Good morning, ladies and gentlemen, and thank you forstanding by. Welcome to the Amerigon, Incorporated 2007 Third-Quarter andnine-months result call. During today's presentation, all parties will be in alisten-only mode. Following the presentation, the conference will be open forquestions (Operator Instructions). This conference is being recorded today,Tuesday, October 30, 2007. I would like to turn the conference over to Jill Bertotti ofAllen & Caron. Please go ahead.

Good morning and thank you, everyone, for joining us todayfor the Amerigon, Inc. third quarter and nine-month results conference call.Before we start today's call there are a few items I would like to cover withyou. First in addition it disseminating through PR Newswire, thismorning’s news release announcing the result for Amerigon's results forthird-quarter and nine-months end September 30th, 2007 and the emailcopy of the release was also sent to a number of conference call participants. If any of you need a copy of the news release you maydownload a copy from the Amerigon web site at www.amerigon.com or the Allen& Caron website at www.allencaron.com. Additionally a replay of this conference call will availableon the Internet via link on Amerigon's website. Finally, I have been asked tomake the following statement. Certain matters on this conference call areforward-looking statements that involve risk and uncertainty. Important factor that could cause the Company's results todiffer materially from the expectations on the call are risks that sales maynot significantly increase, additional financing if necessary may not beavailable, new competitors may arise and adverse conditions in the automotiveindustry may negatively affect its result. The liquidity and trading price of its common stock may benegatively affected by these and other factors. Please also refer to Amerigon'sSecurities and Exchange Commission filings and reports including, but notlimited to its Form 10-Q for the period ending September 30, 2007 and 10-K forthe year end December 31, 2006. On the call today from Amerigon we have Dan Coker, ChiefExecutive Officer, Bud Marx, Chairman, and Barry Steele, Chief FinancialOfficer. Management will review the results and after which we will have aquestion and answer period. I would like to turn the call over to Dan. Good morning Dan.

Good morning, Jill. And thank you very much for theintroduction, and I would like to thank everyone for joining us this fine,beautiful Michigan day. The first comment I would like to make is, I guess wewere reasonably satisfied with our third quarter. Our revenues came in just below $16 million at 15,9. And wewere about 47.2 for the year-to-date numbers and that tracks pretty close towhat we have been expected during the year. This also tracks despite some uncertainty in the marketplaceabout the main customer for our products to date which are the automotiveindustry have entered into their labor negotiation period hand very minordisruptions, but two of the big three in North America had slight disruptions,but two of the big three in North America had slight disruption but minimalizedto their production runs. The other big interest issue for us, of course, has been thegeneral state of the economy and the credit markets, primarily the real estatemarket issues that have caused people to reassess their purchases and theirpurchasing strategies. So we feel like the quarter survived those kind ofcatastrophic issues very well, and we are on track to complete our year as wehad originally projected, and we think that things are going okay. I am going to turn the subject over to Mr. Steele in just asecond, but a couple of things I would like to point out that I think weresignificant during the quarter. We had last Fall, we had a nice introduction bythe Jaguar program with their XJ program, which is their flagship. Just this quarter we’ve had a second announcement fromJaguar, which is the XF platform, which is the replacement for their S-typevehicle if you are familiar with the Jaguar line. It is a very beautiful carand we are expecting big things from the vehicle in terms of sales,particularly for 2008 for us. So we are very excited about that. Bud is going to talk tous a little bit about exciting news at BSST and how our progress is there. AndBarry is going to mention a few things from the financial aspect, particularlyfocusing on R&D tax credit advantage we gain during the quarter. At this point I will turn it over to Barry and let him guideus through the financial statements. Barry.

Thank you, Dan. As you mentioned, product revenues, we had agood quarter with growth of 25% on the quarter over the last year and 33% forthe year-to-date period. Also might note that sequentially, our revenues are up6% and largely driven by seasonal patterns that we see this year. A lot of our sales performance is primarily attributable tonew vehicle launches, mostly in the prior year and some in this current year.Our gross margin was slightly down year-over-year to 32.5% versus 32.7% for thethird quarter last year. Sequentially, we are down to 32.5% from 34.2%. Our variancesin gross margin are completely driven by mix-in products from various customersand various platforms. Moving on, we see our net R&D costs have increasedfor the quarter. They are up by $375,000 for the year-to-date period, $1.332million. That is a 38% and 53% increase, respectively. This has to do with acouple of things. One is our overall spending in that category has increasedas we had talked in the past that is primarily related to our advancedthermoelectric programs at BSST. It is also attributable to decreased fundingfrom Visteon in particular. As you may recall, in the previous quarter, we changed ouragreement with Visteon so that it is no longer an exclusive deal and that hasresulted in less funding partnership with them. I think Bud will probably speakto that to a certain extent as well. In the SG&A line, we are -- we have seen an increaseduring the quarter, $250,000 or 13%. Year-to-date that was $984,000 or 19%.Much of this increase comes from stock option compensation. If you recall inDecember of last year, we issued some stock option to employees and this is theamortization related to those options that will be ongoing. Also, ourmanagement incentive program is a little bit higher in that quarter. Moving on to the…

All right, Barry, thank you very much for that detailedreport. We would like to go to sunny California and see if we can get Bud tojoin us and give us an update on the Advanced Technology team. Bud?

Good morning, everyone. Thank you, Dan. It is indeed sunnyout here, and we are surviving the wildfires pretty effectively. On the BSSTside, we have had, I think, a number of interesting developments. First one, I think it is fair to say that the decline infunded research and development at BSST reflects our opening up the agreementfrom exclusivity with Visteon to permit us to work with other tier-onecustomers in both the power control and power generation arena. And as I mentioned in our quarterly conference last quarter,the challenge for us was to now, with the opportunity ahead of us, to go aheadand sign on to work with other tier-ones. And I predicted that would beprobably a six to nine-month process and we are hard at work at that and, Iwould say, making encouraging progress. The other thing I am finding very interesting is the surgeof interest in power generation. You may recall, we are in the third phase of aDOE-funded program with BMW and Visteon and a couple of academic institutionsto develop solutions in power generation for automotive, at least at the firstapplication, which would lead to a 10% improvement in fuel economy. We are in the third phase of that program. We have been, Ithink, quite successful in DOE's eyes. But the new factor is that the Europeancommunity has announced that it will institute a carbon tax. They hadoriginally announced that it would be effective as early as 2011. We are now seeing, because of the great difficulty ofimplementing that timing, that this might be delayed. But it has sparked asignificant interest in programs leading to production for heat recuperationinto electricity, which then feeds into the vehicle and would improve fuel economyand reduce carbon emissions. And so, the developments in the European sector, I think,are beginning to materialize in a way that we had foreseen that the worldwasn't going to find any cheaper energy and that the interest would becomehigher and higher in recuperating energy that otherwise is lost. So I think that is the new news. Very interesting. Obviouslyit won't be revenue in the near term, but we always said that power generationwas going to be one of the very important developments for the application ofour new technology, and I think we are seeing that. That's probably all the news that is fit to print fromCalifornia.

All right, Bud. Thank you very much. And in our currentattempts to try to streamline these calls as much as possible. The mostimportant factor, of course, is addressing questions that you, the audience,may have. So, at this point, Nicole, we will open the floor for questions.

(Operator Instructions) Our first question comes from thelane of Casey Flavin of CJS Securities. Please go ahead.

Good morning, congratulations on a good quarter guys.

Good morning, sir.

You guided to an extremely robust revenue growth in 2008.Can you give us a sense if that includes any contribution from BSST or is thatbased solely on the core CCS business?

The guidance we provided today is primarily driven by ourcurrent customer base, which is the automotive industry for the Climate ControlSeat. A very modest number for Climate Control Seat for non-automotiveapplications from our advance technology team, but it is not significant atall.

Okay. And I guess if I can ask to you go into a little moredetail on sort of the status of your near-term commercial BSST projects, namelythe chip cooling device and would you be able to give us a sense what thatsmall contribution might be and or a range of revenue contribution that youcould see in 2008?

Actually we've, as part of our policy, we have notidentified that number at all. And we have identified a bit earliest part ofthe BSST revenue will come from a very small program with Herman Miller and wehave indicated that there will be other programs that will come and beannounced by the second half of 2008 or early 2009. So, I prefer not to give you any specific numbers on that aswe are venturing into new areas.

Okay.

It is fair to say that we do expect to have more than oneproduct in production by the end of 2008, but as Dan has said, the -- in termsof percentage of revenue, it would not be a significant percentage of thetotal.

Fair enough. Now given through your window of visibility inthe business for the most part is or can you provide sort of an initial view ofyour expectations for 2009 or is it still a little early?

Definitely little bit early and out of context with what wenormally do? We try to give as clear a vision as we can in practical sense.2008 is a good solid year for us. We believe 2009 is going to be a continuationof our good steady growth, even on as we continue to build now on a biggerbase. We would like to see a good solid 25% average growth peryear. And that's pretty much the best guidance we can give you.

Okay. Great, thanks Dan. And then there is going to be a lotof program activity in 2008. Can you give us a sense of how many programs youmight be looking at? And do you expect these to be primary existing customers ordo you expect some new customer wins and may this be -- could this be theresult of penetrating the lower end market models as well?

Well, there are a lot of questions there Mr. Flavin, but theanswers to your questions are, yes, there are a lot of new programs coming.There is a lot of activity for us in 2008. Obviously, being able to generate a 30% to 40% revenue basisover our current business is going to take a lot of activity. We have spent agood portion of 2007 getting ourselves ready to flex our system to grow fornext year. And we have not specified the number of platforms, but it isgoing to be our biggest year yet in terms of new platform introductions andlaunches. They will be concentrated, I think we can safely say, in NorthAmerica and in Asia, and we do have a couple of opportunities to step down alittle bit further into the mid-price range market with a couple of our newproducts. So, we are very excited about 2008, not just from a growthand revenue standpoint, but from an opportunity standpoint to continue to pressout into a very wide-open area in terms of the automotive industry.

Excellent. And lastly, you mentioned you increased yourspending to growth capacity. Are you comfortable with your current capacitylevel given your outlook over the next several years?

We are very comfortable with our outlook for 2008. That’swhat most of our efforts have been so far in this year as we get ready tolaunch the '08 models, and we are currently in the process of planning for our'09 and 2010 capacity utilization schedule. So, we are very comfortable with that we had the capacitiesand we had the right partners in place to be able to help us supplyhigh-quality parts to a very, very finicky industry.

Thanks a lot. I appreciate, Dan. I will hop back into queue.

Thank you, sir.

Thank you. Our next question comes from the line of SteveDenault with Northland Securities. Please go ahead.

Hi, good morning, everybody. Great quarter. This question isdirected to Barry. Barry, how should we be thinking about the fourth-quartertax rate and the 2008 tax rate?

That -- our best estimate is about 37%.

Okay. Going forward.

Going forward, yes.

What -- how should we be thinking about you really bothSG&A and R&D next year, in terms of the growth rate?

Well, they will increase. SG&A probably not at the sameincrease as you see this year or at the same increase as you see for R&D.R&D will probably increase a little bit more than you see in the currentyear.

In terms of growth?

Probably at the same -- not -- no, much slower growth ratein terms of the current year growth rate, but it will increase.

Okay. That's it. Thank you.

Thank you. Our next question comes from the line of TysonBower with Wealth Monitors. Please go ahead.

Great quarter, gentlemen. Especially given the uncertaintyin the North American side. So commend you on that. A couple of quickquestions. Given the increase on the CCS units expected for 2008, and that weare probably looking at some bigger programs or more vehicles in thoseprograms. Should, we expect a significant change in revenue per uniton the CCS side and also what kind of product mix are we trending toward on themargin side of this?

Well there are answer to your question about the revenue, wewill continue to see as in the past few years trying to eat our prices down asbest we can to keep our end product competitive in the marketplace. The increased volume is a big bite for us to swallow. Weobviously are not trying to, corner the marketplace and Jack the prices up. Wehave got a good target in mind and it will be slightly lower than this year'saverage selling price. What was the other part of the question?

Just -- if there are more -- I am guessing as to your latestgeneration of CCS units are being put in, which should give you a better marginon that mix?

Actually, yes. We are seeing our -- a broader pro-liveration of our latest generation of product we call itMTM2. The mix issue for usthey where primarily based upon the content that we are allowed to kind oftasked to supply by the OEM. And that trend has continued fairly steady as we have seenour -- our base prices go down. We have seen our average selling prices staysteady because of the increased don't that we have seen. And that probably willreach an equilibrium during 2008.

Okay. Sale and revenue per unit may go down, your marginsshould stay fairly stable?

I think, we are hoping to stay again in the low 30s. That isour target.

Okay. Barry, as we saw last year, although you had betterchance to accrue this year, any true-up situations that you see possibly in Q4on the SG&A side?

No, we wouldn't see -- the same rates as we currently see.

Okay. And given that you said mainly in North America, Asiais the primary focus of the new programs. Would that -- given such a robustoutlook for '08, will that tend to lend itself to the OEMs chosen to introducenew products earlier in the year, more in the January, February time frame?

That is a continuing trend for us, although this next year,we are going -- we are going to see a good steady trickle up of revenue but thesecond half is going to be a strong period for us.

Okay. And the last question, any currency rate benefits youare seeing as you are trying to make better inroads into Asia or the Europeautomakers?

We kept our contracts with our customers as well as with oursuppliers in U.S. dollars. So, we don't have any specific risk foropportunities at the moment.

Okay. Thanks a lot, gentlemen.

(Operator Instructions) Our next question comes from theline of Steve Dyer with Craig-Hallum. Please go ahead.

Good morning, guys. Thank you for taking my call. A coupleof quick questions. A lot of them have been answered. First off, was there adynamic that happened in the industry this year that led Q3 to be stronger andnow we are kind of looking at implied guidance of maybe a sequentially down Q4? I know, typically Q4 is very strong and Q3 because of theplant shutdowns and other things is lower.

Well, I would say what happened a little bit is we did havea good third quarter, and I think there is a little bit of banking of inventoryon the auto industries as they entered into their negotiation periods. And Ibelieve that we are going to see a little bit of that inventory being eaten outinto the fourth quarter and I think that would be the main indicator that wehave seen in terms of a shift from a historical trend.

Great. Okay. And then with the soft new car environment, Iwas wondering, if you seen anecdotally any changes in the take rate one-way orthe other?

We have not seen any significant change. In fact, with thechanges that we are seeing, is that we are seeing more and more people as theysee the popularity of the feature. More and more people are now I think areconsidering broadening the availability of the product and that has actuallybeen a very good thing for us. But we haven't seen any appreciable decline in the averagetake rate in general on the vehicles we offered.

Okay. And then any update on when we may hear something moreon the heated and ventilation solution?

You should hear updates on that fairly soon.

Okay. Great. And then finally the Herman Miller’s C2obviously was not supposed to be necessarily a needle mover on the top line. Isthat shipping? And if so, what is the qualitative feedback on that?

The original projections, I think were Herman Miller and ofcourse, Amerigon will be shipping these products beginning in the fourthquarter and that fourth quarter begins in a few days. So we haven’t really hadany feedback from any customers. We are in the final preparation production stage right nowand we will begin our activity in the fourth quarter and they will beginshipping their products to their customers in the fourth quarter.

Okay. Great. Thanks, guys.

Thank you. Our next question comes from the line of GaryHeffernan with Lord Abbett and Company. Please go ahead.

Good morning, everybody. And congratulations on some goodwork here. And I have congratulated you. I challenge the margin. The 32.5%gross margin achieved for the quarter, a little bit of a dip on a prior yearcomparison. And it looks like we are leveling off between two quartersof the last four reported around the 34 level and two in the 32 level and thentaking that with your comment to an earlier question about target of keepinggross margins in the low 30s. You that is all a backdrop to your discussions of looking togrow platforms and maybe they move down to a more lower price vehicle, not alow price but lower price. As the ASPs come down, what is your thought? Why is it okay, just to keep the gross margin percentagelevel here as opposed to still trying to move that up each and over period?

Well, of course, it's for us; it has been a massive effortto get our margins to the low 30s. So, I don't want to belittle the effort onall of our vendors and our team's part to try to get those margins as high aspossible.

Not at all and …

Operating in a very difficult environment where pricepressure is paramount on the minds of our primary customers. But we have builtour model based upon achieving a certain level of profitability based upon agrowth model and being able to generate as much cost efficiencies and gains aswe can based upon the volume curves, as well as design changes and improvementsin our product. Because we all know that our product will sell better, if wecan get the cost down. So our mission here is to try to grow as hard and fastas we can and occupy all the available space that we can and make the firststab into the marketplace. While maintaining a margin level that is within our modeland that target has been in the low 30s. So I hope that indirectly gets to yourquestion.

Maybe, I could chime in for a minute. I don't think, ourtarget on margins has moved at all over the last two or three years. What’sreally happened is we've been able to achieve it and sustain it. And the minorchanges you are seeing of 2/10 of a point here and so forth or even a point asBarry has explained, is much more influenced by product mix of what customerorders what. And we are not consciously planning to cut prices in asignificant way, in order to penetrate these segments further on down theproduct range. Indeed, I think, you will see that the auto companies continueto charge between $600 and $800 per pair of seats regardless of what productthis was offered on. So I don't see a huge trend. I think Dan has said it verywell that our intention is to meet the pressures of the industry on pricingwith cost reductions that keep the margins pretty well constant, keep ourprofitability constant. But don't expose us to competitors coming in from thelow-end and as has happened frequently in the auto industry. Cutting the legsout from under you and then moving upstream. So, I think, we have a pretty goodfix on the kind of pricing and the kind of margins that are appropriate for ourproduct and for our industry. I think there has been quite good execution onthat.

Jerry, does that address your question?

It does. It does. I just want to be apprised of yourmind-set as you are attacking this market. Thank you.

Thank you. Our next question comes from the line of MarkTobin with Roth Capital Partners. Please go ahead.

Hey, Good afternoon, guys. Quick, quick questions for Barryon the housekeeping side. What was the total of BSST R&D spending for thequarter?

Hold on, I have that right here. We did file our 10-Q just alittle while ago.

Are they net number?

For the quarter was $588,000.

Okay. So add the reimbursement to that you get the totalnumber?

That's correct.

Okay. And then for -- for Dan, it seems, at least comparedto last year, that the announcements are coming a little bit later in the year.Is there something on the OEM side that is driving that or what kind of insightdo you have into that?

I don't have any clear insight into that. I think there ismore of a trend of the auto industries are introducing product when they areavailable to the market as opposed to waiting for some auto show or some modelyear event. And we are kind of at the mercy of when they get the car ready. They are ready to roll it out and we are ready to announcewhen they roll. So, we have had some rather sporadic as you pointed out rathersporadic schedule of announcements this year and even last year I think was thebeginning of this trend and you will see a lot of that in 2008 as well.

Okay. And on the G&A side as we look ahead into 2008 and2009, at what point do you require a meaningful investment in -- just in kindof Corporate expenses and that sort of thing?

Hopefully we are going to keep ourselves well in check onthe -- you know, we required capital to grow our business. And then the periodexpenses, the support costs to service our business here is part of our modelhas been to limit that level of expenses much as humanly possible. So we -- as we rather said in the past, next year we areexpecting to grow somewhere in the 30% to 40% range and you will see our periodexpenses growing certainly significantly less than half of that rate. So we are not looking to add any giant corporate towers oranything to our expense rates. We are trying to stay lean and as cheap aspossible to get the job done.

Okay. That's all I have. Thank you.

Thank you. And we have no further questions. I would like toturn it back over to management.

Thank you, Nicole. And again we thank all the questions fromthe marketplace and all of the comments from our various team members. Again aswe have said, we felt like the third quarter was a reasonably good quarter forAmerigon. We think that there is a lot of solid expectations for us in2008. And we believe we have now finished all of the necessary steps to takethe next step to go to 30% to 40% growth rate and maintaining ourprofitability. And we are also very excited about the things that we areseeing on the advanced technology side of our business. And we believe that youwill start seeing some good indications of that on a smaller basis. But again indications in a couple of different areas, inlate 2008 and in 2009. So with that that’s it we would very much again like tothank everyone for your time and attention and we ask everyone to join us againin about 90 days. Thank you, operator

Thank you. Ladies and gentlemen, that does conclude our callfor today. Thank you for your participation and for using ACT. You may nowdisconnect.