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Jo Major

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Gross margins improved for the fourth consecutive quarter and are up 13 percentage points from the same quarter in the prior year, operating expenses declined sequentially and we significantly reduced our cash burn by $14 million compared to the prior quarter. Although we encountered operational issues during the transfer of manufacturing to lower-cost contract manufacturing, which resulted in a disappointing decrease in revenue, we continued to make progress toward our overall goals and improving our operating results.

As we exit our corporate restructuring, we are pleased to introduce a series of innovative new products that we believe will enhance the company's growth possibilities. These products push the technological boundaries in amplification, dispersion compensation, advanced modulation, low-cost monitoring and intelligent subsystems. We see many market opportunities ahead of us, and our new products, manufactured by our newly streamlined organization, position us well for future success.

We are grateful to Tony Riley for his dedication and hard work and look forward to his continuing contributions as our vice president of finance.

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