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We refer you to the documents the company files with the SEC, including our 10-Ks, 10-Qs, and 8-Ks. These documents contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.This conference call is open to all and is being webcast live. It can be accessed from our Investor Relations Website. Now, let me turn the call over to Jon Olson. Jon Olson Thank you, Maria. During today’s commentary, I will review our June quarter business results. I will conclude my remarks by providing guidance for the September quarter. The June quarter was a strong quarter setting records for both sales and operating income. With sales of $595 million, we set a record for the third consecutive quarter. Operating income reached an historic high of $208 million. This operating income performance represents a year-over-year increase of 263%, over four times the rate of sales increase during the same period. The operating leverage was a direct result of not only the significant growth in revenue, but was greatly enhanced by the restructuring actions and cost reduction efforts driven at the company over the past two years. June quarter sales of $595 million increased 12% sequentially, better than expected sales growth was driven primarily by strong new product growth, as well as across the board strength in the industrial and other category. Sales for the first two months of the quarter were in line with our expectations while the third month was stronger than expected. Turns business for the quarter was 53%, down from 56% in the prior quarter. Xilinx remained supply constrained throughout the quarter and we have not experienced measurable lead time improvements. Delinquencies exiting the quarter were in line with our expectations. However, demand has been and continues to be stronger than anticipated in both the June and September quarters. As a result, we do not expect supply constrains to be fully resolved for at least a couple of more quarters.
While we are growing wafers out quarter-by-quarter from our foundry network, the supply chain remains at full capacity. Based on the increases in wafers, we believe that delinquencies can be kept from growing further.Gross margin at 65%, was up from 61.8% in the same quarter a year ago. In the past year gross margin has benefited from the implementation of supply chain efficiencies and greater focus on cost reduction. Operating expenses decreased 5% sequentially, more than anticipated, due to lower R&D spending, which is a result of delayed hiring and a push out of contract engineering services to future quarters. As a result, operating income increased 33% sequentially to a record $208 million or 35% of sales. This is up from 30% in the prior quarter and up from 15% in the same quarter a year ago. New product sales increased 23% sequentially in the June quarter to 39% of sales, driven by exceptionally strong growth from Virtex-5 as well as our newest Virtex-6 family. Sales from our Virtex-6 and Spartan-6 families were up substantially. Mainstream products increased 9% sequentially, representing 30% of total sales and base products increased 4% sequentially to 27% of total. Europe was our strongest geography during the quarter with sales increasing 19% sequentially. Most end markets in Europe posted strong double-digit growth with the sales from wireless communications representing the largest incremental increase. North American sales increased 12% sequentially driven by defense, wire communications and industrial, scientific and medical applications. Asia Pacific sales increased 11% sequentially with strength from wired and wireless communications, consumer and industrial applications. Sales from Japan were essentially flat for the quarter. From an end market perspective, Communications sales increased 12% sequentially. Both wireless and wireline communications increased during the quarter. Industrial and other sales reached a new record, increasing 21% sequentially with double-digit sequential increases from defense, industrial, scientific, and medical and test and measurement. Over the past five years, sales from this category have more than doubled, a strong testament to the fact that PLDs are gaining ground versus ASICs and ASSPs in these markets. Read the rest of this transcript for free on seekingalpha.com