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

John Bright – Avondale Partners Paul Coster – JP Morgan Sanjit Singh – Wedbush Securities Dan McIntosh – Robert W. Baird Hank Bannister [ph] – Saxon Research [ph]

Good afternoon. My name is Christian and I will be your conference operator today. At this time, I would like to welcome everyone to the Plantronics third quarter fiscal 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) Thank you. I will now turn the call over to our host, Mr. Greg Klaben, Vice President of Investor Relations. Sir, you may begin.

Thank you, Christian. Joining me today to discuss our third quarter fiscal 2010 financial results are Ken Kannappan, Plantronics’ President and CEO, and Barbara Scherer, Senior Vice President of Finance & Administration and CFO. I would like to remind you that during the course of today’s conference call, we may make certain forward-looking statements that are subject to risks and uncertainties as outlined in today’s press release. As we have highlighted before, the risk factors in our press release and SEC filings are not standard boilerplate. We update these risk factors every quarter, adding and dropping language and changing the order depending upon the timing and potential impact of the concerns that we foresee. We believe forecasting our results of operations is difficult, and we ask you to focus particular attention on these risk factors that could cause actual results to differ materially from those anticipated by any such statements. For further information, please refer to the company’s forms 10-K, 10-Q, today’s press release, and other SEC filings. Please note that all financials metrics and comparisons are stated in terms of continuing operations, which exclude Altec-Lansing or the AEG division. The sale of Altec-Lansing was effective as of December 1, 2009. Plantronics third quarter fiscal 2010 net revenues were $165.9 million, compared to guidance of $155 million to $160 million. Plantronics GAAP diluted earnings per share were $0.47 in the third quarter fiscal 2010, compared with diluted earnings per share of $0.13 in the same quarter of the prior year. Non-GAAP diluted earnings per share for the third quarter were $0.50, compared with earnings per share of $0.14 in the prior year quarter, and guidance of $0.38 to $0.42. The difference between GAAP and non-GAAP earnings per share from continuing operations for the third quarter include stock-based compensation charges, purchase accounting amortization, and restructuring and other related charges, all net associated tax benefits along with the release of $1.2 million in tax reserves. With that, I will turn the call over to Ken.

Thank you, Greg; and thanks to all of you for taking the time to listen to our call. There are three key points on the third-quarter results. First, revenue was about guidance; and this was driven by stronger-than-expected office and contract center revenues, which include unified communications, with a little help from some bluebirds. In addition, we experienced normal seasonal improvements in our mobile and gaming businesses. Overall, we are seeing improved demand across all major product categories and geographies, but remain cautious as to the strength of the global economic recovery. Second, gross and operating margins improved from the prior year and prior quarter as a result of better than anticipated revenue growth combined with lower relative expense growth and the impact of cost reduction activities that we took earlier in 2009. We will continue to focus on maintaining and improving our gross and operating margins, while investing appropriately for the UC opportunity. Third, we achieved an important milestone in our Bluetooth product group by attaining P&L profitability. You may recall, in September 2008, on significantly higher revenue, we had a positive contribution margin from this product category. Profitability was achieved in part from the success of the Voyager Pro and Discovery 975, which went into broader retail and carrier distribution in the December quarter. Additionally, we realized the full benefit of the outsourcing of production of Bluetooth headsets, which was effected this past August. We also gained share in the US retail Bluetooth market, measured according to NPD or like data. This data excludes sales outside the US, carrier stores and Wal-Mart. We plan to stop disposing on a going-forward basis. Turning to UC, we continue to see signs deployment and planning for Unified Communications and collaboration for UCC, as people are beginning to call it, is a top priority for IT departments of large enterprises. In recent months, we have started to see interest spread beyond Fortune 1000 companies to midsize organizations and government. We expect that calendar year 2010 will largely be a decision-making year for enterprises evaluating UC and many major corporations will start deploying in the latter part of this year or the next, with most more likely to be in 2011. We continue to expect deployments of UC with voice to be the key driver of our revenue and profit growth going forward. As stated in the past, we expect incremental revenue of $350 million annually by our fiscal 2015, as UC deployments drive headset adoption. We continue to feel confident in this revenue opportunity and currently plan to break out UC-related product revenues, beginning in the upcoming June quarter. Turning to products. In January, we won the prestigious international Form or iF product design award for 2010 in Telecommunications category for the Voyager Pro Bluetooth headset, and our product development team created a UC version of the said set, which began shipping at the end of last year. Savi Office wireless headset system has been named the best international CES innovations 2010 design and engineering award winner. Product senders into this program are judged by a panel of independent industrial designers, engineers, and members of the media. We recently expanded our award-winning family of PC headsets with four new wideband models, feature high performance TSP for unparalleled audio quality in listening to music, gaming, and for PC-based conversations. These headsets are ideal for podcasts and PC conversations on services such as Skype and Google Talk. To conclude, we are pleased to have exceeded our long-term gross margin range of 45% to 48%, and finished the quarter within our targeted operating margin range of 18% to 20%. While we are cautious as to the strength of global economic recovery, we remain confident in the positive impact Unified Communications will have on our business. This year, we intend to improve our position in the UC market, while maintaining good margins, with a promising pipeline of new UC solutions that we look forward to sharing with you this year. With that, I would like to turn the call over to Barbara to view our results in more detail.

Thanks, Ken. So our quarterly results were better than expected with net revenues exceeding the high end of our guidance forecast by approximately $5.9 million, primarily due to strong results in EMEA, largely related to Office and Contact Center. Our non-GAAP earnings per share of $0.50 were also well above our guidance of $0.38 to $0.42, primarily due to the higher net revenues and associated gross profit, as well as higher gross margin. Our gross margin was better than forecast, due in part to the larger proportion of OCC revenues in EMEA, where margins on these products are typically higher than in the US or Asia- Pac, and to even stronger improvement in our Bluetooth margins than planned. Our cost reduction efforts were on plan and contributed significantly to our operating results for the quarter. For example, compared to Q3 last year, our gross margin on Bluetooth products was up more than 20 points. A bit more than half of increase was due to our decision to discontinue manufacturing, and that should reduce our fixed cost in sort of an outsourced arrangement. Most of the rest of improvement was due to changes in the portfolio, including the successful ‘Where’s your Pro’? Additionally, non-GAAP operating expenses decreased by $2.9 million overall or 6% down compared to Q3 last year. Our non-GAAP operating profit from continuing operations was $31.8 million or 19.2% of net revenues, and our GAAP income from continuing operations was $23.2 million compared to $6.2 million in the third quarter of last year. Next revenues of $165.9 million were up approximately 9% or $13.3 million compared to the third quarter last year. The increase compared to Q3 last year was primarily driven by higher Bluetooth sales as a result of a better holiday season than last year. We also experienced increases in most of our other product categories, due to a better economic environment and thus higher demand with the exception of Clarity, which decreased compared to the third quarter last year. OCC net revenues were $103.1 million, an increase of $1.4 million from the third quarter last year. On a sequential basis, OCC net revenues were up 10%, exceeding the high end of our OCC forecast, primarily in EMEA, which performed well and increased 26% from the prior quarter. This level of rebound in EMEA was unusually sharp and in fact, we believe it is not yet a sustainable level, and we are forecasting a reduction in EMEA revenues sequentially. However, we believe our global OCC market position is stable, and that we are well positioned for future growth as the global economies continue to recover and as UC gains momentum. On OCC related to our guidance forecasts, one other point is that we had expected our sales to decline in the last week in the month of December or due to holiday shutdowns, which are typically the case. But the last week of the quarter held up relatively better than we expected, probably given the timing of how Christmas fell, but it also contributed to an exceptionally flow Start for the current quarter, the March quarter. The first week of the March quarter was the week between Christmas and the New Year holiday. Net revenues from Bluetooth headsets increased 32% or $10.7 million, compared to the third quarter of last year; and 33% or $11.1 million sequentially. The increase was primarily the result of having two products at the high-end, and the better ACs in the last year. Relative to our guidance forecast, our consumer product line grew slightly higher, due to a few hands-free laws, our promotion with BMW, and a somewhat stronger than expected holiday season. Geographically, the change in net revenues compared to Q3 last year was up 8% domestically and up 9% internationally, resulting in a 60-40 domestic international mix, which is exactly the same as the mix a year ago. I am really pleased to report that non-GAAP gross margin was 48.9% compared to 40.1% in the December quarter last year. The 8.8 improvement was due to 2.8 points from better absorption of overhead due to higher production volume, and those were higher production volumes on lower manufacturing expenses; 2.4 points from higher standard product margins, driven strongly by the increased Bluetooth margins that I mentioned; 2 points from lower warranty provision requirements; and 1.6 points from a variety of efficiency improvements by our operations team. We had a non-GAAP operating margin of 19.2% in Q3, up from 5.9% in Q3 last year and 18.5% sequentially. The increase in operating margin was primarily due to higher gross margin and lower operating expenses on our higher revenue, resulting in operating expenses dropping to 29.7% of revenue versus 34.2% in the same quarter a year ago and compared to 30.2% sequentially. Our long-term target model for operating margin remains 18 to 20 points, and it is terrific to operate in the target range at this level of revenue and in this still weak but recovering economic environment. Year-to-date, we were at 18.6% operating margin, despite revenues being down 17% from the same period last year. We believe we are well positioned to grow profits further as revenue growth resumes in the future. Below the operating income line, we had $1.4 million in other income compared to $1.5 million in other expenses in the year-ago quarter, resulting from foreign currency gains of $0.6 million in Q3 this year compared to foreign currency losses of $1.9 million in Q3 last year as a strength of the result of the US dollar, offset in part by lower interest income due to the significant decline in interest rates. Also included in other income in the current quarter is $0.7 million related to funds received from a government stimulus program in Mexico, where we have our manufacturing facilities. Our effective non-GAAP tax rate for the quarter was 24.9% compared to 6.6% in the year-ago quarter. Our year ago rate was unusually low due to the extension of the R&D tax credit and the lower profit before tax in that quarter. On a GAAP basis, our Q3 tax rate on income from continuing operations was 20.5% compared to -81% in the year ago quarter. The current quarter tax rate includes a tax benefit of $1.2 million related to the release of tax reserves due to the expiration of statutes of limitation; and in the year ago, we had a tax benefit of $2.1 million of tax reserves that was released due to expiration of statutes of limitation, and that was a major reason for the low and actually negative rate a year ago. P As a result of all the above, our Q3 non-GAAP income from continuing operations was $25 million compared to $7 million in the year-ago quarter. These are excellent results, especially given the lower revenue base on which they were achieved and also represent an increase of $4.3 million sequentially. As you have heard, we completed the sale of Altec to Profit Equity LLC during the quarter for a sales price of $16.2 million. In connection with the sale, we received $11.1 million of proceeds in the quarter, and recorded $5.1 million of contingent payments. The sale resulted in the transfer of $15.2 million of net assets to Altec-Lansing LLC, primarily consisting of inventory and fixed assets, net of certain assumed liabilities including inventory reserves and sales related reserves. Not included in the sale were accounts receivable related to the sale of Altec products incurred prior to the close of the deal. These balances are included in our consolidated Accounts Receivable balance at the end of Q3. Also included in our balance sheet at quarter end is a $2.7 million payable to the purchaser of the estimated shortfall in the fair value of the net assets delivered upon closing, compared to the value of those assets contemplated in the purchase price at the time of closing. A loss on disposal of $0.8 million is included in income from discontinued operations. Our GAAP net income, including the results from discontinued operations, was $23.3 million, compared to a GAAP net loss of $92 million in the third quarter last year; and our GAAP diluted EPS on net income was $0.47 compared to a GAAP diluted loss of a share of $1.90 a year ago. On the balance sheet, our $316.7 million in cash, cash equivalents, and short-term investments is up from $218.2 million at the end of last fiscal year, a $98.5 million increase; and up $47.5 million from $269.2 million in September. The $47.5 million increase in the December quarter compared to the September quarter includes $23.2 million in auction rate securities, which had previously been recorded in long-term investments and $11.1 million of proceeds from the sale of Altec-Lansing. Cash from operations in the quarter was approximately $36 million and $24 million was used to buy back stock. Cash collections were strong and Days Sales Outstanding decreased to 61 days from 63 days in the same quarter last year. DSO is based on net revenues from continuing operations, so these among different from previously reported amounts because they exclude AEG net revenues, which are now in discontinued operations. However, the Accounts Receivable balance continues to include amounts related to Altec product sales incurred prior to the close of the deal, since those receivables were not part of the sale of Altec. We expect DSO to drop into the mid-50 day range in the fourth quarter, as most of the AEG-related accounts receivables are collected. The quality of our aging was consistent with the prior quarter and better than the year ago quarter. Net inventories were down $29.1 million sequentially, $22 million related to Altec, and $7.1 million related to ACG inventory, due to our continuing effort to improve asset utilization return on capital. ACG inventory turns increased to 4.8 compared to 3.2 in the same quarter last year and 3.8 sequentially. At the outset of this fiscal year, we said we would cut CapEx by approximately 50% from fiscal 2009. Year-to-date capital spending through Q3 was only $4.3 million, down from $20.9 million in the same period the prior year and depreciation and amortization expense was $14.1 million in the first nine months of fiscal 2010 compared to $20.6 million in the same period in fiscal 2009. We now expect CapEx to be $6.0 million to $6.5 million in total for fiscal 2010, meaning that we will cut CapEx by over 70% in comparison to FY 2009. In FY 2011, we do expect our CapEx to be somewhat higher than fiscal 2010, but still far lower than fiscal 2009. Of the $316.7 million in ending cash, cash equivalents and short-term investments, $117.9 million was domestic, with the balance being international. The stock repurchases of $24.3 million and dividend payments of $2.5 million in the quarter used approximately 23% of the domestic cash during the quarter. In terms of the business outlook, while the economic environment is still weak, we are encouraged by pick up of our OCC business sequentially, and then we actually ended the quarter with higher revenues than the year-ago period. UC contributed to the growth year over year and sequentially. The March quarter is always a particularly difficult quarter to forecast, since it always starts off quite slow and this has been the case again in this quarter. We also have a 14 week Q4, the last one was in fiscal 2004, and that is the normal patterns of typical quarters on that as applicable. We have thus employed a few additional forecasting techniques this quarter and while we do need to enjoy the typical increase in bookings over the course of the March quarter, we believe that net revenues will be in the range of $150 million to $155 million. This would represent a sequential decrease of 7% to 10%, which is typical from December to March quarters normally, and the decrease is expected to come on our consumer business. $150 million to $155 million of revenues will also represent a 17 to 21 increase from the $128.1 million in the year ago March quarter, when we were essentially at the trough of the recession. Depending on the revenue mix and other factors, we believe non-GAAP operating income will be $27 million to $30 million compared to $8.4 million in the March quarter last year. We also expect non-GAAP EPS from continuing operations to be $0.40 to $0.44 on a 26% non-GAAP tax rate and we expect a total of $4.1 million in GAAP charges pre-tax, $2.8 million after tax, and that the GAAP EPS on continuing operations of $0.35 to $0.39. With that, I am going to turn it back over to Christian, the conference facilitator for the Q&A session.

(Operator instructions) Our first question comes from the line of John Bright with Avondale. John Bright – Avondale Partners: Thank you. Ken, Barbara, Greg, congratulations on a terrific quarter. Ken, EMEA looks like it bounced back, judging by the 30% plus sequential jump. How much of that might have been pent-up demand?

I think that there might be a little bit of pent up demand in that equation, but I think that having said that, more often related to the timing of activities rollout some inventory changes in our channels that really related to channel activities, and I would say that those are kind of some of the bigger drivers. We also – on the M&A side had one promotion and we had one hands-free law go into effect that also aided the business. John Bright – Avondale Partners: How would you characterize, to the best of your ability, if you will, the channel, the health of the inventory in the channel?

I think it was a modest situation, where there was a little bit of a downdraft in the September quarter of this and we got a little bit of a rebound. It is not the biggest explanatory factor, but it is an explanatory factor. John Bright – Avondale Partners: Well, let me move forward then to UC, and that is certainly a looking-forward story. Ken, I heard you right I think saying in the prepared remarks that you are going to break that out in the June quarter. I would take that, certainly coming from you, as a bullish statement, given the visibility out that far that you continue to see good signs of adoption. Maybe you could share with us some of the signs of adoption you are seeing, maybe to some of the additional customers you might be talking to, if you can disclose any, and maybe I guess two others associated with that, one, any change in attach rate assumptions that you have made in the past; and then two, any change in the – if you will, the sustainability of gross margin assumption as you see comes online.

Okay, so I will try to answer all those questions, but John, if I miss one, please come back to me and I will try to get to it. First, you know, we are seeing continued progress within UC. I think that while there is going to be a significant upfront pilot statement, it is not just about technical performance, it is also about people matching their business processes to the opportunity and getting their organization ready for adoption, ready to realize benefits from them. In terms of the overall attach rate, if you wanted to express the kind of the differences that we see based upon on vendors in the short term in terms of adoption rate, in general, what we see with Cisco is that there is a much greater push towards a hard phone solutions people are using cell phones and certainly can create a lift in adoption for us and of course accelerated replacement of this product we have in place, but in general, somewhat lower adoption benefit. As they start to get more video out on the desktop, we expect that that will increase adoption further with Cisco. And we think over time that they will wind up having a lower level of hard phone adoption with their solutions than they do at present. On the other hand, with Microsoft, while they will have hard phone solutions that which is more towards cell phone clients and therefore, there is a greater attach rate with the Microsoft solution. So that is kind of a vendor dynamic that effects in the short term how much lift we get from UC. I think over the course of the coming year, some organizations are going to be waiting for some of the newer Microsoft offerings which will come and so in the course of this year, we may see that more of the adoption lift will come on the Cisco side than on the Microsoft side; and in the following year, I think it may be a little bit more balanced. So from our perspective, the long-term hasn't really changed. In the near term, I think there might be a slightly more muted adoption lift from UC, just based upon the vendor mix in the market over the current year. But overall, again, we're seeing good momentum. I think I did not answer all of your questions, John. Which ones did I miss? John Bright – Avondale Partners: Well, I think you got messed up and the gross margin one is one that you didn't get, but before you answer that one, on the Microsoft side of the equation, is that going to be more associated with Windows 7 and the Enterprise?

No, I think it is going to be more associated with the additional PBX-like functionality that they will include in the next rev of their software, which will make it from a communications standpoint, more equivalent with some of the other offerings. John Bright – Avondale Partners: Then the last question was, the sustainability or what is your thinking as far as gross margins as you see comes online and when you start disclosing the information in June?

Well, first, I don't know if we committed yet to the slowing in gross margin. Yes, we talked about closing revenues, just to be clear. I don't know if we have got an opinion yet on the margins. But overall, in the UC business, a couple of comments. First, it has actually been going perhaps as well as we expect it, maybe even slightly better than we expected so far, but we are in a very nascent stage still in that business, evolving very rapidly. You know, we were very conscious of the fact that this spreads our market from our existing customer base of people who have the great deal from the headset is very important and they are purchasing IT, everybody understands that their business management into people who are frequently using a voice communications a lot less and therefore are more likely to buy ported products at the low end of our product line. And therefore, the value on the product being lower, going to be more price sensitive, as well as the fact we have a concentrated purchasing moment. Having said that on the negative side relative to the margins, you know, the positive side is people want these solutions to work, voices – mission-critical application and people already sensitive to quality and value. And so far, again we are still early stages. We think that the margins has held up as well or better than we thought. John Bright – Avondale Partners: Thank you.

Our next question comes from the line of Paul Coster with JP Morgan. Paul Coster – JP Morgan: So, first of all, this question of margins more broadly for the whole company, you have already topped your target gross margins. Is this sustainable, are you going to have to revive up and why are you able to get such high gross margins? Because I don't think we have seen this for several years.

So Paul, this is Barbara. In terms of our target model, it is true that we have 45 to 48 as the gross margin target, but the most important set of numbers on that page are the operating margin targets in that 18 to 20 points. And so for example, in Q4, our gross margins will probably be a bit higher than they were in Q3. So we are expecting revenues to be down, so OpEx will be a higher percent of revenue, and we should still be very nicely in the 18 to 20 points. So we are certainly not in any position to raise the 18 to 20 point target, we are operating nicely within it and I am hopeful we will have operated in it every quarter for the entire fiscal year, which would be excellent. But we are certainly not sustain [ph] out of it. Paul Coster – JP Morgan: Yes, okay. And I assume obviously Office and Contact Center business has higher gross margins than the Mobile, but within Office and Contact Center, is there a big difference between corded and wireless?

The difference has really narrowed substantially over the years. There is still a difference, but I will call it less than 10 points at this point.

So some of the benefit of course is also we had a high European and the currencies were the most of the quarter at favorable exchange rates that also added to the benefit. Paul Coster – JP Morgan: Okay, I have two other questions on the UC front. In the past, you said it is sometimes difficult to tell when a product is actually destined for UC market versus some other application. Why is it that you are now able to segment?

Well, we won’t be able to segment it perfectly, and that is the point. First of all, somebody can buy a UC product from Plantronics and use it for a conventional application. And you know, we (inaudible). I mean, just kind of like today, we would sell a headset and sell to – I don’t know, General Electric, and you know, on one floor, they could have a Contact Center environment; on the next floor, they could have office professionals and it is actually very hard for you to know exactly what is happening. Even when we sell to Contact Centers, we have offices and so forth that are not all agents. And in the case of UC, people can buy these products, one just for selective use, it is more likely that they would buy it for multimedia use, if people are doing Web conferencing without UC; they are listening to a variety of streaming media content. Some people are just using a cell phone client, like Skype or something like that for international calls, not in a UC environment. And so, it is actually plenty hard for me to track the end application. So we will probably wind up reporting kind of all sales that are UC-capable, rather than attempting to narrow down to – we are sure that they are actually UC applications. We just won’t be able to verify that. Paul Coster – JP Morgan: Okay, and my last point on UC question, Ken, is I know people are fascinated by this opportunity, but we are struggling still do understand what the barriers to entry are today and what they will be in the future. Forget brand and distribution for a moment. Is there anything in the intellectual property, the software that really is a barrier to entry for others or will present such barrier to entry?

Well, I think that it is a significant and complex task to create a business that is competitive in UC. If you look at our past business for second as an analogy, you know, there was not a technical barrier to entry. But there were a number of things that people had to do in order to be successful. Certainly, you had to be compatible with a variety of different clothed systems, as an example. And if you weren’t, then you work to be Plug & Play, you aren’t going to have a very favorable experience by the end-user, you can get return rate, the channel wasn’t going to like that and so forth. There were a thousand other things. If I look at UC, just use that single example to comparable items, people need to be compatible, particularly for the large enterprise, with a great variety of different businesses. People are going to want to have co-mingled inventories; they are going to want to spend out a product that has Plug & Play that work for a particular vendor. That means people like Plantronics that are very committed to this market, that are compatible right now with literally thousands of different combinations, when you look at all of the UC platform vendors, their software, when you look at the different software that is actually on the PCs and notebooks, when you look at the different software or other application such as reading from the iTunes, to Google Talk to Skype to various web ex and other applications that you want to use. In order to make sure that is working, and it has to a buck, that is a significant effort. On top of all of that, there is a level of functionality we are providing, in some cases, quite unique. For example, right now, many people deploying UC are using soft clients for internal calls, and for bandwidth and audio quality, there are actually still using landlines for external calls. If you use our product, our Savi Office, you can actually conference between these two, because on the one hand, it is unified communications, and on the other hand, these types are actually still quite separate. So we will be bringing in that value. So there is an awful lot that we do that creates a solution that is robust and reliable for IT and for the end users, and adds value to the actual experience. Can somebody else do it in the past, they couldn’t. Can somebody else do some of these things now? They can, but it is not easy and in some cases, the relationships that we have, the technical relationships with some of the suppliers are either exclusive or limited to often one other player in the market. Paul Coster – JP Morgan: Thank you.

Our next question comes from the line of Rohit Chopra with Wedbush Securities. Sanjit Singh – Wedbush Securities: Hi, guys. This is Sanjit Singh from Wedbush for Rohit Chopra. I have three questions for you. I wanted to go back to Europe. With Europe, are we expecting Europe to come back down due to a 14 week quarter, or is there more economic weakness or a consumer weakness going on in Europe? Second, with the UC product pipeline that you mentioned, is there any timeframe around when you expect new products to hit the market? And third, your outlook for Bluetooth. I know there was some hands-free legislation that went into effect with the first of this year. What is the near-term outlook for Bluetooth? Thanks.

This is Barbara. Let me take the first one about Europe. So we are expecting in our guidance forecast for the European revenues to be down sequentially, both in OCC and consumer. So we are expecting our OCC revenues in the rest of world actually be up. So we are looking at Europe a little bit differently, and heart of that is just – you know, they went into the global economic slowdown later than the US, and they are certainly going to come out, but that was a very fast snap back and the question is, is it really sustainable and in fact, at this point, we have had four weeks of bookings and we see the level of bookings and they are at a lower level than last quarter and we believe that the OCC business will end up lower than Q3, but well above Q2. So we have certainly moved off the trough there in Europe. And now they are also having terrible weather in the UK. It has been kind of in a freeze for about a month and there has just been a lot of impact on business broadly in Europe, partially as a result of that.

Let me try your other two questions. First, UC products, we do have new UC products that we are developing, we launch them based upon what we think is appropriate to market, not necessarily when they are completed we may hold summit where kind of too early relative to both the competitive and the market dynamic. But for sure, there will be new products that we release during the course of the year, and it is not on a set schedule, because it is really related to that market dynamic. You know, hands-free laws, there have been some new hands-free laws if we kind of look at January time frame, we have had – I think Kentucky just passed, Oregon, Fig Island (inaudible), couple of cities, you know, we have got Harrisburg, Pennsylvania; Wilmington, Delaware; I think we have got British Colombia, (inaudible), we just had Serbia. So there are actually hands-free laws, none of them are huge, but it may enhance some publicity in the newspapers, it may enhance certain (inaudible) – you know, you start to have in the United States what I can only describe as an almost checkerboard sort of look, where okay, it is not a hands-free law in Illinois but it is in Chicago, it is not in Florida, but it is in Miami. You know, you got it in so many different locations that if you drive zooming, you can get pulled over, it starts to add to the idea that you know, maybe you ought to consider it. I think that was your last question. Sanjit Singh – Wedbush Securities: Thank you.

Our final question comes from the line of Dan McIntosh with Robert W. Baird. Dan McIntosh – Robert W. Baird: Yes, I was wondering if you guys can provide any detail on the amount stocking by Verizon, and I guess by stocking from hands-free products in general, how many new hands-free products?

Just so we are clear, when you say stocking, you are talking about inventory levels? Dan McIntosh – Robert W. Baird: That is correct.

Well, I don't disclose inventory levels by customer, but I will tell you that Verizon has maintained, in our minds, a fairly consistent level of management, if anything, increasing as a business strategy their overall inventory turns and we work well with them I think to maintain adequate and appropriate inventory stocks in keeping with their business model. So again, I can't really comment too specifically. I will say that kind of on an overall basis, we think our retail and carrier inventories are in line with where they should be. Dan McIntosh – Robert W. Baird: Okay. And when you mentioned retail in general, (inaudible) what that means, excluding Verizon and also with the regular retailers.

Yes, I was saying everybody including Verizon and other carriers and retailers. Dan McIntosh – Robert W. Baird: Great, thanks. And then, actually, final question. I'm just curious can you provide me any detail on sequential trends in the Bluetooth gross margins?

So – in terms of our forecast for this quarter, we are really expecting the Bluetooth margins to stay pretty much just about where they were – you know, on a channel-by- channel basis and exactly how all that – kind of product-by-channel basis and how all that rolls up in total, we believe it will probably be pretty close to last quarter’s level. Dan McIntosh – Robert W. Baird: Okay, that is fine. Great, thank you very much.

You are welcome.

It seems we have time for one last question. Our final question comes from the line of Hank Bannister [ph] with Saxon Research [ph]. Hank Bannister – Saxon Research: Early in the Q&A I think, you had mentioned something about a couple of bluebirds and I was just curious if you could identify them or some of them or whatever and also talk about whether there are other bluebird opportunities as you go on that you might or might not see. I was just wondering if you could sort of bracket them, if you will.

I don't want to give the wrong impression. These were not huge, and we always get what is called a bluebird and blackbird type of stuff. I thought on balance, this was kind of slightly larger into the positive side than the total noise range, so I mentioned it. But I don't want to give the wrong impression that it is truly huge. I can’t name the companies, of course, and what occasionally happens are that people wind up with a little budget at the end of the year, end of a period, and decides if they are going to accelerate plans that they have been contemplating in the presence of (inaudible) orders, you know, greater than we expected in a concentrated period. Hank Bannister – Saxon Research: Got it. And typically, you know, when bluebirds and blackbirds come in, is it just sort of customer by customer, sort of pull in, push out or I are talking about other kinds of things, being relatively new to the story, I was just curious to stab a little bit at that dynamic.

All right. So there is a variety of different tastes in bluebirds and blackbirds and I don’t know if I should go through it all, but let me try to give you a little bit of flavor. First, I was talking there on the B2B side, where it tends to happen a little less frequently. So if we go back in time a little bit, the financial crisis, there were a whole bunch of blackbirds. I mean, we had companies planning to open call centers for example in India, with large numbers of seats, the plans were ready to go, and you know, we had business that was clearly cancelled at the last minute that was – in our minds, kind of a blackbird. You know, for us, bluebird and blackbird again is kind of outside of our expectations in terms of signing and being favorable or unfavorable based upon a changed decision at the customer that we didn't expect, when we put together our report. Now from a retailer or carrier perspective, you know, occasionally, these things come up as well. So if I, for example, if a carrier suddenly decides that they are going to do a promotion, and they are going to bundle or promote one of our products with a particular new phone and its hot, you know, if we cannot notice suddenly get a better-than-expected level of revenue, or if somebody – and that hasn’t happened for a while, decides they are going to give our products away as part of the renewal program or something like that, of course it is a wonderful, unexpected item. You know, it can happen the other way also. Sometimes, people wind up – not necessarily odd, somebody winds up with excess inventory, they have to sell it out and that becomes their focus and impacts our revenue opportunity, a variety of things again can happen on either side. Hank Bannister – Saxon Research: Thanks, that was helpful. Nice quarter.

Thank you.

Thanks.

There are no further questions at this time. Please proceed with any closing remarks.

Thank you very much. If any of you have any further questions, we are available by phone. We appreciate your time.

Ladies and gentlemen, that does conclude today's conference call. You may now disconnect.