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We would like to caution you that actual results could differ materially from those contemplated by the forward-looking statements and you should not place undue reliance on any forward-looking statements. We also undertake no obligation to update any forward-looking statements.During the course of this call, we will also make reference to adjusted EBITDA and adjusted operating expenses, non-GAAP measures we believe are appropriate to enhance an overall understanding of past financial performance and prospects for the future. These adjustments to our GAAP results are made with the intent of providing greater transparency to supplemental information used by management in its financial and operational decision-making. These non-GAAP results are among the primary indicators management uses as a basis for making operating decisions because they provide meaningful supplemental information regarding our operational performance and they facilitate management’s internal comparisons with the company’s historical operating results and comparisons to competitors’ operating results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP. We have provided GAAP reconciliation information for adjusted EBITDA within the press release, which, as previously mentioned, has been posted on our website at www.zhone.com. With those comments in mind, I would now like to introduce Mory Ejabat, Zhone’s chairman and chief executive officer. Mory Ejabat Thanks, Kirk. Good afternoon and thank you for joining us for our second quarter 2012 earnings call. Revenue for the second quarter of 2012 grew by 14% over last quarter to $30.8 million from broad-based demand for our products, both domestically and abroad. As we mentioned last quarter, we exited the first quarter with a significant backlog of orders which got us off to a great start. Although we expect to continue to see growth over the remainder of the year, that growth should be at a more moderate pace.
Gross margins this quarter were below our original expectations, largely because of a single transaction with one of our 10% customers, where we decided to accommodate their request to provide a temporary deep discount on pricing to offset the effect of significant dollar appreciation against the local currency. We do not anticipate making any further accommodations of this magnitude, and therefore expect gross margins to migrate back toward historical levels.With the moderate growth in revenue and improving gross margins, we are still hopeful that we can generate positive adjusted EBITDA for the second half of 2012, which remains our primary financial goal. Also, let me make a few comments about our NASDAQ listing. As you know, we received a notice from NASDAQ that we have until December 18 to get our share price above their $1 minimum price requirement. Last year, we received a similar notice, and we were able to regain compliance by posting a strong fourth quarter earnings. This year, we hope that our strong second half performance will have similar results. Regardless, we continue to evaluate alternatives and develop a contingency plan if necessary. Since Kirk will give you more details on our financial results later on, let me brief you on the state of our business. In Q2 we launched Zhone FiberLAN, an innovative and exciting new product line. We believe FiberLAN is the most cost effective, efficient, and environmentally friendly alternative to existing copper-based internet switch LAN infrastructure available in the market today. Read the rest of this transcript for free on seekingalpha.com