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

John F. Bright - Avondale Partners, LLC, Research Division David M. King - Roth Capital Partners, LLC, Research Division Paul Coster - JP Morgan Chase & Co, Research Division Tavis C. McCourt - Raymond James & Associates, Inc., Research Division Jim Fitzgerald Yi-Dan Wang - Deutsche Bank AG, Research Division

Good afternoon, my name is John, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Q2 2015 Financial Results Conference Call. [Operator Instructions] Greg Klaben, Vice President of Investor Relations, you may begin your conference.

Thanks very much, John. And welcome, everyone, to Plantronics' Second Quarter Fiscal Year 2015 Conference Call. 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 earnings per share. We have 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, a recording of the call will be available with information on our website. Unless stated otherwise, all comparisons of the second quarter fiscal 2015 are to the same quarter in the prior fiscal year. Plantronics' second quarter net revenues were $215.8 million. Our GAAP diluted earnings per share for the second quarter was $0.65 compared with $0.53 in the prior year. Non-GAAP diluted earnings per share for the second quarter was $0.77 compared with $0.64 in the prior year. The difference between GAAP and non-GAAP EPS for the second quarter consists of charges for stock-based compensation and purchase accounting amortization. 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: Thanks, Greg. During our second quarter of fiscal 2015, we had 11% top line growth, 19% operating income growth and 20% EPS growth as our operating margins improved. Our strong year-to-year comparison was a result of continued strength in Unified Communications paired with healthy growth in our core product areas. With that backdrop up, I'd like to highlight the following 4 key takeaways from the second quarter. First, we just launched a revolutionary new portfolio context in our products. This portfolio brings the contextual intelligence we pioneered in USB space into the contact center helping our customers solve some major problems. Contact centers, as many of you know, are carefully managed for cost and customer service levels. But there's an old saying that "if you can't measure it, you can't manage it." ACD's capturing management carefully track when customers are put on hold. It is frustrating to customers as well as being expensive time. Agents know this and often use mute instead because it is not reportable. Sometimes this can indicate the need for consultation. They can also be a behavior issue. Either way, contact centers are very interested in capturing the information to improve customer service. We can detect and reports this event to help contact center managers identify new issues rapidly and coach agents. We're working with the major ACD vendors so that they can accept and process these events from our headsets. There're also a range of audio events that can dramatically improve customer service. For example, it is customary for people to occasionally interrupt each other to acknowledge points, particularly over conversation where you can't see each other live. When people are speaking at the same time too much, it's a sign the conversation's broken down. Because we can detect when voice transmission reception are occurring at the same time, we can report this event to quality management systems so the supervisor can assist. A third example in our new products is improved privacy. When an agent leaves their work area, we can see them signal not only to prevent calls from being routed but to put the screen in privacy mode. For contact centers handling sensitive information, be it financial or HIPAA compliance, this is crucial. For agents working at home where the environment is otherwise not monitored and there are concerns over identity theft, it is also essential. These are just some examples of the value add we can provide through contextual intelligence. Our new portfolio is also a breakthrough in its core hits in engineering and design. Our patented third-generation proprietary microphone delivers better noise canceling performance than other products. We have improved our listening performance for challenging incoming calls, such as those from cellphones where poor audio quality and background noise at the speaker's location can make it hard to understand what someone is saying. Wideband audio is also delivered at a time when contact centers are upgrading to new systems which can support this. The hardware itself is extraordinary. Using advanced materials, such as aerospace aluminum, has allowed us to make our headsets 30% lighter and yet even more durable. The comfort and fit are remarkable. You can move the boom without having torque pushing on your ear, and yet it is stable wherever you set it, making it easier to maintain the right position for voice quality. Second, UC continues to be adopted globally by enterprises of all sizes, and headsets continue to be the audio device of choice. Our UC revenues were up 29% year-over-year. The highest growth rate is in part due to a favorable comparison in last year's September quarter. We expect that uneven growth will be the norm in our UC revenues until the market reaches greater maturity. Third, our consumer business continues to do well with 9% year-over-year growth and a year-to-date U.S. consumer market share in mono Bluetooth of a record 50% plus. Our strategic focus on a small portfolio of excellent consumer products continues to yield favorable results and leverages the technology and audio expertise of our Enterprise market. This September, we introduced the BackBeat PRO, our first active noise reduction headset. This uses the relatively common technology from headphones to create sound waves that cancel out background sound. But unlike these headphones, it also includes outstanding audio quality and communications integration. While an extension of our portfolio, it addresses our core customer base. Wired magazine reviewed it as "better than most" and notes that it is cheaper with additional communications capabilities as well. We received similarly glowing reviews from PC Magazine, CNET and so on. For all of you on the call today wondering what to buy your loved ones for the holidays, I'd like to recommend the BackBeat PRO. At only $249, it has audio capabilities comparable to higher-priced products and some unique features not found in them. Our product is wireless, and it streams high-definition audio in an extended range of 100 feet using Bluetooth 4.0. You can use it wirelessly for 24 hours or use the cord to connect to an airplane's entertainment system. It also uses our sensors to pause and restart audio when the headphones are removed and put on. And of course, you can also make phone calls. You might want to buy one for everyone on your shopping list. We have a good track record of increasing long-term stockholder value and believe we are very well positioned to continue to do by investing in high-growth opportunities, leveraging our business model as we grow and continuously returning cash to stockholders. At this point, I'd like to turn the call over to Pam to discuss the financial results. Pamela J. Strayer: Thanks, Ken. First, an overview of our results. As a reminder, unless stated otherwise, all comparisons of our Q2 fiscal year 2015 financial results are to Q2 of the fiscal year 2014. Second quarter net revenues were $215.8 million, representing 11.3% growth; non-GAAP operating income of $45.3 million, an increase of $7.3 million or 19.2%; non-GAAP EPS of $0.77 per share is $0.13 per share higher than the prior year, an increase of approximately 20%. I want to highlight a few key points on our financial results for the quarter. First, we achieved our previously provided guidance for Q2 with solid improvement in margins. We continue to make improvements in our operating margin, both sequentially and year-over-year, largely the result of improved gross margins and a net litigation gain of $1.8 million. Our operating margin for the quarter was 21% compared to 19.6% in the prior year. Excluding the net litigation expense and gain, our operating margin was at 20.2%. However, we are expecting further improvement in the second half of the year. Second, we continue to target higher-operating margins while continuing to make investments to scale of the company with Unified Communications opportunity. Our second quarter gross margin of 54.9% is well above our long-term range of 50% to 52%. Our gross margin is subject to variability quarter-to-quarter. We expect our gross margins to normalize over the course of the year and in the long-term to stabilize in the 50% to 52% range. Third, our operating cash flows remain strong, and our free cash flow will grow over the prior year as our capital expenditures stabilize at roughly 3% of revenue. We focused on improving receivables and improving our DPO, and with continued focus on inventory turns, we're improving our overall cash conversion cycle. Now I'll cover revenue in more detail. Total net revenues for the second quarter of $215.8 million were up $21.8 million or 11.3% compared to the second quarter last year, most of which was driven by a 30% growth in our Unified Communications revenues. We experienced strong growth in revenues from UC products in all of our geographic regions. Revenue growth was also driven by increases in mobile revenues across all regions driven by a strong product portfolio that is well positioned to take advantage of the growth in the consumer stereo headset category. The following are key product line comparisons to Q2 last year: Enterprise net revenues of $156.7 million were up roughly $16.7 million and 12%; UC was the driver for that growth with UC revenues of $47.8 million, up $10.9 million and approximately 30% over the prior year; core Office and Contact Center revenues experienced 6% growth year-to-year against an unusually weak quarter in the prior year; consumer net revenues of $59.1 million were up roughly $5.1 million and 9.4%, driven primarily by growth in our stereo products, including the introduction of our new BackBeat FIT product. Mono Bluetooth products also experienced growth aided by sales of our new Voyager Edge product. Non-GAAP gross margin was better than expected at 54.9%. That was up 260 basis points compared with last year's margin of 52.3%. Our typical downward pressure on gross margins from product mix reversed this quarter compared to the prior year. Our mix of mobile products were flat to down slightly compared to last year. However, the most significant impact on gross margins by far is attributed to cost reductions. These related to product reengineering, volume discounts and lower overhead rates. In addition, [indiscernible] inventory charges were down by over $1 million compared to the prior year. Non-GAAP operating expenses were $73.2 million, up $9.8 million due primarily to increases in headcount, annual salary increases and increases in variable pay associated with our strong results. In addition, our legal expenses are up almost $3 million compared to 1 year go associated with ongoing litigation. Offsetting these increases is a benefit of $4.2 million we recorded in the quarter from a litigation settlement. As a percentage of revenue, operating expenses were 33.9%. That's up 120 basis points from the prior year of 32.7%. Our non-GAAP operating margin was 21%, up from 19.6% in the prior year. Our effective non-GAAP tax rate for the quarter was 27.1%. As a result of all these items, our Q2 non-GAAP net income of $32.9 million was 16.2% higher than 1 year ago, yielding non-GAAP EPS of $0.77 per share, up $0.13 and approximately 20% from last year's Q2 results. Now I'm going to turn to the balance sheet and cash flow highlights. We finished the quarter with $470 million in cash and investments in our balance sheet and generated over $42 million in cash flow from operations during the period. Of the $470 million in cash and investments at quarter end, approximately $26 million was domestic. We used $6.5 million to repurchase shares during the quarter, and we used another $6.5 million for payments to dividends. DSO was 69 days, up from 57 days at the end of Q2 of the prior year. The increase of 2 days was due to a decline in returns reserves compared to the prior year. Now turning to our capital expenditures. Our Q2 investment was approximately $6 million and just under 3% of net revenues. Expenditures include facilities improvements and equipment and tooling for our operations. Depreciation expense on a GAAP basis for Q2 was $4.4 million, up $700,000 from prior year. Now turning to the outlook. We believe total net revenues for our third fiscal quarter ending in December will be in the range of $220 million to $230 million. This forecast assumes gross margins to be down to approximately to 52%, its level comparable to the third fiscal quarter of last year. This is expected as a result of an increase in product mix towards consumer product category we typically see in Q3. Depending on revenue mix and other factors, we believe our GAAP operating income will be approximately $37 million to $42 million and non-GAAP operating income of approximately $45 million to $50 million. The GAAP reconciling items we expect in the second quarter include approximately $8 million in stock-based compensation expense and purchase accounting amortization before tax. As a reminder, we are including GN litigation cost as part of our non-GAAP results based on our policy for non-GAAP reporting. We expect the expenses for this lawsuit will be fully offset by the recognition of a litigation gain that we will record in the quarter related to a binding agreement with our competitors to this business litigation. However, the GN lawsuit is in the discovery phase, and the associated legal expenses are particularly difficult to forecast. Actual expenses can vary significantly from our forecast. Our non-GAAP tax rate for the quarter is expected to be 27% and we're anticipating a full year tax rate of 27%. Based on all of the above, in the second quarter we expect GAAP EPS of $0.64 to $0.72 per share and non-GAAP EPS to be $0.77 to $0.85 per share on average diluted shares outstanding of approximately 42.5 million. With that, we'll open the call for questions.

[Operator Instructions] Your first question comes from the line of John Bright from Avondale Partners. John F. Bright - Avondale Partners, LLC, Research Division: Ken, it seems that voluntary job turnover is increasing. Would you characterize your Enterprise segment sales as, a, benefiting and, b, beginning to accelerate? That's part one of it. And then as associated with that, you called out the context in our new products, not only in the printed information but also in the prepared text. Is this a refresh you think that could drive -- provide some lift for that segment over the next year or so? S. Kenneth Kannappan: Okay. 2 different questions. So I'm going to try to remember the second one when I get back to it. So let me start with the voluntary turnover. I believe that it has gotten only what I would call a little bit better. The truth is we don't think we've seen much of a rebound in most of the world. So when you talk about where have things improved a little bit, you would say perhaps in the U.S. and the U.K a little bit but not much improvement elsewhere in terms of economic conditions. Within the U.S. and the U.K., we would also say certainly there are hotspots. Silicon Valley is certainly a hotspot where the tech industry has done relatively well and remains a very good market for us. But broadly speaking, if we look at most enterprises, it hasn't gone up significantly. We're nowhere near the levels we were previous session in terms of voluntary turnover of business professionals who tend to be bread and butter in terms of the workforce. So a little bit of improvement but not the kind of dramatic improvement that you would have expected from looking just at the unemployment rates. Labor force participation is still down, and voluntary turnover levels are still not where they were even in the best economies. On the second question, so I think that this is related to the Contact Center portfolio and the business impact that we expect from it. And a couple of things. First of all, we expect this to be the kind of thing that builds over time. Would we expect impact over the course of this fiscal year? Absolutely, we would. But we would expect it to continue beyond that period of time because the contact center purchase cycles are often a little bit longer. John F. Bright - Avondale Partners, LLC, Research Division: Hello? S. Kenneth Kannappan: Yes, that was the end of my answer unless you have another question. John F. Bright - Avondale Partners, LLC, Research Division: No, no, I thought I lost you for a second. Okay. My second question a little bit -- it's more complex. It talks about gross margins and OpEx. One, on the gross margin, you're trending above your long-term model right now. Yet you make a note to say that, again, the long-term model's lower than that, recognizing seasonality in the fourth quarter or in the December quarter. Are you seeing lower-margin sales, gross margin sales to date? Or are you seeing any -- is this just the expected conservatism of price competition as the UC market matures? And I want to pair that question, Ken and Pam, with the OpEx question, i.e., growing your OpEx at or below your revenue growth. Because right now, it seems like you're harvesting your gross margins if we can combine the two. Yet thinking long -term, those -- the gross margins may go down. When are we going to start to see the OpEx stabilize? Pamela J. Strayer: Yes. Thanks, John. I guess you got several questions in there. I'll talk about the gross margins first. So yes, in Q2, we had a slightly lower mix of consumer products, which always helps the gross margin, but we have some significant cost savings as well, and we reengineered some of our core products that give us some cost savings. While those cost savings are fairly broad, they do tend to be stronger in the Enterprise products than in Consumer. And next quarter, we do have a much higher mix of Consumer products. So that's -- the mix is really the primary reason that it declined quarter-over-quarter. For the long-term, we continue to find cost savings wherever we can. As UC becomes a bigger part of our product mix, we do expect that the margins will move towards what we get from the UC products. I'd say the UC gross margin -- the UC product margins in general have been stable for the last 3 years, and I think they're in good shape right now. So it's really a product mix issue primarily over the long term. And we'll take advantage of cost-savings opportunities whenever we can. John F. Bright - Avondale Partners, LLC, Research Division: And the OpEx component of the question. Pamela J. Strayer: Yes. On OpEx, we have been -- we want to go to profitability -- higher profitability this year. We want to let profitability grow with revenues. And we've always plan for a higher lift in profitability in the second half of the year. That's still the case, so our guidance reflects that. Our OpEx quarter-over-quarter is expected to be down so that our profitability will improve in Q3. John F. Bright - Avondale Partners, LLC, Research Division: Last question for me. On the -- and the impact of the onetime, i.e. settlement cost versus legal cost, should we expect about the same balance in Q4? Pamela J. Strayer: No. We had additional gains in Q -- oh, sorry, what quarter were you asking about before ? John F. Bright - Avondale Partners, LLC, Research Division: In December, I apologize, in December. Pamela J. Strayer: December, yes. In Q2, we had additional gains that aren't going to recur. As I said at the beginning of the year, we do have $1.7 million in gains in Q3 and $1.7 million in gains in Q4 that we'll be recording. But we expect that to be almost entirely offset by litigation expenses.

Your next question comes from the line of Dave King from Roth Capital Partners. David M. King - Roth Capital Partners, LLC, Research Division: I guess, Ken, following up on the -- on some of your comments around the new products in the Contact Center. It looks these may have just launched. With that in mind, can you talk about your expectations for the portfolio? How do you expect it to ramp? And then more importantly, on a near-term basis just how you -- how we should think about this in terms of the -- vis-a-vis December quarter guidance? And then maybe more generally for you, Pam, just in general how should we think about your guidance by the 3 kind of segments, call it, Enterprise, UC and Consumer? S. Kenneth Kannappan: Okay. I'm going to try to answer your question, and then if I'm not on target, feel free to redirect me. So first of all, these are not going to have a huge impact in the December quarter. A good deal of this is not really significantly shipping during this particular quarter. And in general, we see in the contact center that customers frequently want to trial these products for a period of time. Some of the integrations will take time to be completed with our partners. And so this is a little bit more long cycle. We've also been asked the question as to whether this is going to have a negative effect because of the announcement of negatively impacting current period shipments and people delaying their purchases. We don't believe that would be the case either. So we think that there will be a very small benefit in the current quarter from those but not significant. Was there any other question on the current quarter in relation to these products and revenue that you wanted from me? David M. King - Roth Capital Partners, LLC, Research Division: Not on the current quarter. That helps a lot. But maybe just the outlook in general and how you expect these products to contribute? How significant is it in terms of the context of your overall OCC business and what are you thinking for it longer term? S. Kenneth Kannappan: Sure. Well, the contact center is -- has always been a important part of our business. It's always been a blurred one. I mean it's not really a segment in some respects because you have the same customers through the same channels buying the same products going to different floors in the same building. Nonetheless, it's a meaningful and important business to us. I think that the portfolio is very well timed. As I mentioned, a lot of these organizations are trying to get deeper and deeper into analytics, and the new systems that the providers are offering have greater analytics capability. And as we're enabling them with even more information, it's allowing contact centers to be able to see a vision that they can materially improve both the customer experience, the engagement that they get with the customer, the agent management and other information to really improve it. So there's a lot of things that come together very, very well for us in this portfolio. We have a very significant installed base that therefore represents a big long-term opportunity for upgrade. David M. King - Roth Capital Partners, LLC, Research Division: Great. That helps. S. Kenneth Kannappan: And then I think there's another part of your question related to financial. I think I'll let Pam answer. Pamela J. Strayer: Yes. You had some questions about Q3 guidance? David M. King - Roth Capital Partners, LLC, Research Division: Yes. Just by segment, then in terms of how we should think about Enterprise and the few components there and also... Pamela J. Strayer: Yes, so we don't usually provide details here. I guess what I would say is mobile has been strong for us this year generally. If you look at a Q2 to Q3 increase in mobile revenues, it's typically pretty strong, 20% or something like that. I think it'll be a little bit lower this year quarter-over-quarter sequentially just because we've had such strong bookings throughout Q2 in mobile. Year-over-year for UC, we do expect growth there. North of 20% quarter-over-quarter there will be growth. But OCC overall, we're thinking flat. It's a forecast. It's inherently flawed. And it's our best guess at this point. David M. King - Roth Capital Partners, LLC, Research Division: Sounds good. That's helpful. And then maybe just switching gears a bit, Pam, in terms of working capital and managing that. Obviously, you've had some progress on the inventory side that you've -- that you've highlighted. It looks like you're also having a fair amount of success in managing payables a little bit better. Can you talk about maybe what's driving both of those things and just the outlook for opportunities on the working capital front going forward? And I'll step back. Pamela J. Strayer: Sure, yes. So for the long term, we do think that -- we are focused very heavily on inventory management and inventory turns, and our operations team has already done some fantastic work there. We've got a culture of continuous improvement. We'll continue to work on that over the longer term and hope to make some improvement there over the next couple of years. But on the DPO side, really that improvement is just primarily a result of focusing on it. And I think there might be a little bit more that we can do there as well.

Your next question comes from the line of Paul Coster from JPMorgan. Paul Coster - JP Morgan Chase & Co, Research Division: Ken, perhaps you can talk a little bit about the -- what you're seeing in terms of end markets by region? What color can you provide there? S. Kenneth Kannappan: Sure. Well, first of all, we're seeing what I would call overall healthier global conditions than one would've expected by reading the newspapers. But having said that, it's not robust. It's just healthy. So I would say that with the exception of a few markets -- I mean, Venezuela, Argentina, Ukraine certainly, come to mind where, obviously, sales is severely impaired -- we're seeing broadly reasonably healthy business conditions. I would say that within Europe, the U.K. remains the brightest spot. And the U.S. economy is certainly continues to be pretty solid for us. India, the Asian markets is right now the strongest. Paul Coster - JP Morgan Chase & Co, Research Division: Okay. And then can you just remind us what your intentions are with the international cash that you've got parked out there around the world? S. Kenneth Kannappan: Sure. Our primary intention is that we believe repatriation is going to happen at some point in time. It's certainly what we hear whether that turns out to be at some point in time in 2015 as a part of a tax deal or goes to 2017. We can't be sure. But we think that the odds have been rising as there seems to be a majority in Congress that favors something. We do not want to repatriate and pay the tax given the possibility of something like that occurring. And we believe that there's a lot of good economic arguments for repatriation and that it's likely to occur and that most companies will leave that cash over there. So that, that huge stimulus effect that would come is something that we think that the government's going to want to take advantage of. Paul Coster - JP Morgan Chase & Co, Research Division: Okay. Great. And then last question to Pam really, I just need a point of clarification here. In the second half of the fiscal year, you're looking for a little bit of leverage out of growth the operating income -- operating margin line. Is that just simply a function of growth? Or is it a seasonal thing? Should we sort of plan on this being the shape of your sort of margins, your operating margins every year, the second half will be stronger than the first? Pamela J. Strayer: I'd say it's probably a little bit of both. We do tend to have a strong Q3 and Q4 quarter. And therefore, it's a better time for us to try and increase profitability. But there's also just some timing differences in when expenses are falling this year, the timing of the litigation expenses and when those are falling, which is a big chunk of expense for us. So I don't know that I'd make a general statement that this is going to be the new norm going forward. No, not to this degree anyway.

Your next question comes from the line of Tavis McCourt from Raymond James. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: I guess, first of all, in terms of timing of the GN litigation expenses, any reasonable chance that this would last into fiscal '16? Or is it reasonably certain that this will pretty much get cleaned up in '15? S. Kenneth Kannappan: No, we would expect that it's most likely to last into fiscal '16 than not. We don't control the timing on it. And we can't be certain. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: Okay. And then, Pam, I want to make sure I kind of understood some of the puts and takes in December guidance. Did I hear you correctly, gross margin of 52%? Pamela J. Strayer: Yes. I'm just looking at the gross margin that we recorded 1 year ago in Q3. Our bottoms-up forecast supports that with a heavy mix towards Consumer. That's likely where we'll land. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: Okay. So if I build in kind of a slightly stronger year-over-year growth in Consumer than Enterprise, it's more of a kind of a flattish trend in Enterprise on a sequential basis. Is that the right way to look at it? Pamela J. Strayer: Yes. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: And is there anything that happened unique in September that would kind of -- that is not -- that hasn't been the seasonal norm, obviously, the last couple of years. I was just wondering is there's anything you're seeing or anything unique that happened in September that would lead you to believe that? Or just kind of early in the quarter so you might as well make it flattish? Pamela J. Strayer: I'm sorry, I'm not sure I understand the question. Anything in the last quarter? Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: The last couple of years in the December quarter, the Enterprise business has actually been up quite nicely. And so I'm just wondering was there -- is there kind of a greater logic behind the kind of flattish Enterprise in December this year, either some things went specially well in September or something you're seeing in October so far leads you to that forecast versus the last couple of years, where I think last year December Enterprise was up $7 million? The year before that December Enterprise was up $6 million or so. S. Kenneth Kannappan: So let me answer the question. I mean, there is -- I would say that it's more likely that other periods are anomalies than our forecast, but there is nothing unique about the forecast. We do base it on what I would call all of the data that we have, and it is intent to be our best guess. The data that we have includes the patterns of all prior periods, month-by-month, third [ph] Quarters. It includes the knowledge that we have of pipelines. There are some random lumpinesses that have occurred in various periods. We almost never forecast unforeseen large blue birds or unforeseen large black birds, so to speak, and the timing of things can move in and out of particular quarters. But we think on balance, this is a fairly reasonable forecast. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: Makes sense, Ken. And then so if I put kind of the midpoint of your revenue range in there and bring the gross margins down to 52%, it's a reasonably meaningful decline on a nominal basis in operating costs sequentially. And this being kind of the holiday season, typically we see an uptick in SG&A, at least. I guess what are the offsets to that this year that are leading to that OpEx decline in the December quarter? Pamela J. Strayer: Well, if you look at the sequential change September to December quarter, one of the big declines we're expecting is in legal expense. But we've also made some conscious decisions to cut some costs to increase our profitability in the second half. So that's where we're landing. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: Okay. And are those decisions -- I guess would those be flowing through going forward? Or are those kind of onetime decisions on advertising and the like? S. Kenneth Kannappan: I would call it more timing of expenses and what we're trying to do rather than a -- something that you should necessarily extrapolate on. I think that the best guidance we could give you on expenses is more that we look at it primarily on an annual basis, that we set a plan and that we are -- sometimes we've been wrong where we thought revenues were going to be higher than they were, and so we had more expense growth as a result and we didn't want to correct right away. What we are looking to do though is to improve in F '16 our operating margin a little bit by trying to set a plan where the revenues, and more particularly, the gross profit will grow a little bit faster than the operating expenses as we seek to improve that operating margin back closer towards the 21%, 21.5% point of the -- of our range. So I wouldn't get too focused on the quarter but more look at the long-term goal that we have. And that's where we're going to be trying to set things. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: I got the message. And then just to be clear, the GN litigation expenses to some degree will likely trail into fiscal '16, but the litigation gain will all be recognized this year, this fiscal year. Is that correct? S. Kenneth Kannappan: Yes, that's correct. And we are hopeful that it won't go all the way through fiscal '16 for those litigation expenses, but we can't be certain.

Your next question comes from the line of Mike Latimore from Northland Capital Markets.

This is Jim Fitzgerald sitting in for Mike Latimore. So my first question is regarding sales cycles. I wanted to see if you could comment a little bit on how sales cycles are changing for your UC products. S. Kenneth Kannappan: Well, I don't really think that they have changed significantly, certainly not since our last call.

Okay. And then secondly, so you have new headphones, new Contact Center products out. What would really be the next features or the next products of emphasis for you guys going forward? S. Kenneth Kannappan: Gosh, I'm not 100% sure how to answer that question. We're -- we have what I described as a rich pipeline across the business and as well as some new areas that we're experimenting in, in addition to what I would call capability, software firmware integrations, that we're doing, and there's not any particular thing that I want to disclose at this time.

Okay. And then lastly, I might have missed this, I apologize if I did, but -- so your headset business has increased sequentially during the past 2 years in December quarters. So do you expect that to occur again this year? S. Kenneth Kannappan: Well, when you say the headset business, I mean, I assume you're referring to the Enterprise portion of it?

Yes. S. Kenneth Kannappan: So we're sticking with our forecast, which -- and the question was kind of asked a little bit, which is fine, but the answer we gave is that we really look at these longer-term patterns try to forecast as best as we can based upon the data that we have, which includes all the specific plans whereas sometimes timings move in and move out. But we think our forecast is reasonable.

Your next question comes from the line of Yi-Dan Wang from Deutsche Bank. Yi-Dan Wang - Deutsche Bank AG, Research Division: First of all, I have a clarification question regarding the Enterprise headset sales in the December quarter. Did you guys say that, that would be flattish compared to the absolute numbers that you reported in the quarter just finished? And then the second question is, your competitors move to give distributors higher rebate rates soon after you announced during the Contact Center portfolio. So the question is, how has that played out in the market so far? How have you guys responded to it? If you could provide some color on that, that would be helpful. S. Kenneth Kannappan: Well, I'll take the second question. But I'll let you go ahead with the first one, Pam. Pamela J. Strayer: Yes. So Yi-Dan, I think you're asking about total OCC or Enterprise revenues which, yes, we're, forecasting right now about to be flat Q3 to Q4. We did have an increase from Q3 to Q4 last year, but other years, it's been flat. So that's our best guess at this point. S. Kenneth Kannappan: As to the competitive activity, I really think it'd be better them comment on how well they think it's worked out for them. I would say that what -- from our end, we've had tremendous interest in our new portfolio, and we think people are really, really excited about what that offers. Yi-Dan Wang - Deutsche Bank AG, Research Division: So have you seen any negative impacts on your business from that? S. Kenneth Kannappan: If you ask a question like that, then the answer would almost by definition wind up being yes. Because even if I had more positives that offset the negatives, the answer would be in the affirmative. But the reality is I think that most of the market is really focused on our new offer and what it has to provide to organizations in terms of improved performance, customer experience, et cetera. And so I don't think that people are primarily focused on that. Yi-Dan Wang - Deutsche Bank AG, Research Division: Okay. So in terms of your response then, have you had to give any pricing away to address that? Or do you think your products are strong enough that you don't need to do any of that? S. Kenneth Kannappan: So really, I'm very conscious of that fact, Yi-Dan, that we're in a litigation right now on the contact center, and you're asking questions about contact center market and pricing. And I've tried to be as expansive as I can be, which is we really think that our product value here is very strong and being very well received in the market. And I'm sorry, but I just kind of want to leave that at that.

There are no additional audio questions. I'll turn the call back over to the presenters.

Great. Thanks, everyone, for joining us today. I'll be available afterwards if anyone has any follow-up questions.

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