Jonathan W. GacekThanks, Shawn. Welcome to our fiscal 2013 Q1 Earnings Call. Today we reported revenue of $140.9 million and non-GAAP loss per share of $0.04. These amounts are consistent with the announcement of our preliminary results on July 9. Clearly, this is a very disappointing result on both fronts. Although the revenue shortfall was the primary cause of the $0.04 loss. Today, I'm going to address the major factors contributing to our Q1 results and then Linda will provide additional details. I will come back to address our plans for Q2 and the rest of fiscal '13. Our revenue shortfall was primarily caused by 4 things: first, $6 million or nearly half of the shortfall was due to lower-than-expected results in Europe across all product lines; second, we didn't close forecasted big deals with the non-European portion accounting for another $4 million of the shortfall again across all product lines; third, entry-level OEM revenue was $2 million lower than expected due to a decision by one OEM customer to reduce inventory; and four, we had a one-time change in the basis on which tape royalties are reported and paid by one of the tape media manufacturers which had a $1 million impact on the quarter. Now, let me say a bit more about each of these 4 factors. In Europe, the $6 million shortfall was due to difficulty closing deals in the last 2 weeks of the quarter. This was across all segments and all products. We believe this is a combination of the economic environment, budget uncertainty and our go-to-market model which relies on a help from channel partners to close deals with end users. We fully recognize that Europe is a difficult market right now and we are increasing our inspection of European deals and driving for more senior end-user contact, especially in larger deals.
Not closing forecasted big deals was part of the issue in Europe but was also a challenge in other reason -- regions most notably North America. We saw it across all our product lines but in -- it was particularly the case with Enterprise DXi. Basically, I'd say that in this economic climate, the bigger the deal, the higher the risk of a purchase not getting funded and appeal not being issued regardless of the size of the entity or geography, and we certainly saw this in Q1. Also, the bigger the deal, the greater the need to be close to the end user which, as I mentioned earlier, is harder with a channel-centric model such as ours. In short, this reinforces both the need to be working more deals, so if a deal falls out, we have others to work on closing and the need to get deals closed as soon as possible during the quarter. As I said earlier, not counting Europe, our inability to close big deals impacted our Q1 revenue by approximately $4 million.The shortfall in OEM revenue was a unique situation with one of our OEM partners who lowered their forecast and revenue by $2 million during the quarter. This involved a low-end, low-margin product but impacted us at the revenue line. We believe this is a reflection of the economic climate and we have now taken necessary steps to validate our OEM partners' plans early in the quarter. Finally, our tape royalty was approximately $1 million lower than expected due to a change in the basis on which royalties are reported and paid by one of the tape media manufacturers. This happened during the quarter. This was a one-time event that affected the timing of royalties but not the ultimate amount we will receive. So although it impacted Q1, we will believe -- we believe that we'll be on track for approximately $13 million of tape royalty this quarter. Read the rest of this transcript for free on seekingalpha.com