Anne Leschin – IR Hans Betz – President & CEO Larry Firestone – EVP & CFO

CJ Muse – Barclays Capital Jay Deahna – JPMorgan [Chris Bancar] – Banc of America Timothy Arcuri – Citigroup Jim Covello – Goldman Sachs Tim Summers – Wunderlich Securities

Thank you, and good afternoon. Thank you for joining us this afternoon for our fourth quarter 2008 earnings conference call.

By now, you should have received your copy of the press release that we issued approximately an hour ago. If you would like a copy, please visit our website at www.advancedenergy.com or contact us at 970-407-4670.

I would like to remind everyone that except for historical financial information contained herein, the matters discussed on this conference call contain certain forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, the volatility and cyclicality of the industries we serve, the timing of orders received from our customers, our ability to benefit from the continued cost improvement initiatives currently underway and unanticipated changes in our estimates, reserves or allowances.

These and other risks are described in Form 10-K and 10-Q and other reports filed with the SEC. In addition, we assume no obligation to update the information that we provide you during this conference call, including the fourth quarter guidance provided on the call and in our press release today.

Guidance will not be updated after today’s call until our next scheduled quarterly financial release. I would now turn the call over to Hans Betz.

Good afternoon everyone and thank you for joining us. Ending an already difficult year due to the ongoing troubles of the semiconductor markets, Advanced Energy was also impacted by the worldwide financial crisis and resulting macroeconomic challenges that took hold in the second half of the year.

We nonetheless achieved our financial targets for the fourth quarter with sales of $67.5 million and a GAAP loss per share of $0.45 including $0.43 valuation allowance for deferred tax assets. We ended the quarter with a strong cash position of $180 million including our auction rate securities.

We ended 2008 with sales of $328.9 million a decrease of 14.5% over 2007. We generated approximately $25 million in cash from operations, introduced new products, and continued to penetrate key growth markets such as solar to extend our position as the overall leader in power conversion technology across our markets.

Sales to the solar market doubled in the year to approximately $56 million from $26 million last year as we concentrated our efforts on diversifying our offerings and expanded non-semiconductor sales in order to limit the effect of cyclical semiconductor sales. With the deteriorating economic conditions continuing into the first quarter we found ourselves faced with a broad based downturn effecting all customers regardless of the industry.

As a result we took proactive steps again recently to improve our operations, reduce costs, and lower our break-even point while continuing to invest in the future. In particular we continued our rate of R&D investment at $13.4 million in the quarter reflecting our strategic focus on power conversion.

Having the market hardest hit during 2008 the semiconductor market has continued to drop to unprecedented levels in the last few months. With a growing number of order push outs and cancellation from Tier 1 OEMs, we have seen the decline of the fourth quarter deepen even further into the first quarter of 2009.

Only the largest semiconductor manufacturer is expected to keep spending on new technology in 2009 while the remainder have delayed any orders until at least the second half of this year. The current low levels of factory utilization reflect the significant decline in 2009 CapEx anticipated by most major semiconductor manufacturers.

We nonetheless continued to ship upgrade kits and focus on developing product for 45 nanometer and 32 nanometer process nodes at varying frequencies and power level. So the outlook for the semiconductor markets remains very bleak, we believe our design wins for the next generation products will enable us to maintain and enhance our market share at top OEM’s positioning us well when the market recovers.

Reflecting our diversification strategy non-semiconductor sales continued to mitigate the impact of the cyclical semiconductor markets contributing 48% of total sales in this quarter. Our focus has been on constantly improving our market leading power conversion technologies and applying it to various markets where we see emerging opportunities whether in thin-film solar, solar inverter, or architectural glass.

We have taken a very strategic approach to building and improving our portfolio of power conversion products as we work to expand Advanced Energy’s presence in the non-semi market especially in alternative energy markets. So impacted by the global financial crisis as well, the solar market continued to show its strength with its second highest quarter of the year.

Solar sales more then doubled during 2008 due to our growing position in the photovoltaic thin-film market which accounted for the vast majority of sales. Inverter has its first full year of sales as we [seeded] the commercial market with our Solaron 333 kW product and achieved the highest efficiency rating of any inverter tested to the CEC standard at 97.5%.

Our product won the [Frost and Sullivan] Award for technology innovation with our [transformerless] inverter technology. This award is given annually to the company that demonstrates outstanding technical achievements in the solar industry.

We now have 28 solar inverters successfully running on the grid which is double the third quarter number. As planned we introduced our 500 kW product aimed at the largest commercial installations and small utilities or private energy providers for which we already have received orders and shipped the initial units in the first quarter.

Based on the transformerless technology of our original offering, the 500 kW inverter performs at the same high efficiency rate as 333 while also improving the return on investment by approximately 20% per watt. This offering not only increases Advanced Energy’s product offering in the commercial inverter market but also leads the way to larger utility installations and product offerings thus expanding our market opportunities.

The introduction of this product reflects our commitment to investing in growing markets for power conversion that are gaining momentum and the decision to receive future investment. Penetration of the solar market both thin-film and inverter remains an integral part of Advanced Energy’s long-term strategy.

While we do not believe the overall inverter market dynamics are changing as we continue to see many [RFPs]. However the timing of the solar projects and inverter sales is being impacted by the financial crisis near-term.

During 2008 we saw very large investment in early stage solar companies for manufacturing of solar panels. Since then however much of this investment has moved to the sidelines as the market goes through a period of rationalization, where processes must be proven and panels tested.

While some companies are thriving, others are losing momentum and cancelling orders unable to [pay] the needed financing to build out projects. In the near-term the number of cancellations has outweighed any increases.

However there are two potentially [inaudible] catalysts for solar in 2009. First alternative energy is high on the Obama administration’s list of potential areas to receive cash inflows from the stimulus package which could be particularly advantageous for US companies to increase their participation in [growing] markets.

Second the [inaudible] market is just emerging currently less then 20% of the overall panel market. As such much of the growth of this market is still ahead.

Sales to the flat panel [inaudible] have a bumpy ride in 2008, declining in the fourth quarter. The build out of the [FAB] capacity for Gen 8 and Gen 8.5 in Japan and Korea in 2008 resulted in the rise and subsequent fall of revenue during the year.

We believe 2008 was the height of the first wave of the current investment cycle. Until Taiwan and China expand their capacity it is unclear when revenues to this market will improve as most OEMs have frozen capital investment for the foreseeable future.

However we continue to make progress with design wins and qualifications of our product at major manufacturers for the next generation products. Architectural glass sales performed well showing slight growth in the quarter.

Similar to our other markets we expect the first quarter to be soft. We are seeing a trend emerge as both solar and architectural glass applications use the same power conversion technology.

With a growing focus on alternative energy increasing demand for high-end glass for solar applications could propel the glass market forward and result in a larger long-term OEM customer for us due to this cross over. Sales to the industrial coatings and emerging markets fell in the fourth quarter due to global economic weakness.

Asia was particularly weak as this market is very much driven by consumer electronics and is more sensitive to macroeconomic factors. As the electronic market recovers we expect this market to benefit as parts and coatings are typically the last of the design cycle.

Data storage sales fell once again to its lowest quarter of the year as capacity expansion in magnetic media have essentially halted. In optical storage Blue Ray adoption is still progressing at a low pace but the high prices of this media looks to curtail this market until economic conditions improve.

Service continues to be an important part of our revenue base and overall growth strategy. With our large install base service has been a stable and growing part of our business which we are expanding through the addition of new service products.

In the near-term we expect to be impacted by low semiconductor and flat panel sales as manufacturers keep only their most productive lines running, by borrowing parts from other lines rather then spending money for repairs. This will limit our service revenue in the first quarter as well.

However as the markets begin to recover and FAB capacity is brought back online it will also increase the need for spare parts and repairs, greatly benefiting our service business. As such we expect service to be a leading indicator for recovery.

We remain confident in the strength of our service business and are working aggressively to provide more advanced service programs to grow this business. Given the difficult macroeconomic environment in which we are now operating we were satisfied that our performance in the fourth quarter met expectations.

In total 2008 was a challenging year for Advanced Energy. As the trough in the semiconductor market deepened and diverse financial crisis the world has seen in decades began global business conditions have deteriorated quickly.

Advanced Energy once again took necessary steps to reduce our cost structure while maintaining our commitment of investing in key areas. We maintained our market leading position in power conversion by targeting our efforts on emerging markets, introducing new products, and staying focused on applying our power conversion technologies across a variety of industries.

We are working closely with our OEM customers to develop and apply our power supply technology to mass produce high quality thin-film and achieve higher efficiency. We are targeting key design win opportunities that we believe could improve our share of the solar market long-term as well.

Similar to our OEM customers our current visibility is extremely limited and subject to order push outs and cancellations in the near-term. We are experiencing a significant decrease in the first quarter outlook due to our semiconductor OEMs work through inventory.

We have seen significant declines in our non-semi markets such as solar and [FPD] which in the past has run counter cyclical to semiconductors. We anticipate the current economic conditions will impact our business regardless of end market to some degree for the next year.

During these times OEMs and their customers are looking for financially strong suppliers like Advanced Energy that will allow them to consolidate their supply chain. We see this as an advantage for Advanced Energy given our strategic concentration on power conversion products for a variety of markets and our strong balance sheet coupled with responsible financial management we see this downturn as a unique opportunity for Advanced Energy to use its financial and balance sheet strength to invest in next generation technology to align ourselves closely with our customers and capture market share.

I would like to thank the entire Advanced Energy team around the world for their hard work. I will now turn over the call to Larry Firestone, our CFO to elaborate on our operating results.

Thank you Hans and good afternoon everyone, I will review the results for the fourth quarter of 2008 and discuss our guidance for the first quarter. The challenging economic environment and continued weakness in the semiconductor market drove our fourth quarter revenue to $67.5 million in line with our guidance but down 19.5% from $83.8 million in the same period a year ago.

During the quarter we achieved a healthy 38.4% growth in our non-semiconductor revenue over the same period last year and our pleased that in this challenging environment our non-semi sales exceeded our semi sales indicating that strength in our newer markets was helping to offset the weakness in the semiconductor market. For the full year 2008 revenues were $328.9 million down 14.5% from the same period last year.

The $84.9 million drop off in revenue from the semiconductor market was a primary concern for the overall decrease while nearly $30.5 million increase in the solar market helped to offset some of this decline. In the fourth quarter sales for the semiconductor market, semiconductor capital equipment market represented 33.4% of total sales in the quarter at $22.5 million down 20.2% from last quarter’s $28.2 million due to order declines and push outs at key OEMs.

Non-semiconductor sales remained healthy at 48.3% of total sales similar to the previous quarter. Non-semi sales for the quarter were $32.6 million compared to $40.7 million in the third quarter of 2008.

Sales for the solar market were $16 million below last quarter’s record revenues of $19.3 million. While solar sales were lower as we began to see the effect of the global economic crisis on project financing, they represented a record percentage of revenues at 23.6% versus 22.8% last quarter.

Architectural glass sales were similar to last quarter partially driven by a shipment to and an installation in Brazil. Glass sales represented a 3.5% of total sales or $2.4 million versus 2.7% or $2.3 million in the third quarter.

Sales for the flat panel display market represented 9.6% of total sales in the fourth quarter versus 11% in the third quarter as next round of investment has been delayed due to the slowdown in end market demand and financing. Sales to our industrial coating and emerging markets were approximately 9.7% of total sales, up slightly from 9.2% in the prior quarter but down in absolute dollars.

As a reminder this area represents sales to various customers in several markets. Data storage decreased to 1.8% of total sales compared to 2.5% last quarter reflecting a combination of economic woes with the seasonality of the market as orders for the holiday season are placed in the first half of the year.

Our service business declined 20.5% over last quarter representing approximately 18.4% of total revenue. This was driven by the increasing trend of cannibalization of spare parts from underutilized tools to keep the lines they are running producing product rather then repairing the power supplies that need to be serviced.

Our book to bill was 0.7 to 1 and we ended the fourth quarter with $28.6 million in backlog down from last quarter’s backlog of $48.9 million. Approximately $21.6 million of this backlog is shippable in the first quarter.

Gross profit was $18.4 million or 27.2% for the fourth quarter compared to $35.3 million or 41.7% in the third quarter. This sequential decline in margin was driven by a $5.1 million charge for excess and obsolete material as well as lower revenue and unit volumes resulting in lower manufacturing overhead absorption.

Additionally costs increased as we transferred manufacturing of some additional products to [Shen Zen]. Gross profit also declined from the same period last year of $32.8 million or 39.1%.

R&D decreased to $13.4 million or 19.9% of fourth quarter sales down from $14.7 million or 17.4% of third quarter sales but up from $12.5 million or 14.9% of sales a year ago. This sequential decrease was the result of strong cost management during this challenging period.

We nonetheless continue to invest in strategic areas of growth such as semi, solar equipment, and inverters. SG&A was down by 34% to $9.5 million or 14.1% of fourth quarter sales compared to $14.3 million or 17% of third quarter sales and $16.1 million or 19.2% in the same period last year as we carefully managed discretionary spending.

This coupled with headcount reductions and our global shutdowns allowed us to drive such an effective SG&A result during this period. During 2008 we continually implemented cost reductions at Advanced Energy.

We announced in early December that we are taking proactive steps to increase efficiencies, improve processes, and streamline operations and reduce our costs in the face of the current economic downturn. Based on the cost reductions implemented to date, we have reduced our break-even point to approximately $65 million on a quarterly basis effective in the second quarter of 2009.

Our most recent actions resulted in a $3.5 million restructuring charge for severance costs and related expenses of which $1.9 million was recognized in the fourth quarter, $1.3 million will be recognized in the first quarter, and $300,000 in the second quarter. Thus far into the first quarter we have seen our markets soften further and as a result we plan to move more of our manufacturing to lower cost areas, decrease our capacity and manufacturing overhead in the US during 2009, and take the necessary measures to drive our break-even point to approximately $55 million level on a quarterly basis in the second quarter of 2009.

This will position us with a lower more streamlined cost basis with which to move forward and when our markets rebound, we will have tremendous profitability leverage from our lower cost structure. During the fourth quarter we evaluated our deferred tax assets and based on the decline in our markets and our profitability for US tax return purposes, over the past three years and the next three years, will be impacted.

As a result we recorded an allowance of $27.5 million against our deferred tax assets in the quarter and this produced a net tax expense that exceeded the income for the year and a charge to earnings of $0.43 per share which was the majority of the loss for the quarter. This is a non-cash charge and going forward our effective tax rate will be close to zero as we reserve a valuation allowance until such time that we will be able to provide evidence to utilize our deferred tax assets in the US.

During the fourth quarter we also conducted our annual impairment evaluation for goodwill and as of October 31 and December 31, 2008 our market capitalization was greater then the carrying value of our assets of the company and therefore our goodwill was not impaired. So far in February however our market capitalization has been continually below our asset carrying value and should a goodwill impairment charge result we anticipate the charge to earnings will occur in the first quarter of 2009.

The company currently has approximately $66 million in goodwill on the balance sheet. Fourth quarter GAAP net loss was $19 million or $0.45 per diluted share compared to net income of $5.4 million or $0.13 per diluted share in the third quarter.

In the fourth quarter of 2007 net income was $4.2 million or $0.09 per diluted share. Lower revenues and the $0.43 per share non-cash charge to the provision for income taxes were the largest contributors to the fourth quarter loss.

Net loss for the full year was $1.8 million or $0.04 per diluted share compared to net income of $34.4 million or $0.75 per diluted share for 2007. Headcount at the end of the fourth quarter was 1,679 employees compared to 1,772 employees at the end of the third quarter.

Cash and investments increased at December 31, 2008 to $180.1 million from $168.2 million at September 30, 2008. This increase was driven primarily by the sale and revaluation of auction rate securities and the reduction of inventory and various cash conservation and cost containment initiatives implemented during the quarter.

DSOs were 76 days compared to 66 days in the third quarter as some of our customers have delayed payments. Trade accounts receivable were $56.5 million at the end of the fourth quarter of 2008 and $64.4 million at the end of the third quarter of 2008.

Total inventory decreased to $46.7 million from $53.6 million in the third quarter. This decrease was driven by inventory control and the $5.1 million charge for excess and obsolete inventory.

Inventory turns were consistent at 3.7x and capital expenditures were $1.9 million and fixed asset depreciation was $2 million for the fourth quarter. Our guidance for the first quarter is as follows, sales will be in the range of $30 to $36 million, gross margins will be in the range of 10% to 17% as factory absorption of our fixed cost becomes a greater issue at these revenue levels, which we plan to address as part of our cost reduction initiatives in 2009.

Our GAAP loss per share will be $0.53 to $0.46 using a zero percent effective tax rate. In summary as the weak economic outlook continues for the foreseeable future we will take additional cost reduction measures to drive our break-even point to approximately $55 million in the second quarter.

Our investments in core market and technology initiatives will continue in order to assure that Advanced Energy is well positioned both financially, and technologically when our markets recover. That concludes our prepared remarks for today, I’d like to open up the call for questions.

You hinted at inventory at the OEMs I was hoping you could expand on that, how we should think about that business and timing of a recovery there, if and when we see a recovery at your key customers.

Just addressing the first half on the inventory side we see our OEM customers with work in process that they’re keeping flexible in reconfiguration to use for any orders that they have so that’s actually had an impact on inbound order volume and pulls from the just in time side of our business. As far as how long that’s going to take before it points to a recover, I don’t think we have visibility on that.

In terms end markets how do you envision 2009 playing out on the mix side for revenues between semi and non-semi.

We don’t have forward guidance on that.

On the EPS guide, can you break out the one-time charges that are embedded in that GAAP EPS guide.

I can’t, its—

Well you told us there was restructuring, can you remind me what that was for Q1.

Yes, its going to be $1.3 million for restructuring in Q1.

And is there any write-down of inventory within that number you guided.

No, not additionally.

Any other charges then we should thinking of.

No, well the additional cost reductions which we haven’t yet defined will come in as one-time charges in restructuring. Those are not embedded in these numbers.

On the inverter market, it sounds like you doubled your installed base sequentially in 4Q if I heard you correctly, is that correct and—

Yes.

Okay, and can you give me a sense as to where you see that going, is that a sustainable quarter to quarter phenomenon, is that kind of a big pick up off the bottom and I’ve been trying to quantify what this means to your overall business and I don’t know that you really talked about it, was wondering if you could put some meat on those bones.

You have to consider the following things, because we sold in the meantime 45 inverters, 28 of them are already on the grids so its hard for us to give some kind of forecast when the customers put the rest of the inventory on the grid. But in general terms I think introducing the 400 kW will be very beneficial for the business in general because of the fact that we do have the European version ready in Q3 and still even have the stimulus package as the European market is still the most attractive one in particular the German market.

So therefore we do have some in the pipeline but its hard for us to see how it unfolds in terms of revenue in particular how quarter to quarter.

So can you give us a rough estimate of an average selling price in your inverter business.

Its between $0.30 and $0.40 a watt.

In the last call I believe you said that you expected the [amorphous silicon] equipment market to grow in 2009, do you still believe that to be the case and if not why, and then are you seeing any of your smaller competitors disappearing or your big customers fearing that they might disappear?

Did I understand you right, I said that the silicon equipment market is growing in 2009?

On the last call I asked you if you thought the amorphous silicon solar—

The solar side, at the time when we had this call you had asked me the question I think the situation even solar was not as bleak as it is right now. And there’s another trend which may delay the amorphous silicon a bit because as you may know the silicon price for poly silicon and [crystal] silicon has dropped substantially and all of a sudden its shifted towards more application of this material rather then the amorphous silicon so in essence bottom line is I do not believe that we see a growth in 2009 on the amorphous silicon side from our business perspective.

The second question was are you seeing any of your smaller competitors disappearing or on the ropes?

I think so to be frank, because what we see is a very dramatic situation on the supply chain in general and I have the feeling that our big OEM customers are really scared about the fact that some of those guys will get out of business and if I look at the entire year 2009 with no substantial recovery at least in the semiconductor side I would wonder if all the players are still around at the end of this year and this is the reason why I think its not all that bad for Advanced Energy because having a solid balance sheet and having concentrated at the beginning of the strategy we concentrate on power conversion, I think we are on the [inaudible] scale would probably be, because the amount of money into R&D which allows us to gain market share and there’s another point which goes in this direction as well. Because of the fact that this downturn will last in my view probably through 2009 if you don’t have a solid balance sheet you are in big trouble and as we see not all of them have a very strong balance sheet.

So therefore your question I think so.

In terms of 2009 can you just tell how you think the service business is going to trend, how much is it going to be down if you can quantify that, it would be helpful.

I think as we pointed out in our script, I think the service business is down because of the fact that people are trying to cannibalize the rest of the equipment not being used and put it on the equipment which is running. So if there’s no pick up, not at all during 2009 the service business will be down but don’t ask me how much.

But as soon as we see some kind of recovery even if you don’t see it on the FAB utilization yet but you will see it probably very soon on the service side so it may or it may not but one thing is for sure if service picks up then we see some kind of starting that the recovery may begin.

In terms of Q1 2009 if I look at your guidance is it fair enough to assume that the OpEx is pretty much flat Q over Q and if that is the case is there going to be a similar number of shutdowns in March quarter versus December.

That’s correct.

In terms of the inverter business, actually more in terms of the overall solar business, last time you said both commercial and residential is slowing but utility side of the business is holding up, is that still the case right now.

I think its not fully this case right now because what we see that the large area farms or the large high power farms are more dependent on the financing then the commercial is and the fact that utilities could in principal finance from their cash flow these projects but they are most of the time, if you are knowing utilities, they are slow movers. So what we see right now to be frank we see the commercial side as the sweet spot at this point in time.

The residential side is growing but on the other side its not a very attractive market because they are very local, they are very fragmented and the big player which are very solid in mass production are getting in so for us as a [inaudible] there are two areas which is commercial and utilities but at this point in time commercial is a bit better then utilities.

What’s the break even exiting June, $65 or $55 million.

Exiting June is currently $65 and it will be $55.

Could you talk about in terms of transition to China manufacturing is that pretty much done, or is there more to go for that and how will that impact your gross margin in 2009.

Its, for the high volume products its pretty much at the tail end. We still have some additional products to transition.

I think we’ve talked in the past about the transition of some legacy products to China which are still yet to go so in our plans for 2009 we still have some transition plans that we’re working on.

And just to double check the tax guidance is like zero percent for 2009.

Yes.

On the model you mentioned that OpEx next quarter is going to be pretty flattish, just curious as we go through the next couple of quarters are there still some costs that you can take out of the OpEx line or should we expect most of that to come out of COGS.

No, there is still costs that will come out of the OpEx line as we get past the end of Q1.

How much is left to take out if we think about the overall cost reduction program that you announced earlier.

Its going to come out of several areas. We’re going to have some that’s going to come out of direct labor and overhead and essentially cost of goods sold but I can’t yet give you the breakdowns on those.

I was just curious how much was left after Q1 that you can still take out that hasn’t been implemented yet.

Its going to be in total, total cost reduction targets is going to be about $7 million a quarter starting Q2, Q3, and Q4. So its still a very big amount.

Just a clarification on your guidance does the EPS guidance include that $1.3 million restructuring charge.

Yes.

On the revenue guidance for Q1 how are you thinking about your semiconductor business versus the non-semi business as it relates to the guidance for Q1.

We don’t really break that out and haven’t broken out directionally on a market-by-market basis so I don’t have further granularity for you on that.

Would you expect though the semi side of the business to be down more on a relative basis.

Yes.

You mentioned that you expected the downturn to last through 2009 and I’m curious are you saying that from the first quarter level you don’t see any increase in revenue on a quarterly basis going forward or could you characterize that another way.

I think to be frank if you look at the 2009 you’ll probably find nobody who gives you some guidance in this granularity. This is, just at this point in time we do not see any indications for a recovery in the market.

I’m not saying completely its out of range that in the second half there will be some increase but its, if it’s the case I don’t think it will be a robust or a strong increase. But I think the visibility to be frank is pretty lousy.

The guidance for revenue is $30 to $36 million you’re going to be exiting Q2 with a break-even rate of $55 million, why not take the break-even down to something closer to the first quarter level.

I think the reason is because $55 allows us to gain a lot of this kind of savings out of improving efficiency without hurting or damaging any kind of strategic important projects. If we go further down I think we have to face the situation that we take some of the projects which may come as a revenue stream in 2010 and 2011 out of our R&D program which we don’t like to do it on the other side, what is the benefit of having a very strong balance sheet, the benefit is that you can keep your important projects running and finance through a situation which we see into Q1.

If it turns out that Q1 is the measure for the rest of the year then we have to take another action but if its one or maximum quarters and looking at our cost savings projects so then I wouldn’t like to take those steps right away.

Just clarifying again on the break-even so what would will be the break-even exiting Q1.

The break-even exiting Q1 is probably closer to this $70 million range, just a little under $70.

And so previously you were targeting—

Q2 is when the $65 kicks in.

So exiting Q2 you will be at $65 not $55.

No, we’ll be at $55. We’re currently at $65 exiting Q2, let me just restate, exiting Q1 we’ll be closer to $70, exiting Q2 we currently have laid in for $65 but we’re going to implement additional cost reductions to take us to $55.

And so Q2 onwards that additional cost reductions are basically roughly $7 million a quarter.

Correct.

Q2, Q3 and Q4 you said, right?

Correct.

So wouldn’t it reduce it further even then.

No because it depends on where its coming out of.

Thank you very much everybody and we’ll talk to you on the next call.