Good Afternoon. Thank you for joining us on today’s call. Bob Switz, ADC’s President and CEO and Gokul Hemmady, ADC’s CFO are with me today. Before we get started, I need to caution you that today’s conference call contains forward-looking statements and that future events and results could differ materially from the forward-looking statements made today. Actual results may be affected by many important factors, including a risk of uncertainties identified in our Earnings Release and the risk factors included in Item A in ADC’s Annual Report on Form 10K for Fiscal-Year Ended October 31, 2005. This Earnings Release can also be accessed at ADC’s investor relations site at www.adc.com/investor. Our comments today will be on a continuing operations basis and a GAAP basis, and we will also refer to adjuster results derived from reconciling items of Restructuring and Impairment Charges, Amortization of Purchased Intangibles, FONS Employee Retention Expense, Stock-option Compensation Expense, and certain non-operating gains and losses included in our GAAP results. These reconciliations of GAAP results to adjuster results are included in today’s Earnings Release. Gokul will cover the financial results first, then provide forward-looking financial model guidance; he will then turn the call over to Bob who will update on ADC’s strategic direction. There is a change in direction; Bob will go first this time, so I will now turn the call over to Bob.

Thank you Mark and good afternoon. We are certainly very pleased with our strong start in 2006. Our Global Fiber and Copper Connectivity sales drove total ADC year-over-year sales growth of 16% in the 1st Quarter or 9% if we exclude the FONS sales. In 2006, we remain focused on four key global growth initiatives that lead us to raise our annual sales outlook to the range of $1.325 billion to $1.375 billion in raise the low-end of our earnings range from the previous low of $0.95¢ to the current of $1. First, we are uniquely positioned to help out customers evolve the core and edge of their networks to deliver next generation video, data, and voice services. Second, we are providing OmniReach™ Fiber and Copper Connectivity solutions that telephone companies worldwide require to build Fiber-to-the-X (FTTX) Networks that deliver the triple play of video, data, and voice services to consumers. Third, we are also ready to serve wireless operators worldwide with our Digivance® capacity and coverage solutions and our Connectivity solutions to support their broadband wireless services in traditional wireless service areas as well as within building solutions. Fourth, our comprehensive TrueNet® structured cabling solutions offer enterprises around the world the copper, fiber, and wireless infrastructure used to cost effectively deliver key business applications. We believe these global initiatives will enable ADC to grow at rates faster than the overall growth rate of our industry in fiscal 2006. I’ll now review the strong growth potential of these initiatives in more detail. Our customers’ evolution of their core networks to support triple play services is driving opportunities for ADC in several areas. The introduction of video services creates video head end infrastructure opportunities for ADC. Data center built in wireline and wireless central offices, cable head ends, and networks operations centers are boosting sales of carrier Ethernet connectivity. New service deployments, particularly Fiber-to-the-Node (OTCQB:FTTN) and Curb Network Builds drove a 25% year-over-year growth in the 1st Quarter global Copper Connectivity sales. This is an excellent example of the global cross sales synergies of the ADC and KRONE acquisition. KRONE’S products are being sold into Fiber-to-the-Node and Fiber-to-the-Curb (FTTC) deployments in the United States as well as Europe. ADC’s DSX Copper Connections are being sold into networks of large wireline and wireless customers in Latin America, Europe, and Asia. Europe is a very large market for our Copper Connectivity solutions as it is primarily an ADSL and VDSL market. The world market is large, global DSL subscribers are estimated to be about 140 million. The deep fiber architectures require additional fiber terminations in central offices and head ends. ADC is high density next generation fiber frames are being deployed globally to address this particular need. For Fiber-to-the X opportunities, Verizon is leading the way in Fiber-to-the-Premise (FTTP) with 3 million homes past in 16 states at the end of 2005. They have reconfirmed their plans for an additional 3 million homes past in 2006 and are targeting 3 million homes past annually for future years as well. They also have video franchises with files TV service covering about 1 million homes in Massachusetts, New York, Virginia, Florida, Texas, and California. AT&T announced its plans to pass 18 million homes with Fiber-to-the-Node and Premise networks by 2008. Beginning in mid-2006, they stated expectations to reach 21 markets and 3 million homes past. BellSouth is expecting their competitive broadband offering for 12-24 megabits through-put, to cover greater than 50% of their 12 million households by the end of 2007 and greater than 75% by the end of 2009. In addition to these strong opportunities in the United States, Fiber-to-the-X is going global in 2006. In our 1st Quarter ADC benefited from sales to a large European Teleco building a Fiber-to-the-Node network while the initial sales are empty cabinets, they will eventually be populated with cable management and automated cross connects. In recent months, many global service providers have announced Fiber-to-the-X deployment plans including Deutsche Telecom, France Telecom, KPN, Telecom Italia, Telefonica, and Telestrov. The timing, duration, and the amount of capital spending on these deployments have not yet been publicly announced. We have also supplied Fiber-to-the-X product to four trials in China. We estimate the global FTTX market is about a $5 billion dollar market in 2006. This market did not exist four years ago. In ADC in particular, has now 226 FTTX customers worldwide. Turning to our growth potential with Digivance® wireless capacity and coverage solutions; in 2006 we are expanding our offerings in this exciting market as we expand into International and Wi-Fi applications in 2006. There are many major issues facing mobile operators today. First, addressing network capacity to support the proliferation of devices; second, difficulty in obtaining base station planning permissions; third, shrinking of cell sizes in order to support 3G data and video services; fourth, expanding or enhancing wireless coverage particularly in densely populated urban areas; and lastly, the problem of wireless dead zones inside of buildings. ADC Digivance® wireless products are designed to overcome these major issues using our patented digital radio frequency transport technology. In addition we also have specific mobile and Wi-Fi products to cover indoor applications. In response to our customers needs, ADC released the following new products this Quarter: Digivance® CXD, this platform has been expanded to include European 3G UMTS bands, along with the current US cellular bands. This new platform opens the European and Asia-Pacific markets for Digivance®. Digivance® IMX, this new distributed antenna system is designed specifically to increase mobile network coverage inside buildings and campuses such as hospitals, airports, as well as offices. Digivance® WFX, this third generation Wi-Fi wireless LAN array solution combines a wireless LAN switch with up to 16 integrated access points to deliver up to 864 megabits per second of Wi-Fi bandwidth over a large area. This allows up to 1.024 users to be wirelessly connected to the network. Digivance® solutions are now approved at three tier-1 US carriers and one large tier-2. Now looking at our enterprise connectivity solutions; in today’s information technology and communications environment structured cabling is the foundation on which the whole enterprise depends. ADC’s TrueNet® structured cabling system is a highly reliable end-to-end system designed to meet the unique network infrastructure needs of enterprises. ADC is the only company in the world to offer a true zero bit error warranty that guarantees signal integrity and network through-put over both copper and fiber. The combination of TrueNet® and Digivance® WFX provides the most highly reliable end-to-end copper, fiber, and wireless enterprise networking system available anywhere in the world. Furthermore, we have upgraded our sales force in the past year and are working with world class distributors in more and more countries around the world. These are key elements to the recipe for success to be a leader in the structured cabling business. To conclude, we believe that ADC has long-term growth potential to build new networks for the future. As ADC’s 3,000+ customers in more than 140 countries around the world build next generation broadband networks. This drives a broad base of growth opportunities in next generation core Fiber-to-the-X, wireless as well as enterprise networks. We believe that our breath of solutions and experience will be a major driver in our ability to meet the demands of our customers worldwide and grow faster than industry capital spending rates as has been our history in prior growth periods. Finally, our three year goal of 14% or better operating margins will be achieved through continued progress in transforming the cost structure and growth driven operating leverage of the company. I’ll now turn the call over to Gokul, who will provide a more detailed financial overview.

Thank you Bob, and good afternoon. We reported solid year-over-year sales growth. 1st Quarter sales of $218 million grew 16% as reported and 9% excluding $17 million of FONS sales from 1st Quarter 2006 results. This sales growth compares to aggregate US industry capital expenditure growth of about 6% in the Quarter. Our GAAP diluted loss per share from continuing operations was $0.02¢ in the Quarter compared to $0.12© GAAP diluted earnings per share last year. Adjusted diluted EPS was $0.09¢ in the Quarter compared to $0.09¢ a year ago. This is GAAP EPS adjusting for Restructuring Charges, Amortization of Purchased Intangibles, FONS Employee Retention Expense, Stock-option Compensation Expense, and a 1st Quarter 2005 gain on the sale of a Note receivables. Our year-over-year sales growth was driven by strong contributions from our fiber and connectivity solutions used in FTTX deployments by telephone companies in the US and Europe. Sales of our global fiber connectivity solutions increased 75% excluding FONS sales the increase was 32%. Global Fiber Connectivity sales was strong in central office infrastructure as well Fiber-to-the-X network deployments. Sales of our global Copper Connectivity solutions increased 25%. This strong growth was a result of demand for Copper infrastructure in Fiber-to-the-Node and Curb networks. This significantly strong connectivity growth in products comprising 61% of ADC 1st Quarter sales was partially offset by the following: professional services representing 18% of 1st Quarter sales decreased by 5% due to lower certain Europe partially offset by increased sales in the US; global enterprise connectivity sales were down 6% as a result of the timing and shipment of orders, sales of these products represent 13% of ADC’s 1st Quarter sales. Wireline access sales were up 2% and represent 6% of ADC’s sales in the Quarter. Wireless access sales were lower by 37% due to the timing of new products and customer deployments as expected; while the sales of 2% of ADC’s sales in the Quarter. To help you with modeling, the Earnings Release includes a table showing the percentage of total ADC sales of products in a broadband infrastructure and access segment. Our year-over-year results continue to support our belief that we are successfully executing on a strategy of focusing ADC on the faster growing areas of customer spend, gaining market shares in our core connectivity businesses, and widely investing in growth initiatives including OmniReach™ FTTX, and supporting copper and fiber connectivity solutions. While wireless and enterprise sales were down in the 1st Quarter as previously explained, we believe strongly in the growth potential of investments in Digivance® wireless capacity and coverage solutions and TrueNet® and copper enterprise solutions. Now let’s review earnings. In the 1st Quarter, there were Amortization of Purchased Intangibles of $7 million, FONS Employee Retention Expense of $2 million; Restructuring charges $1 million, and Stock-option Compensation of $3 million for a total adjustment of $13 million which is 4.7% of sales or $0.11¢ per diluted share resulting in an adjusted diluted earnings per share of $0.09¢. The 1st Quarter adjusted operating margin of 3.3% compares to 7.9% in the 4th Quarter of 2005. This margin decrease was mainly due to lower gross margins. Gross margins of 30.5% were lower than the 4th Quarter of 35.2% as a result of a higher portion of sales to support Outside Plant infrastructure for a FTTX networks. These sales include both fiber and copper Outside Plant connectivity products. We also had a lower portion of Digivance® and enterprise sales in the 1st Quarter, and finally lower seasonal volumes. Adjusted operating expenses in the 1st Quarter were 27.2% of sales compared to 27.3% of sales in the 4th Quarter of 2005. Also our adjusted OPEX in the 1st Quarter was $6 million dollars lower than in the 4th Quarter due to continued focus on cost leadership, lower volume, as well stock related costs. In our 1st Quarter we advanced several projects to transform our cost structure and position ADC for growth driven operating leverage. We believe the benefits of these projects should begin to be visible in our financial results in the second half of 2006. In 2005 and in the 1st Quarter of 2006, we demonstrated our ability to reduce our operating expenses. As we have discussed in the past, we will continue to focus on further cost leadership. Our successful top line growth strategy has resulted in significant reductions in adjusted OPEX as a percent of revenues. We will continue to benefit from this growth driven operating leverage in the future. We believe all of these actions will get us to an adjusted OPEX as a percent of revenue goal of 20%. We expect the benefits of these and other cost saving measures to improve further in fiscal 2007 and beyond as we make progress towards our three year goal of 14% or better operating margins. There were several 1st Quarter actions which are expected to benefit our results in future Quarters. First, we increased our manufacturing work force in Mexico in the 1st Quarter; second, we consolidated certain labor intensive European operations formerly conducted in several locations to a lower cost production facility in the Czech Republic; third, we are also working to move additional product lines to manufacturing operations in China; and fourth, we moved most of our European operations onto ADC’s worldwide enterprise resource planning system and expect most of our Asia-Pacific operations to be on this system by the end of this year. Reviewing employee numbers, we ended the Quarter with about 8,500 people globally, which is up from about 8,200 at October 31, 2005 mainly due to increasing our work force in Mexico. Moving to capital; DSL increased to 60-days in the Quarter compared to 58 days in the 4th Quarter due to seasonally lower sales in our 1st Quarter. Our 1st Quarter returns were 5.5 times compared to 5.6 times in the 4th Quarter also primarily as a result of lower sales of wireless access equipment. We are focusing on improving our working capital performance. In 2006, we have implemented working capital improvement targets into our incentive programs. Turning to cash flow, our total cash, cash equivalents, and available for sale securities are $471 million on January 27, 2006 decreased from $481 million in October 31, 2005, mainly due to $14 million in cash used by operating activities from continuing operations in the 1st Quarter. Depreciation and Amortization expense was $17 million in the 1st Quarter compared to $26 in the 4th Quarter. The decrease was a result of the 4th Quarter being high due to year-end adjustments and write-off of in process technology for the FONS acquisition. Property and equipment additions net of the disposals, were a net expenditure of $5 million in the Quarter compared to $14 million sequentially. The decrease was primarily attributable to a reduction in expenditures and facilities and information technology. We expect that in fiscal year 2006, we will further increase cash provided by operating activities from continuing operations as income is expected to grow and cash required to support capital requirements is expected to moderate compared to 2005. We believe our cash and securities balance is sufficient for our gaining growth plans for our core business as $200 million of Convertible Notes do not mature until June 15, 2008 and the other $200 million do not mature until June 15, 2013. All Convertible Notes have a conversion price of approximately $28.09 per share. In addition, ADC’s deferred tax assets, which are nearly fully reserved at this time, should reduce our income tax payable on taxable earnings in future years. I will now provide financial modeling guidance. As announced in our 4th Quarter Earnings Release on December 13, 2005, and in order to better align our guidance with expected business cycle and its’ variabilities, we are continuing to provide annual guidance that reflects a long term business direction in fiscal 2006. We remain committed to managing our business with a longer-term strategic perspective and expect that Quarter-to-Quarter fluctuations will continue to be a natural part of our business. These short-term variations can be difficult to plan and we do not believe they are critical to the long-term prospects for our business. As Bob mentioned, ADC currently expects its’ annual 2006 sales to be in the range of $1.325 billion to $1.375 billion which will be a 13-18% increase over fiscal 2005 results, sales rather. This is an increase from our previous estimated annual sales range of $1.275 billion to $1.35 billion. Based on this sales guidance and subject to sales mix and other factors, GAAP diluted EPS from continuing operations in fiscal 2006 is estimated to be in the range of $0.68¢ to $0.83¢ and adjusted EPS to be in the range of $1 to $1.15. Based on our 1st Quarter results we feel it is appropriate to maintain the high-end of our EPS guidance for 2006. The $0.32¢ of estimated reconciling items include Restructuring Charges in 1st Quarter 2006 of a $0.01¢, Amortization of Purchased Intangibles of $019¢, FONS Employee Retention Expense of $0.04¢, and Stock-option Compensation Expense of $0.08¢. This guidance excluded potential future restructuring impairment and acquisition related charges and certain non-operating gains/losses of which the amount is uncertain at this time. Also the FONS Employee Retention Expenses are scheduled to be incurred through the 3rd fiscal Quarter of 2006. Now let’s review seasonality. To help you with modeling the working days by Quarter in fiscal 2006, are 59 days in Q1, 65 in Q2, 62 in Q3, and 66 in the 4th Quarter. Our 2nd fiscal Quarter sales are expected to follow historical season patterns of sequential improvement from the previous 1st fiscal Quarter sales as customer capital spending budgets get approved and that are approximately 10% more working days in the Quarter. Here is some more color on our visibility in the first four weeks of the 2nd quarter. First, back-logged shippable in the 2nd Quarter plus revenue for FTTX was approximately at $25 million in the first four weeks, as a comparison FTTX revenues in Q1 were $28 million. Second, average daily bookings for legacy ADC Copper Connectivity are up 33% in the first four weeks of the 2nd Quarter compared to the 1st Quarter and up 6% year-over-year. And third, average daily bookings for Fiber Connectivity excluding FTTX are up in the first four weeks of Q2, 25% sequentially and 40% year-over-year. As a result of experiencing Quarter-to-Quarter sales fluctuations in fiscal 2005, we continue to believe that our expansion into the new growth markets of FTTX, wireless, and enterprise, which collectively represent about 24% of total 1st Quarter sales in 2006 and 28% of our total fiscal 2005 sales, may have changed the seasonality patterns for our business. This seasonality change may be different from the pattern of our central office based business which historically has experienced seasonal patters of sequential sale growth in which our 4th fiscal Quarter sales are higher than those in the 3rd fiscal Quarter. This historical seasonal pattern does not apply in fiscal 2005 and we cannot be certain if it will apply in future fiscal years. The calculation of our GAAP diluted EPS from continuing operations is based on its converted method with assumes that our Convertible Notes are converted to Common Stock if diluted to EPS. This EPS calculation is specified in section of our Earnings Release. Any income taxes as of January 27, 2006, we had a total of a $1 billion dollars in deferred tax assets that have been offset by an early full valuation reserve and as a result have been thrown in the balance sheet at an insignificant amount. Approximately $226 million of this deferred tax assets related to capital loss carryovers which can be utilized only against realized capital gains through October 31, 2009. As we generate pre-tax income in future periods, we currently expect to record reduced income tax expense on deferred tax assets are fully utilized to offset future income tax liabilities or the value of our deferred tax assets are restored on the balance sheet. Excluding the deferred tax assets related capital loss carryover, most of the remaining deferred tax assets are not expected to expire until after fiscal 2021. In summary, we believe that we remain well positioned for growth at about market rate in our fiscal 2006 as we capture customers spend on the upgrade of wireless, video, and data networks as well as work to take market share and continue to reduce manufacturing costs and operating expense as a percent of sales in 2006 and 2007 towards our goal of 20% and make progress towards our three year goal of 14% or better operating margins. That concludes our remarks today. We will now like to open the call to questions.

Your first question comes from the line of John Anthony, Cohen and Company

Good evening guys, a couple of questions. First, is there any way to quantify the margin impact from the empty cabinet sales and the lower wireless? How much of that did that drag down the gross margin?

I think the cabinet field and wireless was probably a percentage point. That was the result of the mix.

You guys are obviously fairly positive about the outlook. Could you rank the opportunities in front of you as to what’s going to drive growth this year Outside Plant, Digivance®, etc?

Clearly Outside Plant in the form of pure FTTX is a big driver of growth, I also am very excited to see the growth in our core fiber business which is demonstrating in the 1st Quarter I believe about 30% growth year-over-year and you heard Gokul comment on how that’s shaping up for the 2nd Quarter, so clearly strong growth across fiber both central office and in the Outside Plant. We are hopeful that wireless will deliver a growth year as you know that’s a spiky business, and we are focused on wireless at this juncture is a second half opportunity for the most part. Our structured cabling business continues to grow and grow significantly particularly in the US, so I would say those are the primary areas, we also are seeing good opportunities in our US based service business which we do expect to drive growth as well. That business, on a global basis is being a little impacted by our situation in France and in Germany, but US is showing growth opportunity as well and I would say those are primarily the main drivers.

Is there any reason specifically why wireless will be back and loaded to the back half of this fiscal year?

There is a couple of reasons, one it’s hard to predict and it’s somewhat spiky and we’ve got some things going on there, quite frankly. We’ve introduced some new products that are not expected to have any significant traction until the second half. They are too new to have an impact in the first part of the year, and I mentioned those on the call. Also, we are seeing in the case of Sprint Nextel, not a lot is happening there at this point as a result of the combinations of the company. Even though we have Nextel is a very good customer, historically as you are all aware, we’re working through the normal merger integration aspect that goes along with combinations. That’s a factor that we think will abate in the second half of the year. And then finally, it is getting traction around this inside the companies in terms of their dedicated spends and how much their budgets are going to be and when will they prioritize some of the coverage and capacity optimization situations as an area of spent.

And lastly, you guys obviously raised the top end of the revenue range, but you didn’t raise the top end of the earnings, is that strictly gross margin related or is that also related to increase staffing in Mexico and some of the other initiatives you talked about?

No, I don’t think it’s related to the staffing, it is somewhat related to gross margin, but just how I would think of it, I think we viewed Q1 has having made good progress towards our annual guidance. There were some very positive things as Bob mentioned on the FTTX side, there were some things not as expected like our, not quite as we expected like our wireless sales. I think we are seeing some good traction in the first four weeks of Q2 and as I said in my remarks, taking all of that into account, we just feel this time it’s just appropriate to maintain that guidance until we see really a strong Quarter behind us.

To back up what Gokul said, we have an awful lot of efficiency and cost related initiatives that we are jockeying around right now and so if I list them, we’ve had product that is being shifted from Shakopee, Minnesota to Mexico, we have product that’s being shifted from Mexico to China, we have product that’s being transferred from various places in Europe, UK, and Berlin to Czechoslovakia, and we also have product from those regions as well that may end up in China and we have product coming out of our Australian business that is targeted to be shifted to India and/or China, so there is a lot of moving pieces that really represents a very exciting margin improvement opportunities but clearly a lot of work is in progress, timing of these things is always difficult to call and I think that is a little more color on what Gokul was saying. In addition, we have sourcing opportunities as well that we are working on to lower purchase materials. So that is just a little bit of added color that relates to timing of margin improvements.

Your next question comes from the line of Steven O’Brien, JPMorgan Steven O’Brien: Thanks for taking my question. You probably saw yesterday Verizon talking about pretty steep declines in their expectations for the cost of passing to home the cost of connecting a home to their FiOS Network. Granted some of that is related to OPEX, but I just wanted to see if you could comment on whether there is pricing pressure from Verizon especially as your volume increased their demand for some type concessions there?

Yes, that’s a great question and I am probably going to give you a long but relatively accurate answer on it. First, I know there were some things they said and I believe that were some analyst reports as well that commented on Verizon’s statements so first, I think it is fair to say the notion that ONT suppliers are somehow being treated more favorably on pricing because of long-term contracts is probably a misnomer. Everything whether it was electronics or passive was forward-priced right from the get-go as part of the competition to get business from Verizon. So if you think way back, AFC now part of Telelabs won the Verizon business over some pretty formidable competitors and that was really done at some pretty significant forward-pricing. In terms of where Verizon is looking for these cost savings, I think it’s fair to say that there will be some that will come from pricing, but I think it’s also fair to say some of those are things that are already built into contracts with existing vendors, so not all of that represents an unplanned hit to the vendors involved. Some will likely come from future RFP’s that either have not been let or have just recently been let and I think you ought to think about that in terms of GPON architecture which recently I believe has been RFP’s, so the move from current BPON to GPON created an RFP and I’m sure that’s going to create some savings in terms of the electronics piece of the network going forward. Also, there is labor savings that they are planning on due to reduced activities in the field particularly around splicing and this is coming mainly from next generation products of which ADC will be a supplier. There are also, and by-the-way, the GPON/BPON RFP does not affect ADC as we are agnostic to that. Improved deployment techniques, you know they have been working at this for the past two years, and over the past two years they’ve certainly learned a lot in terms of what to do and what not to do and how to deploy more effectively and certainly we’ll get cost savings as a result of that. The other thing that’s taken place that’s built into those expectations is, I think in almost all cases, they have eliminated dependency on sole source vendors. They’ve opened up opportunities for more than one vendor to participate and of course that’s driven down cost and I must say that’s something that’s benefited ADC as we started our initiative with Verizon there were areas that we were not participating in that we are now participating in and will in the future as a result of opening up the opportunities to more than one vendor, so clearly they are getting savings there. Also, the equipment that’s being supplied into the network particularly NextGen equipment is very modular in nature and is really configurate for flexibility and for variable take rates in their deployments. Their also reducing overtime through new product, NextGen product, the amount of absolute hardware that gets deployed in the network and that’s a savings for them as well; so I think as you think about this it’s not necessarily going to come from more price pressure on the existing suppliers of the existing product, I think most of that is built in. New product, NextGen product, and new RFP’s will be treated the same as old and forward-pricing will be expected and that’s certainly will help them, but I think it’s the combination of all these things that they have built into those numbers and it seems reasonable to me. Steven O’Brien: Great, thanks for all that color. If I could just add one quick follow-on, I know you’ve talked about this in the past but if would be helpful if you could talk a little bit more about how as Verizon or whoever signs up customers, or add video for example, you mentioned video penetration is certainly live, but data penetration that as incremental revenue in terms of an ADC look on revenue per home?

Yes, I think the way to look at it is a little bit like the razor in the razor blade although not exactly but similar. Depending on current take rates and density of neighborhoods etc., they will put in, in most cases, the least amount in terms of connectivity inside of the cabinets. As take rates go up, as there is the need for more, that gets added as needed; so when we put in the cabinet we’ll populate it with a certain amount based on their need and then down the road we’ll add to that as customers get signed up. And also, they will probably be some additional central office equipment that they’ll require when they more actively start deploying their video products.

Your next question comes from the line of Scott Coleman, Morgan Stanley

Great, thanks guys. Bob you put out a number of $5 billion market opportunity for FTTP in 2006, I’m just curious, what is your addressable portion of that do you think?

You know, I think, I can’t do the math in my head, but you know we’ve given you a range of what we expect to get in terms of homes past and that’s probably the number that we are most comfortable with. It really depends on what gets deployed and when in that $5 billion dollar segment. So, we are pretty comfortable with the range that we put out, that range might move up going forward with the addition of new products depending on the outcomes of RFP’s and market share wins, but to be honest I just really be winging it if I tried to assign a number to that $5 billion.

And when you reported your 4th Quarter results, Gokul I believe you talked about sales in fiscal 2006 probably peeking in the 2nd maybe 3rd Quarter depending on a variety of swing factors, and I know you guys want to get away from Quarter-over-Quarter guidance, but I’m wondering if the increase in your Full-Year number changes that thinking of how the year might shape out?

No, Scott, I don’t think it changes too much, I think we still believe in what I said on the last conference call, but in general I would say relative to where we were in 2005, you know large customers like Verizon, that they’ve get more experience deploying it FTTX, now more measured in their ordering patterns and so you know it’s not unlikely that this year we some sequential growth in the second half too.

You know, I was just going to add to what Gokul said; you know this is still a work in progress because we really don’t have a strong experience base to go off of only one year last year. But, I think I agree with Gokul and last year we peaked in the 2nd Quarter, this year that might be the 3rd Quarter, maybe a little up pick in the 4th, it’s just very hard to tell right now.

I appreciate, Gokul, the details on the bookings, I just want to make sure I’m understanding you’re positioning some of these trends, if you think of normal seasonality in the 2nd Quarter being up high single low double digit percentage on a sequential basis and then the added benefit of 10% more working days in the Quarter, is what you are trying to describe here is adding those together to get towards a sequential growth rate, I just want to make sure I’m reading your comments correctly?

I think you can try to correlate the two. So for example I said our legacy ADC legacy Copper Connectivity bookings in the first four weeks are up 33%. You can try to correlate that to kind of 10% more working days and some sequential growth. I wasn’t trying to correlate that, I was trying to give you and all of you some visibility into how our 2nd Quarter was shaping up since we are not giving Quarterly guidance any more. I wanted to give you some color as to how our Quarter might be shaping up.

I certainly appreciate it; just to understand the context here do your bookings in the 2nd Quarter historically tend to be fairly linear throughout the Quarter or front loaded versed back loaded?

No, I think it’s fairly linear for some of the businesses that I’ve described, you know which are a little more round rate type businesses; central office, Copper Connectivity, and Fiber Connectivity probably fall into that category.

Hi Scott, this is Mark; you have to remember our first month is a four week, our second month is a four week month and our third month is a five week month. So it’s linear by week.

Your next question comes from the line of Aziz Ariyah, Merrill Lynch

Hi, this is on Aziz’s behalf. Gokul, my question is, before the Quarter you gave guidance of gross margin of 22% and the gross margin was about 30.5% I think you mentioned about a percentage pressure because of FTTX, etc. But, still the gross margin was weaker than expected. Can you give us a sense for any gross margin pressure you are seeing in other business lines and what the trend might be in the remainder of the year? Robert Switz This is Bob and I’ll let Gokul comment as well. You know, certainly mix is has had an impact. Also, we did have some commodity price impact in the 1st Quarter which we have attempted to offset with price increases, but those tend to lag so you don’t get the immediate benefit of the price increase. There was some commodity pressure in the Quarter, also we have a service business in France that I think you all know from previous discussions that is not performing up to our expectation, we have implemented cost reductions and social plans there and we are still not where we want to be with that business and that also had an impact on margin in the Quarter.

How much of your second half sales guidance depends on Digivance®? What are your expectations for Digivance® in the second half?

As Bob said, we feel good about the product, we are introducing some new products that we expect to get some benefit from in the second half, clearly we do expect sequential growth in the second half, meaningful sequential growth in the second half but I wouldn’t say we are highly reliant on let’s say, getting to the mid-point of our revenue guidance on significant growth in that product.

Keep in mind with this product, it’s still is a new architecture, there’s still, you know it’s not a run rate business, it hasn’t received the highest level of priority yet in carrier spending plans, they are still focused on other capital deployments around macro based stations, its’ hard to predict, we remain encouraged because we now have international product that we’re bring in the market, we also are able to provide product for neutral host customers and we have significant approvals of carriers in the US, so it’s a hard one to call just because of where it is in it’s life cycle.

And one last question, if I may. What are you doing to proactively manage the inventory situation this year so you don’t get the same kind of pressure that you had last year, especially since you have a number of new products?

Yes, the problem we had last year mainly was related to Verizon; Verizon over ordering on some of the FDH’s and then finding themselves having a bit of excess inventory. About as much as I can say, we internally are being very vigilant around that, constantly talking with our customers about their deployment plans. Verizon themselves has been more cautious this year and we can see that by the order rate in the 1st Quarter. They made sure they worked off they inventory that they had, they were very careful and recognized that they had some challenges last year on the West Coast where they ordered a lot of product and they were hampered in terms of their deployment by weather and other factors and had a lot of contract labor waiting around to deploy and so to protect themselves and improve their own efficiency they’ve been very careful in managing those activities, quite frankly I had a discussion with Verizon today around this very topic and I know that they’re working very hard internally to try and be more effective and work with their vendors accordingly so best I can say is both vendor and customer are working hard to try and make it better than what it was last year.

Your next question comes from the line of Paul Siverstein, Credit Suisse First Boston

Hi, good evening a couple on my mind. Bob can you give us any color on your comment about the four China trials anything more you could tell us in terms of timing, it’s central size, etc. Also your Digivance® comments on the customer account, could you just remind us of what the count was in October, I think those numbers are cleared at one is that correct?

Yes, that’s correct.

Maybe you could just address the China question then I’ll come up with one or two more questions.

Yes, I wish I could address it with lotts of details, but I can’t. We are very much aware of the opportunities in China, we’re aggressively pursuing as many as we can. We have put small amounts of product into four trials. At this point, Paul, it’s really hard to say much more we just don’t have that level of insight in terms of what the customers might do, but the trials are taking place in large cities in China, so if things go right and we participate and they deploy then these could be some interesting opportunities for us down the road. But it’s early in the game at this point, now having said that one of the things we like is we have expanded our manufacturing capability in China and are expanding it further. We have also beefed up our management organization in China and are enhancing our management structure as well so that we are in a better position to serve and participate in these opportunities, but that’s unfortunately about as much as I can tell you.

China right now, Bob, in terms of contribution revenue, is it diminimus?

It’s small in the scheme of things; I’d say it’s probably in the $20 million dollar range annually in that general range. But, we see it as a market of significant opportunity for us; maybe about 1% or so of our business.

With respect to Verizon following the FONS acquisition, it looked like the numbers were good, but any sense for whether there was in fact a shift in terms of the percentage of business that you’ve been allocated. You picked up FONS that gave you 2/3 theoretically, there were concerns in the street about it going back down to ½ reallocation, any insight?

Yes, we have not seen that, Paul. It’s not showing in our order flow at this point in time. We’re getting what we expected to get.

And finally last question, historically you spoke about a range, I think about $50-110 per home paths in connection with FTTX lower in for the FTTN and FTTC, higher for the FTTP, does that range still apply when we think about how many homes path.

Yes, I think that’ still fair.

Your next question comes from the line of Todd Coffman,

Thank you. When I look at the updated guidance that you provided today and put that in the back drop of this new seasonality that you recently been talking about and I look at the 1st fiscal Quarter now already under your belt and look at the rate high end guidance, it would lead me to believe that your fiscal 4th Quarter might not likely be down sequentially listening to some of your other comments about your wireless new product etc., but you made a big, a number of strong comments about that seasonality I guess over the last 3 or 4 months, can you provide any color or comment?

I think you touched on something I said a moment ago, when a previous question was asked. I said, added some commentary behind Gokul and said that it’s possible this year that we won’t peak in the 2nd quarter, but conceivably it could be the 3rd and we could have a sequential up pick in the 4th, but it was just a little to early to tell at this point in time. But, in general I am not disputing the possibility of the pattern you are suggesting.

Your next question comes from the line of Gunther Carter, Discovery Group

Yes, hello I’m Shirley Cauger – I am going to issue a question for Gus. He’s been on the line all this time but he has a very important meeting that he had to go to at 6. So, can I ask you a question for him? What percentage of the total revenue is domestic United States now?

Right now about 55% in this Quarter

And, what is expected for 2006?

I think it’s probably going to run in the range of 50-55% in any given Quarter, about that range.

Your next question comes from the line of Kim Sobinspeck, Pacific Quest Securities

Thanks, a couple of questions. First one, on the services side pretty disappointing services margin in the Quarter; you talked about France and I guess Germany is the major problem. When does France get fixed and is UK a drag any more?

The UK is gone, France is currently being worked on, we have an aggressive program to cure that over the course of this year and Germany is a different set of issues. Germany has been relatively successful for us and we would expect over the course of the year for Germany to hopefully approximate normal activity and we have an active program to take care of the French problem.

In terms of the French issue, it sounds like you might be backing away or backing out of that market?

It’s too early to say that exactly. We have several alternatives that we can elect to pursue to improve our situation there, but I think it’s fair to say that we’re going to be pretty aggressive in our actions in France. One of the things we want to make sure that we continue to maintain is good customer relationship there, because we see significant potential opportunities there for our wireless product, so we want to make sure that whatever we do does not create an obstacle in terms of our ability to sell in our wireless products.

And the second question I have, you talk about accelerating the reorganization and some of the programs in terms of cost cutting, is this a reaction to say a lower contribution from wireless, I mean why wouldn’t you have started these programs now? Why are you accelerating them?

These programs have been started for quite some time. So, the programs that I mentioned and Gokul mentioned, these are programs that we have had under way, we talked about them over the course of last year and right now, particularly on the manufacturing side there’s nothing new in what we are doing, we’re trying to do it faster because we want to achieve the cost benefits sooner rather than later, so there’s nothing that’s a reaction to the 1st Quarter, these are things that have been under way for a year now for the most part.

And the thing I think you should take away from/on the cost side is the message which says our strategy is being of, we’ve demonstrated our ability to grow and that growth has leading to significant leverage on the operating expense side; and therefore, you will see our operating expense as a percent of sales or revenues come down quite drastically and which is why we are seeing our goal is to get it to 20%.

In terms of manufacturing, is it a greater impact of the shipment more to Mexico or the shipment of stuff to the Czech Republic?

Yes, it’s hard to quantify that for you, but for example we have something in the range of 3,000 to 3,500 people in Mexico. We produce a substantial amount of product there. We are looking globally across our product sets to determine the most cost effective place to produce product relative to serving our customer base. That will result in some cases of product that’s manufactured very cost effectively in Mexico today to be moved to China because it can be manufactured more cost effectively. It’ll take products out of places in the US like Shakopee and move it Mexico because that’s the best place with that product. Likewise, consolidating and moving out of higher cost European areas, like Germany and the UK, it makes sense to take some of that product to Bruno, Czechoslovakia; however, it also makes sense to take some of it even further to China. We’re conducting a very exhaustive and very careful study of our products to determine what is the best location globally to manufacture that product.

One final question, what was the commodity that impacted the gross margin in Q1?

Copper.

Your next question comes from the line of Ken Mauve, Robert

Hi guys, a couple of things on the cost savings initiatives can you give us kind of a percentage what would be in COGS and what would be in the outback side?

That’s a little bit hard to do today, we have a lot of moving targets-I’ll let Gokul, Gokul thinks he can give you that color; I’ll let him take a stab at it. But, I think today it would be a swag as opposed to a definitive set of percentages. But, I also want to comment follow up on the last call on the commodity price increase, I did mention earlier in the call that we did raise prices to cover that, that was a factor in the 1st Quarter we expected our price increases would have captured that in subsequent Quarters.

I don’t think I am going to give you a percentage of the COGS and operating expenses, but as you can imagine most of our cost production opportunities based on what Bob outlined are in the COGS area. I think in the operating expense area, we have some cost reduction opportunities, but there the story is more operating leverage driven by our growth.

Then on the guidance that you gave here, kind of backing into some of the earnings numbers you gave, Gokul, is the pattern kind of approximated the same in the dollar amounts how that trades off in the SG&A kind of flowing through the year like you did in fiscal 2005? The area dollars should pick up a little bit kind of Quarterly as the revenues go higher?

Are you talking about the SG&A dollar expense?

Yes, the actual dollar number.

Yes, as I said in my prepared remarks that in Q1 relative to Q4 our operating expense came down by about $6 million dollars, that part you related to volume. In terms of volume, we think about kind of out of dollar expense, operating expense going up at about 10% of incremental revenues. You should expect dollar operating expense in Q2 to be higher based on the higher sequentially growth that we’ve seen on the border.

Yes, I think the one thing to take away, you should probably focus on is that we have very active programs under way to address more efficient COGS and lower OPEX as a percent of sales. What we are really doing is transitioning to the model that we’ve talked about for some time which has been focused on operating income and all these programs that we’re working on combined with our revenue growth, we expect to support our long-term goal of 14% or better on operating income, but it’s pretty systematic across the COGS part of the business as well as the OPEX side. We are working kind of in tandem; we’re driving the business growth in, we’re working very aggressively to lower total cost structure.

Then on the Digivance® side you mentioned that was kind of in your prepared remarks here is down 73%, I believe that’s sequentially clearly the Sprint Nextel Cap X is nowhere near that sequentially, is there a customer loss there are there multiple customer losses in the Digivance®?

No, there’s no customer loss, it’s just a no spend in that area and last year quite frankly if you look at the 1st Quarter of last year, it was not that much different than the 1st Quarter of this year in terms of total revenue.

The last is the Verizon, is that still the vast majority of your Fiber-to-the-X stuff or have you started shipping to AT&T at this point?

Verizon certainly is the big spender, but we have made shipments to AT&T as well.

Your next question comes from Simon Leopold, Morgan Keegan Simon Leopold Thank you, I wanted to take a look back at the FTTX business and I have got a couple of questions, this is a quick one hopefully, what was the percentage of total revenues that were Fiber-to-the Premise, Fiber-to-the-Node related? I think in the past you talked about around 10%

Yes, in Q1 it was about 10%.

It held steady. Didn’t you anticipate ahead of this Quarter some of the inventory issues might make this Quarter a little bit weaker?

Yes, we had said that the inventory going up will probably happen towards in the January time frame, we did expect Q1 to be weaker and that was also part of my remarks that I made, which was in the 1st Quarter our FTTX revenues were $28 million, in the first four weeks of this Quarter, in the 2nd Quarter, our shippable backlog plus our revenues are at already at that level.

Simon, this is Mark. The FTTX was 7% last Quarter, so it really was up it really did not hold steady.

So, it’s 7% in Q1 the January Quarter?

No, 4th Quarter, so 7-10. And you can see that in the table when you see the percentage of break out of sales in the Earnings Release where our Fiber went from 20% in the 4th Quarter to 24% in the 1st Quarter.

I want to go back, I think this was answered a little bit earlier, but when you guys closed announced the FONS acquisition; I think at that point you talked about your share of business with Verizon moving from about 25% to a range of 35-40%. Now I think this topic gets confusing because of some apples and oranges in some of your competitors like Corning who don’t sell exactly the same products you do, could you review a little bit of what your market share is with Verizon?

Yes, you are right; I think that has been confusing in the past. We currently are also participating in new applications; we are going to participate in drop cables as well as access terminals. I think the as well, I would say our share has certainly increased from where it was and I would say at this juncture that range is probably ok. Maybe it might even move up a bit, just depending on circumstances.

Then, a very similar question, during it’s analyst meeting Corning threw out different numbers home past and I think earlier on the call there was a question about your assumption, I think you said the same, but I believe the number you talked about is for home connectivity is 110 not home past, is that correct?

No, we’ve always said home past.

More of the big picture question, and I am sorry for going back to this, I think several people have been homing on this, but the idea that the year is very back end loaded given where we are starting in the is one Quarter what’s really behind the confidence in terms of your level of conviction. You’re taking your numbers up, which I think demonstrates a degree of confidence, yet it’s still we’re looking 3Q and 4Q that have a seasonality effect last year and all the emphasis you’ve made on the change in seasonality, there’s a conflict here that I think a lot of myself included are struggling with between the guidance and then your discussions on seasonality. I’m still confused and I apologize because I know you’ve been through it.

No, well first of all our forecast always starts with a grass roots forecast that comes through our sales organization that gets scrubbed pretty hard a lot of that’s based on contracts in place, some of that is based on expectations of customer needs, requirements, and deployments and where we expect to play in that, so if you look at last year there was a spike in the 2nd Quarter, so we’re certainly expecting that. Based on additional customers around our FTTX, based on what we are seeing in terms of supporting central office fiber growth around that based on new products that we expect to participate in that initiative, all of that gives us confidence in terms of the trajectory for the year. Also, our service business, opportunities around our service business; our enterprise, our structured cabling is continuing to grow at healthy rates in the US. We are continuing to add to our capabilities there and we expect to continue with fairly high growth rates in that part of our business. At this juncture, the area that probably has the least amount of visibility to us is probably in the wireless space, but again we are bringing new products to market, etc. I’ve articulated my position on wireless a little bit earlier. We’re fundamentally trading off and looking at where are we positioned now and what product areas, what are those demand forecasts look like, what are our assumptions around new product introductions, what are our assumptions around market share take, and right now, and also the start to the 2nd Quarter as Gokul has eluded to, all of that gives us reasonable amount confidence that our numbers are relatively solid.

How do you think about your visibility in your confidence when you look at the enterprise business was certainly weaker than I expected in the Quarter and it sounds like some of that is timing of some revenues that sounds like you’ll probably be better in April, but how does that look for the Full-Year or backend of the Year.

Yes, one thing, I didn’t mention this on the call, one thing that has impacted our enterprise business in Europe in particular, we did implement SAP at the start of the Quarter and it was a fairly complicated implementation; we had to bring up a whole number of countries and we eliminated a bunch of warehouses for cost savings and all sorts of things that you would expect to get as a benefit out of SAP. Whenever you bring up a new system, there’s a learning curve associated with learning it and to some extent that impacted our structured cabling business in . That’s pretty much an off the shelf business, got to have the product there when the customer wants it, etc. I think it is fair to say part of the sluggishness there in 1st Quarter part of that was associated with implementing SAP in the region. Based on the channel feedback that we are getting and our initiatives in the US, we are getting very positive signs that you know our growth rate in the US market is going to be pretty solid and we would expect that will turn around post the 1st Quarter.

Your next question comes from Christian Schwab, Craig Hallam Capital Group Christian Schwab Great thanks for taking my question. On the commodity increase, can you quantify that, how much of the revenue increase could be attributed to a 5% increase, 3% increase in Copper Connectivity prices across the board?

No, I think the only way I can, I’d like to quantify this is kind of during Q1 I would say because of the commodity price increase we had probably a ½ million to ¾ of a million dollars in fact to the bottom line which as Bob said, we’ve now offset with price increases so it was just a Q1 phenomena. Does that answer your question?

That answers my question. Gokul, I think I heard you earlier in your prepared comments suggest that great control on operating expenses and a goal of running the company 3 years down the road at 20% operating expenses as a percentage of revenue. Did I hear that correctly?

That’s right. What I said is in Q1 we had good control over our operating expenses all throughout 2005 we’ve significantly reduced our operating expenses as a percent of revenue and with the growth story we had, we feel comfortable that that kind of leverage will continue going into 2006 and beyond. And the 20% goal that I am talking about is the adjusted operating expense when you back our amortization and those other things that I said on the call.

So, kind of suggesting that we expect 34-35% type of gross margin profile on the company 3 years down the road, is that kind of our projective?

You know that’s not what we are saying. We are saying we’ll get to the 14% operating margin goal, we feel pretty good about getting to that goal and Bob outlined several initiatives on the cost of goods side that we are working on, so at the minimum if we get to the 20% adjusted OPEX goal, that would suggest a margin goal of 34% higher.

Just to comment on that, we are attacking the margin issue in a number of ways. One is certainly all of these manufacturing initiatives around the globe. The second is as we look for opportunities to bring new products to market, we are looking at areas where we could introduce product into the system that has higher gross margins than our corporate average. A lot of the wireless products that we’ll be launching, assuming that we get take rates on that and assuming that it’s successful, all of that comes at a higher margin. In our connectivity business we’re looking at products such as automated cross connects and other products that will bring with them higher gross margins assuming those products are successful in the market place as well as products in the enterprise side of the market. On the one side, it is certainly attacking the cost structure and on the other side, it’s looking for opportunities to bring higher value added to market as well.

Great and on the share account, Gokul should we assume we stick around the 117 or does that bounce back to the 130 range.

Yes, it does bounce back to about the $132 million range because once we start showing income you have to assume the converted methods.

So your share account for the remainder of 2006 bounces back from the 116 to 132 roughly.

Yes.

You need to do that math, Christian, this is Mark. By taking the income, dividing it by the basic shares outstanding, coming up with an EPS, then taking the income, adding back the interest as if the shares converted to equity and then dividing by the larger share account and whichever number of those two results is lower, that’s the number that you would use and this associates your account with that.

Great thank you for that reminder. And then, is the FONS revenue that we received in Q4 the October Quarter, do you remember what that was?

I believe it was in the $8-9 million range.

$8-9 million, the FONS was supposed to do $95 million in 2005 right?

That’s what we said when we acquired FONS.

Right, so if we just take away that $10 million and we assume it’s growing at 20 or 30% and just layer that on to the 2006 revenue, then the base business looks kind of to maintain 7 to 8 % type of growth. That doesn’t give a lot of growth to your already existing fiber business, am I looking at that wrong?

The math may be a little bit off, I think FONS when we did the acquisition we had said 95 and then we had the Verizon inventory issue and so the FONS didn’t end up the 95, I think it was more in the 80-85 kind of range. But if you take, I think what you said was a 20-30% growth in 2006?

Well, no. Yes, 20-30 on the existing FONS business or whatever you want to get to make it roughly a $100 million dollar business, you get the $1.275 and then just to get to the high end the $1.375 all the other businesses roughly they grow 8% which seems not all that great given the big fiber business that should be growing quite rapidly for all the reasons that have been mentioned in the last hour.

I think if you do compare apples to apples your guidance would suggest a growth rate of 7-11%. Which in our mind is quite significantly higher than January CAP X growth.

We’ll take one more question.

Your final question comes from the line of Nikos Theodoropolous, UBS

Yes, thank you. Two quick questions; where there any 10% customers in this quarter?

Yes.

How many?

Just one.

Just one. So in the prior call you had mentioned that BellSouth given their rebuild and so forth had a potential but, it doesn’t sound like they are there yet? Robert Switz. Not yet, we have just one.

And the other questions, Gokul, for fiscal 2006 verses fiscal 2005 do you think gross margin is going to be higher or given the low start of the year do you think latches down for the Full-Year is more likely?

Yes, I think there are things that could always happen that could take us higher. I mean , Digivance® revenues and those kinds of things, but I think that the more likely scenario is slacked to slightly down.

Alright, thank you for being on the call today. That concludes the call.