Greg Klaben – VP, IR Ken Kannappan – CEO and President Barbara Scherer – SVP of Finance & Administration and CFO

Reik Read – Robert W. Baird & Company, Inc. John Bright – Avondale Partners Mary [ph] – JPMorgan Tavis McCourt – Morgan Keegan Sanjit Singh – Wedbush Morgan Securities, Inc.

Good afternoon. My name is Marvin and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. Mr. Greg Klaben, you may begin your conference.

Thanks, Marvin. Joining me today to discuss our fourth quarter fiscal 2010 financial results are Ken Kannappan, Plantronics President and CEO, and Barbara Scherer, Senior Vice President of Finance and Administration, and CFO. I would like to remind you that during the course of today's conference call, we may make certain forward-looking statements that are subject to risks and uncertainties, as outlined in today's press release. As we have highlighted before, the risk factors in our press release and SEC filings are not standard boilerplate. We update these risk factors every quarter, adding and dropping language and changing the order, depending upon the timing and potential impact of the concerns that we foresee. We believe forecasting our results of operations is difficult, and we ask you to focus particular attention on these risk factors that could cause actual results to differ materially from those anticipated by any such statements. For further information, please refer to the company's Forms 10-K, 10-Q, today's press release, and other SEC filings. Please note that all financials, metrics and comparisons are stated in terms of continuing operations, which exclude Altec Lansing or the AEG division. The sale of Altec Lansing was effective as of December 1, 2009. Plantronics' fourth quarter fiscal 2010 net revenues were 162.3 million compared to guidance of 150 to 155 million. Plantronics GAAP diluted earnings per share were $0.49 in the fourth quarter of fiscal 2010 compared with diluted loss per share of $0.15 in the same quarter of the prior year. Non-GAAP diluted earnings per share for the fourth quarter of fiscal 2010 were $0.53 compared with earnings per share of $0.07 in the prior year quarter and guidance of $0.40 to $0.44. The difference between GAAP and non-GAAP earnings per share from continuing operations for the fourth quarter of fiscal 2010 include stock-based compensation charges, purchase accounting amortization and restructuring, and other related charges, all net of associated tax benefits, along with the release of 1.1 million in tax reserves, due to the expiration of certain statutes of limitation. I would like to remind you that on the Investor Relations section of our website, we have an updated PowerPoint presentation, as well as an analyst metric sheet with all of the financials and metrics released today. With that, I'll turn the call over to Ken.

Thank you, Greg. And thank you all for taking the time to listen to this conference call. There are five key points I would like to highlight on the fourth quarter. First, revenue was above guidance, primarily due to stronger-than-expected office and contact center revenues as a result of improving economic conditions. Secondly, non-GAAP gross and operating margins improved from the prior year and prior quarter. The year-to-year improvement is due to higher revenue and the sequential improvement is due to better product margins. Our non-GAAP gross margin for the full fiscal year was 50%, which is above our long-term target range of 45% to 48%. Our non-GAAP operating margin for the year was 19.5%, near the high end of our target range of 18% to 20%. Third, our balance sheet improved from last quarter and last year, and we achieved a record cash flow from operations of about 144 million in fiscal 2010. Fourth, our Bluetooth headsets were profitable for the second consecutive quarter and our overall consumer business was profitable for the entire year. Fifth, adoption of Unified Communications is continuing to build. We are still planning to provide our UC-related product revenue, beginning with our first quarter's results in fiscal 2011, that we will announce in late July. Fiscal 2010 was a transformational year for Plantronics. We strengthened our cost structure to face economic conditions early in the year, and focused our resources on the single largest opportunity in the company's nearly 50-year history, Unified Communications. We continued to make progress on our product development efforts for the UC market, introduced new UC-specific products during the quarter, which are receiving favorable market reactions. We have a very exciting pipeline of new products in development, which we believe can further strengthen this market position. At the beginning of fiscal 2010, I stated that our long-term prospects for revenue and earnings growth were brighter than ever. We continue to believe this to be true, given the high levels of enterprise interest in UC, along with strong, strategic alliances with UC vendors and system integrators. In the 2011 fiscal year, we plan to grow revenues and profits, and our goals will be to – number one, obtain a strong position in UC as the market builds; number two, continue to be profitable in the Bluetooth headset market; and number three, achieve strong returns on invested capital. With that, I would like to turn the call over to Barbara to review our numbers in more detail.

Thanks, Ken. Our quarterly results were better than expected, with net revenues exceeding the high end of our guidance forecast by approximately 7.3 million, primarily due to stronger demand for our OTC products. In addition, the anticipated December to March decline in Bluetooth products was not as large as expected. Our non-GAAP earnings per share of $0.53 were also well above our guidance of $0.40 to $0.44, primarily due to the higher net revenues and associated gross profit, as well as higher gross margin. Our gross margin was better than forecast, due to stronger OCC revenues than anticipated, the product and geographic mix within OCC, and to a further improvement in our Bluetooth gross margin. Our cost reduction efforts continued to contribute significantly to our operating results for the quarter. For example, compared to Q4 last year, our margin on Bluetooth products was up 16 points, due to the cumulative benefit of all the cost reductions we have made and the strength of our product portfolio. The net revenues of 162.3 million were up approximately 27% or 34.2 million compared to the fourth quarter last year. The improved economic environment contributed to a much healthier overall demand environment for both OCC and consumer products. New products, both UC and consumer, also contributed to the 27% overall increase from the prior year. OCC net revenues were 111.9 million, an increase of 26.2 million from the fourth quarter last year. On a sequential basis, OCC net revenues were up 8.8 million or 9%, exceeding the high end of our OCC forecast. We continue to believe our market position is stable and that we are well-positioned for future growth in OCC, as the global economies continue to recover and as UC gains momentum. Net revenues from Bluetooth headsets increased 17% or 4.8 million compared to the fourth quarter last year, and decreased 25% or 10.9 million sequentially as a result of the normal post-holiday slowdown. Relative to our guidance forecast, our consumer product lines were higher, primarily due to the strength of the Voyager PRO and the Discovery 975. Our fourth quarter also included a 14th week, which occurs approximately once every seven years, to adjust our fiscal year-end to coincide with the Saturday closest to the last day of March. Since the first week of the March quarter is always slow, the fact that we had a 14-week quarter meant we got 13 good weeks. The first week was unusually slow, since it fell between Christmas and New Year; so that unusual slowness partially offset the benefit of 13 good weeks compared to a typical fourth quarter. It still resulted in higher revenues than would have been the case in a normal 13-week quarter. Geographically, our mix was 60% domestic and 40% international, compared to 62% domestic and 38% in Q4 last year. I'm really pleased to report that non-GAAP gross margin was 54.5% compared to 39.2% in the March quarter last year. The 15.3 point improvement was primarily due to 5.3 points from higher standard product margins, driven strongly by the increased Bluetooth margin, as well as improved margins on our OTC wireless products; plus 4.9 points from lower requirements for excess and obsolete inventory, due to improved inventory management; plus 2.1 points from better absorption of overhead, due to higher production volumes and lower manufacturing expenses; and plus 3 points from a variety of efficiency improvements and lower warranty provision requirements. On that higher gross margin, we had a non-GAAP operating margin of 22.1% in Q4, up from 6.5% in Q4 last year and compared to 19.2% sequentially. Operating expenses as a percent of revenue were 32.5% compared to 32.7% in the same quarter a year ago, and 29.7% sequentially. Our non-GAAP operating margin is the highest it's been in over 20 quarters, and while we are pleased to have exceeded our target range, our long-term target models for operating margin remains 18 to 20 points. For the full year, we had a 19.5% operating margin despite revenues being down 9% from the same period last year. Our effective non-GAAP tax rate for the quarter was 25.9% compared to 55.1% in the year-ago quarter. Our year-ago rate was unusually high, due to the provision for excess and obsolete inventory, which was taken in Q4 '09; primarily that was for Bluetooth products last year, and given our tax structure, we don't receive any tax benefit on E&O provisions. On a GAAP basis, our Q4 tax rate on income from continuing operations was 21.6%, compared to a tax benefit of 17.4% in the prior year-ago quarter. The current quarter tax rate includes a tax benefit of 1.1 million related to the release of tax reserves, due to expiration of certain statutes of limitation. The year-ago rate resulted primarily from the tax benefit on the Q4 GAAP loss reduced by the E&O provision that we did not receive a tax benefit on. And the result of all of the above, our Q4 non-GAAP income from continuing operations was 26.2 million compared to 3.6 million in the year-ago quarter and $25 million sequentially. On the balance sheet, our 369.2 million in cash, cash equivalents, and short-term investments is up from 218.2 million at the end of last year, a $151 million increase, and up 52.5 million from 316.7 million last quarter. Of the 369.2 million in ending cash, cash equivalents and short-term investments, a 130.1 million was domestic, with the balance being international. Cash collections were strong, and days sales outstanding decreased to 49 days from 59 days in the same quarter last year. DSO is based on net revenues from continuing operations, so these amounts differ from amounts reported prior to the December quarter because they exclude AEG net revenues, which are in discontinued operations. However, the Accounts Receivable balance includes amounts related to Altec product sales, as those receivables were not part of the sale of Altec. As expected, DSO dropped from 61 days in the prior quarter as most of the Altec-related Accounts Receivables were collected during the March quarter. The quality of our aging was consistent with the prior quarter and better than the year-ago quarter. Net inventories were down 48.8 million from a year ago and 0.4 million sequentially. Due to our continuing efforts to improve asset utilization and return on capital, we made excellent progress on inventory management over the course of the year. For example, turns improved from 3.1 in the March quarter last year to 4.2 in the quarter just ended. Now that revenue growth is resuming, we believe inventories will start to increase in dollar terms, but our goal is to further improve our turns over the course of the FY '11 fiscal year. Our strong profitability and cash collections on Accounts Receivable helped to generate approximately 55 million in cash flow from operations in the fourth quarter. In addition, we generated 22.2 million in cash from stock option exercises, which was offset by approximately 21 million that was used to repurchase stock and 2.4 million in dividend payments. On the CapEx front, our fiscal year total capital spending was only 6.3 million, down from 23.7 million in the prior year. And depreciation and amortization was 18.1 million in FY '10 compared to 25.8 million in FY '09. Turning to the business outlook, the economic environment has been improving, and we have been participating well in the recovery, with our OCC business up 31% from last March and up 9% sequentially. However, it is still down 15% from peak quarterly levels of 132 million in the first half of fiscal 2008. Assuming that economic recovery continues, we expect our OCC business to grow in fiscal '11 over fiscal '10. Historically, our OCC business is down sequentially from the March quarter to the June quarter, and the fact that we had a 14-week quarter in March further raises the likelihood of this recurring again. We believe that net revenues for Q1 will be in the range of 160 to 165 million, and this range does assume a sequential decline in our OCC revenues. Net revenues of 160 million to 165 million would represent a 13% to 17% increase from 141.2 million in the year-ago June quarter. As mentioned, we expect a mix shift toward consumer during the June quarter compared to the March quarter. This seasonal mix shift will result in a lower gross and operating margin than we earned in the fourth quarter. Therefore, depending on the revenue mix and other factors, we believe non-GAAP operating income will be 32.5 million to 35.5 million, compared to 25.2 million in the June quarter last year and compared to 35.8 million sequentially. We also currently expect non-GAAP EPS from continuing operations will be $0.46 to $0.50 on a 28% non-GAAP tax rate. The reason we expect a 28% non-GAAP tax rate this fiscal year in comparison to the 26% approximate rate we had last fiscal year, are, number one, the R&D tax credit has not yet been renewed and is thus not part of our rate calculation. If it is renewed, all other factors being equal, our non-GAAP tax rate would be 27% on a full fiscal year basis. We also expect a portion of our taxable income that is US-based to be higher than it was in FY '10. If the geographic mix of taxable income were the same as FY '10, we calculate the rate would be a further 1 point lower – or between those two factors, would be close to 26%. The GAAP charges we currently expect in the June quarter include approximately $4.1 million in equity compensation expense; 0.3 million in purchase accounting amortization, bringing the total GAAP estimated charges to 4.4 million pretax and $3 million or $0.06 EPS after tax. We thus expect GAAP EPS on continuing operations of $0.40 to $0.45. With that, let me turn it back over to Marvin, the conference facilitator, for the Q&A session.

(Operator Instructions) And our first question comes from the line of Reik Read with Robert W. Baird & Company. Reik Read – Robert W. Baird & Company, Inc.: Hey guys, good afternoon. Could you just talk a little bit about the Office segment and what is driving that outside of Unified Communications? And I know that you guys had mentioned just economic factors, but with employment trends basically flat, can you give us some sense as to why that spending is occurring and how you think it might progress? And if it matters, can you break it up between North America and Europe?

Sure, I'll try. First of all, although – perhaps employment is flat, we have seen a strengthening of economic conditions in the overall market. And I would include your industry, financial services, as one that has seen some strengthening in terms of business condition stability, hiring, bonds rate turnover, all things which are favorable towards us. We have also continued to see federal government and healthcare remain solid in the market. I would say that, broadly, we did see strength across all geographies, although Asia-Pacific was the strongest of the geographies. Reik Read – Robert W. Baird & Company, Inc.: And what about the inventory levels, Ken? Are you seeing more – because they – it seems like they had been or continue to be fairly low; are you seeing some incremental stocking there, as conditions get better?

I don't think that there has been incremental stocking. The fact of matter is that some of the demand was a little bit higher than what we have had anticipated, so we were a little bit lean on our own deliveries. So there really wasn't the capability for people to stock. But I also think that having said that, our deliveries are still good enough that people are not feeling that they need to bulk up. Reik Read – Robert W. Baird & Company, Inc.: Okay. And then on the deliveries, there have been some other folks that have reported seeing component shortages out there and having to deal with that in the supply chain. To what extent are you guys seeing it and what are some things that you can do to alleviate that?

Well, that is the root of the delivery issues that I was mentioning; but again, we have been – we were on that pretty early. I think that we're, as I said, still reasonably in balance on that, and the corrective actions that we took some time ago I think are still going to leave us in a very good relative position to meet demand in our market. Reik Read – Robert W. Baird & Company, Inc.: Okay. And then just one last question on the excess and obsolete inventory, is that solely due to Bluetooth? Or is there something else behind that as well, Barbara?

Well, the main area that we have had a big reduction in requirements is on Bluetooth. And I do think in great measure it's related to the fact that we went to an outsourced model. And so what we are buying are finished goods. And that you don't end up with all the mismatch in terms of the component parts. And it's just far easier to sell finished goods – I mean, sell them above cost or at cost, so that you're not ending up with the requirements. And you might recall this time a year ago, when – one, everything was kind of falling apart, and two, we were making the decision to go with the outsourcing. And it meant that we ended up with charges that were probably higher than normal as a combination of – one, the economic environment and, two, changing manufacturing, changing supply chain, et cetera. So a year ago was unusually high; but this entire year, we have really – especially since it was completed at the end of September, the transition to Gortech, we have been having very little in the way of requirements on Bluetooth. Reik Read – Robert W. Baird & Company, Inc.: Okay, great. Thank you.

You are welcome.

Our next question comes from the line of John Bright with Avondale Partners.

Hi, John. John Bright – Avondale Partners: Hey Ken, Barbara, Greg. Ken, you sounded as excited as I have ever heard you on UC, calling it, I think, the outlook higher than ever right now. Maybe you can talk to what you're seeing as far as cannibalization is concerned versus your core Office business and the attach rates.

Sure. Let me say this – there is cannibalization in that – to the extent that people leave their existing phones in place or put other hard phones out there. If they are going to use just the hard phone connection, they absolutely can use our existing products. And certainly, in a lot of cases, we are seeing that occur. At the same time, I think that there's two kind of modes of adoption – one which is I would call soft phone centric, where – which is the minority of adoptions out in the market, where people are either removing the hard phones or otherwise really, truly emphasizing the soft phone. And in that case, we do get a list in adoption. Again, I think that's the minority of the market, but at the same time for us, disproportionately large due to the impact. Most of that activity, I think, is still in front of us. We're seeing encouraging signs in terms of interest in that. On the other side of it, it's more of the role where the initial adoption of UC clients does not necessarily lead to a list for us; but as people start to get engaged in using the soft phone interface more, whether it's for desktop video; whether it's for Web conferencing, or whether it's for the soft phone voice as well, we're getting a subsequent, kind of gradual increase in adoption and/or upgrades. John Bright – Avondale Partners: And you talk about soft phone applications – or soft phone usage. Is there any – do you think there's going to be a bigger attach rate with Microsoft communicator versus Cisco or Avaya?

Well, yes, because Microsoft is generally pushing the soft phone in direct voice on the PC; whereas Cisco, although they have those tools on the soft phone, are generally pushing the hard phone. Of course, Microsoft does have USB phones and you can implement without using the soft client. But their emphasis is on the soft phone, whereas Cisco's emphasis is on the hard phone. John Bright – Avondale Partners: Barbara, a final question for you. The gross margins were fantastic in the quarter. You went through some of the reasons that delivered the margins you delivered. Are those sustainable? I know you have your targets, your long-term targets in place. Is this something that you're just – we saw one-time maybe exchange rates might have had some sort of impact?

Well, versus a year ago, exchange rates actually were a bit favorable. And specifically on – just looking at exchange rates and gross margin in Q1 versus Q4, those will be net unfavorable, not that big of an impact overall to operating margin, because we get some offset on operating expenses. But quite a number of the items and the improvement in gross margin are sustainable. Obviously, the work that we have done on the outsourcing is sustainable and has been – being sustained and, in fact, even picking up and a number of other changes in there. But there are other items that are going to vary quarter to quarter and such as excess and obsolete inventory, it's much more much lower overall it was a year ago, but whether it's as low as it is just in Q4 in every quarter, no, that wouldn't be typical or likely. So, several of the percentage points in there would be in the uncertain to unsustainable and others are. And then, of course, you also have mix shift every quarter as – got its own overall make-up of product type and product by geography, et cetera. And the gross margins vary on those. So that's why we kind of come back and seeing – if you're looking over a long-term period and allowing for UC market – that it will be a much bigger market and therefore likely to be more competitive than historically, we continue to feel that really our model is really the right model, which is 45 to 48. And we may be operating above parts of it for periods of time, but it puts down to the 18 to 20 points, which I think is very reasonable for us. John Bright – Avondale Partners: Thank you.

You are welcome.

Our next question comes from the line of Paul Coster with JPMorgan.

Hi, Paul. Mary – JPMorgan: Hi, this is Mary [ph] on behalf of Paul, actually. Good afternoon, everyone. I just had another question on Unified Communications. So we have heard that Microsoft is part-funding pilot deployments of UC at Fortune 1000 companies, and we were wondering, to what extent this initiative of Microsoft might be artificially inflating this market? Thank you.

Well, just to make sure I understand the first part of your question, because I just want to make sure I got the dictions correct, the comment you said about the pilots that Microsoft is doing at Fortune 1000 companies, what exactly did you say again? Mary – JPMorgan: So we just found out that Microsoft might be partially funding pilot deployments. So – yes.

So I got that. So, it is true that companies, when they're doing these things, try to create incentives and call to action and so forth, particularly with respect to companies piloting or they're trialing those sorts of activities. And it is also true that as a vendor, we can benefit from those. But those are very small, because those are not funding the full deployment of these things, which is the level it has to be to affect our revenues. Mary – JPMorgan: Thank you very much.

Our next question comes from the line of Tavis McCourt with Morgan Keegan. Tavis McCourt – Morgan Keegan: Hello?

Hi Morgan; sorry, Tavis. Tavis McCourt – Morgan Keegan: It was actually answered. Thanks a lot.

Okay, thank you.

Our next question comes from the line of Sanjit Singh with Wedbush. Sanjit Singh – Wedbush Morgan Securities, Inc.: This is Sanjit for Rohit Chopra from Wedbush. Couple of questions. If you could talk about linearity in the quarter – how the quarter progressed, in terms of orders and bookings? And so far, this quarter, we have had, I guess, a couple of weeks. Any early takes on booking trends so far this quarter?

All right, sure. I mean, in all honesty, I think that to date, this – it's higher, let's call it calendar year of 2010 as well as that last week of 2009 followed what I consider to be normal seasonal patterns for our business. So we always have this deathly week between Christmas and New Year's, and it was again a fairly deathly week. And as we go to CES, we're always hopeful that a new year will begin. And after this kind of economic turmoil, we're never sure. And in fact, a new year did begin. We did get a normal build-up in business, both in B2B and in consumer. And again, perhaps even a little bit better than we expected, reflecting, I think, strengthened in several industries, and again, in particular, I would say in financial services. So far, we don't have the entire quarter done, but one of the things that I have always liked about the December quarter as well as the June quarter is that we have more useful data at the time that we make those projections. It doesn't mean we're necessarily going to be right, but we do use that data and it is absolutely incorporated into the projections that we have provided for this current quarter. Sanjit Singh – Wedbush Morgan Securities, Inc.: Thanks. And maybe a follow-up. Maybe for next quarter and maybe even beyond, in terms of OpEx, and what is the – what are your hiring plans in terms of R&D and sales and marketing? Is there any huge initiatives coming down the pipe? And then also, CapEx expectations for next quarter and maybe –

Let me answer a part of that and then I'll turn it to Barbara for the corporate side. But we have, in fact, expanded our investment in Unified Communications, and I would call it on a balance basis, which means we're increasing product development as well as sales and marketing, as the opportunity appears to be firming up for the latter half of this year, as Wave 14 gets announced and as adoption continues to move forward in a more favorable economic environment. So, we have increased our investment already. We will continue to increase it. We intend to do so in a responsible manner – by which I mean maintaining consistency with the business model. As Barbara said, it may fluctuate a little bit up and down over time, but we're trying to, on a long-term basis, make sure that we're operating within that framework. Barbara, do you want to comment?

Yeah, on the – well, on the CapEx side, which is the other part of your question, our approved plan for the year it is basically in the range of 11 to $13 million for CapEx. And it's fairly evenly spread by quarter, but I think it will be a little bit more second half than first half. So from that, I think you can derive a good estimate for – Sanjit Singh, Wedbush Morgan Securities, Inc.: No, that's great. Thanks, Barbara. My last question. Ken, I know we're going to talk about some metrics on UC beginning next quarter. Do you have any qualitative commentary regarding the margin structure of what the UC business might look like?

Well, I think a couple of comments. First, as I have said before, that some of the very largest competitive deals, we will see a lot more intensity on the part of the company and the purchasing, everyone else get a good upfront price. Clearly, we're in a situation where we think we have a distinctly better product offering. And I think the market is recognizing that and that leaves your competitor very aggressive in price. We can usually get a premium; the question is kind of how much. I think with some of the other accounts, you don't necessarily see as much competitive pressure on the front end. But we also think that downstream, as people are trying to have simple offering, one user interface and a bunch of other things that may lead to more accounts selecting a smaller number of vendors, a smaller number of products, and a greater software integration, may create greater stickiness, which may improve the margins downstream. It's also a higher mix of corded product relative to wireless, which has historically been a better margin structure for us. So there's a number of factors in play on this overall – as you see, we haven't changed our target model, which we continue to think is reasonable. Sanjit Singh – Wedbush Morgan Securities, Inc.: Thanks, guys.

Our next question is a follow-up question from Reik Read. Reik Read – Robert W. Baird & Company, Inc.: Just going to the mobile side of things, is the $35 million that you reported kind of the correct trend line? Or is there any initial stocking or any other kind of one-time things that would be embedded in there? And I guess I'm referring to the new products that have come out.

Yeah. No, actually, the March quarter is typically one of the lower quarters. One, you get the holiday sell-off. And because there are resets, planning around resets that come in the spring, some – actually, you get some of the carriers and retailers wanting to work down inventories in advance of that. So it wasn't really any loading of the two products I mentioned. It was more a better sell-through and a few smaller placements that – but not big load-ins. So I would say, no, that's not a number to extrapolate, per se; that's more on the low side of a trend line. Reik Read – Robert W. Baird & Company, Inc.: Okay. I guess I was going back to your comment before, Barbara, that it just came in a little bit better than you guys expected and – I was just wondering if there was –

Yeah, it came in a little better, but we were projecting something that's actually worse than the normal seasonal slowdown. And I think what we got was something that was – it was still worse than the normal seasonal slowdown, but not quite down as much as we were expecting. Reik Read – Robert W. Baird & Company, Inc.: Okay. And then just a follow-up question on the gross margins. You gave us that overview year-over-year, but still sequentially, it was a huge boost. I mean, almost 6 points in and of itself. And I guess you attributed that largely to mix. Can you give us some insight as to what that mix looked like? And are there any other factors in there that would be worthwhile to know about?

Yeah, so sequentially, the far away the biggest piece was mix, because we did have a much larger percentage of OCC revenue than we had in the December quarter. And then within the mix itself, some of the particular areas that were strong were in either geographies or products within that, that have higher margins than the average. Also, on excess and obsolete inventory, that was – that added about eight-tenths of a point, because we basically were able to – we actually sold things that had been reserved, in some cases, years ago, but some demand has resurfaced at an amount that is creating some releases. So it's kind of – we ended up with actually very low E&O requirements. We also had somewhat lower warranty; we had lower freight. We renegotiated our freight contract and we picked up that's the part that's sustainable, that was about a half point. We picked up some more, I mean, they're all kind of small things, but maybe they kind of show the breadth at which we continue to go after costs; but we did have some further improvements in the prices at which we are buying Bluetooth products from our ODM partner as well. So maybe that gives you a flavor for it. Reik Read – Robert W. Baird & Company, Inc.: Yeah, that's great. And then just with respect to the comments on geography in products, was there anything unusual or specific that was driving that? Or is that just the way it is?

Well, Europe in general tends to be good and we're actually up a little on corded [ph] there, and we were – and that's when we had been thinking we would be down. Reik Read – Robert W. Baird & Company, Inc.: Okay, great. Thank you.

(Operator Instructions) We have a follow-up question from the line of John Bright with Avondale Partners. John Bright – Avondale Partners: Thanks. Ken, one thing I didn't ask about in the Office and Contact Center segment is, how did the quarter play out and how is it playing out thus far in the June quarter?

Just to make sure I'm clear, John, you're saying in the contact center? John Bright – Avondale Partners: Office and contact center.

Okay and –?

What do you mean by how did it play out? What is –

Yeah, and I'm not sure if I get it. John Bright – Avondale Partners: That's okay, by month. So, was it typical on sales patterns that you have seen in the past with March usually being a heavier month, and January and February; did it ramp through the quarter? Are you seeing that sustain thus far in the April time period as well?

I would say we have seen a fairly typical pattern. I think that if I were to nuance beyond that, I would say that Europe was slightly weaker; Asia, a little stronger on a geographic basis, and particularly Europe towards the kind of the end of the quarter. But overall, again, it was very more similar to normal patterns than anything else.

And maybe just to add on to that, we have described in the past what is the typical monthly pattern within the March quarter and the typical pattern is that it's slowest in the month of January, because we have that very slow Christmas and New Year's period, first week kind of business, getting back from vacation. And then it tends to pick up and get to a pretty nice rate in the month of March. And that's what Ken is referring to when he says kind of the typical seasonality within the quarter. John Bright – Avondale Partners: Final question for me, Barbara. I did not pick this up, but the channel health, particularly on the mobile side of the business.

The channel health? John Bright – Avondale Partners: Your inventory.

Yeah. So, I mean there's just – there's no – there's certainly no issues in terms of inventories in the channel on mobile. I mean, we did have some carriers and retailers that were reducing inventories, getting ready for taking new products with the spring lineup and that was part of what we expected and that occurred, so that's keeping their inventories very fresh. Overall retail weeks on hand are really quite modest.

The sell-through has been solid. I mean, there has really not been any increases that we're aware of in the channel inventories anywhere. John Bright – Avondale Partners: Terrific. Thank you.

You are welcome.

Thank you.

And we have no further questions at this time.

Well, Marvin, thank you very much. I really appreciate everyone's attendance on our call. If you have any further questions, please give us a call, send us an email and we'll be happy to get back to you. Thanks very much.

This concludes today's conference call. You may now disconnect.