that’s kind of the steady state as we go forward. Robert Kosowsky - Sidoti & Company: What specifically were the major projects or products that you saw the biggest growth rate from?

The biggest growth rate in products?

It’s all instrumentation clusters, Rob. Essentially, that's their largest product and that’s where they're really getting the content growth and they have been with two key customers especially.

And we’ll see some additional growth out of our tachograph product, which now is a legislated product in Europe, as we’ve been able to increase our share at some of the OEM, or at one of the OEMs. So, we expect to increase share in that market space also.

I think the one question we have is, Scania, as you know, has been a real contributor over the last 18 months even though the market’s been down, because that was exports into Brazil. There is some question whether that is starting to fall off and we’re starting to see some of that right now. Robert Kosowsky - Sidoti & Company: And then finally, as far as shift-by-wire, how is that ramp going along? I think you're putting in a couple production lines. How much revenue do you think you'll be doing in 2015 and just any more color you can on the scale of that product?

Shift-by-wire really rolls out -- I mean we’ve got some now, as we said, and part of our revenue growth in control devices was one of the early shift-by-wire program which is now in production. The real ramp of that, the real volume from that program comes in 2017. I mean we will be ramping the programs in through 2015 and 2016 and I think we'll be at full potential of that in 2017, so somewhere around $115 billion number that we said. So as you look at it, we’ll consistently build from here on out as we bring on these programs. So I think you will see positive growth in that line in '15 -- well, I know you'll see positive growth in that line of '15 and then the full potential of that in '16 with the absolute number in '17.

Thank you very much for your questions. We have no other questions on the audio at this present time. So, therefore, I’d like to hand back to Mr. John Corey for closing remarks. Go ahead please, sir.

Thank you again for joining us on the call. I mean, this quarter has kind of had a lot of ins and outs with the refinancing, the different actions we’ve taken there which are all positive for the company, the goodwill impairment on PST and then of course the market conditions. Again, as we look at our Company's portfolio, we think our products are -- and the technology, we're moving more to a technology portfolio, we see good growth still in the North American market. We're cautious about Europe's growth, because Europe economy hasn't really kicked into high growth rate. And we do see improvement in PST, primarily, even if the economy stays at that low growth of 1.4, as we can launch these new products and get greater penetration in these markets, we will see the benefit from that. So it's going to be -- the fourth quarter is going to be a little choppy, as George said, but we're confident that we've got the company positioned in the right direction. And with our refinancing, we do have the capability to go out and put on those bolt on acquisitions. So with that, I'd like to thank you for joining us on the call.