Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Stoneridge Fourth Quarter 2017 Conference Call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, we will host a question-and-answer session, and our instructions will be given at that time. [Operator Instructions] As a reminder, this conference call maybe recorded. It is now my pleasure to turn the conference over to Mr. Matt Horvath. Sir, you may begin.

Great. Thank you, Brian. Good morning, everyone. And thank you for joining us to discuss our fourth quarter and full year results. The release and accompanying presentation was filed with the SEC yesterday evening and is posted on our website at www.stoneridge.com in the Investors section under Webcast & Presentations. Joining me on today’s call are Jon DeGaynor, our President and Chief Executive Officer; and Bob Krakowiak, 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 which will be filed with the Securities and Exchange Commission under the heading Forward-Looking Statements. During today’s call, we will also be referring to certain non-GAAP financial measures. Please see the appendix for a reconciliation of these non-GAAP financial measures to most directly comparable GAAP measures. After Jon and Bob have finished their formal remarks, we will then open up the call to questions. I would ask that you keep your questions to a single follow-up. With that, I will turn the call over to Jon.

Thanks, Matt, and good morning, everyone. I am happy to join you today from Stuttgart, Germany where last night on behalf of Stoneridge I have the honor and the privilege to accept one of three 2017 Supplier Awards given by Daimler Truck at their Annual Key Supplier event. This award is recognition from a key customer that we are providing compelling technical solutions to help ensure their success in all regions of the world. This morning we will review and discuss our fourth quarter and full year results. We delivered another quarter of strong financial performance, concluding a very successful year for the company. Let me begin on page three. 2017 was a tremendous year for Stoneridge. We have gone through a significant amount of transformation during the year from changes in our leadership team to the acquisition of Orlaco. These changes itself helped accelerate and solidify our long-term strategy. Additionally, our awarded business backlog increased by 14.9% in 2017 to almost $3.5 billion. Our customers recognize our commitment to providing high quality solutions across the world that will lay the foundation for long-term stable growth. I believe that all segments are well-positioned to continue to deliver profitable growth in 2018 and beyond. Let me provide some additional detail regarding our financial performance for the year. Our 2017 sales of $824 million resulted in an adjusted gross margin of 30.3% translating to an adjusted operating margin of 8.1%. Adjusted EPS for the year was $1.57. For comparison purposes utilizing our 2017 adjusted tax rate in 2016, 2017 EPS improved by $0.56. This represents EPS growth of 55% on revenue growth of 18.5%. Detail on adjustments made to our reported financial information can be found the appendix of our presentation that’s been hosted to our website. This morning we are also…

Thank you, Jon. Turning to slide 10. Net sales in the fourth quarter were 207.4 million, an increase of 20% relative to the fourth quarter of 2016. Adjusted operating income of $15.3 million or 7.4% of sales represented a 50% increase over the same period last year. Strong bottomline performance was driven by an increase in gross profit of 28% with adjusted gross margin increasing by 170 basis points versus the fourth quarter of 2016. More specifically, Control Devices net sales of $109.6 million increased by approximately 6% quarter-over-quarter resulting in operating income of $17.3 million or 15.8% of sales, which is an increase of 18% relative to the fourth quarter of 2016. Electronics net sales of $84.6 million increased by 52% resulting in adjusted operating income of $5 million or 5.9% of sales. PST’s net sales of $24.4 million increased by 9%, resulting in adjusted operating income of $1.9 million or 7.6% of sales, an increase of $1.1 million relative to the same period last year. This morning we are providing guidance on our 2018 financial performance. We expect continued topline growth due to product launches in our Control Devices and Electronics segment, as well as continued strong performance by PST. We are guiding 2018 revenue to a midpoint of $850 million, an increase of approximately 3.1% versus 2017. As discussed previously, we expect continued margin improvement this year through improved operating performance. We are guiding adjusted gross margin to a midpoint of 31.5% of sales, an improvement of 120 basis points versus 2017. Similarly, we are guiding 2018 adjusted operating income to a midpoint of 9.5% relative to 8.1% last year. In addition, we are guiding adjusted EBITDA margin to a midpoint 13% in 2018, an improvement of 140 basis points versus last year. In 2018, our expected…

Thank you, sir. [Operator Instructions] And our first question will come from the line of Christopher Van Horn with B. Riley FBR. Your line is now open.

Good morning. Thanks for taking my questions and congrats on the quarter.

Good morning, Chris.

Good morning, Chris.

So I just want to ask about margins and what really -- what was -- what’s driving this continued increase in your margin profile, if you could give us a sense of, is it mix volumes, cost reductions you are seeing in the plants? And then, maybe looking out, do you see continued opportunity for these margins to move, maybe not in similar fashion but certainly move higher as you brought in that mix and volume profile?

Chris thanks for the question. And I will, excuse my voice, I will try to do my best to answer of it and I will let Bob step in. We see the opportunities both with mix and with performance in the plants. We have talked multiple times in these calls about what we are trying to do to sell higher value-added products, more technology and really transform the product portfolio the Stoneridge has with more and more smart products and those things gives us the opportunity to have additional margin. Secondly, is the execution of the new launches and driving the growth which spins our fixed costs. And then third, it is really the focus that we have on continuous improvement that is driving results within our plants and driving results in the supply chain to take cost out with our supply base and just drive efficiencies. What you see and answer to the question on do we see it going forward? I think you can tell based on the time line we had between 2016 and 2017 but then also into our guidance for 2018 that we are confident that we will continue to drive performance both on topline growth and more importantly on bottomline growth. So this isn’t the one-off. We have been talking about it with regard to continuous improvement as long as I’ve been here and I think the quarter-over-quarter data and the year-over-year show it.

Yeah. I will just add to what Jon said, really I talk about it every quarter on the call about the culture and the environment that we are buildings at Stoneridge around continues improvement. So, Chris, what you are going to see is just an improvement in the underlying base business as a results of really just continuing to look at our performance quarter-over-quarter and just driving an improvement in everything that we do around the P&L and in addition to that with the growth that we are seeing with the product portfolio as we continue to expand in smart products and more electronics we are going to see the positive -- we are going to see the benefit of that as well.

Okay. Great. Thanks for the color there. And then for my follow-up you mentioned capturing MirrorEye opportunities and it sounds like 2018 might be an inflection point for this is product category both on the retrofit and the OEM side. I just wanted to see if you could update us on the pipeline and what the customers are saying around their timing and some of the highlights of what’s going on in the pipeline for MirrorEye? Thanks.

Yeah. Let me -- Chris let me try to answer that. First, the -- we have been as we talk about we have been fleet trials in the U.S. with some partner fleets for us really to try to get feedback in the marketplace and a feedback both from our OE partners, as well as from the fleet that’s been incredibly positive, it is allowed us to continue to refine our product but the responses has been just nothing short of tremendous. What we are seeing from a timeline perspective is that 2019, 2020 timeline from a MirrorEye implementation on OE applications, we still think is about right. We have multiple customers that we are working with in the final stages of our key processes, nothing to talk about. Nothing to talk about there yet with regard to awards, but we have customers that we are working actively with. But what we see right now is the opportunity to expand our fleet trials with some initial retrofit activities. It won’t be huge revenue. But it’s a good opportunity for us to get more products into the field to learn and to start really to create a pull for this technology in the space. And I can tell you that during the discussions here in Stuttgart yesterday that the customer see MirrorEye more and more every day as a tool to help them as they are trying to make their commercial vehicle smarter, so it’s not just solely a fuel economy play, it’s safety play but it’s really as a tool to make the vehicles smart.

Yeah. I would just add two things to what Jon said, so I mean, it’s important to note on MirrorEye, we have gone over a 0.5 million miles on free trials right now on the MirrorEye system. So we have been with our fleets. We have been partner with them for a while and we have a 0.5 million miles under our belt already and we continue to make improvements with respect to the system. And the other thing I want to mention, Chris, I think, it’s really important to people understand, when you look at our backlog, we estimate the OE opportunity for the market on MirrorEye is about a $250 million opportunity at full run rate and we haven’t incorporated that -- any of that into our backlog at this point in time.

Okay. Thank you very much.

Thank you. This concludes our question-and-answer session for today. So now it’s my pleasure to hand the conference back over to Mr. Jon DeGaynor, Chief Executive Officer some closing comments and remarks. Sir?

I just want to thank everybody today, our investors and members of our organization for participating in today’s call. I can assure all of you that our company is committed to driving shareholder value through strong operating results, profitable new business and focused deployment of our available capital. We are confident that our actions will continue to result in success in 2018 and beyond and we look forward to talking to you again very soon.

Ladies and gentlemen, thank you for your participation on today’s conference. This does conclude our program and you may all disconnect. Everybody have a wonderful day.