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Now onto the call. Dave?David Tacelli Thank you, Mark, and good morning everyone. On today’s call, my comments will focus on the progress we’ve made in gaining share in our target market segments of SOC test space as well as how we see the business environment for the remainder of the calendar year. With the continued strong performance of the business model during the third fiscal quarter, our Company remains focused on driving top line growth through market share gains. As a reminder, there are three key components to our corporate strategy: focus on high-growth market segments within the SOC test market and strive for market leadership in each one; fund a strong pipeline of differentiated cost-optimized products designed with innovative technology; and continuously improve on a business model that has been designed for our cyclical industry. Product revenues bounced back in the third fiscal quarter, growing approximately 16% over Q2, driven by a rebound in the RFPA power management and application-specific market segments. In particular, PAx, one of our new products introduced in our second quarter, experienced a sharp ramp in demand and we expect this trend to continue. The primary business drivers were handsets and other consumer products, including tablets and Smartphones. The business model once again delivered above expectations. While revenue was at the midpoint of our guidance, EPS was above the high end of the range. Our balance sheet was further strengthened by a combination of better than expected cash generation from operations and the receipt of the $15 million break-up fee from Verigy. We are seeing a growing SOC market with particular strength in five key segments we target. Our fourth quarter guidance, a 7 to 14% increase in revenues from last quarter, reflects this strength. We have focused our business development efforts on five key segments: microcontrollers, power management, RFPAs and front-end modules, data converters, and application-specific integrated circuits.
There are several key attributes of these particular market segments. First, they represent fast-growing markets on a unit basis with chip volume expansion as the key driver for demand in test equipment. Second, because there is a mix of analog, digital, power and RF technologies, this provides the opportunity to deliver truly differentiated test solutions. And third, system sales into these targeted markets can deliver strong gross margins relative to the more commoditized digital test segments. Our ability to grow the top line of the Company by focusing on specific market segments will come from both existing customer expansion and our ability to win share away from our primary competitor.During the quarter, we had success at our existing accounts as well as new customer where we are displacing the incumbent supplier. These new wins were in several of our target market segments and are directly the result of our ability to deliver significantly differentiated low-cost test solutions. As for those new customer wins, we do not expect to see significant revenues for the next couple of quarters as they ramp into volume production. We do expect to see meaningful revenue contributions from these customers later in the calendar year. With these wins and several others currently in the sales pipeline, we see the incremental business driven by these customers as the key to achieving to our market growth objectives. Read the rest of this transcript for free on seekingalpha.com