I’d also like to mention that in addition to reporting financial results in accordance with general accepted accounting principles or GAAP, we will discuss a non-GAAP financial measure, specifically adjusted EBIDTA. Adjusted EBIDTA excludes interest income and expense, income taxes, depreciation, amortization of acquired intangible assets, impairment of long lived assets, stock-based compensation costs, and restructuring expense. A reconciliation of adjusted EBIDTA to GAAP net income from continuing operations is included in the earnings press release we issued this afternoon.I am now pleased to turn over the call to Mercury’s President and CEO, Mark Aslett. Mark Aslett Thanks Bob. Good afternoon and thank you for joining us. I’ll begin with an update on our business for the third quarter. Bob will review the financials and discuss our guidance and then we’ll open it up for your questions. We’ve refocused Mercury’s business to benefit from the fundamental changes taking place in defense electronics technology and procurement as evidenced by our results in the third quarter. Total revenue exceeds the high end of our guidance range by [$9.6] million. We reported GAAP earnings from continued operations of $0.16 per share compared with guidance of an $0.11 to $0.15 loss. We did not record any revenue from the $27 million missile defense radar order that we received in Q2. However, the GAAP earnings outside this quarter did reflect a high defense revenue from other programs. Earnings were also driven by higher gross margin associated with favorable changes in our business mix. Adjusted EBIDTA for the third quarter fiscal 2010 came in at $4.2 million compared with our guidance of a negative $1.1 million to a positive $100,000. Operating cash flow grew to $4.5 million from $2.5 million in Q3 last year. Total bookings for the third quarter were $49.9 million down 11% sequentially because of an over achievement last quarter relating to a large missile radar defense order we received.
Bookings in our ACS commercial business more than doubled sequentially driven by a strong performance in [semi]. On a year-over-year basis total bookings for the third quarter were down 14% from the unusually strong Q3 in fiscal 2009 when we booked a large defense order in ACS and its stronger bookings in our Mercury Federal Systems business.Our total book to bill for Q3 was 1.14, total backlog is up 32% year over year and our 12 month backlog is up 44%. Looking specifically at our defense business, total defense revenue in the third quarter, including ACS and Mercury Federal, declined 1% sequentially and by 9% year over year to $34.2 million. Defense bookings in Q3 were $29.4 million. Both bookings and revenues this quarter reflect the top sequential and year over year comparisons I just mentioned. Our book to bill in defense for the third quarter fiscal 2010, including ACS and MFS was 0.86 down from 1.38 in the sequential second quarter and 1.25 in Q3 of fiscal 2009. Our backlog in defense for Q3 decreased 4% sequentially but increased 33% for the same quarter last year. Looking over defense bookings from a broader perspective, last fiscal year the second half was stronger than the first. This trend reversed in fiscal 2010 as we had a very strong first half and I anticipate a weaker second half. For fiscal 2010 we currently anticipate reporting a book to bill of approximately 1:1. We expect defense bookings to be down from last year. This is largely due to the near term trends we’re seeing in our sales and systems integration business in ACS as well as in MFS. I’ll speak to those trends in a moment. Overall we expect to return Mercury to growth and to report solid defense revenue growth for the full fiscal year 2010. This reflects the progress we’ve made in restructuring, refocusing and strengthening our core business. Read the rest of this transcript for free on seekingalpha.com