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Tecumseh Products Company (TECUA)

Q4 2008 Earnings Call

March 17, 2009 11:00 AM ET

Executives

Teresa Hess - Director of Investor Relations

Ed Buker - President and Chief Executive Officer

Jim Nicholson - Vice President and Chief Financial Officer

Lynn Dennison - Vice President and General Counsel

Analysts

Brian Grad - DLS Capital Management

Charlie Rentschler - Wall Street Access

Jason Nelson - Rommel Asset Management

Scott Barbee - Aegis Financial

Presentation

Operator

Good morning and welcome to the Tecumseh Products Company's Fourth Quarter and Full Year 2008 Earnings Conference Call. All participants will be in a listen-only mode until the question-and-answer session of the conference. This conference is being recorded at the request of Tecumseh Products. If anyone has any objections, you may disconnect at this time.

I would now like to introduce Ms. Teresa Hess, Director of Financial Reporting and Investor Relations at Tecumseh Products. Ms. Hess, you may proceed.

Teresa Hess

Thank you, Jimmy. Good morning and welcome to Tecumseh Products fourth quarter and full year 2008 conference call. I am joined on the call today by Ed Buker, President and CEO, Jim Nicholson, Vice President, Treasurer, and Chief Financial Officer and Lynn Dennison, Vice President, General Counsel and Secretary.

Yesterday afternoon, we announced the company's fourth quarter and full year results for the period ended December 31, 2008. If you did not yet receive a copy of the press release, please contact Amanda Passage at 616-2333-0500 to have one sent to you. Please note that the release is also available on many news sites and it can be viewed on our corporate website at www.tecumseh.com.

Also this call is being simultaneously broadcast on the Internet and will be archived for replay starting this afternoon. The replay can also be accessed at our website tecumseh.com.

Before I turn the call over to Ed and Jim to comment on our results, I would like to remind you that this conference call contains certain statements regarding the company's plans and expectations which are forward-looking statements and are made pursuant to the Safe Harbor provision of the Securities Litigation Reform Act of 1995. These forward-looking statements reflect the company's views at the time such statements are made with respect to the company's future plans, objectives, events and financial results such as revenues, expenses, income, earnings per share, operating margins, financial position, expected results of operation and other financial items, as well as industry trends and observations.

In addition, words such as estimate, expect, intend, should, could, will and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence.

There are a number of factors many of which are beyond the company's control which could cause actual results and outcomes to differ materially from those described in the forward-looking statements. Risk factors exist, a new risk factors emerge from time-to-time that may cause actual results to differ materially from those contained in the forward-looking statements.

Given these risks and uncertainties, investor should not place undue reliance on forward-looking statements as a prediction of actual results. Furthermore, the company expressly disclaims any obligation to update, amend, or clarify forward-looking statements.

In addition to the foregoing, several risk factors are discussed in the company's most recently filed Annual Report on Form 10-K and other SEC filings under the titles Risk Factors or Cautionary Statements related to forward-looking statements, and those discussions regarding risk factors as well as the discussion of forward-looking statements in such sections are incorporated by reference in this call.

With that said, I would now like to turn the call over to Ed Buker, President and CEO of Tecumseh Products.

Ed Buker

Thank you, Teresa. Good morning and welcome to our fourth quarter and full year 2008 conference call. Today I will provide you with an update on our business from several perspectives. First I'll provide some context for our fourth quarter and full year results as well as the broader markets and global economic conditions and their impact on those results.

Then I will turn the call over to our CFO, Jim Nicholson to go over our financial results for the quarter in year and greater detail. Then I'll update you on a number of recent developments including the investigations into our industry and our ongoing initiatives to transform our company into a world-class compressor manufacturer. Finally, we'll open up the call to your questions; I've asked Lynn Dennison, the company's General Counsel to join us in case you have questions but most appropriately answered by legal counsel.

Although 2008, will likely be remembered for the significant global financial turmoil which has led to the worst economic contraction at least the last 25 years. Year just ended was in fact a period of progress for the Tecumseh. While the deepening global recession as a significant impact on our financial results and masked our progress during the year particularly in the fourth quarter. We didn't complete many actions towards transforming our company into world-class competitor and our core compressor business.

As we entered 2008, we knew we had our work cut out for us. We also knew that course before us would take more than a year, then we would face unforeseen challenges and opportunities along the way. The primary mandate of that course is in the near-term is ringing out the waste in an efficiencies created over the past several decades. The period characterized by over-investment in vertical integration and redundancies across our various geographic locations.

Under the philosophy of our former management, the global locations of our operators are autonomous businesses resulting in duplicate operational marketing and product development processes, extremely inefficient use of valuable scarce resources.

By coordinating all of our activities globally and conducting certain operations in those locations that offer the best costs and shifting other activities to those locations that are critical to properly serving the local customer, we expect to substantially improve the financial results of our business over the next several years.

While the current economic climate will slow our progress, and as a result it will take us a little longer to arrive at our destination. I am still confident that we will achieve our stated goals.

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