Greg Klaben - Vice President of Investor Relations S. Kenneth Kannappan - Chief Executive Officer, President and Executive Director Pamela J. Strayer - Acting Chief Executive Officer, Chief Financial Officer and Senior Vice President

John F. Bright - Avondale Partners, LLC, Research Division David M. King - Roth Capital Partners, LLC, Research Division Tavis C. McCourt - Raymond James & Associates, Inc., Research Division Michael Latimore - Northland Capital Markets, Research Division Rohit N. Chopra - Wedbush Securities Inc., Research Division

Good afternoon. My name is Candice, and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter fiscal year 2014 conference call. [Operator Instructions] I'll now turn the call over to Greg Klaben, Vice President of Investor Relations. You may begin your conference.

Thank you, Candice. Good afternoon, and thank you for joining us for Plantronics' financial results for the second quarter of fiscal year 2014. Joining me today are Ken Kannappan, Plantronics' President and CEO; and Pam Strayer, Plantronics' Senior Vice President and CFO. The information presented and discussed today includes forward-looking statements which are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The risks and uncertainties related to such statements are detailed in our most recent 10-K, 10-Q and today's press release. For the remainder of today's call, we will be providing only non-GAAP metrics related to gross margin, operating expenses, operating income, net income and EPS. We've reconciled these measures in our earnings press release and in our quarterly Analyst Metric Sheet, both of which are available on the Investor Relations page of our website. Additionally, after the conclusion of today's call, the recording of the call will be available with information on our website as well. Unless stated otherwise, all comparisons of the second quarter fiscal year 2014 financial results are to the same quarter and the prior year. Plantronics' second quarter revenues were $194 million and our GAAP diluted earnings per share were $0.53 compared with $0.61 in the same quarter of the prior year. Non-GAAP diluted earnings per share for the second quarter was $0.64 compared with $0.70 in the prior year quarter. The difference between GAAP and non-GAAP EPS consist of charges for stock-based compensation, early exit lease termination, accelerated depreciation, amortization of purchased intangible assets and restructuring and other related charges, all net of the associated tax impact as well as the tax benefits from the expiration of certain statutes of limitations and other tax benefits that are not reflective of our ongoing operations. Please refer to the full reconciliation of GAAP to non-GAAP in our earnings release. With that, I'll turn the call over to Ken. S. Kenneth Kannappan: Thank you, Greg. First, I'd like to provide an update on my medical status. My leave of absence has ended and I'm very pleased to return as President and CEO. My doctors believe that the cancer, for which I took my medical leave in April, has been successfully treated. I'd like to thank everyone for their support during my leave. In particular, I would like to thank Pam Strayer for assumption of additional responsibilities as acting CEO and her excellence in carrying out those duties over the past period. I'd also like to thank the entire management team at Plantronics and all of our associates for furthering our progress on our UC strategy and corporate goals. I'm on the path to complete recovery and look forward to seeing you at investor conferences when I resume a normal travel schedule. We achieved revenue and earnings just below the midpoint of our guidance, with year-over-year revenue growth in the U.S., Europe, in Africa and Asia Pacific regions. Office & Contact Center revenues grew by 5% with core OCC revenue being flat year-over-year. As expected, core OCC was down sequentially due, at least partially, to the timing of deals in the June quarter. Voluntary job turnover, the key driver of headset replacement sales, remain sluggish, still down about 20% from prerecession levels. UC revenues grew by 22% year-over-year, with growth in every geography. Revenues were down sequentially for the first time and down in every geography sequentially. See outline in last quarter's conference call, we believe this is primarily due to the timing of UC deals. Our year-to-date UC revenues are up 36%, and this growth is in line with our long-term expectations for the market. In the past, we've emphasized that the quarterly forecasting of UC is challenging and that we may experience volatility. Our third quarter UC revenues are off to a solid start and the long-term fundamentals behind the UC opportunity remain as strong as ever. Our position in the UC market remains excellent and we continue to believe we are widely recognized as the leader in market share and innovation. In the Mobile product group, revenues were up 28% year-over-year through a combination of market share gains in the U.S. and abroad in mono Bluetooth and positive market acceptance of our new stereo Bluetooth headset, the BackBeat GO 2, which showed revenue growth in stereo of over 50%. We've introduced several innovative products recently. For the office, we introduced the Voyager Legend CS, building on our popular Legend headset platform with a new base to connect the Bluetooth Legend headset to your office desk phone, while also providing connectivity to your mobile and computer. It has all the features of the Voyager Legend, including advanced sensors, voice commands and superior sound quality. It intuitively directs calls to your phone or headset and allows you to automatically answer calls by placing the headset on your ear. We also introduced the CS500, a wireless office headset for high-density headset environments. Which allows approximately 3x the number of headsets be used in a small area. In the gaming area, we introduced and recently started shipping the RIG headset, the first gaming headset designed with mobile connectivity in mind, utilizing the mixture to combine gaming with music and mobile communications and the versatility of the game on PC, Mac, Xbox 360, PS3s, smartphones and tablets. Given that we are now halfway through our fiscal year, I'd like to provide an update on our goals for fiscal year 2014: first, deliver profitable growth; second, extend our brand; third, expand our consumer reach; fourth, optimize the culture; and fifth, scale for growth. Delivering profitable growth is one of our top priorities as we aim for the right balance between investing for the future and maintaining a high level of profitability and cash flow generation. In Q2, our operating margins were slightly below our long-term target range of 20% to 23%, although we are on track for the first half of fiscal year. We do expect operating margin to be below 20% in the third quarter due partially to mix in gross margin, investments we expect to pay off in growth over the next year and increased legal expenses related to litigation with GN. We've indicated we don't intend to let these legal expenses reduce our investment in the business, and we expect these expenses will primarily occur during the next 4 quarters. We continue to believe that our long-term model is correct and achievable. For the full fiscal year, we expect to be close to the range for operating margins excluding litigation expenses. Our second goal is to extend our brand association among consumers. We're undertaking new digital marketing initiatives, channel marketing programs and, as I've discussed in the past, we made investments in wearable technology and contextual intelligence that are increasing the value and relevance of our brand. Our website will be relaunched shortly to provide a better experience for enterprise and consumer customers. We made good progress on our third goal, improving consumer reach. Bluetooth market share in the U.S. has improved throughout the year. We've also grown our share internationally. Our expansion of share of Bluetooth category has proved successful in the BackBeat GO 2 launch and our new gaming portfolio is generating rave reviews. In addition, our innovations team is making good progress with incorporating advanced sensors and tracking into our products for greater consumer appeal. Our fourth goal relates to scaling for growth. In the first half this year, we've invested in a new more efficient manufacturing plant in Mexico, going online in August. We anticipate being at the full annualized savings rate of $2 million to $3 million beginning next fiscal year. We're on track with our Oracle R12 implementation which will allow us to simplify our processes, saving time and money, invest in our workplace and associates including greater investment in training and performance tracking. Finally, last quarter, I covered how we've been working to optimize the Plantronics culture and make it a great place to work and attract talent, combined with making institutional changes to support faster growth and increased innovation. On behalf of everyone at Plantronics, we want to thank you for your continued support. And I'd like to now turn the call over to Pam to discuss the second quarter results in more detail. Pamela J. Strayer: Thanks, Ken. I'll start with an overview of the quarter before getting into more detail. We achieved our revenue and earnings guidance for the quarter, although both were towards the lower end of our range. Second quarter net revenues were $194 million, representing 8% growth over the prior year. Non-GAAP operating income of $38 million is a decline of 5% compared to Q2 of last year. Non-GAAP EPS of $0.64 is $0.06 lower than the prior year, a decrease of 9%. As we discussed last quarter when provided guidance for Q2, our second fiscal quarter is typically a seasonally low quarter. Summer holidays result in a slow July and August. We typically see a strong pickup in bookings in early September, but the timing of that pickup can vary and have a large effect on our results for the quarter. This September quarter was the most back-end loaded we have seen in 3 years. The good news is that we did see a strong pickup entering the December quarter, but several metrics for Q2, including DSOs and cash flows from operations, were negatively impacted as a result. Now, I'll cover revenue in more detail. Total net revenues for the second quarter of $194 million were up $14.7 million or 8% compared to the second quarter last year. All of our regions experienced growth. The U.S. grew 8%, E&A grew 11% and Asia Pac grew 17% over the prior year. The following are key product line comparisons to Q2 last year. OCC net revenues of $140 million were up roughly $7 million and 5%. Net revenues from OCC products grew in all regions of the world. UC was the driver for that growth while core OCC was generally flat compared to the prior year. UC was up roughly $6.8 million or 22% over Q2 of the prior year, with strong double-digit growth in all regions of the world. Net revenues for mobile products were up $9.4 million and 28% compared to a year ago. This growth increased mobile revenues to roughly 22% of our total revenues compared to 19% in Q2 of the prior year. Our growth in mobile products was driven primarily by sales of our Voyager Legend and our Backbeat GO product. During the second quarter, we launch our new Backbeat GO 2 and the sales are outpacing the sales of the Backbeat GO 1 in the first full quarter of shipping. Non-GAAP gross margins were 52.3% this quarter, down from 54.7% in the Q2 of the prior year. Product mix was the primary reason for the decrease and accounted for a gross margin decline of approximately 130 basis points. As mentioned earlier, mobile revenues as a percentage of total increased to 22% from 19% last year. UC revenues as a percentage of OCC revenues increased to 26%, up from 23% in the prior year. In addition to product mix, higher E&O expense accounted for a decrease of 40 basis points, and increased freight out charges accounted for a decline of 30 basis points compared to the prior year. Non-GAAP operating expenses were $63 million, up $5 million or 9% versus the prior Q2. The major drivers of the increase were $3 million related to higher headcount and annual merit increases. In addition, we spent an additional $2 million for product launches in the quarter which increased our marketing expense compared to the prior year. Our non-GAAP operating margin was 19.6%, down from 22.3% in the prior year. Our effective non-GAAP tax rate for the quarter was 27%. As a result of all these items, our Q2 non-GAAP net income of $28 million was 6% lower than a year ago, yielding non-GAAP EPS of $0.64, down $0.06 from last year's Q2 results and in line with our guidance. Now turning to the balance sheet, we finished the quarter with $439 million in cash and investments on our balance sheet and generated over $23 million in cash flow from operations during the quarter. Of the $439 million in cash and investments at quarter-end, $40 million was domestic. We used $16.5 million to repurchase shares during the quarter. DSO was up 57 -- was 57 days, up from 54 days at the end of Q2 in the prior year. The increase was due primarily to the higher bookings in the third month of the quarter than in the prior year. These bookings are due after the end of Q2 and, therefore, we end up with a higher percentage of our quarterly revenue still in accounts receivable at the end of Q2. Net inventories were up $7.5 million versus a year ago. Inventory turns are up to 5.5 compared to 5.3 in Q2 of last year. Turning to our capital expenditures. Our Q2 investment was $14.2 million or 7.3% of net revenues. Approximately half of that investment relates to the completion of the building construction and furniture and equipment for our new manufacturing facility in Tijuana, Mexico. Depreciation expense on a GAAP basis for Q2 was $3.7 million and was down from $4 million in the second quarter last year. We're forecasting to spend $16.5 million in capital expenditures next quarter and $5 million for the fourth fiscal quarter for an annual total of roughly $50 million in the full fiscal year 2014. Turning to the outlook. Our third fiscal quarter is typically the strongest quarter for our mobile product due to the holiday season, therefore, we expect our percentage of revenues for mobile products to increase and our gross margins for the quarter to be down from Q2 levels. In addition, after a down sequential quarter for UC, we expect the third quarter to return to a more typical growth pattern for revenues from UC products. We believe total net revenues for the third fiscal quarter ending in December will be in the range of $202 million to $210 million. This forecast assumes gross margins to be closer to the low end of our long-term range of 50% to 52%, primarily due to a higher percentage of revenue coming from mobile products. And while we don't know if there will be one, we are conservatively including in our guidance the possibility of an E&O charge of approximately $1 million. Between our revenue mix and other factors, we believe our non-GAAP operating income will be approximately $36 million to $39 million. This results in an operating margin which is below our long-term targeted range. If you compare our forecasted operating margin in Q3 to this latest second quarter operating margin of 19.6%, approximately 3/4 of the decrease quarter-over-quarter is related to the decline in gross margin due to seasonal mix and conservative forecast for E&O. Approximately 1/4 of this decline is related to litigation expenses from the GN lawsuit. Our guidance expects that we will spend a little over $1 million on this lawsuit in Q3. As a reminder, we are including GN litigation costs as part of our non-GAAP results based on our policies for non-GAAP reporting. The GN lawsuit has recently entered the discovery phase and the impact to operating income from the associated legal expenses is particularly difficult to forecast. Actual expenses can vary significantly from our forecast. Non-GAAP tax rate is expected to be 27%. Based on all the above, we currently expect non-GAAP EPS to be $0.60 to $0.65 per share on average diluted share outstanding of approximately 43.8 million. The GAAP-reconciling items we expect in the third quarter include approximately $6 million in stock-based compensation expense and purchase accounting amortization net of associated tax. Therefore, we expect GAAP EPS of $0.50 to $0.55 per share for the December quarter. With that, I'll turn it back over to the operator for Q&A.

[Operator Instructions] And your first question comes from John Bright with Avondale Partners. John F. Bright - Avondale Partners, LLC, Research Division: Ken, welcome back. The UC revenues this quarter, down. It feels like it was a timing issue not only in the June quarter -- not only from the strong June results but also maybe some slipped out into the December quarter. Does that sound about right? S. Kenneth Kannappan: Yes. I think that there -- we had a number of large deals. Some of them were OCC rather than UC that hit in the June quarter, and we pretty much had expected we would have a bit of a dip into the September quarter based on what we knew of the likely timing. A number of the large UC deals in our minds remain very much on track. They're not all necessarily going to all hit in December, but some of them do begin, or at least are scheduled to begin in the December quarter. John F. Bright - Avondale Partners, LLC, Research Division: Can you give us an update on the competitive dynamics within the UC market? S. Kenneth Kannappan: Sure. I mean, I don't know if you want to narrow the question, but I guess, from my perspective, what we're continuing to see is that -- in terms of the providers, that Cisco and Microsoft continue to aggressively pursue the market with a good deal of success. We're believing that, frankly, we are very much recognized as the leading player in our part of the business not just in terms of market share, but in terms of innovation, in terms of support, in terms of thought leadership. And we're -- we feel very, very good about that position and how we've been strengthening it. John F. Bright - Avondale Partners, LLC, Research Division: Ken, when you mentioned your FY '14 updated goals, the third one, expand the consumer reach, I think, is what you said, or customer consumer reach. As I look forward to FY '15, you're going to have some capital allocation decisions, I think, because you're probably going to build up a bit of cash. This quarter, you, I think, completed the plant in Tijuana. You've done the work in Santa Cruz. So from a CapEx standpoint, I don't think there's any major projects out there, correct me if I'm wrong. Is M&A still something that is really unlikely, it's more just something that was compelling and very opportunistic? Is that how we should think about that within capital allocation? S. Kenneth Kannappan: So our -- just to separate for a second because the plant in Plamex actually did not use domestic cash, okay, which -- and we're not able to return the international cash effectively to our shareholders at this point in time. Of course, we're hoping for a tax holiday, but right now, that's the case. So with our domestic cash, we do attempt to return roughly 1/3 of it in the form of dividends and 2/3 of it in the form of share repurchases, more when the stock is lower, less when it's high, and then we accumulate a little bit more. We have not found many acquisitions that were material, and we're not aware of any that we think are appropriate. Now it's not a kind of question I'm going to answer all the time because you never know when something to your point could pop up. But in general, most of the plans that we have seem to be obtainable through organic growth. If something comes along that is a really good fit and made a lot of sense, either because we couldn't do it internally or because it was a product that really fit our portfolio and our distribution channels and we thought we can successfully sustain it, than we might do it. But that has not been our primary orientation. John F. Bright - Avondale Partners, LLC, Research Division: Final question for Pam. Pam you talked about the legal expense over the next 4 quarters. Difficult to measure -- and maybe I missed it, did you break it out for this current quarter? Pamela J. Strayer: We didn't have significant expenses related to GN in Q2, if that's what you mean by this quarter. For Q3, our guidance includes a little over $1 million for GN. I don't have -- no. John F. Bright - Avondale Partners, LLC, Research Division: Is that something -- and should we think about that, $1 million each over the next 4 quarters, best guess? Pamela J. Strayer: Yes. I mean, I don't -- it's really going to be tough to know. So we don't have really have guidance on that.

And your next question comes from Dave King with Roth. David M. King - Roth Capital Partners, LLC, Research Division: I guess in terms of your revenue guidance and kind of thinking about some of your other businesses beyond UC, it sounds like UC, you do expect some -- a little bit of re-acceleration there. But maybe looking at kind of core OCC -- Ken you talked about there've been timing of deals there as well, I think last quarter or seen this quarter, you got -- you were hit by that, cascaded last quarter. I mean, how should we think about that? Should there be a re-acceleration there as well? And then as we think about mobile, I understand that, obviously, it's higher seasonally, but -- or could it be stronger seasonally, but how are you thinking about it from a year-over-year standpoint, maybe? Just any color you guys can provide on -- along those lines would be helpful. S. Kenneth Kannappan: Sure, I'll try to do that. First, yes, we do think that we have a great secular growth trend with UC and, even though there's some volatility, we expect that to continue. Relative to core OCC, I would look at this as being largely tied to economic conditions. And the single most important economic condition is the robustness of voluntary turnover. When the employment markets are robust, people are confident, more willing to take risk, more willing to leave, secure jobs where they know people and go elsewhere. When their housing markets are more robust, they are more willing to relocate. And those things all feed into voluntary turnover. As I mentioned in the call, the reality is we haven't seen yet that rebound in voluntary turnover which you would normally expect, frankly, a couple of years back. And so, a lot of the UC growth has been offset by this continued weakness in the OCC markets. Now if we start to see a more robust broad-based recovery, we absolutely would expect that. Do we expect it right away? Not really. I mean, we had a little bit of a lift in the June quarter, but it's been -- it's a little bit flattish right now. I think there's been a lot of headline concerns still about economies around the globe and some uncertainties around the U.S. economy. So what we would hope for, really, in the absence of better GDP growth is fairly slow growth in the OCC market rather than something that's really robust. If in a better economic environment, then we would hope to see some better growth in that business. Relative to the mobile business, the -- there's been a couple of things that had driven the business, one has been new hands-free laws. And although there have been some, the most recent large one being China, we're not aware of anything large coming up. Illinois is coming up, but the truth is that Chicago already had a hands-free law, so it's a much smaller lift that we expect than if we had the whole state, including Chicago, suddenly coming online. The Bluetooth stereo market is absolutely growing and we are intending to participate in that. And then the gaming market is also growing and we do intend to participate in that. So I don't know if that's helpful and responsive. If not, let me know if there's a further question. David M. King - Roth Capital Partners, LLC, Research Division: No, sir. That's helpful. I mean, I guess, in terms of on the core OCC side, it sounds like it's going to remain challenging due to the macro. I guess it just -- had shown some signs of improvement for a couple of quarters there, and so it sounds like maybe it's not going to necessarily improve all that much until we really see a more robust recovery, so... S. Kenneth Kannappan: Yes. Part of that was some institutions, some of the financials had bought earlier, they'd kind of gotten their balance sheets in place, they're a little bit bitter able to recover. But the broad-based kind of upswing, we haven't seen them in this. More recently, we've seen a little bit of upturn in the U.K. but again, it's just not been a full global recovery. David M. King - Roth Capital Partners, LLC, Research Division: Okay, that's helpful. And then one other question related to kind of the expense guidance and, I guess, operating income guidance, is a better way of saying it. In terms of -- I think, Pam, you laid it out as being 3 quarters related to gross margin, back-end gross margin, and some of that's happening in 1 quarter litigation, if I heard that correctly. I guess , can you just help us out in understanding how much of it's investments in the business and where -- future investments in the business? And so, where -- how to think about that and where you're allocating those investments in terms of people or R&D and some of those things and kind of a run rate as we look out even further to the next quarter, what to kind of expect. Pamela J. Strayer: Sure. Yes. Well, one of the challenges with providing more details on the guidance is that we are providing a range. We are going to be investing in more sales and marketing to take -- to cover GO expansion and continue to invest in the UC opportunities. So there are those investments in there for the quarter. As you know, we're making those investments ahead of any revenue payoffs for them, so we expect that those will return over the next year or so. But because it is a range that we're providing, it depends on the timing of when the headcount comes on, when we can hire people, that type of thing. So I didn't really highlight it necessarily, but the plan doesn't include that investment there.

And your next question comes from Tavis McCourt with Raymond James. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: A couple of questions, Pam, and then I want to dig into the mobile business, a little bit, Ken. First on the CapEx, I want to make sure I heard you right, was the $5 million number for the fiscal fourth quarter? And is that a kind of reasonable quarterly run rate now that kind of the big capital spending is done or are there other you would expect to do in the near future in terms of CapEx? Pamela J. Strayer: Yes. So the $5 million was for the fiscal fourth quarter. And I think prior to the Plamex building investment and some of the other facilities investments that we're making here at Santa Cruz, our CapEx run rate per quarter was somewhere in the range of $5 million to $10 million a quarter, so that's how I would think about it going forward. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: Great. And the $2 million to $3 million in savings, that's an annual number? Pamela J. Strayer: It is an annual number. And the challenge with that is a big part of that savings is going to be coming from our solar installation and the savings we're going to be getting using solar, which is going to be much higher in the summertime. So it's tough right now to predict exactly when that would fall, but it is an annual number. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: Okay. And then, Ken, the mobile business that -- you've had, obviously, for a number of reasons, a good couple of quarters year-over-year. So as I think about seasonality in the December quarter, should we think about sequentially a similar seasonal ramp as you guys have seen in the past or is the September quarter, we're coming off kind of so strong that maybe not quite as much seasonality? S. Kenneth Kannappan: Yes, I think it will probably mute a little bit the typical seasonal lift. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: And when you talk about -- I think, in answering another question, you mentioned Bluetooth stereo, I presume you're talking headsets. Did you plans to get into the speaker market again or is that really related to the headset commentary only? S. Kenneth Kannappan: Yes, that was really related to headset commentary only. I mean, it's certainly an adjacent market, but -- so I'm not -- I'm certainly not ruling it out, but I was really referring to headsets.

And your next question comes from Mike Latimore with Northland Capital. Michael Latimore - Northland Capital Markets, Research Division: Great, and also, congratulations, Ken. And then, I guess on the -- I'm just thinking about the long-term operating margin of 20% to 23%. I know that you used to invest for growth for a while here. I guess, I mean, as long as there's a pretty big Unified Communications opportunity, I mean, when would you sort of slow investments for growth as long as an opportunity's kind of pronounced? S. Kenneth Kannappan: Yes. I think that -- it's a matter of looking, of course, at the ROIs, at the -- what we need to do to maintain or enhance our competitive position in the market. But the truth is that we are probably at a point where our portfolio is very, very strong relative to that growth, and we are actually beginning to shift a little bit of the investment on the R&D side back towards some other parts of the business. And the -- so the UC investment is, in my mind, pretty full. We're expanding a little bit on the go-to-market side, a little less, as I say, on the development side. And so, I think that after we get done with a couple of things, including this litigation expense that will largely run for 4 quarters or so, we would expect our margins to properly be able to lift back a little bit. Michael Latimore - Northland Capital Markets, Research Division: Okay. I didn't hear any commentary around sort of the federal government. Did that -- does that have any influence on the September, December quarter kind of activity there? S. Kenneth Kannappan: So when you say any influence, of course, it's possible that it did. But having said that, we do not think that we have a significant impact from the sequestration or the budget issues. The sequestration primarily affects some of the contractors, and a lot of that is not really rippled through to a significant degree, so we might have had a small impact. A lot of the government is still investing, though, in productivity. And so, our category continues to be reasonably favorable. From the budget slowdown and the government shutdown, we probably had a small dip in revenues in the December quarter, but we expect that we'll recover that during the course of the quarter. Michael Latimore - Northland Capital Markets, Research Division: Okay. And then is the general view is though that the Unified Communication, your Unified Communications business, is on track for the year? And then in -- by your own track, I guess, how would you define that? S. Kenneth Kannappan: Well, so we look at it in terms our performance and that's -- our performance is really relative to the potential, which we don't control. We don't intend to really cause the adoption of the market. We're letting Cisco, Microsoft, the other big UC vendors really spread those solutions. And the pace at which those voice deployments occur is determined by the big companies and we're just trying to follow along, do the best job we can, providing great solutions, capture market share and satisfy our customers and try to make a profit from it as well. So from our perspective, the market is, overall, very much on track. We continue to see very good momentum towards the market. Again, the timing of particular deals is a little bit volatile, but in terms of our market position, in terms of the market, we think it's very on track. Michael Latimore - Northland Capital Markets, Research Division: And lastly, the pricing environment. Any comment on the pricing environments for Unified Communications products, maybe Europe versus U.S.? S. Kenneth Kannappan: So overall, we continue to feel that our value proposition is very strong and that's allowing us to maintain margins. So most of the mix effect on our margins is due to a larger portion of UC rev and any deterioration of our UC margins. We certainly find that there's nothing but price out there. I mean every competitor has the same strategy which is, if you're not better, then you're going to be cheaper. And so, we certainly see a lot of price competition out there. But an awful lot of people want their systems to work, too, and so, we continue to be the leader.

And your next question comes from Rohit Chopra with Wedbush. Rohit N. Chopra - Wedbush Securities Inc., Research Division: And Ken, great to have you back. I wanted to ask you about Cisco, if you don't mind. Cisco released a brand-new set of products, I guess, it's a full-on launch that they did last week. Do you think that this has any impact -- or did it have any impact maybe on the timing of the orders that you're talking about? S. Kenneth Kannappan: So I don't actually think so. Don't get me wrong, Cisco is massive and very, very important to our ecosystem and that can affect their orders. But I think that the timing of these rollouts and the replacement cycles for our products are still a little bit independent of that. We're excited by some of these new products. We've got some great integrations with them. It allows us to show some new features. And it's, again, really good stuff. But it's more of a long-term driver that it is affecting, I think, the timing of our orders. Rohit N. Chopra - Wedbush Securities Inc., Research Division: Okay. And I take it you're part of this whole rollout, so you're well aware of what I'm talking about, right? The integration of the new products and you're part of that? S. Kenneth Kannappan: Yes. Rohit N. Chopra - Wedbush Securities Inc., Research Division: Okay. The other piece that I wanted to ask you about on these cancellations or timing of the orders. Is that... S. Kenneth Kannappan: There weren't any cancellations. Rohit N. Chopra - Wedbush Securities Inc., Research Division: Okay. The timing of the orders, is that really related to U.S.-based companies or is that just, globally, you found that was the same everywhere? S. Kenneth Kannappan: Yes, that was a global comment. Now don't get me wrong, it was certainly true in the U.S. and -- but, and some of these deployments are global. Some major companies, some of which were in the U.S., did some large purchases in the June quarter, and that was just their timing and so that happened. Rohit N. Chopra - Wedbush Securities Inc., Research Division: Okay. And then one other question. I just wanted to follow up on a question I asked last quarter and you sort of alluded to pushing a little harder into consumer. If you could provide an update on to wearable technology beyond the Bluetooth headset, what you're doing in that area, that would be very helpful. S. Kenneth Kannappan: Well, so I'm not going to provide a complete snapshot on that point, even though it's a very legitimate question and we are investing some dollars and resources into the area, because we do think it is a very interesting area, but it's premature at this point in time for us to get into that. I will say that a lot of the contextual intelligence that we've developed is of immense value for organizations, but it also depends upon a greater degree of ubiquity and usage that we can currently provide. So many people are excited with the information that we can provide, in our ability to communicate it to systems and what that means for other systems, processes and so forth to be able to leverage that. But if our sensors are only attached to, in a non-UC example, 7% or 10% of people, and even in a UC example, if people are not wearing them all the time, then that information has less value. And so, people are very interested in a lot of the intellectual property that we've developed and a lot of the connection we developed and how can we get those into more ubiquitous platforms. So we are working all the time on increased sensors and other things to -- and interconnections that will add value, which are things that we have talked about, but we're also definitely exploring other areas and showing other technologies that leverage some of that. Rohit N. Chopra - Wedbush Securities Inc., Research Division: Ken, that was extremely helpful and I appreciate it. If I could ask one quick follow-up on that. Does that mean, from what you're saying, that there's also a potential for licensing opportunities or partnership opportunities with the intellectual property you've developed? S. Kenneth Kannappan: Again, I think it would really be premature on that one also.

[Operator Instructions] And we have no further questions at this time. I'm sorry, we do have another question from Dave King with Roth. David M. King - Roth Capital Partners, LLC, Research Division: I guess, just some real quick ones. On the gaming side, in terms of the new product introductions, I guess, just a quick question regarding the console replacement cycle that we have kind of ahead here. What, if any, kind of promotions are you guys planning to do around that, if at all, in terms of new products to kind of play on that? And are you expecting any kind of benefit from this console replacement cycle on the gaming business? I guess that's the first one. S. Kenneth Kannappan: So the gaming area is really a new initiative for us. We haven't -- we've been in the PC gaming area, but we have not been in the console gaming area. And so, this is really more of a new effort for us. We do believe that some of these new platforms will represent an opportunity to potentially work with -- I mean, we're not a part of their launch because we're new to the market, but we do believe that they will represent an opportunity to form partnerships now and be part of these new platforms. And that was part of the reason that the timing was good for us to establish our credentials and then develop these relationships and, ultimately, expand into it. But it's not a near-term promotion with these platforms. David M. King - Roth Capital Partners, LLC, Research Division: Okay, that helps. And then, Pam, in terms of the E&O charges, it sounds like you are expecting a kind of another big one this upcoming quarter and would now have a few quarters of those. Is this something we should kind of be modeling in and thinking about as kind of an ongoing sort of run rate? Is it fair to be thinking about some of these charges as fairly one-time in nature? Any context there, I think, would be helpful. Pamela J. Strayer: Yes. So it's a good question, and one of the things that we're going to be looking at in Q3 is really trying to benchmark excess and obsolete charges, what do -- what should we be expecting as a normal E&O charge. In the past, we had charges ranging from $250,000 a quarter, up to $1 million a quarter. So it's a wide range there. I guess, I'm thinking that, over the long term, annual charges of $2 million to $3 million is probably about where we're going to land, but it's kind of early for me to really be too firm about that. That's just kind of what I'm thinking at this point. David M. King - Roth Capital Partners, LLC, Research Division: No, fair enough. And then lastly, Ken, sort of a big picture question. You talked about your initiatives being delivering profitable growth, one of your key initiatives is delivering profitable growth. Obviously, you do have some of these charges, like the E&O charges, like some of the litigation stuff. But even if I back some of that out, it looks like net income has kind of been not necessarily growing at the same pace as revenue. I guess, how should we be thinking about it -- or I guess, how do you think about it when you say delivering profitable growth? Is that something in terms of on a net income line and sort of long-term kind of growth rate, where you expect to be? Obviously, there's different impacts when you get to earnings per share just given your stock options and things of that nature. But just how should we be thinking about that when you talk about that as being a key initiative? S. Kenneth Kannappan: So I mean, partly, you make that kind of initiative because you think you need to do so, obviously, and we were expecting that we would probably have a little bit of downward pressure this year. But as I said, I think we'll still be holding close to that 20% x litigation this year. And then, as I say it, after a few things get done including some of those litigation expenses, then we would expect it to be heading back. In some of the initiatives, I didn't go through all of them because they're not complete, that we're working on them, and some of those will occur next year. We think we'll substantially improve our business efficiency and reduce our cost, increase our speed. And those are things we also think will enhance profitability. So what I would like you to take out of it is that we feel very good about our operating model. I think that, that margin structure is right and, to the extent that we deviate slightly, intend to make those periods of time modest in duration at best and then get back into our target range

And we have no further questions at this time. I'll turn the call back to our presenters.

Great. Thanks, everyone for joining us today. If you have any follow-up questions, we'll be available afterwards.

And this concludes today's conference call. You may now disconnect.