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These statements reflect management's current expectations, estimates, and assumptions. These forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause Westell's actual results, performance or achievements to differ materially from those discussed.A description of factors that may affect our future results is provided in the Company's SEC filings including Form 10-K for the fiscal year ended March 31, 2011 under the section Risk Factors. The forward-looking statements made in this presentation are being made as of the date and time of this conference call. Westell disclaims any obligation to update or revise any forward-looking statements based on new information, future events or other factors. Our presentation today also will include non-GAAP financial measures. We provided reconciliations to the most comparable GAAP measures in our earnings press release, which is available on our website, westell.com. Now, I would like to turn the call over to Rick Gilbert, Chairman, President, and Chief Executive Officer of Westell. Rick Gilbert Good morning, and thank you, for joining Westell Technologies’ second quarter fiscal 2012 earnings conference call. I am Rick Gilbert, Westell’s Chairman and CEO. During this call, I’ll discuss recent developments in the business, and then turn the call over to Brian Cooper, who will discuss the second quarter results in more detail. At the end of the call, Brian and I will answer your questions. During the second quarter, on consolidated revenues of $31.2 million, we recorded earnings per-share of $0.05 on a fully diluted basis, as compared to $0.07 for the second quarter of last year. The $0.05 EPS includes about $0.03 derived from various one-time items. Brian, will describe these items later on during the call. During Q2, we increased cash and short-term investments to $111.2 million and we repurchased 917,000 shares of Westell stock under the Board’s authorized program at a total cost of $2.5 million. I’ll focus the rest of my comments on the second quarter performance of our three business units, compared subsequently with our performance the last quarter.
During the second quarter, Customer Networking Solutions increased revenues by 24% and generated $1.1 million of additional operating profit when compared to last quarter. The revenue was mostly due to continued shipments of the ProLine modems and VersaLink gateways to Verizon per our contractual agreements. We also performed some product screening and rework services for Verizon Association with previously shipped UltraLine Series3 gateways. Reduced expenses also help drive the bottom line.As we look to the future, it’s important to note that our contractually-agreed shipments to Verizon will be completed during the current quarter as originally planned. There are roughly $6 million of these shipments scheduled for our fiscal third quarter. The Homecloud project continues in the developing phase. During the second quarter, we experienced a delay in the program, and we now expect commercial release sometime during the first calendar quarter of 2012. Outside Plant System experienced a weak quarter, with revenues down 30% and operating profits down 86% when compared to last quarter. These results were unexpected as we entered the quarter with our internal forecast showing modest quarter-to-quarter growth. However, during the second quarter, we experienced weak demand pretty much across the entire product line. We believe labor actions, merger actions, [inaudible] and inventory management of the large carriers during the quarter had an adverse effect on our results. But we also believe the primary cause for the weak orders was an accelerated shift from T1 technology to Ethernet technology for the backhaul of cellular traffic. This technology change is significant and we expect it to have a continuing impact in the coming quarters, so that Outside Plant clearly needs to replace some T1 revenue with revenue from new products. To that end, Outside Plant has been actively developing new products over the past two years. We have launched and begun sales of a number of these products during the past few months, and several have been formally announced in the Westell press releases in recent weeks. Read the rest of this transcript for free on seekingalpha.com