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John Daane

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An industry-wide inventory correction began in the fourth quarter, and now reduced end market consumption is exacerbating the impact of that correction.

In our international channels we are experiencing a sharper decline in demand than we had forecasted and therefore, we have modified our second quarter revenue guidance.

Looking beyond these near term challenges, we are seeing excellent customer response to our growing list of new products and our design win momentum is continuing. We will be in a strong position when growth resumes in the markets we serve.

As we continue to execute on our business strategy, the current business environment requires us to be cautious and make some pragmatic, yet difficult decisions.

We are seeing the effects of reduced capital spending by service providers and other communications market end customers impact our customers' business and hence their purchases. The slowdown in end market activity is prolonging the inventory correction, but we believe that moderate sequential revenue growth will resume in the second half.

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