Good afternoon, my name is Michelle and I will be your conference operator today. At this time I would like to welcome everyone to the ADC first quarter 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. Borman, you may begin your conference.

Good afternoon and thank you for joining us on today’s call. Bob Switz, ADC’s President and CEO as well as Jim Mathews, 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 risks and uncertainties identified in our earnings release and in the risk factors included in Item 1A of ADC’s annual report on Form 10K for the fiscal year ended October 31, 2007 and as may be updated in Item 1A of ADC’s subsequent reports on Form 10Q or other reports filed with the SEC. This earnings release can be accessed at the investor relations section of ADC’s website at www.ADC.com/Investor. ADC’s comments will be on a continuing operations and GAAP basis. Bob will provide an update of ADC’s strategic direction. He will then turn the call over to Jim who will cover the financial results and provide forward looking financial guidance. I will now turn the call over to Bob for the rest of the call. Robert E. Switz: Good afternoon everyone. I’m pleased to see that 2008 started strong as we continue on our momentum from 2007 in making significant strides in building ADC’s long term value as a leading global network infrastructure company. In our first quarter of 2008, we continued to execute successfully our strategic plan to grow sales and operating earnings while better positioning ADC for global fiber connectivity leadership, a new generation of wireless capacity and coverage solutions and expansion into developing country markets. We are also very pleased with the progress of our recent acquisitions of LGC Wireless and Century Man as well as our competitive transformation initiative, a multiyear program designed to serve our customers better, achieve significant competitive advantages and establish cost leadership in our businesses. Let’s now review our four strategic growth initiatives. Global fiber connectivity leadership, new wireless capacity and coverage solutions, growth in developing country markets and competitive transformation. Our first strategic growth initiative, global fiber connectivity leadership. ADC has achieved strong growth as a result of our aggressive steps to bolster our leadership position as a provider of high performance fiber connectivity solutions. Across the globe deployments of fiber intensive broadband networks are accelerating to meet market demand for enhanced communications services. In the first quarter of 2008 sales of global fiber connectivity solutions increased 20% year-over-year primarily due to strong growth in central office and data center deployments. This compares favorably to overall fiscal year 2007 when sales of global fiber connectivity solutions increased 13% year-over-year. There are three key drivers to our strong growth profile in our global fiber connectivity business. First, demand is being fueled by our customers’ need to provide greater bandwidth. One of the biggest drivers was the growth in video on Internet which doubled in 2007. Second, the race to provide this bandwidth continues to heat up as telco’s FTPS deployments compete with cable MSOs and satellite TV. Direct TV now offers over 90 high definition channels and Comcast is looking to provide over 1,000 high definition shows and movies by year’s end. Third, investments in high density datacenters continue to gain momentum. We are seeing increased activity across our entire customer base including carriers, traditional enterprise customers, Fortune 500 companies and companies focusing on Internet services. This ever growing demand for bandwidth is driving extensive fiber deployment across the entire network using ADC connectivity solutions in central offices, cable MSO head ends and many datacenters as well as fiber to the x and outside plant at locations. With these favorable market conditions, we are well positioned for global fiber connectivity leadership through our investments in additional go to market and engineering resources to reach more customers which has begun to reap significant benefits as shown in our first quarter fiber results. ADC’s best in class fiber management for high density fiber intensive applications and our investments in meeting our customers’ delivery requirements through improved supply chain efficiencies. We had strong growth in the EMEA region this quarter particularly in deploying fiber intensive network solutions due to strong demand for bandwidth in the more developed countries of EMEA. We believe alternate carriers are emerging as serious competitors to the PPTs in the region. We have also increased depreciably the investment in critical fiber resources in EMEA including the introduction of feature rich high density solutions an increased fiber manufacturing capacity in the region to provide competitive deliveries. We also see in are participating in many opportunities for FTTX deployments globally. In 2007 we directed R&D resources towards the suite of next generation fiber to the premises products including our reduced band radius fiber to improve the viability of FTTP in the multi dwelling unit or MDU environment. ADC believes success in the MDU environment is extremely important in the United States as well as abroad. The MDU market opportunity for ADC is global. We believe the percentage of potential FTTX subscribers are living in the MDU environments approximates 25% in the US, 50% in Europe, 75% in Asia and 75% in Latin America. Many of these MDUs also contain small businesses making the ability to provide FTTX services even more attractive to our customers. Thus far ADC is receiving positive market feedback on the ability of our products to drive down cost in MDUs through labor savings. These new products are being placed in North America as well as in Europe, Asia and South America. Let’s turn to our second strategic growth initiative, new wireless capacity coverage solutions. In December we closed the acquisition of LDC Wireless, a global leader in wireless coverage capacity solutions for large buildings and other hard to serve areas. Our acquisition of LDC wireless more than doubles our wireless product sales and greatly expands our go to market team globally for these solutions. The in building wireless market is estimated to be approximately $1.6 billion in 2007 and is expected to grow to $2.9 billion in 2010, a 23% compound growth rate. We are pleased with our integration progress as sales and costs synergies are both on target. We are focusing our integration and efforts in 2008 on supply chain integration, channel expansion in EMEA, Latin America and the Asia Pacific regions. In addition, we are working to deliver solutions that leverage the combined ADC and LGC product portfolios for in building coverage, outdoor coverage, connectivity gear, structured cabling solutions and professional services. Our wireless strategy, much as our fiber strategy revolves around creating compelling solutions for the edge of the network as we move to an ever more data persuasive society, wireless networks are evolving from big macro cells to smaller cell sites that provide better coverage and higher capacity and dedicated in building coverage systems for optimal wireless connectivity. The recent inclusion of LGC Wireless has significantly strengthened our portfolio which ranges from solutions for coverage holes in the macro network to systems that provide optimal in building coverage in large enterprises all from a single system. Our architecture gives the wireless operator the flexibility to deploy multiple 2G and 3G protocols as well as future 4G protocols such as LTE and WiMAX. In our wireless business we see a trend towards consolidating wireless radio capacity in so called base station hotels. These hotels can be located in less expensive rental locations and therefore save the operator in equipment, installation and commissioning as well as significantly reduce annual operating costs. The hotels are connected to compact remote outdoor radio heads via fiber runs or millimeter wave wireless transport links using our proven digital over RF technology. We believe we are approaching the tipping point of the adoption of this network architecture and see many of our customers implementing base station hotels using our digital distributed antenna solutions. These allow our customers to maximize base station resources by distributing and managing wireless capacity over multiple radio heads. Lastly, one of the most exciting outcomes of combining LGC and ADC capabilities is one that perhaps few have considered. Every installation of wireless coverage capacity solutions has wired connectivity at its core. ADC’s extensive experience in copper and fiber infrastructure uniquely positions us to provide a truly integrated solution versus our wireless only competitors. Our third strategic growth initiative is growth into developing country markets. We are poised to accelerate our sales growth and to leverage our operations in developing countries markets. Developing countries in Asia and Eastern Europe, Latin America and Africa are important to ADC as these areas are investing in communications infrastructure at higher rates than develop countries to meet significant demand for communications services. In many cases, these countries need products designed for their unique application and installation requirements. In January, 2008 we closed our acquisition of Century Man a leading provider of connectivity distribution frame solutions in China. Our market research indicates that Century Man provides ADC a leadership position with a number two market share in the connectivity frame market in China. The China market continues to be one of the fastest connectivity growth markets in the world and this acquisition makes us ideally positioned to participate in that opportunity. Since we closed on Century Man just two weeks before the end of our first quarter in January, we only reported $1.5 million of sales in that period. The Century Man integration progress is going well. We completed a very successful February sales meeting with the combined ADC and Century Man go to market teams and are now meeting with all of our key customers throughout China. Given that the Chinese New Year holiday was February 7th through the 23rd customer activity was slow over the period. The acquisition of Century Man has given us strong relationships and customer sales with top China carriers such as China Mobile, China Telecom, China Netcom, China Unicom and China Railway. Additionally, sales and relationships with original equipment manufacturers such as ZTE and UT Starcom also provide a sound foundation for future growth opportunities. Chinese customers have found this acquisition to be beneficial with the combining of two strong complimentary brands. Century Man has an excellent lower cost position and fit for the China market. We believe a broader product portfolio of both Century Man and ADC products that are more tailored to local China carriers’ needs will drive new sales opportunities. In addition, we believe these products are also suitable for other similar developing markets such as India and other parts of Southeast Asia. Finally, our fourth strategic growth area is continuing our competitive transformation initiative. Coupled with the need for sales growth we will continue working on our competitive transformation initiative, a multiyear program designed to serve our customers better, achieve significant competitive advantages and establish cost leadership in our businesses. Through this initiative we expect to realize the benefits of our highly leveragable operating model to drive strong earnings growth and cash flow generation at higher sales volumes. In the first quarter of 2008 our excellent gross margin performance of 36% improved by 4.1 percentage points compared to the first quarter of 2007. We estimate that our competitive transformation efforts represented the most significant portion of this improvement. The smaller portion came from improved product mix and the LGC Wireless acquisition. Similarly the 1.5 percentage point sequential improvement from the fourth quarter of 2007 was mostly from our competitive transformation efforts and the remainder primarily the result of LGC Wireless. To conclude, we established great earnings momentum in 2007 and expect to grow sales and profitability in 2008 at or above the average rate globally for our industry. This is based on our expectation that normalized spending patterns will resume in 2008 as the merger integration of some of our key customers is completed and our belief that we are very well positioned to grow our market share in the fiber, copper and enterprise connectivity markets as well as in wireless capacity and coverage and developing country markets. The combination of these sales growth expectations and our continued efforts to competitively transform our operations drives our belief that we can grow operating income in 2008 at a rate faster than sales as we did in the first quarter of 2008 and throughout fiscal 2007. I’ll now turn the call over to Jim who will comment more specifically around our financial results in the quarter. James G. Mathews: Good afternoon to everyone. It’s my pleasure to share with you the highlights of our strong first quarter operating results. First, our sales of $339 million came in stronger than expected and were up 14% year-over-year and up 3% from the fourth quarter of 2007 excluding the $24 million in first quarter 2008 sales from the LGC Wireless and Century Man acquisitions, first quarter 2008 sales were up 6% year-over-year and were down 5% from the fourth quarter of 2007. This 5% sequential decline from the fourth quarter is at the favorable end of historical seasonality between our fourth and first quarters. Second, gross margins were very solid at 36%. This compared to 34.5% in the fourth quarter and even more favorably to the 31.9% in last year’s first quarter. Third, our operating income was up 156% year-over-year. Fourth, GAAP diluted loss per share was $0.24, this included however $0.52 per share of charges for a non-operating securities impairment, restructuring and operating impairment charges, purchased intangibles, amortization and stock option compensation expense. Lastly, total cash provided by operations activities from continuing operations were $6 million in the first quarter of 2008 and $127 million in the last 12 months ended February 1, 2008. Now, let’s go over those consolidated earnings in a bit more detail. Our GAAP diluted loss per share from continuing operations was $0.24 in the quarter which compares to a $0.06 loss per share sequentially and earnings of $0.08 last year. This quarter’s $0.24 loss per share includes $0.52 of charges which comprise $0.43 per share for a non-operating securities impairment charge, $0.01 per share of restructuring charges, $0.07 of purchased intangibles amortization and $0.01 of stock option compensation expense. As Bob mentioned earlier, gross margins of 36% continue to outperform expectations which is largely attributable to the significant progress in our competitive transformation initiatives similar to our fourth quarter outperformance along with a smaller benefit in the first quarter from our LGC Wireless acquisition. Selling and administration expense was $74 million in the first quarter compared to $76 million in the fourth quarter. The fourth quarter expense included a $10 million grant to the AUC Foundation as well as incentive compensation accruals. R&D of $20 million in the quarter compared to $18 million in the fourth quarter. The higher operating expenses in these categories in the first quarter are primarily a result of the two acquisitions that we closed during the quarter. Moving on to working capital, DSOs at 58.6 days were above our 50 day goal and this is also about the 51.7 days in the fourth quarter and 46.4 days of one year ago. The DSO increase in the first quarter 08 was due mostly to our two mid quarter acquisitions where we only have a partial quarter of sales but had the full amount of receivables on the balance sheet from the acquired companies. DSOs for legacy ADC were actually flat versus the prior quarter. Our first quarter inventory turns were at 4.4 times down from 5.1 in the fourth quarter and 4.8 turns reached one year ago. Turns also were impacted by our two recent mid quarter acquisitions and we expect to improve turns during our ongoing integration processes. Strong operating earnings partially offset by working capital investments and the payment of incentives earned during fiscal 2007 generates $6 million in total cash provided by operating activities from continuing operations in the first quarter. For the 12 months ended February 1, 2008 which generated $127 million in total cash from operating activities from continuing operations. Depreciation and amortization expense was $20 million in the first quarter which is up from $17 million in the fourth quarter due to both of our recent acquisitions. Property equipment and patent additions net of disposals produced a net expenditure of $7 million in the first quarter which was flat versus the $7 million that we spent in the fourth quarter 2007. ADC’s total cash, cash equivalents and available for sale securities were $899 million as of February 1, 2008. The increase from $708 million at October 31, 2007 was primarily a result of $439 million from a convertible note issue in December, 2007 partially offset by $197 million paid for the acquisition of LGC Wireless and Century Man as well as a $50 million other than temporary impairment charge on available for sale securities. This impairment is recorded as an unrealized non-operating charge in other income expense. A few further comments on our impairment charge for available for sale securities. As we disclosed in our annual report on Form 10K for the 2007 fiscal year and as last updated on a Form 8K filed on February the 6th of this year. Current capital market conditions have significantly reduced our ability to liquidate our remaining auction rate securities which we classify as available for sale securities on our balance sheet. However, all of our auction rate security investments have made their scheduled interest payments based on their par values. In addition, the interest rates have been set to the maximum rates defined for the respective issuers. During the three months ended February 1, 2008 we recorded a $50 million other than temporary impairment of our holdings in auction rate securities. As of February 1st we held auction rate securities with a par value of $170 million and a fair market value of $90 million. As noted in our earnings press release based upon prices and monthly account statements, as of February 29th which are provided by the firm who manage our investments in auction rate securities. We presently estimate that we will record an additional charge of approximately $7 million during the second quarter of fiscal 2008 to further reduce the fair value of these securities. All of the auction rate securities we hold are now classified as long term on our balance sheet. We do not expect to be able to liquidate these auction rate securities until a future auction is successful or until we decide to sell the securities in a secondary market. A secondary market sale of any such securities could take a significant amount of time to complete and could potential result in further loss. I want to state again how disappointed we are at having to record this non-operating impairment charge in our investment portfolio due to uncertainties in the capital markets regarding auction rate securities. As we’ve stated before we believe ADC has always taken a conservative approach to investing our cash. Our corporate policy specifies investing only in highly rated investment grade securities with preservation of capital and liquidity as primary objectives. We’re very displeased that certain highly rated investment grade securities in our portfolio are currently in liquid and have lost value. Capital market conditions for auction rate securities remain uncertain and we will continue to monitor these investments very closely. That stated, our balance sheet and our cash position remain very strong with $793 million of cash and cash equivalents we currently expect that our existing cash resources will be sufficient to meet our anticipated needs for working capital and capital expenditures to execute our business plan as well as to pay $200 million for the maturity of our convertible notes that come due in June of this year. I will now provide annual financial modeling guidance. As Bob mentioned in his closing remarks, we expect to grow sales and profitability in 2008 at or above the average rate globally for our industry. The combination of our sales growth opportunity and our continued efforts to competitive transform our operation, drives our belief that we can grow operating income in 2008 at a rate faster than sales just as we did in the first quarter of 2008 and throughout fiscal year 2007. To date, we have not seen an impact on our business that we would attribute to the current concerns in the general economic environment. Like most companies however, ADC continues to monitor these developments as a general economic slowdown or recession could have an adverse impact on our business going forward. In fiscal 2008 we currently expect our second quarter 2008 sales will be sequentially higher than the first quarter by 10 to 15% as customers begin spending their 2008 capital budgets which should be continued through the balance of the calendar year. Expectations for sequential growth in the second quarter of 2008 are slightly lower than in recent years due to the strong performance we just generated in the first quarter of 08. We believe that sales will peak in the third quarter of 2008 at a level slightly above the second quarter and as in the past three years we expect fourth quarter 2008 sales to be lower than the third quarter as customers’ capital spending nears the end of the calendar year. In 2008 quarterly gross margins are expected to be 35% or higher however, they are expected to rise and decline with sales volumes and mix from quarter-to-quarter resulting in the first and fourth quarter’s gross margins generally being lower than in the middle two quarters. On a continuing operations basis ADC currently expects its 2008 sales to be in the range of $1.480 to $1.505 billion dollars. This includes the results of both the LGC Wireless and Century Man acquisitions that closed in the first quarter of 2008. Based on this annual sales estimate and subject to sales mix and other factors GAAP diluted EPS from continuing operations in 2008 is estimated to be in the range of $0.32 to $0.42 which includes the following estimated charges or benefits net of tax. First, amortization of purchased intangibles $0.31 per share, stock option compensation expense $0.05, restructuring and operating impairment charges of $0.01 per share and from the $57 million of non-operating impairment of available for sales securities including the amount through February 29, 2008 and subject to further evaluation $0.46 per share suggest a repeat of the GAAP EPS on a diluted basis for the year in a range of $0.32 to $0.42 with amortization of purchased intangibles at $0.31 per share, stock option compensation expense at $0.05, restructuring and operating impairments at $0.01 per share and the impairment charge on available for sales securities of $0.46 per share. This guidance excludes potential future restructuring, operating impairment, non-operating impairment associated with our available for sale securities, any incremental purchased intangible amortization and certain non-operating gains and losses as well as benefits from any reductions of the deferred tax asset evaluation reserve of which the amounts are uncertain at this time. The calculation of our GAAP diluted EPS from continuing operations includes the if converted method which assumes that our convertible notes are converted to common stock if they are dilutive to EPS. This calculation is specified in our earnings release. Ending briefly with income taxes, as of February the 1st we had a total of $1 billion in deferred tax assets that have been offset by a valuation allowance of $953 million. This net asset is primarily in other long term assets on our balance sheet. Approximately $213 million of these deferred tax assets relate to capital loss carryovers which can be utilized only against realized capital gains through October 31 of 2009. Based on our recent experience generating US income along with our projection of future income we recorded a tax benefit of $49 million in fiscal 2006 and an additional $6 million in fiscal 2007 for a total of $55 million related to a partial release evaluation allowance. This reflects the portion of our US deferred tax assets that are expected to be realized over the two year period subsequent to fiscal 2007. For financial modeling purposes we expect the effective tax rate to be 10% for each quarter of this year. As we generate pre-tax income in future periods we will currently expect to record or reduce the level of income tax expense until either our deferred tax assets are fully utilized to offset future income tax liability or the value of our deferred tax assets are fully restored on our balance sheets. Excluding the deferred tax assets related to capital loss carryovers most of the remaining deferred tax assets are not expected to expire until after fiscal 2021. To summarize, we remain committed to strategically managing our business for long term growth and profitability. We’re executing a multifaceted long term approach to growing value for our shareholders in a market with ever increasing competitive pressures. We intend to continue building ADC into the leading global network infrastructure company that has the potential to grow faster than the global industry growth rates while having strong earnings leverage with increasing sales volumes. We’ll now open the call up for questions.

(Operator Instructions) Your first question comes from the line of Tal Liani.

My question is regarding your organic sales growth in fiscal 2008, if I were to exclude the roughly $125 to $150 million that you would get from your two acquisitions in fiscal 08, just looking at what they did in the last 12 months, the remaining sales from my calculations are probably going to be flat to slightly down year-on-year. So, first I want to confirm that math and if that math is right why are we seeing that weakness in your organic sales. James G. Mathews: I think if you go back and you actually exclude the impact of LGC and Century Man you’d find that our organic growth rate would be mid single digits.

But, if I look at LGC and Century Man, I think one did $40 million and the other did $80 million last year so that’s about $120 to $125 million assuming that they have some growth this year, you exclude that from the $1.5 billion or so that you’re guiding for fiscal 08 then I get to about $1.37 billion or so, so that suggests very low organic sales growth. James G. Mathews: Well, there are obviously some estimations in all those numbers. When we look at our own organic growth as we guided earlier this year, we expect to be in the low to mid single digits and I would say given our first quarter results we would reiterate that.

So perhaps I can ask the question in a different way. Among your organic segments which segments do you expect to be strong and which segments to you expect to be weak in 2008? Robert E. Switz: I think the other thing to consider in your estimates is, as Jim had mentioned, there’s late quarter and mid quarter closes on the acquisitions. So, we don’t necessarily get the full revenue impact. But, to comment briefly on growth, certainly our core fiber business we expect to see significant growth. Right now as we mentioned it’s in the double digit range so we would expect based on the trends that we’re seeing to see that growth continue. Our structure cabling business has been posting decent growth as well. Clearly, our wireless business although the comparisons are a little hard to calibrate given the inclusion of LGC to the ADC business but again, wireless is an area that we would be expecting double digit growth rates. And, our copper business remains strong and I think as you know we tend to model that down each year and I think it’s fair to say that at a minimum we don’t see it going down as much as we modeled and in the case of last year we actually had some growth. But those are the areas I would say that would stand out in terms of the highest growth rates. James G. Mathews: Bob’s point was excellent on the timing. Century Man really will just be in our results for nine months this year, LGC for 11 months.

Got it. And, just one last question, now that you have made these acquisitions what should we assume is going to be your target for gross margin and operating margin as we look at the longer term model for ADC? How should we think about gross margins and operating margins? James G. Mathews: I would say at the operating margin level we haven’t changed our goal. Robert E. Switz: Remember we gave you the goal of 14% so I think with gross margins improving assuming revenue continues to accelerate, that gets us closer to the OI and gets us there faster assuming we sustain the gross margins. I would say at the gross margin level I think our past guidance, and correct me if I’m wrong Jim, I think our past guidance was suggesting something in the 34% range. So, I guess I would say at this point we would stick with that with the caveat that assuming our CCT, our competitive transformation effort continue and assuming other initiatives that we have around improving gross margins continue we can probably look to the upside to that at some point in time. I’m not going to forecast that today but we clearly like the direction that our gross margins are going in.

Your next question comes from the line of Christian Schwab.

One quick question on the model first, share count that we should be assuming on the go forward basis similar to what we just saw here in the January quarter on a diluted basis? James G. Mathews: Yeah, then you adjust for the if converted method calculation. So we’re giving that detail near the front end of the release as we usually do.

Perfect. James G. Mathews: [Inaudible] interest add back and the additional shares for the converter.

Correct. Okay. As we look to 2008 with normalized spending patterns resuming at Bell South and Cingular implied, can you quantify how big that opportunity is? Just a return to normalized spending there? Robert E. Switz: I’m not going to put an absolute dollar amount on it, Jim might have a better fix on what that number might be because we’re almost looking at a year and a half of transition so it kind of depends on which year you’re comparing it to but let me say the following. At this point in our first quarter, if we look at Q1 08 versus Q4 07, Bell South is off about 7%. If I look at Q1 2008 versus Q1 2007 they’re off in double digit percentages. So, they haven’t turned the corner yet. Cingular was about just a modest decline in Q1 08 over Q4 07 but I think there’s significant upside if indeed the rates revert back to something that approximates normal.

So, should we assume that significant upside is not yet in your estimates but just a return of some type of up – I’m just trying to gage how much upside from Bell South and Cingular you’re assuming versus what could potentially be there. Robert E. Switz: We do not have a lot of upside built in. I think as we look out over the year we have factored in some improvement but I would say it’s clearly not at normal levels so there is opportunity there.

So, estimates could prove to be conservative should they actually return to true normalized spending? Robert E. Switz: Correct.

Then on your next comment regarding market share growth. If we look at your business growing in the mid single digits, let’s say the industry grows flat to maybe 1 to 2% and you grow 5 to 8%, how much of that growth are you getting from your penetration in to developing countries and market share gains? Just so we can gage that. Rob I would say right now developing countries probably will not in 08 represent the larger portion of that. I would see that coming quite frankly, based on current trends, some of that’s going to come out of EMEA, we’re off to a very good start in EMEA. Our fiber business is doing extremely well there. I think you’ll recall me saying from prior conference calls over the past year or so that we never did get the full benefit out of the [inaudible] cross selling in our fiber business and that that would be coming towards the end of 07 and 08 and I think we’re now seeing that. Also, we’ve been highly focused on our current core product line there where a year or so ago we got somewhat distracted focusing on the large DT cross connect opportunity quite frankly, maybe to the expense of the fiber products and other products. So, with renewed focus on that part of the business as well as a reflection of creators of attempted cross selling I think we’re making significant penetration in EMEA around fiber. At the high end we continue to do well in structure cabling in certain verticals particularly. So, we clearly see some market share gains there. So, that’s just maybe a snap shot of a couple of the areas.

Great. Then, just one last question then, on the share gains in the structure cabling and enterprise cabling do you think you’re gaining share versus the other players or the number one player? Robert E. Switz: I’d say it varies with the project and clearly the share we take is from the larger market leaders.

Okay. And you would expect double digit growth year-over-year in that business? Robert E. Switz: In the structured cable business?

Yeah. Robert E. Switz: Probably right now I’d put it at the mid to upper single digit. It could convert into double but I would say for now mid to upper single.

Your next question comes from the line of [Amid Bob Passey]. [Amid Bob Passey]: My first question was just on your gross margin guidance, I think you said you expect gross margins to be north of 75% on a quarterly basis for the rest of the year. I’m just wondering why that would be the case given the fact that you did 36% in the first quarter and I suspect the sales in the subsequent three quarters would be higher than the first quarter. So, maybe you can just help us understand why not north of 36% rather than 35? James G. Mathews: Well, there were some mix – we had some relatively favorable mix issues in the first quarter. Some of our higher margin projects came in and I’d acknowledge that there’s some conservatism in those numbers where we’re a bit cautious as we look out. But clearly, our first quarter numbers were very robust and we’re reluctant to forecast an absolute repeat of those but that’s why our guidance at 35% or above is sort of open ended. Robert E. Switz: The other thing is even within our competitive transformation program this particular quarter we experienced pretty high volume in fiber and a lot of our competitive transformation early efforts have been focused around the fiber product line. So, that also contributed to very healthy margins in the first quarter. If the mix continues along those lines then we should see those benefits continue. But, at this stage of the game I think we’d like to have another quarter under our belt to get a better feel of where we think margins are going on a more permanent basis. [Amid Bob Passey]: Okay. Then, I just wanted to confirm the guidance you provided for the full year 2008, on an adjusted basis if I exclude a lot of the one-time events and exclude stock option expense, have you basically raised guidance by about $0.03 so it’s about $1.15 to $1.25 from $1.12 to $1.22 previously? James G. Mathews: Yeah. [Amid Bob Passey]: Okay. Then, just as far as thinking about the business model for the rest of the year, is it fair to assume once we include the impact of Century Man that R&D should roughly be in the 5.5 to 6% and SG&A in the 20 to 21%, is that sort of the right levels to be thinking about these two items? James G. Mathews: That’s about right. [Inaudible] with LGC in the mix because LGC is a high margin business but is also a big consumer of R&D. So, even though proportionally it’s not that large, its disproportional in terms of its R&D expense so you might see that rise to the high fives or something like that. [Amid Bob Passey]: Then just my last question was interest income in this quarter was actually higher than we had anticipated, is that because the convert effect didn’t kick in until late in the quarter? I’m just wondering how to think about interest income going forward and what explains what we’ve always a relatively large number for the quarter. James G. Mathews: Well, the convert was in there for half the quarter. Realize to that we had a bit of benefit from a reduction in rates on the floating rate convertible, the 2013 maturity coming down so much so just some of the offset there benefitted us. Also, I would say that in general the interest rates in the markets tend to lag a bit so you’re seeing a lot of rates come down but as various funds mature and roll over that’s when we’re starting to realize that. But, the vast majority of that was just from having the additional $440 million from the convert on the balance sheet. [Amid Bob Passey]: Okay. I apologize I had one other one, just very quickly, once you pay off the convert later this year are you still pretty comfortable with your overall liquidity position? James G. Mathews: Yes. I mean we’ve looked at available cash and think even with all working capital needs on a very conservative basis and paying off the $200 million that we have fully adequate cash on our balance sheet.

Your next question comes from the line of Simon Leopold.

I’d like to start with a housekeeping question, I apologize if I missed it but I was wondering if you mentioned your 10% customers in the quarter? Robert E. Switz: No, we didn’t. I have two 10% customers Verizon and AT&T.

And approximately where they came in for the previous quarter? Robert E. Switz: Collectively in this quarter they’re about 32% of revenue and that’s similar to where they have been.

Okay. I’d like to come back to the gross margin question if I may. You did 36% this quarter, you’re calling for 35% or better in subsequent quarters and I think you said your long term target is still 34%? Is that correct? And if so, why wouldn’t you be guiding it up given your confidence about this fiscal year? Robert E. Switz: That was a historical target that we had put out periodically so I may have lost track and timing of when we may have revised that with you but I’m told we actually did offer some guidance of up to 35% I guess a quarter ago. So we’re at that high end by a point in this quarter.

Okay. Fair enough.

We have 34, we put in 35 in 2007 so we raised the goal to 35 and then having just raised it to 35 and coming in at 36 we want to just stay with that goal a little bit longer but certainly we’re out performing it already.

In terms of your new pro forma guidance, you beat this quarter by a good $0.08 and you’ve raised the fiscal year by $0.03 so I’m wondering if maybe we should be looking at some higher operating expenses than perhaps we have before? James G. Mathews: Well, I think there are a couple of things here, first of all the couple of projects that we were anticipating we would complete in the second quarter came in the first so there were probably $0.03 or $0.04 from that. The other thing is a question was asked earlier about interest income, clearly we are seeing interest income come down and even though that’s a non-operating item it’s hitting the EPS so you would see a disproportion amount of impact on the bottom line from that. Robert E. Switz: So there really is no plan to consciously raise operating expenses?

So when you talk about interest income coming down we’re probably looking at a good $1 million or more step down in the April quarter? James G. Mathews: I haven’t put that exact pen to paper but let’s see, you can think interest rates last year, midyear were running in the mid fives, we kind of came into the year in the mid fours and probably today reinvested cash is more at the 3.5% level.

Your next question comes from the line of Paul Silverstein.

A couple of clarifications if I may, a lot of discussion on the gross margins and I just want to make sure that I understood you all correctly. I thought I heard Jim say each quarter 35 or better and then later on I thought I heard a comment to the effect that some quarters would be 34ish and some better. I just want to clarify are you in fact telling us that you think it will at least be 35 per quarter and the question is how good? James G. Mathews: That’s the current thinking. Robert E. Switz: Yes.

Or better.

Then, on the op ex comment that you just made, I forgot what was the number Bob, but when you say no plan to raise op ex, I think it was you Bob, is that in dollars or is that in percentage terms? Robert E. Switz: That was in percentage terms or to address the last questioner about the guidance given that we didn’t reflect the full benefit he was asking if that represented the fact that you might be increasing your operating expense in the latter part of the year and the answer is no more than we normally would. So, clearly on a quarter-to-quarter basis there will be some absolute dollar of increase in op ex but the percentages Jim gave in terms of percent of revenue will hold.

Got you. So, higher in Q2 and Q3 and then it comes down in Q4. James G. Mathews: On an absolute basis.

Got you. Okay. The AT&T announcement this morning, I don’t know if you saw it but it was [inaudible] I assume when a carrier whether AT&T or whoever deploys more systems, more infrastructure in general that there’s a certain amount of basic connectivity in terms of the patch panels and distribution frames and other related equipment that go along with that? Would that be a fair assumption? Robert E. Switz: Yeah. I mean, there’s was quite a broad statement making, or at least what I saw of it, addressing their business solutions side of the business so depending on what it is that they’re going to spend for I would expect some part of that we would see a benefit in professional services both fiber and copper termination product and possibly some structured tabling. But, that’s just a guess right now Paul. It’s just great to see their increasing their budget.

Okay. Then the last one if I might, Bob in terms of your commentary about strong European fiber based businesses this past quarter, it sounds like you’re not attributing that and perhaps not surprisingly to the FTTX initiatives. I know there’s been a regulatory law jam not just in Europe but also in Asia Pac but there have been a number of country announcements over the last month or two albeit that the European regulatory agency is still trying to hold it in check but it look likes at least at a country level the regulatory agency has been green light and [inaudible]. In terms of your guidance have you factored in anything? Or if you have, what have you factored in from these FTTX projects going forward? I’m assuming your one project doesn’t move the needle but collectively either the European initiatives and/or the Asia Pac initiatives could influence your growth rate. Robert E. Switz: In our 2008 outlook there’s not very much factored in to our current estimate. I’ve been fairly candid last year going into this year that I expected the international benefits probably to start to occur at the end of calendar 08 going into 09. I think that’s probably still the same but if it isn’t then it would be business, if we win it, that would not be in the current outlook.

Bob, have you seen anything post the regulatory announcements have you seen any movement? Have you gotten any calls saying, “We want you to deliver.” Or, is it still too early for that? Robert E. Switz: No, I wouldn’t say it’s at that stage but clearly there is a lot of activity going on. Europe has moved slower than things in the US but clearly that has certainly been a very positive sign to those carriers. We are seeing increased levels of activity but I can’t say that anybody picked up the phone and placed an order because of it. But, certainly it’s sending the right message to the carriers.

Your next question comes from Kenneth Muth.

Can you just talk about a little bit about the commodities and the impact on the margin profiles? Are there any benefits there? Any pastures that we’ll be hitting in this fiscal year? Robert E. Switz: I’m sorry will you repeat the question? I missed the very first part.

Just about how the commodities and if you’re pass through costs there and how that might be impacting gross margins? Or, are you actually having some price erosion due to your not being able to pass through. Robert E. Switz: We have been and will continue to pass through commodities prices. But, it’s not at large a part of our business as it might be some others. So, it’s a factor but it’s not going to move the needle dramatically such as people that are actually out there selling a lot of copper cabling for instances.

Okay. But, even on the enterprise side? Could you just maybe talk about – Robert E. Switz: We are passing along commodity price increases in that part of our business.

Okay. Then just on the carrier side with all the announcements of flat rate pricing, can you talk about any impact that you might and maybe not in the near term but in any longer term impact that flat rate pricing plans would impact on your business? Robert E. Switz: I can’t say – I can’t translate from that marketing effort and pricing effort on their part with their customers, how that might or might not come back to us. I would day probably not as a direct result but quite frankly, we’re always working with our customers to make them more efficient and help them with their economics and so forth. So, I would see us continuing to do that but I don’t see any direct one-for-one on our business as a result from that?

Okay. Then can you just maybe talk about any market share shifts with yourselves and [inaudible] at Verizon or AT&T and has bit been fairly consistent or have there been any movements one way or the other? Robert E. Switz: So far this year, as I mentioned we’re early in the year. I have not seen any market share shifts from where we were last year. So, I think both of us are going into 08 with our market shares intact from where they were when we exited.

Your next question comes from the line of Tim Savageaux.

A couple of question for you, first on the fiber business where you mentioned it was pretty strong growth performance, actually nearly 20% and I wondered if you could is first and a couple of follow ups here, described what’s driving that fiber connectivity? It may be that Verizon showed up a little bit earlier this year, I’m not sure if that’s what you’re saying? You’ve mentioned sort of the core fiber optic which I take to be more central office versus outside plant oriented. Or, if you can talk about that growth and whether you think 15 to 20% growth is sustainable for fiber? Robert E. Switz: Yeah, you’re correct it’s in the core. It’s not just Verizon, it’s global. We’re seeing increased demand across the board for our core fiber products. As you recall last year, I’m just going to pull the growth rates off the top of my head but core fiber has been in high double digits for a couple of years now and I think what we’re seeing is a couple of things one, you know there is a need for more capacity and more bandwidth and it does reflect the evolution of the networks to fiber based. So, we do see continued growth in the core fiber business for the foreseeable future.

Great. That sure brings me to the overall organic growth question again which is to say should your fiber connectivity business continue to grow 15, 20% and it sounds like you’re saying copper looks flattish, it was in the quarter, maybe down a shade, but that’s 60% of your business at a 10% rate right there, enterprise we know is growing, services we know is growing, also in the quarter both I think in double digits or maybe a little less than enterprise. So I understand HDSL is declining but if I do the back of the envelope math and add all that up unless something funky is planned for the second half this sounds like a high single digit grower, not a low single digit grower, or maybe a double digit grower. I’d love to get your thoughts on that as I kind of – Robert E. Switz: Are you saying the overall business?

Uh huh, if you could add up the component parts. Robert E. Switz: The service business is one that’s a little tricky because it fluctuates up and down with customer volatility and that’s a couple hundred million dollar chunk of our business so that one’s a little tough to plan around. Also the copper business as we mentioned has proven to be a little difficult to forecast in book and ship business with a transitioning technology and if it were to move down on us and not continue to perform the way it has then clearly that’s a healthy chunk of business that can ding us in margins and our access net business that’s the AMIA cabinets that we had a benefit from in prior years. That business is not growing, it sacked us about a 7% decline. So I think the guidance we’ve got out there in terms of growth is probably reasonably accurate, maybe a little conservative. Under the right set of circumstances could we see double digit? Well sure that’s possible.

Yeah, it does sound a little conservative and on that front let’s talk about gross margins for a moment. In each of the last couple, three years you’ve had anywhere from 250 to 300 basis point sequential increases in gross margins in the second quarter and I understand you’re expecting less revenue growth because some of it came in a little bit earlier and so I wouldn’t expect to see that degree of improvement, but I would still expect to see a sequential up and you kind of hint at that in the text of the release, so as we look at 36 moving up from there, probably staying up there and heading back down for the year it seems like 36 + should be a good expectation and as you look forward into 09 and continue to grow as you continue to cut costs where is the negative pressure on gross margins? What are the factors that may drive it down in 09 versus the way – Robert E. Switz: Well, certainly certain materials that we can’t pass along could have an impact. I would say pricing clearly will have an impact. Over the time period there are pieces of business that –

All those factors are in play right now, though, I don’t know is something really changing there? Robert E. Switz: No, I mean they’re not in play in this quarter, okay? But over a future time period very clearly product pricing could have an impact on the business. Mix as well even from a standpoint of within our CT program the things that we’ve cost reduced the most at the front end those need to continue to be the high runners. So there’s a number of factors in there plus, to be perfectly honest, to get down to the decimals that you’re referring to it’s a little challenging to be that precise around gross margins.

Well, understood, but directionally you have increased margins pretty substantially in the second quarter for several years now. Are you saying it’s not fair directionally to expect them to go up in Q2? James G. Mathews: Tim, I would say if you look at the fiber business was so strong in the first quarter and as Bob said that’s where we’ve seen an awful lot of the competitive transformation benefit so obviously it’s tough to predict that continuing in that proportion. We have just added, although again it’s not a huge piece of the business, Century Man which is clearly a pretty basic type of product business in the China market and that’s going to be certainly well below our historical average margin. So we do have some pressures running against us. Is the guidance conservative? Probably somewhat but I think we just really want to see how some of these trends develop looking ahead before we feel comfortable that those are going to be sustainable.

I hate to beat this so I’ll leave it alone after this last question, but in the release when you talk about first and fourth quarter margins generally being lower than the middle two quarters is that theoretical? Is that in a different year or – when you say that what do you mean I guess? James G. Mathews: Tim, I think first quarter was particularly strong and it may in fact break the rule a little bit this year in terms of being lower than second and third quarters. Do I think we’ve got a shot at sustaining a 36% gross margin for the year? Yeah, sure do and maybe we exceed that. But at this point again I would hesitate to view first quarter as one of the lower gross margin quarters of this year. Certainly not all the stars align but some things went well. We obviously are going to try to continue those trends. As Bob mentioned we will expect to have cost pressures and other factors come into play, so I think I’d probably leave it there.

Your next question comes from the line of Steven O’Brien. Steven O’Brien: I was wondering if you could about the linearity of Q1 in terms of the various months and what you saw in January in comparison to some of your peers in the fiber to the homes base who, while not direct competitors, saw some slowing orders and saw some price downs. Did that impact your January results in the quarter? Robert E. Switz: Our quarter was reasonably linear, there was no real surge beyond the norm in January. In fact January came in on the historical average so to that extent we had a reasonably balanced quarter. As a point of fact each quarter had something over 30% in each quarter. I’m not sure I can speak to all the problems of the peers that you referenced but we didn’t see anything highly unusual in our first quarter. Steven O’Brien: So if we look at 10 to 15% sequential growth could you characterize that based on where you think that would have been had there not been a couple pull throughs in Q1 and where it would be relative to the sort of historical sequential growth that tends to be a bit higher in Q2? And then is there something fundamental going on, maybe it’s acquisitions although I would think in this case acquisitions would lead to higher sequential growth but changes in your business that may make Q2 less of a huge sequential up tick next quarter? Robert E. Switz: I’ll answer part of it and I’ll ask Jim to chime in as well. I think going from first to second quarter I think, as best I can tell from order pattern as Verizon continues to streamline and become efficient in their procurement logistics as they did last year and so I think this year we’ll probably see even more of a balance over the course of the year than we did last year so that would account for a little bit of the change in the sequential pick up from Q1 to 2. In terms of the acquisitions it’s a little early to tell because each of them have patterns that have to be accounted for as part of the ADC pattern. So I’m not sure that they yet if they really are going to take away or add but clearly I think at this juncture we’re still learning about their quarterly, monthly patterns. So I don’t see anything unusual in the business other than what Jim articulated. There was some business, I wouldn’t use the word pull through, I would use the word got closed in Q1 when we’re planning for quite frankly certain projects to hit in the second quarter. So with those reflected in the first quarter, we’ve adjusted for that. Now could they be backfill? That’s possible. But clearly in our plan we were accounting for them in the second quarter and then again the Verizon improved linearity also would account for some of that. You care to add anything to that, Jim? James G. Mathews: Just probably that the 20% year-over-year growth in fiber which is now really our largest single product line, certainly we expect very robust growth but to predict that [inaudible] that is probably beyond expectation. Steven O’Brien: If you characterize the fiber strength between Europe and North America in that 20% would you say that either geography was higher or lower than that 20% growth this quarter? James G. Mathews: Just keep in mind that our business in the US is substantially larger so it’s disproportionate in terms of the impact but it was actually on a percentage basis much higher in AMEA than it was in the US. It was actually in the mid 30s in AMEA, fiber growth.

Your next question comes from the line of Jack [Monty].

I’m just trying to think about the operating margin target of 14% and kind of the drivers that get us there. How should we think about it in terms of volume, maybe also in terms of mix or operating expense reductions and how we get from the immediate base line of 10% to a 14% longer term? James G. Mathews: We have reiterated recently on a number of occasions actually that probably to get to the 14% target which we still believe is achievable that we’re going to have to grow and likely that growth will be up into high one point million range. That is near the $2 million range to be able to get the top line leverage to do so. Obviously we took some steps in that direction with our recent acquisitions, we’ll probably go through even with the synergies that we expect we’ll go through some periods of time obviously with integration costs and that sort of thing. But as we build these and gain efficiencies and start to utilize go to market channels and various other things across ADC legacy and the acquisition lines we think we’ll see a lot more of that benefit come through in terms of overall efficiency and reduction in op ex. I think sort of one point of comparison is if you look at our first quarter op ex on an adjusted basis, that is as we have measured that 14% and you just look at that historically we were in the 8’s in the first quarter. That’s really strong for ADC. On a year-over-basis for example that was up 3.5 margin points versus the first quarter of just last year. So clearly we feel like we’re heading toward pretty solid double digits or soon to be double digits and again with some top line growth and some additional efficiencies through our competitive transformation we believe that that 14% target is still reasonable. How quickly we get there probably depends on how quickly we grow to the revenue levels I’ve described.

So from like a modeling perspective, if I just model sales growth, keep the gross margins at 35% and then basically grow the revenues to get to the 14% that’s kind of how you’re thinking? And I would want to keep this R&D and SG&A at 5% of sales and 20% of sales respectively? Is that what you’re thinking? James G. Mathews: I think that’s generally directionally right. I mean it’s hard to say – if some of this growth occurs through acquisition it’s difficult to characterize exactly what the structure of those businesses might be. LGC for example is a high margin but it’s a high R&D business as well so it’s sort of difficult to be too specific but I think generally the direction that you’re taking it in is right. Having said that I would probably think we are going to expect to see margins continue to come up somewhat and to get to the 14% OI we would probably expect to see gross margins above the 35% that you’ve referenced.

Your next question comes from the line of Brian Coyne.

Most of my questions have been asked so I’ll just do sort of a quick one. I don’t know if you’ve touched on it but on cost transformation outlook, I know you’ve talked about $30 million this year and perhaps still more in 2009, 2010, do you have any updates on kind of where you think directionally that might go and sort of those out years and what might be the factors that could drive that? James G. Mathews: When we initially defined this as what we used to call competitive cost trends [inaudible] we recognized pretty quickly that this becomes an ingrained part of business culture here and think as we’ve now turned that into sort of a three year rolling program in looking at 09 and 10 I think it’s obvious that it becomes more and more difficult to get incremental benefit. If you sort of look back at what we’ve done in the first couple of years the first two years total to around $60 million in annual benefit. We think this year as you just said we’ll add another $30 to that. I think we could probably do that for another couple of years, incrementally, but clearly it gets somewhat more difficult as we move forward and then again on an absolute dollar basis you’ve got to relate it to the size of the business. But I would expect to say that based on things we have a line of sight on that the opportunity in 2009 and 2010 are probably somewhat along the same lines that we’ve got this year.

Your next question comes from the line of George Notter.

Any chance you guys could give us the exact breakdowns between Verizon and AT&T as a percentage of sales? Robert E. Switz: Verizon is about 16.5 and AT&T is close to 16.

Then as another question I wanted to ask also about your forward-looking expectations for the year, what have you baked in, in terms of your thoughts on the economy in terms of the overall expectations? Robert E. Switz: We’re being somewhat cautious at this point in time although in discussions with many of my customers and others there is not a sense that our industry is going to be impacted in any major way because of a recession in 08. That could prove to be wrong but that’s the general thinking right now. I think we’ve taken an appropriate level of caution and we’re monitoring it closely but we haven’t done anything drastic in terms of our numbers.

So it fair to say that if the economy doesn’t worsen that it would – Robert E. Switz: George, are you still there?

That line has been withdrawn. James G. Mathews: I think that’ll conclude the call for today. Is anybody else in the queue?

No, sir there are no further questions. James G. Mathews: Okay, we’ll conclude the call then for today. Thank you all for joining us. Good night.

This does conclude today’s conference call. You may now disconnect.